CCW PACKET REVISED 03-12-2018-Corrected Item for LF&A #3

COUNCIL COMMITTEE OF THE WHOLE AGENDA MARCH 13, 2018 - 6:00 P.M. CITY HALL COUNCIL CHAMBERS 15 LOOCKERMAN PLAZA DOVER, DELAWARE PUBLIC COMMENTS ARE WELCOMED ON ANY ITEM AND WILL BE PERMITTED AT APPROPRIATE TIMES. WHEN POSSIBLE, PLEASE NOTIFY THE CITY CLERK (736-7008 OR E-MAIL AT CITYCLERK@DOVER.DE.US) SHOULD YOU WISH TO BE RECOGNIZED. LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE AGENDA ADDITIONS/DELETIONS 1. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 2017 (CLIFTONLARSONALLEN, LLP) (STAFF RECOMMENDS ACCEPTANCE OF THE REPORT) 2. PRESENTATION - COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) (STAFF RECOMMENDS ACCEPTANCE OF THE REPORT) 3. STATUS OF OTHER POST-EMPLOYMENT BENEFITS (OPEB) AND PENSION FUNDS (COMMITTEE ACTION NOT REQUIRED) 4. PROJECT CARRY-FORWARD BUDGET BALANCES AND PROPOSED ORDINANCE #2018-02 - FY 2017- 2018 BUDGET ORDINANCES - FIRST AMENDMENT (STAFF RECOMMENDS APPROVAL OF THE PROPOSED BUDGET AMENDMENTS FOR FISCAL YEAR 2018) 5. DIVERSITY AND INCLUSION STUDY REQUEST FOR PROPOSAL (RFP) (STAFF RECOMMENDS AUTHORIZING FUNDING UP TO $97,400 TO SUPPORT THE FULL SCOPE OF THE RFP) 6. AMBULANCE SERVICES PROPOSAL (STAFF RECOMMENDS AUTHORIZING THE CITY MANAGER TO EXECUTE A SIX-MONTH EXTENSION OF THE CURRENT CONTRACT WITH PRIMECARE MEDICAL TRANSPORT, LLC AT THE RATES PROVIDED) 7. PROPOSED ORDINANCE #2018-03 AMENDING THE DOVER CODE OF ORDINANCES BY CREATING A NEW CHAPTER 84 - PUBLIC SAFETY FEE (SPONSORS: HARE AND NEIL) (STAFF RECOMMENDS ADOPTION OF THE ORDINANCE) 8. ADJOURNMENT OF LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING

MARCH 13, 2018 COUNCIL COMMITTEE OF THE WHOLE Page 2 UTILITY COMMITTEE AGENDA ADDITIONS/DELETIONS 1. UPDATE - U.S. ROUTE 13 EAST PUMP STATION #7 (PS #7) EMERGENCY RESPONSE (REQUESTED BY MR. LEWIS) (COMMITTEE ACTION NOT REQUIRED) 2. ADJOURNMENT OF UTILITY COMMITTEE MEETING PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE AGENDA ADDITIONS/DELETIONS 1. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) APPLICATION REVIEW (STAFF RECOMMENDS APPROVAL OF THE PROPOSED C OMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ALLOCATION RECOMMENDATIONS FOR THE FY 2018 CDBG GRANT RENEWAL FISCAL YEAR) 2. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM SEMI-ANNUAL UPDATE (COMMITTEE ACTION NOT REQUIRED) 3. ADJOURNMENT OF PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING ADJOURNMENT OF COUNCIL COMMITTEE OF THE WHOLE MEETING /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\COMMITTEE-AGENDAS\2018\03-13-2018 CCW AGENDA. WPD THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. PURSUANT TO 29 DEL. C. §10004(E )(2), THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS, WHICH ARISE AT THE TIME OF THE MEETING.

CITY OF DOVER Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2017

2 FY 2017 Financial Highlights The Government-wide change in Net position is inclusive of Pension & OPEB expense, actuarial adjustments, cost vs. market differences on investments and depreciation. Governmental Business Type Activities Activities Total Changes in Net Position $ 8,573,682 $ 16,006,845 $ 24,580,527 Net Position Beginning - as Previously Reported 33,043,618 174,549,738 207,593,356 Prior Period Adjustment - OPEB Liability (31,065,241) (14,515,025) (45,580,266) Net Position Beginning - as Restated 1,978,377 160,034,713 162,013,090 Net Position Ending $ 10,552,059 $ 176,041,558 $ 186,593,617 The most significant activities that affected the changes in Net Position were: • The early implementation of GASB 75 which restated the Net OPEB Liability by negative $31.1 million for Governmental Activities and negative $14.5 million for the Business Type Activities, as can be seen in the chart above. • Both Governmental Activities and Business Type Activities had a positive change in Net Position, $8.7 million and $15.9 million respectively excluding the afore-mentioned GASB 75 restatement.

3 Capital Assets Capital Asset Summary information Water/Wastewater General Fund Fund Electric Fund Total Asset Beginning Balance $ 102,106,781 $ 91,100,693 $ 192,044,105 $ 385,251,579 New Assets 3,311,243 5,226,959 4,488,635 13,026,837 Disposed Assets (1,096,615) (1,507,403) (6,496,997) (9,101,015) Asset Ending Balance 104,321,409 94,820,249 190,035,743 389,177,401 Net Accumulated Depreciation (43,761,057) (35,462,441) (109,466,757) (188,690,255) Net Capital Assets $ 60,560,352 $ 59,357,808 $ 80,568,986 $ 200,487,146 Current Year Depreciation $ 3,460,455 $ 2,166,414 $ 5,513,294 $ 11,140,163 Major Assets added this fiscal year: • General Fund • Purchase of 2 Water Street properties $0.4 million • Other street paving, lighting, curb work and Salt Storage Barn $0.9 million • Vehicles and equipment totaling $1.1 million • Additions to CIP of $0.5 million • Water/Wastewater Fund • Contractor contributed infrastructure $1.3 million • Various projects including a pump station replacement $2.4 million • Vehicles and equipment totaling $0.2 million • Electric Fund • Decommissioned McKeee Units 1 & 2 ($4.6) million • Vansant Improvements – Exhaust Plenum and capacity increase of $1.2M • Various projects added $1.4 million • Additions to CIP of $1.6 million • Vehicles and equipment totaling $0.1 million

4 Long-Term Debt Long-Term Debt is inclusive of Compensated absences, Bonds, OPEB Obligation and Net Pension Liability. Water/Wastewater General Fund Fund Electric Fund Total LT Debt Beginning Balance $ 67,869,855 $ 21,138,347 $ 34,348,885 $ 123,357,087 New Debt 1,764,548 134,007 289,510 2,188,065 Reduction of Debt (11,941,010) (1,984,116) (2,855,343) (16,780,469) LT Debt Ending Balance $ 57,693,393 $ 19,288,238 $ 31,783,052 $ 108,764,683 • General Fund change in long-term debt is due to: • $1.8 million increase offset by $1.4 million decrease in compensated absences • $7.2 million decrease in Net OPEB Liability No new • $2.7 million decrease in Net Pension Liability bonds • Normal decrease for principal payments were • Water/Wastewater Fund change in long-term debt is due to: issued • $26,582 decrease to compensated absences • $0.7 million decrease for Net OPEB Liability and $0.3 million decrease or Net Pension Liability in FY • Normal decrease for principal payments 2017 • Electric Fund change in long-term debt is due to: • $66,268 decrease in compensated absences • $1.1 million decrease for Net OPEB Liability and $0.7 million decrease for Net Pension Liability • Normal decrease for principal payments

5 Governmental Statement of Revenues, Expenses and Transfers Total net change across all funds: Water/Wastewater General Fund Fund Electric Fund Total Revenues $ 23,779,785 $ 17,446,550 $ 84,461,564 $ 125,687,899 Expenses (36,702,874) (11,528,350) (63,497,919) (111,729,143) Net Transfers- Operating 13,885,445 (1,106,200) (9,768,800) 3,010,445 Net changes $ 962,356 $ 4,812,000 $ 11,194,845 $ 16,969,201 General Fund Revenues General Fund Expenses $679,106 $67,647 $2,039,700 $150,000 $811,992 $312,914 $2,023,756 $295,923 $3,548,401 $1,606,995 $501,559 $2,514,645 $764,622 $13,885,445 $219,198 $4,275,648 $1,679,390 $733,961 $1,837,056 $20,750,196 $119,507 $12,929,597 $1,343,020 $585,558 Fines Library Revenue - General General Government Library services Library Revenue County Reimb. Licenses and Permits Public Safety Public Works Sanitation Fees and Rebates Miscellaneous Services Recreation Services Street/Sanitation Services Property Taxes Grants Received Engineering Services Financial Administration Garage and Stores Insurance Court of Chancery Fees Investment Income Retiree Health Care Employee Pension Approp Transfers Community & Economic Street Lights

6 Business-type Statement of Revenues, Expenses and Transfers Electric Fund Revenues Electric Fund Expenses Distribution to Customers $1,845,936 Transfers Out $9,768,800 Interest Interest & Fiscal Charges $884,704 Earned $657,089 Retiree Healthcare $709,300 Depreciation $5,513,295 Utility Tax $1,322,015 Miscellaneous Systems Operations $435,112 Services/Income, Charges for Metering $300,738 $1,668,084 Services, Engineering $797,438 $81,946,194 Transmission & Distr. $2,983,697 Power Supply $43,554,438 Charges for Services Miscellaneous Services/Income General Administrative $4,646,177 Interest Earned $- $20,000,000 $40,000,000 Water/Wastewater Fund Revenues Water/Wastewater Fund Interest Expenses Earned Operating, $190,491 Transfers Out $1,106,200 Interest & Fiscal Charges $343,259 Miscellaneous Retirees Healthcare $192,400 Services/Income, Charges for $1,746,311 Depreciation $2,166,413 Services, $14,270,657 General Administrative $1,683,223 Charges for Services Miscellaneous Services/Income Water/Wastewater Services $7,031,099 Interest Earned Operating $- $2,000,000$4,000,000$6,000,000$8,000,000

7 Original vs. Final Budgets – Major Operating Funds General Fund Original Budget Final Budget All Funds • Beginning Fund Balance adjusted to audited balance Revenues $ 42,223,500 $ 42,304,100 • Revenues adjusted to actual/trending amounts Expenditures/Expenses (42,223,500) (43,082,900) • Expenses adjusted for unanticipated expenses/project carryforwards Net Change $ - $ (778,800) Beginning Fund Balance 4,493,900 5,424,800 General Fund Ending Fund Balance $ 4,493,900 $ 4,646,000 • Interfund Service Receipts Water / Wastewater increased $19,600 • Interfund Service Receipts Electric increased by $61,000 Water Fund Water & Wastewater Fund Original Budget Final Budget • Engineering & Inspection adjusted up from $516K to $522K (actual $468K) Revenues $ 6,459,700 $ 6,459,700 • Water fees adjusted up from $655K to $670K (actual $632K) Expenses (5,923,100) (6,009,500) • Wastewater fees adjusted up from $962K to $984K (actual $903K) Net Change $ 536,600 $ 450,200 • Wastewater Treatment expense adjusted up approximately $16.6K Beginning Fund Balance 566,500 881,300 • Added OPEB unfunded liability expense in the amount of $101,800 Ending Fund Balance $ 1,103,100 $ 1,331,500 • Inter-fund Service Fees adjusted up by $19,600 • Transfer to Water and Wastewater I&E both decreased by $20K each • Transfer to Contingency Reserve Water increased by $21,100 Wastewater Fund Original Budget Final Budget Electric Fund Revenues $ 9,007,500 $ 9,007,500 • Administration expense increased by $4,500 Expenses (8,504,400) (8,560,500) • Transfer from Rate Stabilization Fund increased from $1.3M to $3.3M Net Change $ 503,100 $ 447,000 • Electrical Engineering increased $3,000 Beginning Fund Balance 663,200 719,200 • Systems Operations adjusted up by $10,400 Ending Fund Balance $ 1,166,300 $ 1,166,200 • Added OPEB Unfunded liability expense in the amount of $109,300 • Inter-fund Service Fees adjusted up by $61,000 • T&D expense increased by $10,600 Electric Fund • Transfer to Future Capacity Reserve increased by $2.0 million Original Budget Final Budget • Transfer to Depreciation Reserve increased by $2.0 million Revenues $ 79,428,600 $ 79,428,600 Expenses (79,021,500) (85,191,800) Net Change $ 407,100 $ (5,763,200) Beginning Fund Balance 13,302,200 19,896,400 Ending Fund Balance $ 13,709,300 $ 14,133,200

8 General Fund Budget General Fund General Fund Final Budget Actual Revenues $ 42,304,100 $ 42,518,766 Expenditures/Expenses (43,082,900) (41,871,316) Net Change $ (778,800) $ 647,450 Beginning Fund Balance 5,424,800 5,424,751 Ending Fund Balance $ 4,646,000 $ 6,072,201 General • The General Fund is the primary operating fund and the largest source Fund fund of day-to-day service delivery. balance • The budget balance in the fund is $6,072,201 and is 14.3% of 2017 increased by general fund revenues. • The overage will be allocated to unfunded retirement liabilities or as $647,450 to otherwise designated. an ending balance of Significant favorable variances are as follows: • $407,611 Permits & Other License fees $6,072,201 • $243,020 Court of Chancery fees • $64,464 Interest Earnings Significant unfavorable variances are as follows: • $291,231 Inter-fund service receipts W/WW & Electric • $84,231 Fines and police revenue

9 Governmental Governmental Capital Projects Fund Capital Projects Fleet Maintenance Fund Facilities Management City Manager Ending fund balance was favorable by Sanitation $1,164,261. Of this Streets amount, $1,105,200 will Recreation be carried forward to the next year. Public Services - Administration Projects that will be Procurement and Inventory carried forward include: Police • City Clerk – Life Safety Broadcast & Production Library Equipment Grounds Maintenance • Old PW2 site Fire improvements City Clerk • FY17 Street & Alley program $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 • Silver Lake Dam Improvements Actual Budget

10 Proprietary Funds – Water/Wastewater Budget Water Fund Water Fund Wastewater Fund Wastewater Fund Final Budget Actual Final Budget Actual Revenues $ 6,459,700 $ 6,872,335 $ 9,007,500 $ 9,160,288 Expenses (6,009,500) (6,073,159) (8,560,500) (8,479,761) Net Change $ 450,200 $ 799,176 $ 447,000 $ 680,527 Beginning Fund Balance 881,300 881,297 719,200 719,132 Water Fund Ending Fund Balance $ 1,331,500 $ 1,680,473 $ 1,166,200 $ 1,399,659 balance increased by Fund balance for the Water Utility at the end of the year is $1,680,473 which is a favorable variance of $348,973: $799,176 • Miscellaneous service fees came in over budget by approx. $11,568 • Water impact fees came in over budget by $420,147 • Water department expenses came in under budget by $38,062 • Water debt service came in under budget by $69,074 Offset by: • Transfer to water impact fee reserve $312,560 • Water treatment plant expense over budget by $22,528 Wastewater Fund Fund balance for the Wastewater Utility at the end of the year is $1,399,659 which is a balance favorable variance of $233,459: increased by • Wastewater impact fees came in over budget by $383,800 $680,527 • Kent County Treatment Fees came in under budget by $409,953 • Wastewater fees under budget by $80,643 Offset by: • Wastewater, Groundwater adjustment & Wastewater Treatment fees under budget totaling $243,452 • Transfer to impact fee reserve of $458,643

11 Proprietary Funds – Water/Wastewater I & E Fund • Some projects in this fund were not completed and the balances are being carried forward to FY 2018 in the amount of $2,237,500 as follows: Water/Wastewater Capital Outlay • $21,400 new compressor for both water and $4,500,000 wastewater departments $3,908,100 $4,004,700 $4,000,000 • $71,600 future well installation $3,500,000 • $519,400 Westover pump station upgrade $3,000,000 • $439,300 Rolling acres pump station replacement $2,500,000 • $33,000 Delaware Tech pump station replacement $1,920,157 $2,000,000 $1,200,000 • $17,400 Walker Woods pump station replacement • $1,115,200 WTP Process Improvements $1,500,000 $1,067,067 $30,400 $1,000,000 • There continues to be large budget balances due to $500,000 $84,808 $26,831 delay of projects and various other issues like: $- Water Wastewater Water Treatment Engineering & • Land acquisition Plant Inspection • Bid prices over budget – going out to re-bid Budget Actual • Awaiting final invoices on completed projects • Awaiting delivery of materials • Project Engineering & Design not ready • Emergency repairs taking precedence

12 Proprietary Funds – Electric Fund Budget Electric Fund Electric Fund Final Budget Actual Revenues $ 79,428,600 $ 81,240,247 Expenses (85,191,800) (78,884,100) Net Change $ (5,763,200) $ 2,356,147 Beginning Fund Balance 19,896,400 19,896,366 Ending Fund Balance $ 14,133,200 $ 22,252,513 The Electric Fund balance for the Electric Utility at the end of the year is Fund fund $22,252,513 which is a favorable variance of $8,119,313 primarily due to the following favorable variances: balance has • Direct Base sales $3,430,981 a favorable • Power Supply and Generation $5,747,886 variance of • Administration $135,405, attributed mainly to vacancies within the $8,119,313 department and lower costs for legal expenses and consulting fees • Electrical Engineering $179,359, resulting from lower labor costs and lower environmental expenses • Lower Interfund service fees $200,856 Offset by unfavorable variances as follows: • Purchased power adjustment $1,845,936

13 Proprietary Funds – Electric I & E Fund • Electric I & E Fund balance has increased by $1,051.301. New Development budgeted expense of $1,945,400 had actual expense of Electric Capital Outlay $600,764. This expense is dependent on $3,000,000 developers. New Development revenue $2,389,100 $2,500,000 $2,170,400 billed was $772,885 and collected $2,000,000 $1,736,300 amounted to $647,270. $1,500,000 • Some of the projects in this fund have $905,624 $968,755 $1,000,000 $1,000,000 $628,567 $64,800 not been completed and the balances $23,000 are being carried forward to FY 2018 in $500,000 $17,993 $- $58,252 the amount of $1,636,400, some of the $- larger projects are as follows: • $394,200 VanSant unit #11 major overhaul • $941,700 Purchase of ERP system • $82,400 Unit #3 Hydrogen Analyzer • $31,700 Oak Grove trailer park – Budget Actual distribution upgrade • $36,000 2018 Ram 1500 (2)

14 Worker’s Compensation and Grants Summary Revenue, Expense and Net Change of Worker’s compensation and Grants Worker’s Worker's Compensation Compensation Grants Fund balance Revenues $ 958,790 $ 3,955,853 Expenses (958,065) (1,402,229) increased by Transfers out - (3,010,445) $725 Net Change $ 725 $ (456,821) Beginning Fund Balance 1,256,956 759,309 Ending Fund Balance $ 1,257,681 $ 302,488 Workers Compensation • Claims payable increased by $203,701 from prior year • Claims paid increased by $318,301 from prior year Grants Grants ending fund • Includes Police, Library, Municipal Street Aid, CDBG, State DOT, Substance balances abuse, ERLSP & Realty Transfer grants • Grants revenue decreased $1,571,518 from prior year in all of the Grant funds decreased by except the following: $456,821 • Library Grant Fund • Municipal Street Aid Fund

Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 Prepared by the Finance Department Lori Peddicord, Acting Controller/Treasurer

DOVER, DELAWARE CAPITAL OF THE FIRST STATE 300th Anniversary 1717 – the City of Dover was officially laid out by the Delaware General Assembly, setting forth a trajectory that would forever transform history. Dover was a significant stop on the Underground Railroad, lends its history to the origins of the record and popular music, and is home to Dover Air Force Base, Dover International Speedway, and host to the annual Firefly Music Festival. Residents of Dover were among the first to convene for the ratification of the Constitution of the United States of America, making Delaware the First State, and the only state in the union for five consecutive days. From the beginning, Dover has been a symbol for the practice and promotion of religious freedom, cultural diversity, entrepreneurship, and the persistence of the American spirit. In reverence of this rich history, and in preparation for an even more prosperous future, the City is inviting all of its residents and people from all over the world to participate in these historic celebrations.

Acknowledgements The City of Dover’s Comprehensive Annual Financial Report was prepared by the Finance Department Tracey Lisiecki Financial Reporting & Accounting Manager Jeffrey Dill Accountant II Jennifer Helms Accountant II Sharon Daniel Account Clerk II Katie Heffington Payroll Specialist Sophia Isip Debbie Krueger Administrative Assistant Special appreciation is extended to Mrs. Donna S. Mitchell, City Manager, and all personnel throughout the City for their continued support of the Finance Department.

City of Dover, Delaware Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 Table of Contents PAGE INTRODUCTORY SECTION Letter of Transmittal ................................................................................................................................................ 1 Certificate of Achievement for Excellence in Financial Reporting ................................................................... 7 Mayor and City Council Members ......................................................................................................................... 9 List of Elected Officials .......................................................................................................................................... 10 List of Appointed Officials .................................................................................................................................... 11 List of Committees, Commissions, and Boards .................................................................................................. 12 Organization Chart .................................................................................................................................................. 13 The City of Dover, Delaware Vision ..................................................................................................................... 14 FINANCIAL SECTION PART A - Report of Independent Public Accountants .............................................................................. 15 PART B - Management’s Discussion and Analysis ................................................................................... 19 PART C - Basic Financial Statements ............................................................................................................. 37 Government-wide Financial Statements Statement of Net Position ................................................................................................................................ 39 Statement of Activities ..................................................................................................................................... 40 Fund Financial Statements Balance Sheet – Governmental Funds .......................................................................................................... 41 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ......... 42 Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds ......... 43 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................................................................... 44 Statement of Net Position – Proprietary Funds ............................................................................................ 45 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ................ 46 Statement of Cash Flows – Proprietary Funds .............................................................................................. 47 Statement of Net Position – Fiduciary Funds ............................................................................................... 48 Statement of Changes in Net Position – Fiduciary Funds........................................................................... 49 i For electronic viewing, please click on a topic or page number.

City of Dover, Delaware Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 Table of Contents PAGE FINANCIAL SECTION – CONTINUED Notes to Financial Statements Index to Notes to Financial Statements ......................................................................................................... 51 Notes to Financial Statements ......................................................................................................................... 53 Part D - Required Supplementary Information General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) ............................................................................................................................... 112 Police Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios ............................................................ 114 Schedule of Employer Contributions ...................................................................................................... 114 Net Pension Liability .................................................................................................................................. 115 General Employee Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios ............................................................ 116 Schedule of Employer Contributions ...................................................................................................... 117 Net Pension Liability .................................................................................................................................. 117 Delaware Public Employee Retirement System – County and Municipal Police and Firefighter’s Pension Plan Schedule of the City of Dover’s Proportionate Share of the Net Pension Liability ......................... 118 Schedule of the City of Dover’s Contributions ...................................................................................... 118 Other Post-Employment Benefits Trust Fund Schedule of Changes in Net OPEB Liability, Related Ratios............................................................... 119 Schedule of City’s Contributions .............................................................................................................. 120 Notes to Required Supplementary Information Governmental Budgets .............................................................................................................................. 121 Part E - Supplementary Information General Fund Combining Schedules ............................................................................................................... 125 Combining General Fund Balance Sheet ....................................................................................................... 126 Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund (Non-GAAP Basis) ............................................................................................................................................ 127 ii For electronic viewing, please click on a topic or page number.

City of Dover, Delaware Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 Table of Contents PAGE FINANCIAL SECTION – CONTINUED Governmental Capital Projects Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) ...................................................................................... 128 Special Revenue Funds ........................................................................................................................................ 129 Special Revenue Funds – Combining Balance Sheet.................................................................................... 131 Special Revenue Funds – Combining Statement of Revenues, Expenditures and Changes in Unreserved Fund Balances .................................................................................................................................................... 132 Police Grants – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual .......................................................................................................... 133 Library Grants – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual .......................................................................................................... 134 Municipal Street Aid Fund – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual ........................................................................................ 135 Housing Programs – CDBG & NSP – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual ............................................................................. 136 State of Delaware Department of Transportation Grants – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual ................................... 137 Substance Abuse Prevention Program – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual ........................................................ 137 Proprietary Fund Types - Enterprise Funds .................................................................................................. 138 Water/Wastewater Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ................................................................................................................................................................... 139 Water/Wastewater Improvement & Extension Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual........................................................................................................................ 140 Electric Revenue Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ................................................................................................................................................................... 141 Electric Improvement & Extension Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ................................................................................................................................................ 142 Proprietary Fund Types - Internal Service Funds ........................................................................................ 143 Internal Service Fund – Worker’s Compensation – Schedule of Revenues and Expenses – Budget (Non- GAAP Basis) and Actual .................................................................................................................................. 143 Fiduciary Fund Types Agencies........................................................................................................................ 144 Combining Statement of Changes in Assets and Liabilities – All Agency Funds .................................... 145 iii For electronic viewing, please click on a topic or page number.

City of Dover, Delaware Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 Table of Contents PAGE STATISTICAL SECTION Net Position by Component ................................................................................................................................... 150 Changes in Net Position .......................................................................................................................................... 151 Fund Balances of Governmental Funds ............................................................................................................... 153 Changes in Fund Balances of Governmental Funds ........................................................................................... 154 Governmental Activities Tax Revenues by Source ............................................................................................ 156 Assessed and Estimated Actual Value of Taxable Property ............................................................................. 157 Property Tax Rates – All Direct and Overlapping Governments with the Capital School District ............ 158 Principal Tax Payers ................................................................................................................................................. 159 Property Tax Levies and Collections ..................................................................................................................... 160 Ratios of Outstanding Debt by Type .................................................................................................................... 161 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net Bonded Debt Per Capita...... 162 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures .. 163 Computation of Direct and Overlapping Debt with the Capital School District ........................................... 164 Computation of Legal Debt Margin ...................................................................................................................... 165 Revenue Bond Coverage – Electric Revenue Bonds .......................................................................................... 166 Revenue Bond Coverage – Water/Wastewater Bonds ....................................................................................... 167 Top Ten Water/Wastewater Utility Customers ................................................................................................... 168 Top Ten Electric Utility Customers ....................................................................................................................... 169 Demographic and Economic Statistics ................................................................................................................. 170 Major Employers – Current Year and Nine Years Ago ...................................................................................... 171 Full-time Equivalent City Government Employees by Function – Budgeted ............................................... 172 Operating Indicators and Capital Assets Used in Operations ........................................................................... 173 Summary of Insurance ............................................................................................................................................. 175 iv For electronic viewing, please click on a topic or page number.

INTRODUCTORY SECTION THIS SECTION INCLUDES THE FOLLOWING: LETTER OF TRANSMITTAL CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING LIST OF ELECTED OFFICIALS LIST OF APPOINTED OFFICIALS LIST OF COMMITTEES, COMMISSIONS, AND BOARDS ORGANIZATION CHART VISION

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section January 31, 2018 The Honorable Mayor, Honorable Council President, Members of the City Council and Citizens of the City of Dover Dover, Delaware 19901 Ladies and Gentlemen: I am pleased to submit the Comprehensive Annual Financial Report of the City of Dover for the fiscal year ended June 30, 2017. This report is published to comply with the provisions of Article IV, Section 46 of the City Charter. It is also intended to provide financial data to the tax and ratepayers, bondholders, trustees, banks, federal and state agencies and the financial community at large. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The financial statements in this report have been audited by CliftonLarsonAllen LLP, an independent firm of certified public accountants as required by Section 46 of the City Charter. CliftonLarsonAllen LLP has provided an unmodified opinion on the City of Dover financial statements for the year ended June 30, 2017. The report of independent public accountant is located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Our MD&A can be found immediately following the report of our independent auditors. THE REPORTING ENTITY AND ITS SERVICES The City of Dover was incorporated in 1829 under a Charter granted by the General Assembly. Dover is the Capital of the State of Delaware and is located in the central part of the State. It is home to the State Governor’s office, legislative offices, and is the County seat for Kent County. The City currently occupies a land area of 23.74 square miles and serves a population of approximately 37,686. Dover’s governing body is composed of a Mayor and nine Council Members, with one Council Member elected by Council to serve as Council President. Two members of City Council are elected from each of the four districts; the ninth Council member of Council and the 1

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section Mayor are elected at-large. The Council is responsible for all matters of policy and is the authority for levying taxes, securing revenues, authorizing expenditures of City funds and incurring City debts. The City of Dover operates under a Council – Manager Form of government. The City provides a full range of services as mandated by the Charter or adopted by the City Council. They include police protection, street and sanitation maintenance, recreation, library, community development, economic development, public improvements, planning and zoning, safety inspections, electric power generation and distribution, water and wastewater services, legislative services and general administration. Within the City is a volunteer fire company that is autonomous. Under established criteria, the operations of the Robbins Hose Fire Company are not a part of this report. However, the City provides financing for dispatching personnel costs, most of the building and equipment maintenance, supplies, and contractual services. The City also provides funding to Robbins Hose for payments on several pieces of firefighting apparatus. These payments are grouped under the Fire Department and are included in the General Fund. The Fire Chief is elected by the volunteer members of the Fire Company. The City Council traditionally adopts the election and officially appoints the Fire Chief for a one-year term. Therefore, the position of Fire Chief is included in the City organization chart. The Capital School District does not meet the established criteria for inclusion in the reporting entity and, accordingly, is excluded from this report. The City Council shall, on or before the second Monday of June in each year, adopt a budget for the succeeding fiscal year. This annual budget serves as the foundation for the City of Dover’s financial planning and control. The budget is prepared by fund and department. With approval of the City Manager and Controller/Treasurer, Department Heads may transfer resources within or between departments, with the exception of capital project budgets. Transfers between funds and transfers of capital project budgets, however, need special approval from the City Council. ECONOMIC CONDITION AND FUTURE GROWTH The City of Dover is distinguished as the dominant center of employment, commerce, educational opportunity, and cultural activity in Central Delaware. Economic growth appears to be occurring in Dover, as evidenced by the increased building permit activity and value of construction during the fiscal year. While still below the level of growth prior to the recession, Dover is experiencing a consistent level of new investment that reflects economic growth within the capital. Residential growth continues to improve, albeit slowly, and major institutions and government agencies continue to expand to meet the demands of a growing regional population and economy. Commercial corridor areas of U.S. Routes 13 and 113 and DE Route 8 have continued to be the center of commerce in Dover. Significant new projects have been proposed in the past year, expanding commercial services in this area, particularly along the U.S. Route 13 corridor. Efforts to revitalize the traditional urban core of downtown Dover have continued and gained a new breath of life with the designation of Dover’s Downtown Development District by Governor Jack Markell on January 11, 2015. Dover was one of three districts designated statewide, where development projects are eligible for a rebate of up to 20 percent of construction costs. These rebates, combined with other incentives offered by the City of Dover, Kent County, State of Delaware, and the Downtown Dover Partnership, have generated a new interest on the part of the development community. Dover is beginning to see renewed development activity, especially in the removal of 2

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section blighted houses and construction of new, owner-occupied units in these formerly depressed neighborhoods. Total value of construction was estimated at $41.6 million during Fiscal Year 2017. This is less than the $80.2 million of the previous year which saw large investments in new schools (Dover High School) and in projects at the Garrison Oak Technology Park. But encouraging news is that the recent investment is in new commercial, office and services facilities throughout the City, and is not driven by a couple of unusually large projects. The City of Dover issued 2,920 business licenses in Fiscal Year 2017. Building permits issued during this period total 2,420, which is an increase of 169 permits over the previous year; overall another indicator of expanding economic activity. Growth and development trends during Fiscal Year 2017 are further discussed and summarized below: Population Growth The 2010 U.S. Decennial Census, which was conducted in April 2010, found that 36,054 people reside in Dover. The Delaware Population Consortium estimates that the City of Dover’s population as of July 1, 2017 was 37,686, a population increase of 4.5% over the decennial Census. Recent residential building permit numbers suggest that the current estimates are low, not fully reflecting recent growth. Residential Development The City’s growth continues to lag the region in terms of new single family residential development, but the market for townhouses and apartments is especially strong. Many projects are fully subscribed before completion. Construction continues in such developments as Liberty Court, Tall Pines, Leander Lakes, the Village at McKee Branch, Blue Hen Apartments and Eden Hill Farm. A number of new single family homes have been constructed in the blighted areas near downtown, with more in planning for the upcoming year. Downtown residential units are also in high demand. These projects and others are expected to have a positive influence on the City’s annual rate of growth. Downtown Dover Redevelopment Downtown revitalization continues at an accelerated pace. Through the Downtown Development District designation, the work of the Downtown Dover Partnership, and the efforts of those involved in Restoring Central Dover program, new businesses have opened on Loockerman Street, safety concerns have been addressed, and new owner-occupied housing is rapidly changing the appearance and appeal of formerly blighted areas. The City, NCALL, Habitat for Humanity and others are involved in street lighting initiatives, sponsoring downtown events, and creating a much more positive image for Dover’s historic central business district. A pilot program (Unlock the Block) is being developed in conjunction with the State’s newly created Division of Small Business Development and Tourism to bring technical assistance to property owners and prospective businesses. The City’s Planning Office is working to make the Downtown Dover Development District’s various incentives easier to obtain and more widely known. Retail/Commercial Development Construction in the retail sector continues to show improvement during Fiscal Year 2017, particularly along the DuPont Highway corridor. Renovations were completed at the former Walmart site, Dover Town Center, and most of the tenant’s spaces are now occupied. Renovations were completed on the Lone Star Steakhouse to convert it to Mission Barbeque. The former Kmart location underwent 3

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section renovations to be the new home of Burlington Coat Factory and Big Lots, and two restaurants. During the year over 100,000 square feet of new commercial space was approved in such projects as Capital Station (65,000 square feet), Dover Dialysis Center, Dover Station, and Eden Hill (new medical space for A.I. Dupont de Nemours Health Care). Industrial Development While the significant new retail and office related sector has garnered much attention, the Dover economy is still well balanced with a solid mix of military, health, governmental, educational and industrial components. Health care in particular is booming with new facilities and services at Eden Hill and in the western part of the City, along with continued expansion of specialized care services, throughout the City. Delaware State University has begun a major student housing project while Wesley expands its occupational therapy offerings and both Del-Tech and Wilmington University show solid student enrollment growth. Infrastructure The City has several large water and sewer projects underway to upgrade pump stations, distribution and transmission mains. These projects will improve water quality and reduce the inflow/infiltration in our sewer system. The City continues to upgrade the electric transmission and distribution system with systematic upgrades to substations and the transfer of overhead distribution lines to underground lines in the electric territory subdivisions. The City and the State have several transportation projects underway, including the construction of the West Dover Connector, which will alleviate some of the traffic going through the downtown area. Summary While Dover continues to be affected by the nation’s economic downturn, fiscal year 2017 saw continued and meaningful growth in the state capital. Dover remains a center for commerce, as evidenced by the retail expansions seen during fiscal year 2017, as well as growth in services and new residential communities. As the economy rebounds, Dover is well positioned to support continued growth, and the investment associated with the State’s Downtown Development District program creates an optimistic future for the City of Dover. LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES The City completed the infrastructure build out of the Garrison Oak Technology Park (GOTP) which will service as a technology and industrial park. The design of the GOTP subdivision includes fifteen parcels, of which two are leased and two were sold. The parcels sold were to Uzin Utz, a German manufacturer of flooring compounds and Advantech a provider of security systems. The Dover Sun Park has occupied one of the parcels since 2010 and the Calpine 305 megawatt electric generating station was completed in May 2016. The City Council continues its focus on replacing or upgrading old infrastructure in order to improve the quality and reliability of our utility systems. In fiscal year 2017, $2.6 million of water and wastewater capital improvements were completed as well as another $1.2 million of infrastructure contributed by developers. This included the completion of S. New Street Water Main Replacement, Hazlettville Road Sewer Main and ancillary services, Retreat Pump Station Replacement, Delaware Avenue Sewer Main extension and N. State Street Lateral replacements. 4

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section The electric utility completed capital improvements of $2.8 million in fiscal year 2017. The major initiatives completed by our Transmission and Distribution crews were the completion of McKee Run Unit# 3 Boiler Stack Repairs, VanSant capacity increase and exhaust plenum replacement, switchgear replacements at various locations (i.e. E Dover High School, Kent County Building, Blue Hen Corporate Center), and conductors at the West Dover Connector. The City maintains a five-year Capital Investment Plan which serves as its planning and budgeting tool to program upgrades and replacements to its equipment, facilities, and infrastructure. As part of this process, operating expenses are identified and funding sources are determined. Managers are required to rank capital expenditures by criticality based on the impacts on customer service and revenue losses. The fiscal year 2017/2018 Capital Investment Plan includes $1.0 million for vehicles and equipment and $10.9 million of infrastructure and utility improvement projects. The Capital Investment Plan is presented to City Council each year during the budget workshops, and the final plan is approved by City Council along with the annual budget. FINANCIAL POLICIES AND FINANCIAL PLANNING Unassigned fund balances in the General Fund (13.1%) exceeded the policy guidelines of a minimum of 8% and maximum of 12% of current year operating revenues as approved by City Council in the City of Dover financial policies. This overage was attributed to lower than budgeted expenditures along all functions of the government due to attrition and vacancies, and as a result, the fiscal year 2018 budget will be adjusted to address the overage. The water and wastewater utility guidelines are to maintain a minimum budget balance of at least 8% and no greater than 17% (two months) of the current year operating revenues. The water utility ended the year with a budget balance greater than the 17% at (26%). The current budget balances as of June 30, 2017 for the utilities are water (26.0%) and wastewater (15.5%). The water and wastewater utilities are accounted for in the same fund and have a combined budget balance of (19.9%). The electric utility is to maintain a minimum budget balance of at least 12% (45 days) of the current year operating revenues less the power cost adjustment. If the balances fall below the established percentages, the City Manager is required to submit budgets to bring the balances up to minimum within three years. The electric utility ended the year with a budget balance greater than the 12% at 28%. This was attributed to lower than projected power supply and generation cost and higher than anticipated direct base sales. The fiscal year 2018 budget will include a distribution of prior year earnings to the electric customers in the form of a negative power cost adjustment. The City policies also require non-recurring revenues to be set aside for capital improvements as designated by City Council (reserve accounts) and a $700,000 contingency reserve in the General Fund, $250,000 each for the Water/Wastewater Fund contingency reserves and $750,000 contingency in the Electric Revenue Fund to address unforeseeable natural disasters and insurance losses. All major funds meet the contingency reserve requirements. The water and wastewater utilities impose impact fees, which are reserved by ordinance, on new developments or facilities to assist with financing future expansion projects. The electric utility maintains depreciation and future capacity reserves to assist with asset replacements and system expansions. Financial policies require the electric utility to maintain a minimum of $10.0 million in each of these reserves, with replenishment over seven years when used to finance projects. 5

2017 Comprehensive Amua} Financia,/ RepotlfortheCityofDover,Dejaniare Itxtroductory Sechon TheCity'sfinancial policies alsoincludeanElectricRateStabilization Reserve account. The purposeof this reserve is to level off the fluctuations in the wholesale power supply market and in turnprovide stable rates to the City's customers. Thereserve balance shall be maintainedat a minimumof 10% not to exceed 20% of the purchase power cost in any given year. lf the reserve balance exceeds the 20% maximum, a credit will be applied to the power cost adjustment. AWARDSAND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificateof Achievement for Excellence in Financial Reporting to the City of Dover, Delaware for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2016. Thiswas the thirty-second (32) consecuhve year that the City of Dover has achieved this prestigious award. lnorder to be awardeda Certificateof Achievement, a governmentunit must publishan easily readableand efficiently organized comprehensive annual financial report. Thereport must satisfy bothgenerally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensiveannual financial report continues to meet the Certificate of AchievementProgram's requirements,and we are submitting it to the GFOA to determine its eligibility for another certificate. TheFinanceDepartment extendsour thanksto you for your continuedinterestandsupportin andconducting planning the financialoperationsof the City in a responsible and progressive manner.l also expressmy appreciationto the manyCity employeesfor their assistance and during cooperation theyeartnpreparation of thisreport. My appreciation is extended to Mr.Dave Hugg 111, City Planner for his assistance with the preparationof the local economy section, andMs.Deborah Krueger for hersupport in thepreparation of the annual report. Special appreciationis extended to the employees of the Finance Department, whose pride and dedicated service continues to make this report and each year a success. R lly submitted, Lori T'eddicord ()t <c.>ci Controller/Treasurer 6

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section CITY OF DOVER, DELAWARE LIST OF ELECTED OFFICIALS JUNE 30, 2017 Length of Term Service Expires Mayor Robin R. Christiansen 3 Years May 2019 City Council At-Large * Timothy A. Slavin 4 Years May 2021 First District Matthew J. Lindell 1 Month May 2019 Tanner Wm. Polce 2 Months May 2021 Second District William F. Hare 6 Years May 2021 Brian E. Lewis 2 Years May 2019 Third District Scott W. Cole 2 Years May 2019 Fred A. Neil 2 Years May 2021 Fourth District David L. Anderson 6 Years May 2021 Roy Sudler, Jr. 2 Years May 2019 * Council President Note: length of service does not reflect previous, non-consecutive service, or interim appointment prior to permanent appointment 10

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section CITY OF DOVER, DELAWARE LIST OF APPOINTED OFFICIALS JUNE 30, 2017 Length Length of of Time Time in with the Position City City Clerk/Assistant Treasurer – Traci A. McDowell 11 Years 30 Years Acting City Manager/Civil Defense Director – Donna S. Mitchell 3 Months 17 Years City Solicitor – Nicholas H. Rodriguez 49 Years 49 Years Deputy City Solicitor – William W. Pepper 27 Years 27 Years Council President – Timothy A. Slavin 2 Years 4 Years City Assessor – Cheryl A. Bundek 8 Years 25 Years Acting City Building Inspector – David S. Hugg III 2 Months 2 Months Acting City Planner – David S. Hugg III 2 Months 2 Months Acting Controller/Treasurer – Lori Peddicord 2 Months 3 Years Fire Chief – Carleton Carey, Jr. 1 Year - Fire Marshal – Jason A. Osika 1 Year 15 Years Police Chief – Marvin C. Mailey 1 Month 23 Years Note: length of service does not reflect previous, non-consecutive service, or interim appointment prior to permanent appointment. 11

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section LIST OF COMMITTEES, COMMISSIONS, AND BOARDS Awards Committee Downtown Dover Partnership Board of Directors Kent County Tourism Board of Directors Peggy Angel Anita Evans Councilman Fred A. Neil Ronald R. Gough Lucy Findlay Georgia Van Sant Michael Harrington Kent Economic Partnership Board of Directors Maxine Lewis Councilman David L. Anderson Board of Adjustment Mitch May K.C. Sheth, Chair Todd Stonesifer Legislative, Finance and Administration Committee Arthur G. Ericson, Vice Chair Erin L. Thwaites Councilman William F. Hare, Chair William A. Hufnal Wendie Vestfall Daniel T. Shevock James N. Keller Chief Executive Officer of Bayhealth Foundation, Vacancy Courtney Stewart Richard D. Senato President of Wesley College, Robert E. Clark, II Other Post-Employment Benefits (OPEB) Board Board of Assessment Appeals Economic Development Committee Councilman Scott W. Cole Thomas Burns, Real Estate Brokerage of Sales Mayor Robin R. Christiansen, Chair Councilman Matthew J. Lindell James Galvin, Undesignated Acting City Manager, Donna S. Mitchell Acting City Manager, Donna S. Mitchell, Chair William Garfinkel, Undesignated Councilman William F. Hare Acting Controller/Treasurer, Lori Peddicord John Kelly, Accounting Councilman Scott W. Cole Human Resources Director, Kim Hawkins Todd Stonesifer, Real Estate Brokerage of Sales Gregory V. Moore James Welsh, Property Appraisal/Assessments Acting City Planner, David S. Hugg III Parks, Recreation and Community Enhancement Clayton E. Hammond II Councilman Roy Sudler, Jr., Chair Compensation Commission Kishor C. Sheth M. Milford Caldwell, Jr. Thomas J. Leary, Chair Ann Baker Horsey James Brockton Election Board Jean C. Taylor First District: Anita L. McDowell Boyer Planning Commission Clarence (Bud) Wagner II Second District: Cherrita L. Matthews At-Large: Dr. Bobby Jones Vacancy Third District: Curtis E. Raymond, Interim Chair First District: Kathleen Welsh, Vice Chair Controller/Treasurer, Donna S. Mitchell Fourth District: M. Milford Caldwell First District: Deborah L. Edwards Human Resources Director, Kimberly Hawkins Traci A. McDowell, City Clerk (Liaison Member) Second District: Thomas Holt Second District: Andrea Maucher Construction and Property Maintenance Code Board of Appeals Ethics Commission Third District: Dean Holden Councilman David L. Anderson Thomas C. Jackson, Chair Third District: Fred Tolbert, Chair Councilman Brian E. Lewis Robin F. Case Fourth District: John H. Baldwin, Sr. Councilman Fred A. Neil Gary Coy Fourth District: Kenneth Roach Charles Martin Andrew S. Moreland Adam M. Perza Nancy J. Shevock Police Pension Plan - Retirement Committee Councilman David L. Anderson Dover Fourth of July Celebration Committee General Employee Pension Plan Board of Trustees Councilman Brian E. Lewis Greg Patterson, President/Vice Chair Councilman David L. Anderson Councilman Brian E. Lewis Mayor Robin R. Christiansen, Chair Councilman Brian E. Lewis Chief of Police, Marvin C. Mailey Andrea Maucher, Vice-President Acting City Manager, Donna S. Mitchell (Ret. Lt.) Timothy Mullaney, Sr., Chair Jennifer Helms, Treasurer/Secretary Acting Controller/Treasurer, Lori Peddicord (Ret. Captain) Larry Gray Susan Betts Robert Gedney (Ret. Sgt.) Steve Rogers Carolyn D. Courtney Kristen Mullaney Gail Nemcic Teresa Tieman, Chair Public Advisory Committee of the Dover/Kent County MPO Karen Nickerson Dr. Carlton L. Cannon, Jr. Sarah Zimmerman Greater Dover Arts Council Jonathan Contant Chevis Anderson, Chair Karen McGloughlin Dover Housing Authority Sydney Arntz Vacancy (At-Large Alternate) Mark Harmon N. Taylor Collins Enrico LePore Caroline Greene Safety Advisory and Transportation Committee Cherritta L. Matthews Charles Guerin Councilman Brian E. Lewis, Chair Audrey Daniels Paul Janiga William T. Garfinkel Phillip McGinnis Tracey Miller Dana Shelton Sandra Mifflin-Taylor Cheryl Scheir Cynthia Witt Silver Lake Commission Dover Public Library Advisory Commission Sarah Zimmerman Dean E. Holden, Chair Councilman Scott W. Cole Nicholas A. Adams Zachery C. Carter Historic District Commission Tricia K. Arndt Gertrude Jackson Joseph McDaniel (Chair) Business Rep./Resident James A. Burcham Beth Petit De Mange Eric S. Czerwinski, Professional Zachery C. Carter Jill B. Street Ann Baker Horsey, Professional/Resident Lyle Allen Jones Robert S. Wetherall C. Terry Jackson II, Professional/Resident Richard Scrafford, Professional St. Jones Greenway Commission Dover/Kent County MPO Council James Burcham Mayor Robin R. Christiansen Human Relations Commission Michael P. Mercer At-Large: Sara Herbert Acting City Parks and Recreation Director, David S. Hugg III Downtown Dover Partnership Board of Directors First District: Paul Fleming Gregory V. Moore (President) First District: Vacancy Technical Advisory Committee of the Dover/Kent County MPO Acting City Manager, Donna S. Mitchell Second District: Vacancy Public Works Director, Sharon Duca Acting City Planner, David S. Hugg III Second District: Theodore Henderson, Chair Acting Director of Planning and Community Development, Councilman David L. Anderson Third District: Alan Gaddis David S. Hugg III Councilman William F. Hare Third District: Wanda Mullen Councilman Fred A. Neil Fourth District: Rita Mishoe Paige Utility Committee Mayor Robin R. Christiansen Fourth District: Vacancy Councilman Scott W. Cole, Chair State of Delaware Representative - Vacancy Tricia Arndt Diane Laird, Office of Economic Development Lester L. Blakeman, Sr. Timothy A. Slavin, Office of the Secretary of State Brian Bushweller, State Senator - 17th District Sean M. Lynn, State Representative - 31st District 12

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section ORGANIZATION CHART 13

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section Vision The City of Dover is a place where people want to live! Through the team effort of its elected officials, employees, and citizens, Dover is a clean and safe community, with a future of balanced growth and opportunity where all citizens are heard, enjoy a high quality of life, and diversity is valued. 14

Financial SECTION THIS SECTION INCLUDES THE FOLLOWING: PART A REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS PART B MANAGEMENT’S DISCUSSION AND ANALYSIS PART C BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Fund Financial Statements Notes to Financial Statements PART D REQUIRED SUPPLEMENTARY INFORMATION PART E SUPPLEMENTARY INFORMATION Combined Fund Statements Budgetary Schedules 18

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2014 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part A FINANCIAL SECTION PART A REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 15

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Report of Independent Public Accountants – Part A 16

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Report of Independent Public Accountants – Part A 17

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Report of Independent Public Accountants – Part A 18

FINANCIAL SECTION PART B MANAGEMENT’S DISCUSSION AND ANALYSIS 19

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B The City of Dover Management’s Discussion and Analysis For the Year Ended June 30, 2017 The City of Dover management offers readers of the City of Dover financial statements this narrative overview and analysis of the financial activities of the City of Dover for the fiscal year ended June 30, 2017. Readers are encouraged to consider the information included in the management’s discussion and analysis along with additional information that we have presented in our letter of transmittal, which can be found on pages 1-6 of this report. Financial Highlights Governmental Accounting Standards Board Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other than Pension Plans and Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions have been implemented during fiscal year 2017. The result of this implementation was an adjustment to both the Governmental and Business-Type Activities Net Position of negative $31.1 million and negative $14.5 million respectively. Total assets of the City exceeded its liabilities by $186.6 million (net position). Of this amount, ($23.0) million was reported as a deficit in “unrestricted net position”, which represents the amount available to meet the City’s ongoing obligations to citizens and creditors. The general government reported an unrestricted deficit of $44.1 million and the business type activities, Water/Wastewater and Electric funds, reported $21.1 million of positive unrestricted net position. The difference between the unrestricted amounts and the total net position is $209.6 million, $44.5 million is restricted primarily for debt and capital construction purposes, and $165.1 million is net investment in capital assets.  The governmental activities experienced: an increase of $0.1 million invested in capital assets, a decrease in restricted net assets of $0.6 million, and a decrease of $21.9 million in unrestricted net position. The current year resulted in a positive net position from operations of $8.7 million; however, combined with the Net OPEB Liability adjustments related to the implementation of GASB 75 of a negative $31.1 million, the overall change in net position was a negative $22.4 million.  The business-type activities experienced: an increase of $0.1 million invested in capital assets, an increase in restricted net position of $7.2 million and a decrease of $5.8 million in unrestricted net position. The current year resulted in a positive net position from operations of $15.9 million; however, combined with the Net OPEB Liability adjustments related to GASB 75 of negative $14.5 million, the overall change in net position was a positive $1.5 million. 21

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B Overview of the Financial Statements This Comprehensive Annual Financial Report (CAFR) consists primarily of three required parts - management’s discussion and analysis (this section), the basic financial statements and required supplementary information. The CAFR also includes optional supplementary information that provides summary information and detail, and a statistical section. The basic financial statements are of two kinds that present different views of the City:  The first two statements are government-wide financial statements (pages 39-40) that provide both long-term and short-term information about the City’s overall financial status.  The remaining statements (pages 41-49) are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. - The governmental fund statements (pages 41-44) tell how general government services, like community services, planning, public safety, and public works, were financed in the short term as well as what remains for future spending. - Proprietary fund statements (pages 45-47) offer short and long-term financial information about the activities the government operates like businesses, which for the City of Dover are the Electric and Water/Wastewater Funds. - The Fiduciary fund statements (pages 48-49) provide information about the financial relationships in which the City acts solely as a trustee or agent for the benefit of others, to whom the resources belong. The City is the trustee, or fiduciary, for its Employee and Police Pension plans and Other Post-Employment Benefits plan and acts in an agency capacity for the Dover Downtown Partnership and Fourth of July Celebration Committee, none of which are considered to be component units of the City. All of the City’s Fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Fiduciary Net Position. We exclude these activities from the City’s other financial statements because the City may not use these assets to finance its operations. The City is responsible for insuring that the assets reported in these funds are used for their intended purposes. The financial statements also include notes (pages 51-108) that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information (pages 109-122) that further explains and supports the information in the financial statements. Other supplementary information includes details on non-major funds and other information that can be found on pages 123 through 146. The following page summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and content of each of the statements: 22

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B Major Features of City’s Government-wide and Fund Financial Statements Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Scope Entire City The activities of the Activities the City Instances in which government City that are not operates similar to the City is the (except fiduciary proprietary or private businesses, trustee or agent funds) fiduciary, such as such as electric, for someone public safety and water and else’s resources public works wastewater funds Required financial  Statement of  Balance sheet  Statement of  Statement of statements net position  Statement of net position fiduciary net  Statement of revenues,  Statement of position activities expenditures, revenues,  Statement of and changes in expenses and changes in fund balances changes in net fiduciary net position position  Statement of cash flows Accounting basis Accrual Modified accrual Accrual accounting Accrual and measurement accounting and accounting and and economic accounting and focus economic current financial resources focus economic resources focus resources focus resources focus Type of All assets Generally, assets All assets deferred All assets and asset/deferred deferred outflows and deferred outflows of liabilities, both outflows of of resources, outflows of resources, short-term and resources/liability/ liabilities, and resources expected liabilities, and long-term deferred inflows deferred inflows to be used up and deferred inflows of of resources of resources both liabilities and resources both information financial and deferred inflows of financial and capital, and short- resources that come capital, and short- term and long- due or available term and long-term term during the year or soon thereafter, no capital assets, or long-term liabilities included Type of All revenues and Revenues for which All revenues and All revenues and inflow/outflow expenses during cash is received expenses during the expenses during information the year, during or soon after year, regardless of the year, regardless of the end of the year; when cash is regardless of when cash is expenditures when received or paid when cash is received or paid goods or services received or paid have been received and payment is due during the year or soon thereafter 23

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B Government-wide Statements The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the City of Dover’s assets, liabilities, and deferred inflows and outflows of resources with the difference reported as net position. Net position is one way to measure the City’s financial health or position. Over time, increases or decreases in the City’s net position is an indicator of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the City, one needs to consider additional non-financial factors such as changes in the City’s property tax base and the condition of the City’s physical assets and infrastructure. The government-wide financial statements of the City are divided into two categories:  Governmental activities—Most of the City’s basic services are included here, such as general government, public safety, planning and code enforcement, public works, library and recreation, community and economic development, central services and financial administration. Property taxes, business licenses, permits, sanitation fees, fines, utility transfers and state and federal grants finance most of these activities.  Business-type activities—The City charges fees to customers to help it cover the costs of certain services it provides. The City’s electric, water, and wastewater services are included here. Fund Financial Statements The fund financial statements provide more detailed information about the City’s most significant funds—not the City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law and by covenants. The City Council may also establish other funds to control and manage money for particular purposes. The City has three kinds of funds:  Governmental Funds - Most of the City’s basic services are included in governmental funds, which focus on (1) how cash, and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps one determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Since this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information on a separate page, which explains the relationship (or differences) between them. - Governmental Fund Balance classifications are reported to the extent to which they are constrained as promulgated by Governmental Accounting Standards Board Statement No. 54. - The City’s General Fund is the only governmental fund considered to be a major fund under the requirements of Governmental Accounting Standards Board Statement No. 34.  Proprietary Funds – Services, for which the City charges customers a fee, are generally 24

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long and short-term financial information. - The City’s enterprise funds (one type of proprietary fund) are the same as its business- type activities, but provide more detail and additional information, such as cash flows. - The City’s two enterprise funds are both considered major funds under the requirements of GASB Statement No. 34.  Fiduciary Funds – The City is responsible for assets that because of a trust arrangement can be used only for the trust beneficiaries. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All the City’s fiduciary activities are reported in a separate statement of fiduciary net assets and a statement of changes in fiduciary net assets. We exclude these activities from the City’s government- wide financial statements because the City cannot use these assets to finance its operation. Financial Analysis of the City as a Whole The City produces government-wide financial statements using the full accrual basis of accounting and economic resource management focus. As year-to-year financial information is accumulated on a consistent basis, changes in net assets may be observed and used to discuss the changing financial position of the City as a whole. The Net Position, of the City of Dover, as of June 30, 2016 and 2017 are as follows (presented in millions of dollars): Governmental Business-Type Activities Activities Total 2016* 2017 2016* 2017 2016* 2017 Assets Non-Capital Assets $ 14.8 $ 15.2 $ 86.9 $ 96.4 $ 101.7 $ 111.6 Capital Assets 61.1 60.5 141.3 139.9 202.4 200.4 Total Assets 75.9 75.7 228.2 236.3 304.1 312.0 Deferred Outflow of Resources 3.2 4.7 1.4 1.3 4.6 6.0 Liabilities Current Liabilities 2.8 3.4 8.9 7.9 11.7 11.3 Non-Current Liabilities 42.2 57.7 46.0 51.1 88.2 108.8 Total Liabilities 45.0 61.1 54.9 59.0 99.9 120.1 Deferred Inflow of Resources 1.1 8.7 0.2 2.6 1.3 11.3 Net Position Net investment in Capital Assets 54.3 54.4 110.6 110.7 164.9 165.1 Restricted 0.9 0.3 37.0 44.2 37.9 44.5 Unrestricted (22.2) (44.1) 26.9 21.1 4.7 (23.0) Total Net Position $ 33.0 $ 10.6 $ 174.5 $ 176.0 $ 207.5 $ 186.6 * The City implemented GASB 75 effective July 1, 2016. The 2016 net position amounts have not been restated to reflect the implementation of GASB 75. 25

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B The Changes in Net Position, for the City of Dover, as of June 30, 2016 and 2017 are as follows (presented in millions of dollars): Governmental Business-Type Activities Activities Total 2016* 2017 2016* 2017 2016* 2017 Revenues: Program Revenues Charges for Services $ 10.5 $ 10.7 $ - $ - $ 10.5 $ 10.7 Water/Wastewater Charges for Services - - 15.0 16.0 15.0 16.0 Electric Charges for Services - - 80.7 83.6 80.7 83.6 Operating Grants and Contributions 2.7 2.0 - - 2.7 2.0 Capital Grants and Contributions 0.7 0.4 - 1.2 0.7 1.6 General Revenues Property Taxes 12.8 12.9 - - 12.8 12.9 Transfer Taxes 2.2 1.6 - - 2.2 1.6 Earnings on Investments-Other 0.3 0.1 1.1 0.4 1.4 0.5 Total Revenues 29.2 27.7 96.8 101.2 126.0 128.9 Expenses General Government 5.7 4.5 - - 5.7 4.5 Public Safety 20.0 14.9 - - 20.0 14.9 Public Works 8.1 7.6 - - 8.1 7.6 Library and Recreation 2.2 2.9 - - 2.2 2.9 Community and Economic Development 0.7 0.4 - - 0.7 0.4 Central Services 1.5 1.4 - - 1.5 1.4 Financial Administration 3.4 3.1 - - 3.4 3.1 Interest Charges 0.1 0.1 - - 0.1 0.1 Plus (less) Indirect Expense Allocation (5.1) (5.0) 5.1 5.0 - - Water/Wastewater - - 10.5 9.8 10.5 9.8 Electric - - 57.4 59.6 57.4 59.6 Total Expenses 36.6 29.9 73.0 74.4 109.6 104.3 Change in Net Position before Transfers (7.4) (2.2) 23.8 26.8 16.4 24.6 Transfers 16.3 10.9 (16.3) (10.9) - - Change in Net Position 8.9 8.7 7.5 15.9 16.4 24.6 Net Position, beginning of year 24.1 33.0 167.0 174.6 191.1 207.6 Prior Period Adjustment - Net OPEB Liability - (31.1) - (14.5) - (45.6) Net Position, Beginning of Year restated 24.1 1.9 167.0 160.1 191.1 162.0 Net Position, End of Year $ 33.0 $ 10.6 $ 174.5 $ 176.0 $ 207.5 $ 186.6 * The City implemented GASB 75 effective July 1, 2016. The 2016 revenue and expense amounts have not been restated to reflect the implementation of GASB 75. 26

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B Governmental Activities The preceding table shows changes in net position for the year ended June 30, 2017 compared to the year ended June 30, 2016. Governmental net position decreased by $22.4 million; this is a decrease of $31.3 million over the prior years’ positive change in net position. The beginning net position as of July 1, 2016 for governmental activities was restated by ($31.1) million, to adjust the Net OPEB liability for early implementation of GASB 75. In the past, the OPEB expense was the amount of the employer contribution. Current reporting provides a more comprehensive measure of OPEB expense which is more reflective of the benefit amounts employees earned during the year. The $22.4 million decrease in net position previously mentioned is primarily a result of the GASB 75 Net OPEB Liability restatement in the amount of negative $31.1 million offset by a positive $8.7 million in current year operations. The $8.7 million increase in net position is a decrease from prior years’ change in net position of $8.9 million. Total revenues of $27.7 million were less than the prior year by $1.5 million. The decrease in revenues is due to decreases in: operating grants and contributions, capital grants and contributions, transfer taxes and earnings on investments-other totaling $1.8 million. The decreases were offset by increases in charges for services and property taxes totaling $0.3 million. Total expenses in the amount of $29.9 million reflects an overall decrease from the prior year. The decrease in expenses of $6.7 million from the prior year is due to decreases in all functions of government except for library and recreation which had an increase of $0.7 million and central services and interest charges which remained constant. The decreases are primarily due to the change in the reporting requirements in recording the Net OPEB Liability and associated expenses. Additionally, the current year had a decrease in transfers-in of $5.4 million from the prior year, as the prior year had a one-time adjustment for recording pension liability and expenses. The chart that follows allocates revenues to program costs as applicable. It shows that some City functions are in part self-supporting either through customer charges or inter-fund charges through the utilities (presented in millions of dollars): 27

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B Expenses, Program Revenue & Interfund Receipts - Governmental Activities $16 $14.9 $14 $12 $10 Millions $8 $7.6 $6.0 $6 $4.5 $4 $3.5 $3.1 $2.9 $2.4 $2.3 $2 $1.4 $1.1 $1.0 $0.9 $0.7 $0.2 $0.4 $0 General Public Safety Public Works Library & Community & Central Services Financial Government Recreation Economic Administration Development Interfund Receipts Revenues Expenses The following chart shows the sources of funding for program costs for the last fiscal year. As can be seen, a substantial portion of funding for governmental operations is provided by property taxes, charges for services and transfers from the utilities. Revenues by Source - Governmental Activities Interfund Receipts 11% Charges for Services 24% Utility Transfer In Operating Grants 25% and Contributions 5% Capital Grants and Contributions Transfer Taxes 1% 4% Property Taxes 30% 28

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B Business-Type Activities The business-type activities saw an increase in net position of $1.5 million. Both the water/wastewater and electric utilities experienced an increase in charges for services of $1.0 million and $2.9 million, respectively. There was $1.2 million in capital grants and contributions received for the utilities in the current year. The indirect expense allocation decreased by $0.1 million as well as the expense for the water/wastewater utility in the amount of $0.7 million, conversely the expense for the electric utility increased by $2.2 million which resulted in a combined net increase in expense of $1.4 million. Transfers out to the general fund included $0.9 million from the water/wastewater utility and $10.0 million from the electric utility. The beginning net position as of July 1, 2016 for business-type activities was restated by ($14.5) million, to report the Net OPEB liability for early implementation. In the past, the OPEB expense was the amount of the employer contribution. Current reporting provides a more comprehensive measure of Net OPEB liability and expense which is more reflective of the benefit amounts employees earned during the year. The water/wastewater utility realized a positive change in net position of $4.8 million. The utility experienced an increase in operating income of $1.0 million from the previous year. The increase in operating income was due to an increase in water fee revenue of $0.3 million related to higher usage and an increase in water and wastewater impact fees of $0.8 million offset by small decreases in wastewater fees, ground water adjustment fees and the wastewater treatment fees totaling $0.1 million. Expenses in the water/wastewater fund decreased by $0.7 million due to a decrease in water/wastewater services. The depreciation expense for water/wastewater increased by $0.2 million. Contractor contributions increased by $1.2 million from the prior year and attributed to the positive change in net position. Finally, the transfers out decreased by $1.9 million mainly due to the prior year’s one-time adjustment for recording pension liability and expense. The electric utility realized a positive change in net position of $11.2 million. The revenues increased by $2.9 million attributed to an increase in power usage by customers and in General Service billing for installation of electrical infrastructure and meters to private companies. Expenses in the Electric Fund increased in total by $2.2 million including power supply and generation in the amount of $1.1 million, discount to customers in the amount of $1.8 million, and retiree’s healthcare in the amount of $0.6 million. The offsetting decreases were attributed to the following: $0.2 million indirect expense allocation, $0.5 million for the general and administration function, $0.2 million for depreciation, $0.2 million for engineering function and $0.3 million for the Transmission and Distribution function. Finally, the transfers out decreased by $3.3 million mainly due to the prior year’s onetime adjustment for net pension liability. 29

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B Operating Revenues, Expenses and Transfers - Business-Type Activities $90.0 $84 Operating $80.0 $70 Revenues & $70.0 Millions Transfers $60.0 $50.0 Operating Expenses & $40.0 Transfers $30.0 $20.0 $16 $12 $10.0 $- Electric Revenue Fund Water/Wastewater Fund The chart above does not include Contractor Contributions. Financial Analysis of the City’s Funds Governmental Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Government funds focus on expendable resources and near-term inflows and outflows of those resources. As such, fund balance is generally a good indicator of net resources available for spending at the end of the fiscal year, subject to any stated restrictions on its use. The combined fund balances of the City’s governmental funds as of June 30, 2017, were $10.4 million. This represented an increase of $0.5 million during the year. Approximately 54% of the combined fund balances, $5.5 million, constitutes unassigned fund balance, which is available to meet the City’s current and future needs. The remainder of fund balance is non-spendable, restricted, committed or assigned to indicate that it is not available for operational spending because it is constrained by legally enforceable contracts, other governmental agreements and legislation, City Council resolution or it is not convertible to cash within a reasonable period of time. Further detail of fund balances is presented in the Notes to the Basic Financial Statements in Note 7. The General Fund is the primary operating fund of the City, accounting for such activities as general government, public safety, public works, library, recreation, planning, community and economic development, central services and financial administration. The General Fund balance as of June 30, 2017, was $10.1 million. Revenue decreased by $0.2 million due to a decrease in miscellaneous services of $0.2 million, investment income of $0.1 million and other decreases in library revenue county reimbursement, sanitation fees and grants received totaling $0.1 million, offset by increases totaling $0.2 million in fines, library revenue-general, licenses and permits, property taxes and court of chancery fees. Expenditures decreased $1.7 million mainly due to a decrease in street program capital outlay of $1.8 million since the Garrison Oak Tech Park street infrastructure was completed in the prior year and $0.6 million in employee pension unfunded liability expense. Other decreases were across the general government, 30

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B recreation services, public safety and law enforcement and financial administration functions totaling $0.3 million. The previously mentioned decreases were offset by increases across the following functions: library services for adding passport services and a new custodial contract and public works for purchasing 4 new trucks in the grounds division and an in public works administration for salaries and fringes all totaling $0.4 million. Additional increases were for retiree health care for $0.5 million and other expenditures in engineering services, garage and stores, insurance, community and economic development, street lights and debt service totaling $0.2 million. Proprietary Funds The City’s proprietary funds provide the same type of information found in the government- wide financial statements, but in more detail. As of June 30, 2017, the water/wastewater fund has a net position of $55.5 million, of which $2.5 million is unrestricted. The fund’s net position increased $4.8 million during the year as explained on page 29. As of June 30, 2017, the electric revenue fund has a net position of $120.6 million, of which $18.6 million is unrestricted. This fund experienced an increase in net position of $11.2 million during the year as explained on page 29. General Fund Budgetary Highlights During this fiscal year, the City Council amended the budget one time. This budget amendment or supplemental appropriation ordinance was primarily for the following purposes: 1. To re-appropriate budget balances for ongoing capital projects. 2. To amend the grant budgets, reserve accounts for the actual results from the prior fiscal year and all carried forward budget balances for the major operating funds from the prior fiscal year, as well as program revenues and expenses based on changes in program revenues, expenses based on actual amounts. The General Fund financials in the Governmental Funds Balance Sheet (page 41) and Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds (page 43) include both the General Fund operating activities and the Governmental Capital Project Fund activities. The General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget & Actual is included in Part D – Required Supplementary Information (pages 112-113). The Governmental Capital Projects Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual is included in Part E – Supplementary Information (page 128). The Combining Statements – Combining General Fund Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund and the General Capital Projects Fund is included in Part E – Supplementary Information (page 126 & 127). The Final General Fund Budget incorporated the following two changes to the Original Budget. The Budget Balance carried forward from the prior fiscal year was higher by $0.9 million 31

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B than was projected. Revenues had an increase of approximately $0.1 million. The increase was for inter-fund service receipts attributed to an increase in staffing in the Customer Service department that is partially paid for by the utilities through the inter-fund service receipts. Budgeted expenditures were revised to reflect an aggregate increase of $0.9 million. The increases were reflective of an appropriation to the Capital Asset Reserve in the amount of $0.2 million and a transfer to Capital Fund for Projects in the amount of $0.5 million to cover an acquisition of nuisance properties located on Water Street. Additionally, there were increases in staffing within the Customer Services and Library departments in the amount of $0.1 million. The net result of these changes was a $0.2 million increase in the revised budget balance over the original budget balance (on a non-GAAP basis). Actual revenues and other financing sources received were above the final budgeted amounts in the General Fund by $0.2 million for the current fiscal year. The more signif icant positive variances were in permits and other licenses and court of chancery fees. These revenue increases were offset with revenue decreases in Fines & Police Revenue, inter-fund Services Receipts for Water/Wastewater and Electric and police pension grant receipts. Expenditures were approximately $1.2 million under budget a result of several operating departments experiencing personnel savings through attrition as well as lower than budgeted transfer to the Police Pension Fund. The General Fund budget balance carry forward was $1.4 million higher than budgeted a result of the above variances. Capital Asset and Debt Administration At the end of the current fiscal year, the City’s governmental and proprietary funds had invested $60.5 million and $139.8 million, respectively, in a variety of capital assets and infrastructure, as reflected in the following schedule, which represents a net d e crease of $0.6 million for governmental activities and a net decrease of $1.4 million for the business-type activities. The decrease in Governmental Activities is because current year depreciation was more than capitalized assets for the year. The decrease in Business-Type Activities is due to taking electric generating units 1 & 2 off-line. Additional detailed data for all capital assets of the City is presented in the Notes to the Basic Financial Statements in Note 4. The following schedule is presented in millions of dollars. Governmental Business-Type Activities Activities Total 2016 2017 2016 2017 2016 2017 Depreciable Assets, Net Buildings $ 24.1 $ 23.6 $ - $ - $ 24.1 $ 23.6 Equipment 2.4 2.5 - - 2.4 2.5 Vehicles 1.5 1.7 - - 1.5 1.7 General Infrastructure 27.7 26.8 - - 27.7 26.8 Utility, Plant, Buildings, and - Infrastructure - - 136.0 134.9 136.0 134.9 Other 0.6 0.5 - - 0.6 0.5 Non-depreciable Assets Land 4.2 4.7 1.6 1.6 5.8 6.3 Construction in Progress 0.6 0.7 3.7 3.4 4.3 4.1 $ 61.1 $ 60.5 $ 141.3 $ 139.9 $ 202.4 $ 200.4 32

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B The chart below shows that the Net OPEB Liability for the Governmental Activities increased by $16.5 million, and the Net OPEB Liability for the Business-Type Activities increased as well by $7.8 million. The increases in Net OPEB Liabilities for both types of funds is due to the early implementation of Governmental Accounting Standards Board Statements 74 & 75. Additional detailed data for all debt of the City is presented in the Notes to the Basic Financial Statements in Note 5. The City Charter limits the amount of general obligation debt the City can issue in any one year to .25% of the taxable assessed value of real property within the City. The aggregate of amounts borrowed for which the full faith and credit of the City is pledged cannot exceed 5.0% of assessed value of real property within the City boundaries. The City has used 3.9% of its debt limit. The City of Dover’s non-current liabilities as of June 30, 2016 and 2017 are as follows (presented in millions of dollars): Governmental Business-Type Activities Activities Total 2016 2017 2016 2017 2016 2017 Non-current liabilities Liability for Compensated Absences $ 2.0 $ 2.4 $ 0.8 $ 0.7 $ 2.8 $ 3.1 Bonds (Net of Discount/Issuance Cost) 6.8 6.2 32.2 30.7 39.0 36.9 Net OPEB Liability 15.6 32.1 0.4 8.2 16.0 40.3 Net Pension Liability 17.8 17.0 12.5 11.5 30.3 28.5 $ 42.2 $ 57.7 $ 45.9 $ 51.1 $ 88.1 $ 108.8 Economic Factors and Next Year’s Budgets and Rates The City developed the fiscal year 2018 budget in accordance with the City’s financial policies ensuring all budgets are balanced and reserve requirements were adhered to. The following changes over fiscal year 2017 were incorporated into the fiscal year 2018 budget.  Property taxes and utility rates remained the same as the prior fiscal year.  Trash fees (in City) were increased to $21.00 per month.  Trash fees (outside City) were increased to $54.00 per month.  A power cost adjustment credit was increased from $0.00252 to $0.00855 for the electric utility due to lower power supply cost.  The City’s headcount remained constant at 450, however full-time positions increased by 4 and part-time positions decreased by 4 overall and were as follows: City Manager’s department decreased by 4.  Increases in wages based on collective bargaining agreements were included.  A 2.0% wage increase was included for non-bargaining employees.  Benefit rate changes were included for health insurance, pension, OPEB and worker’s compensation for a total $0.5 million.  Funded the capital investment plan with a commitment to providing dollars for necessary infrastructure and utility improvements. The General Fund operating revenues are projected to increase by 1.7% or $0.7 million and expenditures increasing by 1.5% or $0.6 million. The net increase was made up of an increase in permits and other fees $0.3 million, property taxes $0.1 million, sanitation fees $0.5 million due to increase in rates for current year, court of chancery fees $0.3 million, inter-fund service receipts 33

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B $0.2 million offset by decreases in police extra duty receipts $0.2 million, transfer tax fees $0.4 million and police pension grant $0.1 million. The increased expenditures were attributed to salary and fringes in every department other than grounds, police extra duty, streets and city managers totaling $1.2 million, appropriation to the police pension fund $0.1 million, appropriation to the general pension fund $0.1 million, uncollectible – trash and other $0.1 million, and small increases in insurance, bank and credit card fees, street lighting expense and retirees healthcare totaling $0.1 million offset by decreases in debt service due to the 2014 GO Bond series-A was redeemed $0.2 million, transfer to capital fund – projects $0.5 million and appropriation to the police pension – state grant $0.1 million. The Water/Wastewater Fund operating revenues are projected to remain neutral at $15.4 million and expense projections increased 4.8% or $0.7 million. The revenue is remaining neutral with a slight increase in water services and water tank space leasing of $0.2 million or 2.3% offset by decreases in all other revenues including wastewater services, wastewater treatment services, groundwater inflow adjustment, water impact fees, wastewater impact fees, interest and miscellaneous service fees of $0.2 million or 1.8%. The increase in expenses are related to the transfer to the Water/Wastewater capital project fund of $0.6 million for both the Water and Wastewater departments totaling $1.2 million. Additional increases to expense are for: Water Treatment Plant division for increase of salary and fringes and contractual services for UCMR monitoring, inter-fund service fees for increases in expense in allocated departments, retiree’s healthcare all totaling $0.2 million. The offsetting decreases to expense are in debt service $0.1 million, Kent County Treatment charge $0.2 million, transfer to the contingency reserves $0.2 million and the transfer to electric capital project fund of $0.2 million. The City continues to maintain competitive water and wastewater rates within the State of Delaware. The Electric Fund overall revenues are projected to increase by 0.8% or $0.6 million and expense projections increased by 9.1% or $7.2 million. Revenue increases are due to Customer sales $0.6 million attributed to higher sales, other revenue increases are for interest earnings due to actual interest realized in the preceding year and green energy all totaling $0.2 million. Offsetting decreases in revenues are to utility tax receipts, miscellaneous revenues and rent revenue all totaling less than $0.1 million. Expenses are increasing by $7.2 million mainly due to an increase in the transfer to the Rate Stabilization reserve of $4.0 million for fiscal year 2017 projected savings, transfer to electric capital project fund $2.5 million, contractual services – RFP’s $0.1 million, retiree health care $0.2 million due to retirements, internal service allocations $0.1 million, OPEB appropriation towards unfunded liability $1.0 million and pension appropriation towards unfunded liability $1.0 million. Offsetting decreases are to: power supply & generation $0.1 million, operating expenses $0.1 million because legal and consulting services associated with power supply and generation, were moved to other expenses for RFP’s and transfers to future capacity and depreciation reserves both decreased in total by $1.5 million. The City also budgeted a distribution of earnings to customers of $6.2 million or 5.5% of revenue, a result of lower cost of service than projected for fiscal year 2016. The electric power supply cost decreased $0.4 million but was offset by $0.3 million decrease in capacity revenue, netting a decrease in power supply cost of $0.1 million. Transfers to the capital project fund and rate stabilization reserve were included in the current budget for a total increase of $6.5 million. The appropriation to the capital project fund increased $2.5 million. The OPEB appropriation increased by $1.0 million due to an increase in the Net OPEB Liability and the Pension appropriation increased by $1.0 million due to an increase in the Pension Liability. Capital projects are budgeted to be financed with a $5.0 million transfer from operating income, and $0.4 million of developer charges for new development projects. 34

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Management’s Discussion & Analysis - Part B The City continues to closely monitor the local economy and its impact on growth and revenues. Revenue enhancements, rate increases, and potential cost reductions will continue to be reviewed in order to maintain the City’s financial policies. Contacting the City’s Financial Management This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Ms. Lori Peddicord, Controller/Treasurer at 302-736-4452 (TTY/TDD Operator 1-800-855-1155). 35

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FINANCIAL SECTION PART C BASIC FINANCIAL STATEMENTS 37

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Statement of Net Position June 30, 2017 Governmental Business-Type Activities Activities Total Assets: Cash and Cash Equivalents $ 3,388,615 $ 10,235,834 $ 13,624,449 Investments 9,396,693 29,227,685 38,624,378 Receivables, Net 865,436 6,300,242 7,165,678 Internal Balances 475,742 (475,742) - Due from Other Governments 109,146 - 109,146 Inventory 102,335 4,835,903 4,938,238 Prepaid Items 81,107 473,226 554,333 Restricted Cash and Cash Equivalents 742,474 2,961,652 3,704,126 Restricted Investments 18,538 42,797,754 42,816,292 Capital Assets, Not Being Depreciated 5,401,648 5,022,039 10,423,687 Capital Assets, Net of Depreciation 55,158,704 134,904,755 190,063,459 Total Assets 75,740,438 236,283,348 312,023,786 Deferred Outflows of Resources: Pension related Deferred Outflows 4,678,674 1,268,766 5,947,440 Liabilities: Accounts Payable and Accrued Liabilities 3,138,035 4,604,129 7,742,164 Unearned Revenue 107,316 495,182 602,498 Customer Deposits - 2,198,351 2,198,351 Other 225,061 550,808 775,869 Non-Current Liabilities Due within One Year 1,540,730 1,818,447 3,359,177 Due in more than One Year 7,028,392 29,651,138 36,679,530 Due in more than One Year - OPEB 32,120,477 8,130,748 40,251,225 Due in more than One Year - Pension 17,003,794 11,470,957 28,474,751 Total Liabilities 61,163,805 58,919,760 120,083,565 Deferred Inflows of Resources: Pension related deferred inflows 2,143,190 930,230 3,073,420 OPEB related Deferred Inflows 6,560,058 1,660,566 8,220,624 Total Deferred Inflows of Resources 8,703,248 2,590,796 11,294,044 Net Position: Net Investment in Capital Assets 54,350,984 110,779,002 165,129,986 Restricted for: Capital Projects 70,913 44,176,110 44,247,023 Public Safety Grants 205,493 - 205,493 Verizon Grant 6,035 - 6,035 Library Grant 20,463 - 20,463 Community Development Grants 3,470 - 3,470 Other State Grants 100 - 100 Unrestricted (44,105,399) 21,086,446 (23,018,953) Total Net Position $ 10,552,059 $ 176,041,558 $ 186,593,617 The notes to financial statements are an integral part of this statement. 39

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C 40

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Governmental Funds Balance Sheet June 30, 2017 Total Total General Nonmajor Governmental Fund Funds Funds Assets: Cash and Cash Equivalents $ 2,825,171 $ - $ 2,825,171 Restricted Cash and Cash Equivalents 462,391 280,083 742,474 Investments 7,972,206 - 7,972,206 Restricted Investments 18,538 - 18,538 Receivables, Net Accounts 675,486 126,800 802,286 Taxes 51,194 - 51,194 Due from Other Funds 572,697 3,679 576,376 Due from Other Governments - 109,146 109,146 Prepaid Items 63,364 3,993 67,357 Inventory, at Cost 102,335 - 102,335 Total Assets $ 12,743,382 $ 523,701 $ 13,267,083 Liabilities: Accounts Payable $ 2,053,517 $ 127,657 $ 2,181,174 Unearned Revenue 99,431 7,885 107,316 Due to Other Funds 14,963 85,671 100,634 Other 225,061 - 225,061 Total Liabilities 2,392,972 221,213 2,614,185 Deferred Inflows of Resources: Unavailable Revenue 228,830 - 228,830 Fund Balances: Non-Spendable 187,294 3,993 191,287 Restricted 7,979 298,495 306,474 Committed 2,441,641 - 2,441,641 Assigned 1,956,061 - 1,956,061 Unassigned 5,528,605 - 5,528,605 Total Fund Balances 10,121,580 302,488 10,424,068 Total Liabilities, Deferred Inflows and Fund Balances $ 12,743,382 $ 523,701 $ 13,267,083 The notes to financial statements are an integral part of this statement. 41

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2017 Amounts reported for governmental activities in the statement of net position (page 39) are different because: Total fund balances for governmental funds (Page 41) $ 10,424,068 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 60,560,352 Other assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the funds. Deferred inflows of resources $ 228,830 228,830 The Net Pension Liability & OPEB Liability is not due and payable in the current period; therefore, the liability and related deferred inflows/outflows are not reported in governmental funds: Deferred Outflows - Pension $ 4,678,674 Deferred Inflows - Pension (2,143,190) Deferred Inflows - OPEB (6,560,058) (4,024,574) An internal service fund (page 45) is used by the City to charge the cost of the workers' compensation fund. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. 1,246,280 Accrual basis of bond interest paid 496 Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities both current and long-term are reported in the statement of net position. Compensated absences represent amounts accrued for sick leave for those employees who are vested and accrued vacation for all employees. The Net Pension Liability and OPEB Liability are not a use of current financial resources, and therefore, are not reported in the governmental funds. Current- General Obligation Bonds $ (332,152) Compensated Absences (1,208,578) Police Officer separation agreement (190,000) (1,730,730) Long-Term- General Obligation Bonds $ (5,877,216) Compensated Absences (1,151,176) Net Pension Liability (17,003,794) Net OPEB Liability (32,120,477) (56,152,663) (57,883,393) Total net position of governmental activities (Page 39) $ 10,552,059 The notes to financial statements are an integral part of this statement. 42

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds For the Year Ended June 30, 2017 Total Total General Nonmajor Governmental Fund Funds Funds Revenues Fines $ 679,106 $ 463,616 $ 1,142,722 Library Revenue - General 67,647 - 67,647 Library Revenue County Reimbursement 312,914 - 312,914 Licenses and Permits 3,548,401 - 3,548,401 Sanitation Fees and Rebates 2,514,645 - 2,514,645 Recreation - 53,301 53,301 Miscellaneous Services 1,679,390 - 1,679,390 Property Taxes 12,929,597 - 12,929,597 Transfer Taxes - 1,634,707 1,634,707 Grants Received 585,558 1,800,502 2,386,060 Court of Chancery Fees 1,343,020 - 1,343,020 Investment Income 119,507 3,727 123,234 Total Revenues 23,779,785 3,955,853 27,735,638 Expenditures Current: General Government 2,023,756 2,812 2,026,568 Library Services 1,606,995 319,566 1,926,561 Public Safety and Law Enforcement 20,750,196 498,365 21,248,561 Public Works 1,837,056 282,130 2,119,186 Recreational Services 733,961 - 733,961 Streets and Sanitation Services 4,275,648 - 4,275,648 Engineering Services 219,198 - 219,198 Financial Administration 764,622 - 764,622 Garage and Stores 501,559 - 501,559 Insurance 295,923 - 295,923 Retiree Health Care 2,039,700 - 2,039,700 Community and Economic Development 150,000 299,356 449,356 Street Lights 811,992 - 811,992 Debt Service: Principal Retirement 573,497 - 573,497 Interest and Fiscal Charges 118,771 - 118,771 Total Expenditures 36,702,874 1,402,229 38,105,103 Excess (deficiency) of Revenues over Expenditures (12,923,089) 2,553,624 (10,369,465) Other Financing Sources (Uses) Transfers In 13,885,445 - 13,885,445 Transfers Out - (3,010,445) (3,010,445) Total other Financing Sources (Uses) 13,885,445 (3,010,445) 10,875,000 Net Change in Fund Balances 962,356 (456,821) 505,535 Fund Balances at Beginning of Year 9,159,224 759,309 9,918,533 Fund Balances at End of Year $ 10,121,580 $ 302,488 $ 10,424,068 The notes to financial statements are an integral part of this statement. 43

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2017 Amounts reported for governmental activities in the statement of activities (page 40) are different because: Net change in fund balances--total governmental funds (Page 43) $ 505,535 Governmental fund reports capital outlays as expenditures. However, in the statement of activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capitalization of net capital asset expenditures including CIP $ 2,973,131 Loss on assets disposed of during the year (60,362) Current year depreciation (3,460,455) (547,686) Governmental funds report the repayment of principal of general long-term debt as an expenditure but the repayment reduces the liability in the statement of net position. 573,497 Revenues that are not available to pay for current period expenditures are not reported as revenues in the funds. (44,411) Contractually required contributions are reported as expenditures in governmental funds; however, the statement of activities reports these amounts as deferred outflows. 248,541 Except for amounts reported as deferred inflows/outflows, changes in the net pension liability are reported as pension expense in the statement of activities. 421,642 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for the transactions that are not normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, assets are not recognized in governmental funds unless they represent current financial resources but are recognized in the statement of activities as they accrue. The following differences, therefore, occur between the statement of activities and the governmental funds. Increase in compensated absences $ (341,044) Police separation agreement payout (190,000) Bond interest accrual 496 Increase in OPEB Liability - General Fund 7,957,788 7,427,240 An internal service fund is used by the City to charge the costs of workers' compensation insurance to individual funds. The change in net position of the internal service fund is transferred to the governmental funds and amounts attributable to internal charges are then allocated to functional expenditures. Net revenue is allocated back to respective functions and business type activities, as appropriate. (10,676) Change in net position of governmental activities (Page 40) $ 8,573,682 The notes to financial statements are an integral part of this statement. 44

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Statement of Net Position - Proprietary Funds June 30, 2017 Governmental Business-type Activities Activities Water/ Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Assets Current Assets: Cash and Cash Equivalents $ 2,845,846 $ 7,389,988 $ 10,235,834 $ 563,444 Investments 7,875,977 21,351,708 29,227,685 1,424,487 Receivables, Net 960,762 5,339,480 6,300,242 11,956 Due from Other Funds-Charges 10,376 19,229 29,605 - Inventory 124,819 4,711,084 4,835,903 - Prepaid Items - 473,226 473,226 13,750 Total Current Assets 11,817,780 39,284,715 51,102,495 2,013,637 Non-Current Assets: Restricted Assets Cash 442,798 2,518,854 2,961,652 - Investments 5,308,213 37,489,541 42,797,754 - Capital Assets, Not Being Depreciated 1,637,136 3,384,903 5,022,039 - Capital Assets, Net of Depreciation 57,720,672 77,184,083 134,904,755 - Total Non-Current Assets 65,108,819 120,577,381 185,686,200 - Total Assets 76,926,599 159,862,096 236,788,695 2,013,637 Deferred Outflows of Resources: Pension Related Deferred Outflows 258,820 1,009,946 1,268,766 - Liabilities Current Liabilities: Accounts Payable and Accrued Expenses 1,209,155 3,394,974 4,604,129 767,357 Due to Other Funds - Charges 186,205 319,142 505,347 - Unearned Revenue - 495,182 495,182 - Accrued Interest Payable 108,831 441,977 550,808 - Customer Deposits - 2,198,351 2,198,351 - Revenue Bonds Payable 798,689 730,000 1,528,689 - Liability for Compensated Absences 86,533 203,225 289,758 - Total Current Liabilities 2,389,413 7,782,851 10,172,264 767,357 Non-Current Liabilities: OPEB Liability 3,139,596 4,991,152 8,130,748 - Net Pension Liability 3,858,274 7,612,683 11,470,957 - Revenue Bonds Payable 11,312,399 17,890,000 29,202,399 - Liability for Compensated Absences 92,747 355,992 448,739 - Total Non-Current Liabilities 18,403,016 30,849,827 49,252,843 - Total Liabilities 20,792,429 38,632,678 59,425,107 767,357 Deferred Inflows of Resources: Pension Related Deferred Inflows 290,160 640,070 930,230 - OPEB Related Deferred Inflows 641,208 1,019,358 1,660,566 - Total Deferred Inflows of Resources 931,368 1,659,428 2,590,796 - - Net Position Net Investment in Capital Assets 48,830,016 61,948,986 110,779,002 - Restricted for Capital Construction 4,167,715 40,008,395 44,176,110 - Unrestricted 2,463,891 18,622,555 21,086,446 1,246,280 Total Net Position $ 55,461,622 $ 120,579,936 $ 176,041,558 $ 1,246,280 The notes to financial statements are an integral part of this statement. 45

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds For the Year Ended June 30, 2017 Governmental Business-type Activities Activities Water/ Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Operating Revenues Charges for Services $ 14,270,657 $ 81,946,194 $ 96,216,851 $ - Miscellaneous Services/Income 1,746,311 1,668,084 3,414,395 938,395 Total Operating Revenues 16,016,968 83,614,278 99,631,246 938,395 Operating Expenses Water/Wastewater Services 7,031,099 - 7,031,099 - General Administrative 1,683,223 4,646,177 6,329,400 786,595 Power Supply - 43,554,438 43,554,438 - Transmission/Distribution - 2,983,697 2,983,697 - Engineering - 797,438 797,438 - Metering - 300,738 300,738 - Systems Operations - 435,112 435,112 - Utility Tax - 1,322,015 1,322,015 - Depreciation 2,166,413 5,513,295 7,679,708 - Contractual Services - - - 16,118 Taxes - - - 43,349 Retirees Health Care 192,400 709,300 901,700 - Self Insurance-Workers' Compensation - - - 112,003 Total Operating Expenses 11,073,135 60,262,210 71,335,345 958,065 Operating Income/Loss 4,943,833 23,352,068 28,295,901 (19,670) Non-Operating Revenues (Expenses) Interest Earned: Operating Funds 108,498 329,604 438,102 - Reserve Funds 81,993 476,090 558,083 21,998 Net Decrease in Fair Value of Investments (111,956) (505,069) (617,025) (13,004) Interest and Fiscal Charges (343,259) (884,704) (1,227,963) - Distribution to Customers - (1,845,936) (1,845,936) - Gain on Sale of Assets 37,128 41,592 78,720 - Total Non-Operating Revenue (expenses) (227,596) (2,388,423) (2,616,019) 8,994 Income before Contributions and Transfers 4,716,237 20,963,645 25,679,882 (10,676) Contractor Contributions - Infrastructure 1,201,963 - 1,201,963 - Transfers In - 231,200 231,200 - Transfers Out (1,106,200) (10,000,000) (11,106,200) - Total transfers (1,106,200) (9,768,800) (10,875,000) - Change in Net Position 4,812,000 11,194,845 16,006,845 (10,676) Total Net Position--Beginning 54,762,091 119,787,647 174,549,738 1,256,956 Prior period adjustment - OPEB Liability (4,112,469) (10,402,556) (14,515,025) - Total Net Position--Beginning as Restated 50,649,622 109,385,091 160,034,713 1,256,956 Total Net Position--Ending $ 55,461,622 $ 120,579,936 $ 176,041,558 $ 1,246,280 The notes to financial statements are an integral part of this statement. 46

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2017 Governmental Business-type Activities Activities Water Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Cash Flows from Operating Activities Receipts from Customers $ 15,887,299 $ 83,483,178 $ 99,370,477 $ - Payments to Suppliers (including Purchased Power) (6,538,805) (47,949,635) (54,488,440) (161,798) Payments to Employees (2,284,539) (4,636,016) (6,920,555) - Payments of Personnel Related Costs (1,439,305) (2,523,960) (3,963,265) 834,236 Internal Activity-Payments from (to) Other Funds 16,865 (301,379) (284,514) - Other Receipts (Payments) including Claims Paid 4,083,351 9,050,335 13,133,686 (474,360) Net Cash Provided by (used for) Operating Activities 9,724,866 37,122,523 46,847,389 198,078 Cash Flows from Noncapital Financing Activities Transfers Out (1,106,200) (10,000,000) (11,106,200) - Transfers In - 231,200 231,200 - Distribution to Customers - (1,845,936) (1,845,936) Net Cash Used for Noncapital Financing Activities (1,106,200) (11,614,736) (12,720,936) - Cash Flows from Capital and Related Financing Activities Acquisition and Construction of Capital Assets (2,723,857) (2,363,378) (5,087,235) - Principal Paid on Revenue Bond Maturities (777,703) (695,000) (1,472,703) - Interest Paid on Capital Debt (343,258) (884,704) (1,227,962) - Net Cash Provided by (used for) Capital and Related Financing Activities (3,844,818) (3,943,082) (7,787,900) - Cash Flows from Investing Activities Interest on Investments 108,498 329,604 438,102 - Redemption of Investment Securities 1,826,345 1,609,936 3,436,281 (19,132) Purchase of Investment Securities (6,271,135) (9,914,031) (16,185,166) 20,395 Interest on Restricted Cash 81,993 476,090 558,083 - Net Cash Provided by (used for) Investing Activities (4,254,299) (7,498,401) (11,752,700) 1,263 Net Increase in Cash and Cash Equivalents 519,549 14,066,304 14,585,853 199,341 Cash and cash equivalents June 30 (incl. $499,187 for W/WW fund and $1,668,369 for Electric fund reported in restricted accounts) 2,769,095 (4,157,462) (1,388,367) 364,103 Cash and cash equivalents July 1 (including $442,798 for W/WW fund and $2,518,854 for Electric fund reported in restricted accounts) $ 3,288,644 $ 9,908,842 $ 13,197,486 $ 563,444 Reconciliation of Operating Income to Net Cash Provided by (Used for) Operating Activities: Operating Income/(Loss) $ 4,943,833 $ 23,352,068 $ 28,295,901 $ (19,670) Adjustments to Reconcile Operating Income to Net Cash provided by (Used for) Operating Activities: Depreciation Expense 2,166,413 5,513,295 7,679,708 - Changes in Assets and Liabilities (Increase)/Decrease in Receivables (119,618) (296,317) (415,935) 1,044 (Increase)/Decrease in Due from Other Funds (10,051) (16,323) (26,374) - (Increase)/Decrease in Inventory 70,672 225,170 295,842 - (Increase)/Decrease in Prepaid Items - (120,538) (120,538) - (Increase)/Decrease in NPA for pension (446,164) 3,155,497 2,709,333 - (Increase)/Decrease in deferred outflow of resources 31,982 64,174 96,156 - Increase/(Decrease) in accounts payable and accrued expenses (589,898) (641,520) (1,231,418) 216,704 Increase/(Decrease) in deferred revenue - 99,659 99,659 - Increase/(Decrease) in due to other funds 16,865 (51,379) (34,514) - Increase/(Decrease) in Customer Deposits - 81,881 81,881 - Increase/(Decrease) in Liability for Compensated Absences (26,582) (66,268) (92,850) - Increase/(Decrease) in Net OPEB Liability 3,139,596 4,991,152 8,130,748 - Increase/(Decrease) in Net pension liability (340,670) (683,550) (1,024,220) - Increase/(Decrease) in deferred inflow of resources Pension 247,280 496,164 743,444 - Increase/(Decrease) in deferred inflow of resources OPEB 641,208 1,019,358 1,660,566 - Net Cash Provided by Operating Activities $ 9,724,866 $ 37,122,523 $ 46,847,389 $ 198,078 Non-Cash Investing, Capital and Financing Activities: Change in Fair Value of Investments $ (111,956) $ (505,069) $ (617,025) $ (13,004) Capital Contributions - Infrastructure 1,201,963 - 1,201,963 - The notes to financial statements are an integral part of this statement. 47

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Statement of Net Position Fiduciary Funds June 30, 2017 Pension OPEB Trust Trust Agency Funds Fund Funds Assets Cash and Cash Equivalents $ 3,123,156 $ 1,280,064 $ 733,221 Investments at Fair Value - Mutual Funds 50,204,270 28,248,757 - Receivables - - 3,579 Prepaid Items - - 3,188 Total Assets 53,327,426 29,528,821 739,988 Liabilities Accounts Payable 719,881 474,975 47,108 Due to Agencies - - 692,880 Total Liabilities 719,881 474,975 $ 739,988 Net Position Net Position Restricted for Pension and Retiree Health Benefits $ 52,607,545 $ 29,053,846 The notes to financial statements are an integral part of this statement. 48

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Basic Financial Statements – Part C City of Dover, Delaware Statement of Changes in Net Position Fiduciary Funds For the Year Ended June 30, 2017 Pension OPEB Trust Trust Funds Fund Additions: Net Investment Income $ 5,784,037 $ 3,073,693 City's Contribution-Payroll Based 2,876,657 1,559,528 City's Contribution-Lump Sum 670,000 3,043,200 Employee Contribution 202,175 - State Grants 444,317 - Other 4,029 - Total Additions 9,981,215 7,676,421 Deductions: Benefit Payments 5,274,236 2,662,737 General Administration 22,656 3,000 Total Deductions 5,296,892 2,665,737 Change in Net Position 4,684,323 5,010,684 Net Position - Beginning 47,923,222 24,043,162 Net Position - Ending $ 52,607,545 $ 29,053,846 The notes to financial statements are an integral part of this statement. 49

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section Notes to Financial Statements Year Ended June 30, 2017 INDEX PAGE 1. FINANCIAL REPORTING ENTITY A. The City of Dover , Delaware ...................................................................................53 B. Reporting Entity .......................................................................................................53 2. SIGNIFICANT ACCOUNTING POLICIES .................................................. 53 A. Basis of Presentation ................................................................................................54 B. Basis of Accounting and Measurement Focus ...........................................................55 C. New Pronouncements ...............................................................................................56 D. Capital Assets and Long -Term Liabilities .................................................................57 E. Budget Procedures ...................................................................................................58 F. Major Transfers ........................................................................................................59 G. Inventories and Prepaid Items .................................................................................59 H. Cash and Investments ..............................................................................................60 I. Accounts Receivable ..................................................................................................60 J. Restricted Assets .......................................................................................................60 K. Unbilled Service Receivables ....................................................................................60 L. Bond Accounts/Issuance Costs ................................................................................60 M. Deferred Outflows/Inflows of Resources ................................................................60 N. Fund Balances and Net Position ..............................................................................61 O. Estimates .................................................................................................................62 P. Net Position Flow Assumption .................................................................................62 3. DEPOSITS AND INVESTMENTS ................................................................ 62 A. Cash in Bank and Cash Equivalents ........................................................................62 B. Investments ..............................................................................................................62 4. CAPITAL ASSETS ......................................................................................... 67 5. LONG-TERM OBLIGATIONS ..................................................................... 69 A. Summary of Bonded Indebtedness by Issue ..............................................................69 B. Status of June 30, 201 7 – General Obligation Bonds ...............................................70 C. Change in Long-Term Debt ......................................................................................70 D. Debt Service Requirements ......................................................................................71 51

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section Notes to Financial Statements Year Ended June 30, 2017 INDEX PAGE 6. RESTRICTED NET POSITION .................................................................. 74 7. FUND BALANCES & NET POSITION ........................................................ 74 8. CHANGE IN ACCOUNTING PRINCIPLE AND RESTATEMENT OF NET POSITION ..................................................................................... 76 9. PROPERTY TAXES ..................................................................................... 76 10. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS ................ 77 A. Due To/From Other Funds – Charges and Allocations ............................................77 B. Interfund Transfers .................................................................................................77 11. RENTAL INCOME ..................................................................................... 77 12. MATERIAL COMMITMENTS ................................................................... 78 13. FORWARD CONTRACTS ............................................................................ 78 14. INSURANCE ............................................................................................... 81 A. Health Insurance – State of Delaware ......................................................................81 B. Workers’ Compensation Fund – Self-Insurance .......................................................81 C. Other than Health or Workers’ Compensation Insurance .........................................81 15. COMPENSATED ABSENCES ..................................................................... 81 16. OTHER POST-EMPLOYMENT BENEFITS ............................................. 82 Summary of Principal Plan Provisions as of July 1, 201 5 ..............................................83 17. DEFERRED COMPENSATION PLAN ....................................................... 91 18. RETIREMENT PLANS .............................................................................. 91 A. Defined Contribution Plan .......................................................................................92 B. Defined Benefit Plans .............................................................................................93 52

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2017 1. FINANCIAL REPORTING ENTITY A. The City of Dover, Delaware The City of Dover was incorporated in 1829 and is a municipal corporation governed by an elected mayor and a nine-member council. The accompanying financial statements present the financial position and operating results for fiscal year ended June 30, 2017. B. Reporting Entity In evaluating how to define the reporting entity, for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit was made by applying the criteria set forth in Generally Accepted Accounting Principles in the United States of America (GAAP). The criterion used is that set forth by Statement of Governmental Accounting Standards (GASB) number 14 and as updated by GASB 61 which defines the reporting entity as the primary government and those component units for which the primary government is financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Based upon this criterion, the following is a brief review of each potential component unit addressed in defining the government’s reporting entity. Included within the reporting entity: The City provides many services as follows - police protection, street maintenance, sanitation, recreation, library, community development, public improvements, planning, safety inspections, electric generation and distribution, water and wastewater services, legislative services and general administration, including employee benefits. These functions are part of the City’s daily operations and therefore are not legally separate component units. Not included within the reporting entity: The City has joined the State of Delaware Police Pension Plan for uniformed police officers employed by the City after September 1, 1982. The plan is completely managed by the State of Delaware and, therefore, is not included in the financial statements. The Robbins Hose Volunteer Fire Company and the Capital School District are not included within the financial reporting entity because they do not meet the criteria for inclusion set forth by GAAP. 2. SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. A summary of the more significant policies follows: 53

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements A. Basis of Presentation Government-wide Statements: The statement of net position and the statement of activities include the financial activities of the overall government, except for fiduciary activities. Individual funds are not displayed but the statements distinguish governmental activities, generally funded by taxes and other City revenue, from business-type activities (BTAs), generally funded in whole or in part with fees charged to external users. Eliminations have been made for the doubling-up effect of certain internal activities. The government-wide statement of activities presents a comparison between direct program expenses and program revenues for each function of the City’s governmental activities and for each of the City’s identifiable business-type activities. Direct expenses are those that are specifically associated with a program, function or activity. Program revenues include a) charges paid by the recipients or beneficiaries of goods or services offered by the programs and b) grants and contributions that are restricted for meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. The City allocates the costs of certain governmental services to the costs of business-type activities (indirect expense allocation). These costs include allocated amounts of city management, centralized budgetary formulation and oversight, accounting, financial reporting, payroll, fleet and building maintenance, procurement contracting and oversight, investing and cash management, personnel services, etc. The allocations are charged to the BTAs based on the use of these services. As a matter of policy, the costs of certain governmental functions are not allocated to the business-type activities such as tax assessor, planning and zoning, public safety, library and recreation and community services. Fund Financial Statements: The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows/outflows, fund equity, revenues and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The fund financial statements provide information about the City’s funds, including fiduciary funds. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as non-major funds. The City reports the following major governmental fund: General Fund The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The City reports the following major proprietary funds: Water/Wastewater Fund This fund accounts for transactions related to water and wastewater services, including the payment of fees to Kent County for the treatment of sewage. The City also holds lease agreements with cell phone companies for equipment placed on City water towers. 54

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Electric Revenue Fund This fund incorporates all transactions related to the generation, transmission and distribution of electricity. The City has contracted with both The Energy Authority and North American Energy Services to manage the City’s power supply and generation assets. The City reports the following non-major funds: Internal Service Fund The City has created one internal service fund to account for the activities related to self-insured Workers’ Compensation. Receipts are provided from contributions by the City’s three major funds. Expenses are related to payment of claims, premiums, and administration costs. Actuarial analyses are completed every three years to insure sufficient reserves for claims for the Workers’ Compensation Fund. Special Revenue Funds The City has eight Special Revenue Funds to account for proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Fiduciary Funds Fiduciary funds consist of trust and agency funds and are used to report assets held by the City in a trustee or agency capacity for other purposes. These funds are, therefore, not available to support City programs. The City is the trustee for the City’s two pension plans, the Police Pension Fund and the Employee Pension Fund, as well as, the Other Post-Employment Benefit Trust. The activity of these plans is accounted for in the Basic Financial Statements. Agency funds are used to account for assets held by the City as an agent for individuals, private organizations or other governments. The City has two agency funds. The City acts as the receiving and paying agent for the Downtown Dover Partnership and the Fourth of July Celebration Committee. B. Basis of Accounting and Measurement Focus Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting and the current financial resources measurement focus. Their revenues are recognized when they become measurable and available as net current assets. Revenues that are susceptible to accrual include property taxes, grants and billable service charges. All other revenues are accounted for when they are received. Property taxes are recognized in the fiscal period for which they are levied provided they are “available”- i.e., they are collected in the current period or are expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The City considers all 55

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements revenues reported in the governmental funds to be available if the revenues are collected within sixty-days after year-end, except for trash collection, which has a thirty-day collection period. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. The exception to this general rule is principal and interest on general long-term debt which is recognized when due. Also, claims and judgments and compensated absences are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. The government-wide financial statements as well as all proprietary and fiduciary trust funds are accounted for using the accrual basis of accounting and the economic resources measurement focus. Agency funds have no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities. A reconciliation of the governmental fund financial statements prepared on the modified accrual basis of accounting to the government-wide financial statements prepared on the accrual basis of accounting is also provided on pages 42 & 44. The types of transactions included in program revenues in the government-wide statement of activities include charges for services, operating grants and capital grants. Operating income reported in the proprietary fund financial statements includes revenue and expenses related to the continuing operations of the fund. Principal operating revenue for proprietary funds is charges to customers for sales and services. Principal operating expenses are the costs of providing goods and services, which include purchased power, administrative expenses and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. C. New Pronouncements GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions” was issued in June 2015 and is effective for periods beginning after June 15, 2017. This statement’s objectives are to improve information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. It also replaces statements No. 45 and No. 57 and establishes new accounting and financial reporting requirements for OPEB plans. The City implemented GASB 75 during the year ended June 30, 2017, as disclosed in note 8. GASB Statement No. 83, “Certain Asset Retirement Obligations” was issued in November 2016 and is effective for periods beginning after June 15, 2018. This Statement will enhance comparability of financial statements among governments by establishing uniform criteria for governments to recognize and measure certain AROs, including obligations that may not have been previously reported. This Statement also will enhance the decision-usefulness of the information provided to financial statement users by requiring disclosures related to those AROs. GASB Statement No. 84, “Fiduciary Activities” was issued in January 2017 and is effective for periods beginning after December 15, 2018. The requirements of this Statement will enhance 56

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements consistency and comparability by (1) establishing specific criteria for identifying activities that should be reported as fiduciary activities and (2) clarifying whether and how business-type activities should report their fiduciary activities. Greater consistency and comparability enhances the value provided by the information reported in financial statements for assessing government accountability and stewardship. GASB Statement No. 85, “Omnibus 2017” was issued in March 2017 and is effective for periods after June 15, 2017. The requirements of this Statement will enhance consistency in the application of accounting and financial reporting requirements. Consistent reporting will improve the usefulness of information for users of state and local government financial statements. GASB Statement No. 86, “Certain Debt Extinguishment Issues” was issued in May 2017 and is effective for periods after June 15, 2017. The requirements of this Statement will increase consistency in accounting and financial reporting for debt extinguishments by establishing uniform guidance for derecognizing debt that is defeased in substance, regardless of how cash and other monetary assets placed in an irrevocable trust for the purpose of extinguishing that debt, were acquired. The requirements of this Statement also will enhance consistency in financial reporting of prepaid insurance related to debt that has been extinguished. In addition, this Statement will enhance the decision-usefulness of information in notes to financial statements regarding debt that has been defeased in substance. GASB Statement No. 87, “Leases” was issued in June 2017 and is effective for periods after December 15, 2019. This Statement will increase the usefulness of governments’ financial statements by requiring reporting of certain lease liabilities that currently are not reported. It will enhance comparability of financial statements among governments by requiring lessees and lessors to report leases under a single model. This Statement also will enhance the decision- usefulness of the information provided to financial statement users by requiring notes to financial statements related to the timing, significance, and purpose of a government’s leasing arrangements. It is anticipated that this standard will not have a material effect on the financial statements. D. Capital Assets and Long-Term Liabilities Capital assets used in Governmental Fund type operations (general capital assets) are accounted for in the government-wide financial statements rather than in the funds. Public domain ("infrastructure") general capital assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, are capitalized in the government-wide financial statements along with other general capital assets. The capitalization threshold for the City’s assets is $5,000. Personal computers and related hardware valued under $5,000 are manually controlled by the Information Technology Department. All capital assets are valued at historical cost and donated capital assets are shown at acquisition value based on the developers’ cost of the infrastructure. Depreciation has been provided on general capital assets and is shown in Note 4. Depreciation has been provided over the estimated useful lives using the straight-line method. Estimated useful lives are as follows: Buildings 20 - 50 years Infrastructure 20 - 50 years Vehicles 5 - 7 years Equipment, Furniture & Fixtures 5 - 15 years 57

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Long-term liabilities expected to be financed from governmental funds and the long-term estimated liabilities for compensated absences are accounted for in the government-wide financial statements, but not in the governmental funds. Depreciation of all exhaustible capital assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is shown in Note 4 of this section. Depreciation in the proprietary funds has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are presented below: Buildings, Mains & Plant 25 - 90 years Improvements 15 - 20 years Equipment 5 - 15 years Vehicles 5 - 7 years Capital assets are maintained substantially and reported in accordance with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission (FERC) for the Electric Fund and the National Association of Regulatory Utility Commissioners (NARUC) for the Water/Wastewater Fund. E. Budget Procedures Legally adopted budgets are prepared for the General Fund, Water/Wastewater Fund, Electric Revenue Fund, the Internal Service Fund and the following non-major special revenue funds: Municipal Street Aid Fund, Electronic Red-Light Safety Program Fund, Community Development Block Grant Fund (Federal), State Department of Transportation Grants Fund (Community Transportation), Police Grant Funds, Substance Abuse Prevention Program Fund, Realty Transfer Tax Fund and Library Grants Fund. The General Governmental Capital Projects Fund provides for separate budgets to cover the planning and control of capital items for the governmental programs. The financial transactions of this fund are included in the financial statements of the General Fund. The Electric Improvement and Extension Fund and the Water/Wastewater Improvement and Extension Fund are sections of each utility enterprise. These sections are required by bond resolutions. Separate budgets for these funds cover the planning and control of only the capital items of the utilities. The financial transactions of these funds are included in the financial statements of the Electric Revenue Fund and the Water/Wastewater Fund. The City prepares the budget for the General Fund revenues on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. The budget and actual schedule in the legal budget format (non-GAAP), adopted by the City for the General Fund, the City’s major governmental fund, is presented in the required supplementary information section of this report. Budgets for the Electric Revenue Fund, Water/Wastewater Fund and Internal Service Fund are prepared on an accrual basis. Budgets are prepared under the assumption that the principal redemption of long-term debt must be assumed by Enterprise Fund activity in conformity with the bond ordinance. 58

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements The Combining General Fund Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund as well as the budget and actual schedules of the other funds are also presented in the supplementary information section of this report because they are “not required.” According to the City's procedures, the preceding year's ending net budgetary balances are considered as resources for the following year. The beginning balances become operating items of revenues in the budgets. Estimated ending budgetary balances provide the balancing amount for each budget. In accordance with the City’s financial policies, adopted by City Council, the General and Water/Wastewater funds are required to maintain an 8% minimum ending budget balance and the Electric fund is required to maintain a 12% minimum. These percentages are expressed as a percentage of operating revenues, excluding the beginning budget balance. Unassigned fund balances as a percentage of current year operating revenues for the General Fund, Water/Wastewater Fund and Electric Fund are 13.1%, 19.9% & 28% respectively and all are exceeding the financial policy maximum for each fund. Per the Financial policy, these overages will be addressed in the next year’s budget. F. Major Transfers The Electric Revenue Fund and Water/Wastewater Fund annually transfer a budgeted portion of their revenues to the General Fund. Transfers are also made from the Realty Transfer Tax Fund, Municipal Street Aid Fund, Electronic Red-Light Safety Program (ERLSP) Fund and Police Grant Funds to the General Fund. The purpose of these transfers is to provide routine subsidies to the General Fund for operating functions, capital project expenditures and debt service requirements. Several Special Revenue Funds represent a pass-through of State collected revenues on behalf of the City or other State revenues provided for in the State of Delaware Code. These receipts are thereafter transferred to the General Fund in support of public safety, City maintenance of State roads and other public services. Several transfers between the General Fund and the non-major governmental funds are netted in the government-wide financial statements. G. Inventories and Prepaid Items Both inventories and prepaid items are accounted for using the consumption method. Inventories are treated as operational expenditures at the time of use rather than at the time of purchase for both the governmental and proprietary funds. Prepaid expenses are reflective of insurance policies and commitments due on July 1 for the following fiscal year. The warehouse inventories, consisting mostly of parts and supplies, are maintained on a perpetual inventory basis. Inventories of all funds are valued at cost and net of reserves, utilizing a weighted moving average method of valuation. The City maintains inventory reserves to charge off any damaged or obsolete items. The Electric Revenue Fund maintains fuel inventory for the generating assets on a perpetual basis and utilizes the weighted moving average method of valuation. 59

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements H. Cash and Investments The City's cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments consist of United States Government and its agencies notes and bonds, corporate bonds and common stocks and open-end mutual funds. The fair value of investments is determined by GASB 72 Fair Value Measurements. I. Accounts Receivable Allowances for uncollectible accounts are maintained and uncollectible accounts are charged off against these allowances. The authority to write off accounts is vested with the City Council. Current balances of allowances are as follows: General Fund $355,032 Water/Wastewater Fund 105,704 Electric Revenue Fund 1,118,623 J. Restricted Assets Certain assets are restricted because their use is limited by bond covenants, endowments, or other similar third-party restrictions. Restricted assets as of June 30, 2017 total $46,520,418 including cash and cash equivalents of $3,704,126 and $42,816,292 in investments. Of this amount, $761,012 is attributed to governmental activities and $45,759,406 is attributable to business-type activities. K. Unbilled Service Receivables The City follows a policy of billing for services in accordance with billing cycle procedures. All known services rendered are billed and incorporated in the books at the end of the fiscal year. L. Bond Accounts/Issuance Costs The City recognizes bond discounts and issuance costs in governmental funds, as well as the proprietary funds, as a current period expense in accordance with GASB 65. All unamortized bond discounts and issuance costs held by the general fund and the proprietary funds have been expensed in prior years. M. Deferred Outflows/Inflows of Resources The statement of financial position in addition to reporting assets and liabilities will sometimes report a separate section for deferred outflows / inflows of resources. Deferred outflows / inflows of resources represent either a consumption or acquisition of net position that applies to a future period(s) and will not be recognized as an outflow / inflow (expense / revenue) of resources until that period. The City’s deferred outflows / inflows of resources are reported on the government-wide statement of net position for pension and Other Post-Employment Benefit (OPEB). For 60

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements purposes of measuring the OPEB and pension liability, deferred outflows of resources and deferred inflows of resources related to OPEB and pensions, and OPEB and pension expense, information about the fiduciary net position of the OPEB and pension plans and additions to/deductions from their fiduciary net position have been determined on the same basis as they are reported by the City of Dover’s OPEB Trust and pension systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. The OPEB and pension systems report investments at fair value. Deferred inflows of resources related to OPEB and pensions are explained in Notes 16 and 18, respectively. The City also reports unavailable revenue only in the governmental funds balance sheet, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. The governmental funds report unavailable revenues from property taxes, demolitions, general billings, grass cutting, police extra-duty, and State grants. N. Fund Balances and Net Position Governmental fund balances are reported based on a hierarchy of constraints on the nature or specific purpose to which the funds can be spent. The classifications of fund balance are as follows:  The non-spendable fund balance classification includes amounts that cannot be spent either because they are in a non-spendable form or because they are legally or contractually required to be maintained intact.  The restricted fund balance classification includes amounts that can be spent only for specific purposes because of the City Charter, the City Code, State or Federal laws, or externally imposed conditions by grantors or creditors.  The committed fund balance classification includes amounts that can be used only for specific purposes determined by the formal action by City Council through a motion or an adopted City Ordinance which is approved by City Council’s majority vote the highest level of decision-making authority.  The assigned fund balance classification includes amounts authorized and established by City Council. The City’s financial policies as adopted by City Council includes the purpose and description of all classes of fund balance. Modifications require City Council approval.  The unassigned fund balance classification includes amounts that have not met the criteria of the afore-mentioned fund balance classifications. The unassigned fund balance is available for expenditures as they are incurred. The general fund is the only fund that reports a positive unassigned fund balance amount. The City considers restricted, committed, or assigned amounts to have been spent when a related expenditure is incurred. Proprietary funds report net position in three categories: 1) Net investment in capital assets; 2) Restricted 3) Unrestricted Fund balances and net position are further explained in Note 7. 61

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements O. Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. P. Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. 3. DEPOSITS AND INVESTMENTS A. Cash in Bank and Cash Equivalents Custodial credit risk – deposits. The bank collateralizes the City of Dover’s deposits over and above those covered by the $250,000 FDIC Insurance limit with specific securities, which are ‘marked to market’ daily against the aggregate balances. The market value of the collateral is at a minimum of or equal to 102% of the amount of applicable deposits. Collateral consists solely of either full faith and credit obligations of the United States Government or fixed rate obligations of agencies or instruments of the United States Government. On June 30, 2017, the carrying amount of unrestricted cash and cash equivalents totaled $13,624,449, and the bank cash balances totaled $14,259,116. The carrying amount of restricted cash totaled $3,704,126 and the bank cash balances on restricted accounts totaled $3,352,045, $1,604,016 of the bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. Fiduciary funds cash and cash equivalents included $1,002,246 of cash deposits, $198,410 of the bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. The restricted deposits are held by the City for bond related transactions, special purpose operating and capital grants. Fiduciary fund deposits of $5,136,441 are excluded. B. Investments The City Council has adopted an investment policy which is reviewed every two years and updated as needed for best practices. The Pension Boards have their own distinct investment policy over the Pension Trust funds since the objectives differ from those of the City. The City investments are segregated from the Pension Trust investments for clarity. As of June 30, 2017, the City had the following investments: 62

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements i. Investments Held by Third Party Custodian The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The City’s government wide investments are held in a number of different investment capacities from mutual funds and certificate of deposit with a significant investment in debt securities.  Level 1 – Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;  Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets or identical assets or liabilities in less active markets, such as dealer or broker markets; and  Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on market, exchange, dealer or broker- traded transactions. The City recorded the following investments as of June 30, 2017: Fair Value Measurements Using: Quoted Prices in Significant Active Other Markets for Observable Weighted Identical Inputs Investment Type (Years) June 30, 2017 Assets (Level 1) (Level 2) Government-Wide: Investments by fair value level Debt securities: U.S. Government Treasuries 3.26 $ 17,770,028 $ - $ 17,770,028 Federal Agency Bond / Note 1.90 19,429,482 2,749,560 16,679,922 Municipal Obligations 1.84 5,714,474 - 5,714,474 Corporate Bonds 2.41 22,038,146 - 22,038,146 U.S. Government CMO's 1.76 1,808,291 - 1,808,291 Supra-National Agency Bond / Note 2.36 3,040,124 - 3,040,124 Federal Agency Mortgage-Backed Security 9.67 556,684 - 556,684 Total Investments by fair value level $ 70,357,228 $ 2,749,560 $ 67,607,668 Other Investments: Accrued Interest Earned 377,135 Money Market Mutual Funds & Equity Stock (Amortized cost) 156,535 Commercial Paper (Amortized cost) 1,485,038 Certificate of Deposit (Amortized cost) 9,064,735 Total other investments 11,083,443 Total Government-Wide Investments $ 81,440,670 Interest rate risk: As a means of limiting its exposure to fair value losses arising from rising interest rates the City’s investment policy limits U.S. Government securities and most other investments to a maximum maturity of 10 years from the date of purchase. Commercial Paper, Bankers’ Acceptances and Repurchase Agreements all have a much shorter investment period ranging from 365 days to 90 days. Short-term cash flow balances are invested up to one year. The portfolio’s weighted average maturity is 2.31 years. 63

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Credit risk: The City’s investment policy is to apply the prudent-person rule. Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital and, in general, avoid speculative investments. As of June 30, 2017, the City’s fixed income and short-term investments had the following risk characteristics as compared to the Standard & Poor’s: Policy Minimum Percent Authorized Investments Rating Category Portfolio Ratings Allocation U.S. Government N/A AA+ 22.70% U.S. Government Agency N/A AA+ 28.20% Certificates of Deposit and Short-Term A-1 Short-Term A to A-1+ 11.60% Time Deposits Long-Term AA Long-Term AA- Corporate Debt Issued by a US Corporation Commercial Paper A-1 A-1 to A-1+ 1.90% Corporate Notes/Bonds A A to AAA 28.30% Repurchase Agreements Short-Term A-1 N/A Long-Term AA Registered Investment Companies AAAm AAAm (money market funds) Municipal Obligations A A+ to AA 7.30% Concentration of credit risk: As of June 30, 2017 Fannie Mae represented 11.4% of the portfolio and Federal Home Loan Bank represented 12.1% of the portfolio. No other issuer exceeded 5% of the portfolio. 64

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements ii. Investments Held by Trustee for Post-Employment Benefits & Pensions The Pension Trust and OPEB Trust have their investments exclusively in open-end mutual funds. The fair value is measured using the net asset value (NAV) in a manner consistent with the measurement principles for investment companies calculated as of June 30, 2017. Investment Type June 30, 2017 Other Postemployment Benefits (OPEB) & Employee's Police OPEB Pension Funds (Trustee held): Plan Plan Trust Total Investments measured at the net asset value (NAV) Money market funds $ 2,195,378 $ 895,331 $ 1,049,515 $ 4,140,224 Fixed Income: Short-term bond funds 983,060 528,673 1,728,029 3,239,762 Intermediate-term bond funds 1,966,136 594,765 1,440,289 4,001,190 Long-term bond funds 1,964,588 660,310 1,438,824 4,063,722 Inflation protected bond funds 1,961,659 659,362 1,149,412 3,770,433 High Yield bond funds 2,375,746 731,916 1,739,905 4,847,567 Nontraditional bond funds 1,965,374 660,588 1,439,474 4,065,436 Total Fixed Income 11,216,563 3,835,614 8,935,933 23,988,110 Equities: Large cap value funds 4,329,755 1,455,254 3,465,124 9,250,133 Large cap growth funds 5,508,603 1,798,167 3,747,126 11,053,896 Mid-cap value funds 1,182,055 397,288 2,020,080 3,599,423 Mid-cap blend funds 1,181,720 383,045 - 1,564,765 Small value funds 2,746,444 923,148 2,586,293 6,255,885 Foreign large growth funds 2,361,914 793,850 1,441,582 4,597,346 World stock funds 2,355,060 791,588 1,437,415 4,584,063 Diversified emerging market funds 3,551,350 1,193,575 2,601,025 7,345,950 Real estate funds 3,142,897 1,056,380 2,014,179 6,213,456 Total Equities 26,359,798 8,792,295 19,312,824 54,464,917 Total investments measured at the NAV $ 37,576,361 $ 12,627,909 $ 28,248,757 $ 78,453,027 65

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements The City recorded the following OPEB and Pension investments as of June 30, 2017: Quoted Prices in Active Markets for Identical Investment Type June 30, 2017 Assets (Level 1) Other Postemployment Benfits (OPEB) & Pension Funds Investments by fair value level Mutual Funds $ 78,453,027 $ 78,453,027 Other Investments at amortized Cost Money Market Mutual Funds 4,140,224 $ 82,593,251 $ 78,453,027 Limits on investments are as follows: Category Allocation Target Percentage Employee's Police OPEB Plan Plan Trust Cash & Short Term Bonds 7.00% 8.00% 8.00% Non-traditional Bonds 5.00% 5.00% 5.00% Inflation Protected Bonds 5.00% 5.00% 4.00% Intermediate Term Bonds 5.00% 4.50% 5.00% Long Term Bonds 5.00% 5.00% 5.00% High Yield Bond 6.00% 5.50% 6.00% Large Cap Value 11.00% 11.00% 12.00% Large Cap Growth 14.00% 14.00% 13.00% Mid Cap 6.00% 6.00% 7.00% Small Cap 7.00% 7.00% 9.00% Real Estate Investment 8.00% 8.00% 7.00% Foreign Equity 12.00% 12.00% 10.00% Emerging Markets 9.00% 9.00% 9.00% 100.00% 100.00% 100.00% Custodial credit risk-investments: For an investment, this is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. To avoid custodial credit risk, it is the City’s policy to have its investments held at a third-party custodian in the City’s name. 66

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 4. CAPITAL ASSETS A summary of the capital asset activity for the year ended June 30, 2017 is presented below and on the following page: Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated Land $ 4,284,369 $ 403,932 $ - $ 4,688,301 Construction in progress 538,674 512,785 338,112 713,347 Total capital assets, not being depreciated 4,823,043 916,717 338,112 5,401,648 Capital assets, being depreciated: Buildings 29,196,537 140,538 - 29,337,075 Furniture and fixtures 826,322 - - 826,322 Equipment 8,194,103 526,472 189,507 8,531,068 Vehicles 5,554,343 703,986 568,996 5,689,333 Lights 641,630 14,017 - 655,647 Improvements other than buildings 52,870,803 1,009,513 - 53,880,316 Total capital assets, being depreciated 97,283,738 2,394,526 758,503 98,919,761 Less accumulated depreciation for: Buildings (5,076,426) (623,557) - (5,699,983) Furniture and fixtures (417,679) (65,337) - (483,016) Equipment (5,791,532) (382,161) 185,798 (5,987,895) Vehicles (4,055,158) (451,764) 512,342 (3,994,580) Lights (497,384) (10,991) - (508,375) Improvements other than buildings (25,160,563) (1,926,645) - (27,087,208) Total accumulated depreciation (40,998,742) (3,460,455) 698,140 (43,761,057) Total capital assets, being depreciated, net 56,284,996 (1,065,929) 60,363 55,158,704 Governmental activities capital assets, net $ 61,108,039 $ (149,212) $ 398,475 $ 60,560,352 67

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Beginning Ending Balance Increases Decreases Balance Business-type activities: Electric Revenue Fund Capital assets, not being depreciated Land $ 1,458,066 $ - $ - $ 1,458,066 Construction in progress 2,265,262 1,583,228 1,921,653 1,926,837 Total capital assets, not being depreciated 3,723,328 1,583,228 1,921,653 3,384,903 Capital assets, being depreciated Buildings 17,881,414 65,544 300 17,946,658 Production 66,252,450 1,492,815 4,166,402 63,578,863 Transmission 36,684,541 407,712 - 37,092,253 Distribution 65,068,946 826,704 359,507 65,536,143 Administration 1,783,987 - 23,465 1,760,522 Vehicles 649,439 112,632 25,670 736,401 Total capital assets, being depreciated 188,320,777 2,905,407 4,575,344 186,650,840 Less accumulated depreciation for: Buildings (13,030,240) (448,489) - (13,478,729) Production (46,936,655) (2,059,014) 4,166,402 (44,829,267) Transmission (15,095,269) (1,289,819) - (16,385,088) Distribution (31,134,017) (1,632,851) 197,795 (32,569,073) Administration (1,647,784) (46,239) 23,465 (1,670,558) Vehicles (522,830) (36,882) 25,670 (534,042) Total accumulated depreciation (108,366,795) (5,513,294) 4,413,332 (109,466,757) Total capital assets, being depreciated, net 79,953,982 (2,607,887) 162,012 77,184,083 Total electric revenue fund capital assets, net 83,677,310 (1,024,659) 2,083,665 80,568,986 Water/Wastewater Fund Capital assets, not being depreciated Land 163,240 - - 163,240 Construction in progress 1,405,393 1,367,588 1,299,085 1,473,896 Total capital assets, not being depreciated 1,568,633 1,367,588 1,299,085 1,637,136 Capital assets, being depreciated Plant, wells, pumping stations, and storage 22,724,199 763,644 - 23,487,843 Distribution mains, hydrants, and accessories 22,599,935 827,025 - 23,426,960 Sewage plant mains, and pumping stations 38,766,085 1,752,631 - 40,518,716 Vehicles and equipment 5,441,841 516,071 208,318 5,749,594 Total capital assets, being depreciated 89,532,060 3,859,371 208,318 93,183,113 Less accumulated depreciation for: Plant, wells, pumping stations, and storage (8,047,734) (524,792) - (8,572,526) Distribution mains, hydrant, and accessories (7,380,606) (426,336) - (7,806,942) Sewage plant mains, and pumping stations (14,210,380) (934,481) - (15,144,861) Vehicles and equipment (3,857,820) (280,805) 200,513 (3,938,112) Total accumulated depreciation (33,496,540) (2,166,414) 200,513 (35,462,441) Total capital assets, being depreciated, net 56,035,520 1,692,957 7,805 57,720,672 Total water/wastewater fund capital assets, net 57,604,153 3,060,545 1,306,890 59,357,808 Business-type activities capital assets, net $ 141,281,463 $ 2,035,886 $ 3,390,555 $ 139,926,794 68

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 2,644 Central services 95,346 Public safety 450,046 Public works 2,230,364 Library and recreation 641,339 Financial administration 40,716 Total depreciation expense - governmental activities $ 3,460,455 During the fiscal year there were impaired assets across the following departments/functions:  Water and Wastewater Fund miscellaneous assets totaling $4,138.  Electric Fund Distribution and Underground Transformer assets totaling $13,424.  General Fund Copiers and totaled vehicle assets totaling $47,246 5. LONG -TERM OBLIGATIONS A. Summary of Bonded Indebtedness by Issue Original Remaining Interest Maturity Arbitrage Purpose Governmental Activities 2012 General Obligation Bonds $ 3,500,000 $ 2,930,618 2.60% 6/25/13 - 5/25/19 No Construction of New Library, Street Paving Program 2014 General Obligation Bonds $ 3,660,000 $ 3,278,750 Variable = 11/14/14 - No Street and storm water infrastructure at the Series A (65% of 5/14/22 Garrison Oak Technology Park, police and fire Daily radios, and firefighter's breathing apparatus LIBOR rate) plus .666% Business Type Activities Water/Wastewater Bonds 2000 State of Delaware - $ 750,000 $ 149,243 3.60% 10/1/00 - 4/1/20 No Wastewater Pump Station # 7 - Leipsic Revolving Loan Fund - Municipal Revenue 2009 State of Delaware - $ 5,581,059 $ 4,349,516 2.00% 12/1/12 - 12/1/31 No Pump station replacements/upgrades and Revolving Loan Fund - Municipal sanitary sewer main relining Revenue 2010 State of Delaware - $ 2,404,017 $ 1,825,236 2.47% 4/1/12 - 10/1/30 No Water quality improvements and main Revolving Loan Fund - Municipal replacements Revenue 2011 State of Delaware - $ 765,060 $ 652,093 2.00% 6/1/12 - 12/1/31 No Pump station replacements/upgrades and Revolving Loan Fund - Municipal sanitary sewer main relining Revenue 2013 Revenue Bonds $ 6,125,000 $ 5,135,000 3.58% 7/1/14 - 7/1/33 Yes Water and Wastewater capital project financing, refund 2003 Series WWW bonds (Coverage ratio on Water/Wastewater Bonds requires net revenues to be at least 1.2 times the maximum annual debt service) Electric Revenue Bonds 2008 Revenue Bonds $ 22,200,000 $ 18,620,000 4.81% 7/1/09 - 7/1/33 Yes Expansion and upgrades of electric system (Coverage ratio on Electric Bonds requires net revenues to be at least 1.25 times the maximum annual debt service) 69

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements B. Status as of June 30, 2017 – General Obligation Bonds Long-term indebtedness of the City of Dover consists of the following general purpose General Obligation Bonds: 2012 Series $ 2,930,618 2014 Series A 3,278,750 $ 6,209,368 The total General Obligation Bonds outstanding amount includes $332,152 payable within one year. C. Change in Long-Term Debt The following tables summarize the debt transactions for the year ended June 30, 2017: i. General Long-Term Debt Balance Payable within Item 7/01/16* Additions Reductions Balance 6/30/17 One Year Compensated Absences $ 2,018,710 $ 1,764,548 $ 1,423,504 $ 2,359,754 $ 1,208,578 General Obligation Bonds 6,782,865 - 573,497 6,209,368 332,152 Net OPEB Liability 39,334,748 - 7,214,271 32,120,477 - Net Pension Liability 19,733,532 - 2,729,738 17,003,794 - Sub-total of General Long-Term Debt $ 67,869,855 $ 1,764,548 $ 11,941,010 $ 57,693,393 $ 1,540,730 ii. Enterprise Funds Debt – Water/Wastewater Fund Balance Payable within Item 7/01/16* Additions Reductions Balance 6/30/17 One Year Compensated Absences $ 205,862 $ 134,007 $ 160,589 $ 179,280 $ 86,533 Revenue Bonds-Water and Wastewater 5,465,000 - 330,000 5,135,000 340,000 State of Delaware Municipal Revenue Bond - Wastewater 5,487,091 - 336,239 5,150,852 344,297 State of Delaware Municipal Revenue Bond - Water 1,936,700 - 111,464 1,825,236 114,392 Net OPEB Liability 3,844,750 - 705,154 3,139,596 - Net Pension Liability 4,198,944 - 340,670 3,858,274 - Sub-total of Water/ Wastewater Fund $ 21,138,347 $ 134,007 $ 1,984,116 $ 19,288,238 $ 885,222 70

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements iii. Enterprise Funds Debt – Electric Revenue Fund Balance Payable within Item 7/01/16* Additions Reductions Balance 6/30/17 One Year Compensated Absences $ 625,485 $ 289,510 $ 355,778 $ 559,217 $ 203,225 Revenue Bonds 19,315,000 - 695,000 18,620,000 730,000 Net OPEB Liability 6,112,167 - 1,121,015 4,991,152 - Net Pension Liability 8,296,233 - 683,550 7,612,683 - Sub-total of Electric Revenue Fund 34,348,885 289,510 2,855,343 31,783,052 933,225 Sub-total of Enterprise Fund Debt 55,487,232 423,517 4,839,459 51,071,290 1,818,447 Grand Totals of Long-Term Debt $ 123,357,087 $ 2,188,065 $16,780,469 $ 108,764,683 $ 3,359,177 * Balance at 7/1/16 for Net OPEB Liability was restated for the implementation of GASB 75. The City does not receive reimbursement for debt service from any other governmental units. The City does not have any special assessment debt or defeased bonds as of June 30, 2017. D. Debt Service Requirements The following are the debt service requirements to maturity on the City's general obligation bonds and revenue bonds. i. Governmental Activities: 2012 General Obligation 2014 General Obligation Fiscal Bonds Bonds Series A Year Principal Interest Principal Interest Total 2018 $ 149,152 $ 75,459 $ 183,000 $ 25,491 $ 433,102 2019 2,781,466 65,567 183,000 24,031 3,054,064 2020 - - 183,000 22,632 205,632 2021 - - 183,000 21,111 204,111 2022 - - 2,546,750 18,038 2,564,788 Total $ 2,930,618 $ 141,026 $ 3,278,750 $ 111,303 $ 6,461,697 71

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Water/Wastewater/Electric Revenue Funds Business-type Activities (Continued) ii. 72

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Water/Wastewater/Electric Revenue Funds Business-type Activities (Continued) ii. 73

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 6. RESTRICTED NET POSITION In the government-wide financial statements the restricted net position of the governmental activities and business type activities are as follows: Governmental Activities Grants-capital projects This represents the State DOT grant $ 70,913 reported in the non-major special revenue funds. Grants-public safety These represent the Police grants, ERLSP 205,493 grant and Substance Abuse Prevention grant in the special revenue type funds. Other Purposes These represent all other funds reported in 30,068 the special revenue type, except the grants reserved for capital construction and public safety. Also included is the interest from an endowment from Mary Elizabeth Paton and the verizon reserve. Total Restricted Net Position $ 306,474 Business Type Activities Net restricted position for construction purposes - expendable Water/Wastewater Restrictions on investments $ 4,167,715 imposed by bond covenants Electric Restrictions on investments 40,008,395 imposed by bond covenants Total Restricted Net Position $ 44,176,110 7. FUND BALANCES & NET POSITION In the governmental fund financial statements, fund balances are reported based on a hierarchy of constraints on the specific purposes for which the funds can be spent. Non-spendable fund balances represent items that are not in spendable form and not expected to be converted to cash. This criterion also applies to the corpus of permanent funds, which would include the Mary Elizabeth Paton library endowment. Restricted fund balances represent amounts that have externally imposed restrictions by creditors, grantors, enabling legislation or laws and regulations of other governments. The fund balances of the City’s grant funds fall into this category, as well as a couple of accounts that have contractual restrictions imposed by a third party. Committed fund balances represent amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of City Council through a motion or an adopted city ordinance. These amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action to which it previously committed the amount. 74

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Assigned fund balances represent amounts constrained by the City’s intent to be used for specific purposes. These amounts represent the City’s capital asset appropriations. The constraints placed on assigned fund balances are implemented through internal processes such as a budget ordinance or motion of City Council. Therefore, assigned fund balances do not have the same restrictive nature as a restricted fund balance. Unassigned fund balance is the residual amount that has not met the criteria for the previously mentioned classifications. The unassigned fund balance is available for expenditures as they are incurred. The General Fund is the only fund that reports a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. The composition of the City fund balances as of June 30, 2017 is as follows: Other General Governmental Fund Funds Total Fund balances: Nonspendable: Inventory & Prepaids $ 165,700 $ 3,993 $ 169,693 Patronage Stock 16,594 - 16,594 Library Endowment 5,000 - 5,000 Subtotal Nonspendable: 187,294 3,993 191,287 Restricted for: Library Endowment Interest 1,944 - 1,944 Verizon cable franchise 6,035 - 6,035 Highway resurfacing - 70,913 70,913 ERLSP - 100 100 Neighborhood Stabilization Program - 3,470 3,470 Substance Abuse Prevention - 83,834 83,834 Municiple Street Aid - 100 100 Library Grants - 18,519 18,519 Police Grants - 121,559 121,559 Subtotal Restricted for: 7,979 298,495 306,474 Committed to: Contingency 743,598 - 743,598 Parkland 336,260 - 336,260 Subtotal Committed to: 2,441,641 - 2,441,641 Assigned to: Capital Projects 1,956,061 - 1,956,061 Unassigned 5,528,605 - 5,528,605 Total fund balances $ 10,121,580 $ 302,488 $ 10,424,068 As noted in the Introductory section of this report (page 5), the City has established the “City of Dover, Delaware Financial Policies” booklet which is a standardized set of principles that the City follows and the Finance Department manages, to ensure that the minimum fund balance policies are followed. 75

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 8. CHANGE IN ACCOUNTING PRINCIPLE AND RESTATEMENT OF NET POSITION For fiscal year 2017, the City implemented the Governmental Accounting Standards Board (GASB) Statement No. 74, “Financial Reporting for Postemployment Benefit Plans other than Pension Plans” and GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other than Pensions’. The implementation of these pronouncements had the following effect on net position as of June 30, 2016: Governmental Business type Water/Wastewater Electric Activities Activities Fund Revenue Fund Net position June 30, 2016, as $ 33,043,618 $ 174,549,738 $ 54,762,091 $ 119,787,647 previously reported GASB 75 adjustment (31,065,241) (14,515,025) (4,112,469) (10,402,556) Net position June 30, 2016, as $ 1,978,377 $ 160,034,713 $ 50,649,622 $ 109,385,091 restated During the transition year, as permitted, beginning balances for deferred outflows of resources and deferred inflows of resources will not be reported, except for deferred outflows of resources related to contributions made after the measurement date of the beginning Net OPEB Liability which is required to be reported by Governmental Accounting Standards Board Statement No. 74, OPEB Transition for Contributions Made Subsequent to the Measurement Date. Beginning net position for governmental and business type activities were restated to $1,978,377 and $160,034,713 respectively. 9. PROPERTY TAXES Property taxes are levied under the authority of the City Charter on all real property located within the City limits. The City assessor oversees the property assessments and the City Council levies the property tax rate. The following table provides important dates with reference to property taxes. Beginning of fiscal year for taxes July 1 Tax rate levied 2nd Council Meeting in June Taxes billed July 1 Taxes due and payable at par July 31 Penalty of one and one-half percent starts August 1 Lien established on property for property taxes July 1 Tax sales of property with unpaid taxes 2 years from date of billing As of June 30, 2017, there were no material delinquent taxes. 76

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 10. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of June 30, 2017 is as follows: A. Due to/from other funds – Charges and Allocations Receivable Fund Payable Fund Amount General Fund Non-Major Governmental Funds $ 85,671 Water/ Wastewater Fund 168,055 Electric Revenue Fund 318,971 Water/ Wastewater Fund General Fund 10,205 Electric Revenue Fund 171 Electric Revenue Fund General Fund 1,079 Water/Wastewater Fund 18,150 Non-Major Governmental Funds General Fund 3,679 Total $ 605,981 The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. B. Interfund Transfers Transfers In - Electric Revenue Transfers Out General Fund Fund Total Non-Major Governmental Funds $ 3,010,445 $ - $ 3,010,445 Water/ Wastewater Fund 875,000 231,200 1,106,200 Electric Revenue Fund 10,000,000 - 10,000,000 Total $ 13,885,445 $231,200 $14,116,645 Transfers are generally made to provide operating capital or debt service subsidies to the receiving fund in accordance with City policy. 11. RENTAL INCOME The City currently has two lease agreements at the Garrison Oak Technical Park (GOTP) that are included in miscellaneous revenue in the General Fund. The first lease is with LS Power – White Oak Solar Energy LLC, which generated $63,005 in rental income, and the second lease is with Garrison Energy Center which generated $32,734 in rental income. The City’s Electric Revenue Fund owns a professional office building which houses the City’s Customer Service, Finance and Information Technology Departments. At June 30, 2017, the City had a lease with one tenant for part of the remaining space available. Lease revenue is $188,388 in the Electric Revenue Fund consisting of office space rental of $80,497, substation rental of $30,000 and pole attachment rentals of $77,891. The City maintains several water tower leases for a group of telecommunications companies. These are recorded as revenue of the Water/Wastewater Fund and total $376,228 in the current fiscal year. 77

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 12. MATERIAL COMMITMENTS A. The City is the guarantor on one loan for the Dover Fire Department, a separate entity from the City of Dover. The City also budgets monies to assist the volunteer fire company with payments on firefighting apparatus. The current fiscal year includes $145,614 in expenditures for Ladder #1 in the Governmental Capital Projects Fund budget. B. The City entered into a three-year management contract with The Energy Authority effective July 1, 2016 to provide a market-based approach for power supply management. The Energy Authority manages energy purchases and utilizes the City’s generating assets to provide a level of rate stability as necessary to mitigate the effects of rising and volatile energy prices. Additional tasks The Energy Authority has contracted with the City are (1) 2016 Integrated Resource Planning Services and (2) Reactive Revenue Requirement Analysis and Filing Services. C. The City also entered into a management contract with North American Energy Services (NAES) to operate and maintain the generating assets of the electric utility in May 2006. The City extended the contract with NAES through June 30, 2020. The City has incorporated the budgets and financial activity of the plant into its procedures used for all other divisions of the electric utility. These procedures include a line item budget and adherence to City policies. All personnel are employed by NAES and personnel costs are billed to the City bi-weekly. Any capital improvements are included in the City’s capital improvement plan. The contract also provides for a monthly management fee and a performance incentive based on budget and plant performance. The fiscal year 2017 annual cost for management and estimated incentives are $781,759, and is included in the plant-operating budget. D. The City is the guarantor on two $1.3 million loans held by the Downtown Dover Partnership. The loans are secured by two parcels in the downtown business district that the Downtown Dover Partnership is marketing for its redevelopment initiative. The principal and interest on both loans is paid monthly from rental receipts the Partnership receives from its current tenants on the properties. E. The City owes $190,000 to a former employee of the City due to a separation agreement. The former employee is owed this money over the next 5 years. 13. FORWARD CONTRACTS Pursuant to the July 1, 2011 Energy Management Agreement between the City and The Energy Authority (TEA), the City has formed an Executive Risk Management Committee (ERMC). The ERMC has adopted a Governing Policy for Energy Commodity Risk Management (Policy) aimed at addressing the energy commodity risks and the Procedures and Controls Manual for Energy Commodity Risk Management (Procedures Manual). The Procedures Manual further describes the risk management philosophy under which TEA, the City’s designated provider of energy risk management services conducts its activities. The Procedures Manual authorizes TEA to enter into physical forward transactions which shall be governed by Edison Electric Institute (EEI), North American Energy Standards Board (NAESB), or similar agreements with counterparties approved by the City. 78

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements These agreements will enable the City to hedge the forward price of purchased power, natural gas or fuel oil for delivery as needed to meet its load requirements. No speculative transactions for volumes in excess of forecasted power and fuel needs are permitted. TEA also provides advisory services to the City for financial hedges in determining if they would be beneficial to mitigate market and credit risk. These contracts meet the definition of a derivative instrument as defined by GASB Statement No. 53, Accounting and Reporting for Derivative Instruments (GASB 53). However, these contracts meet the normal purchases and sales exemption of GASB 53 as the City intends to use the physical commodity in its normal utility operations to supply energy to its customers. Accordingly, these contracts are not within the scope of GASB 53 and are not recorded on the City’s Statement of Net Position. Under the Procedures manual the City will not extend credit to any potential counterparty that has a credit rating below investment grade (defined as BBB as rated by Standard & Poor’s or Baa2 as rated by Moody’s). Any counterparty that is unrated by either S & P or Moody’s must be approved by the ERMC prior to the execution of any trading activities. Credit risk is mitigated using collateral thresholds, credit limits, maximum nominal exposure and term limitations. A collateral threshold is the amount of unsecured credit granted to the counterparty. Unsecured credit exposure includes amounts owed by the counterparty, whether billed or not, and the marked-to-market differences in value of any collateral held. Any net exposure above the collateral threshold will require the posting of collateral by the counterparty. Collateral thresholds, term limitations and credit exposure limits are subject to maximums as established by the ERMC. A summary of the contracts outstanding as of June 30, 2017 are as follows: 79

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 80

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 14. INSURANCE A. Health Insurance – State of Delaware The City participates in the State of Delaware Health Insurance Program. The State offers four health plan options. The administration of benefits is coordinated with Aetna and Blue Cross Blue Shield of Delaware. Pre-determined premiums consisting of the City and employee contributions are subsequently paid to the State of Delaware. B. Workers’ Compensation Fund – Self-Insurance On July 1, 1990, the City began self-insuring its Workers’ Compensation insurance. For this purpose, the City has established a separate fund. Claims are processed and administered by a third-party administrator. The City manages the revenue and expenditures in this fund and maintains all the records. The City maintains a fund balance to cover any incurred but not reported claims. AMI Risk Consultants completed an updated valuation in fiscal year 2014. As of June 30, 2017, there is $751,659 reserved for open claims in this fund. An appropriate umbrella policy for the excess coverage has been purchased and is in effect as of June 30, 2017. Workers’ Compensation activity is as follows: 2017 2016 Claims payable, beginning of year $ 547,958 $ 286,426 Claims incurred 786,684 526,215 Payment of claims (582,983) (264,683) Claims payable, end of year $ 751,659 $ 547,958 C. Other than Health or Workers’ Compensation Insurance The City purchases commercial insurance policies to cover risks not insured through self- insurance funds. The City has designated a contingency account to provide for uninsured losses (See Note 7). There have been no significant reductions or settlements exceeding coverage in the past five fiscal years. 15. COMPENSATED ABSENCES The City grants a specific number of vacation days with pay to its employees. Upon termination or retirement, an employee is paid for accumulated vacation days. The City also grants one paid sick day per month to all employees, with the exception of employees covered by the International Brotherhood of Electric Workers (IBEW) contract. The IBEW employees are granted eleven sick days per year. The City of Dover follows a terminal leave policy which varies with each of the four unions as well as the non-bargaining group. The maximum accumulated sick days paid upon retirement is 150 days for 25 years of service. No accrued sick leave is paid when an employee is terminated. 81

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements In the government-wide and proprietary fund financial statements, unpaid compensated absences are recorded as a liability as the vested employees' benefits accrue, to the extent it is probable that the employee will be paid for sick benefits at retirement. In governmental funds, compensated absences are recorded as expenditures as payments become due; accordingly, no liability is recorded in the Governmental Funds statement. Typically, the General Fund has been used in prior years to liquidate the liability for compensated absences recorded in governmental activities. 16. OTHER POST-EMPLOYMENT BENEFITS Plan Description On May 11, 2009, the City of Dover Other Post-Employment Benefits Trust (OPEB Trust) was established pursuant to Section 115 of the Internal Revenue Code. Policy for and management of the OPEB benefits provided to retirees are the responsibility of the City of Dover. No stand- alone financial report is issued for the OPEB Trust. The City of Dover OPEB Plan is a post retirement employee benefit program established for the purpose of funding retiree health care as provided for in Chapter 80, Article IV, Division 5 of the City Ordinances. The OPEB Trust is a single-employer defined benefit plan. The OPEB Trust provides retirement medical coverage to pensioners and their eligible dependents in the City of Dover defined benefit and defined contribution pension plans. Plan Administration Management of the plan investments are fully vested with the City of Dover OPEB Board as established in the City Code, which consists of three elected by plan members, two Council members appointed by the Council President, the City Controller/Treasurer, and the City Manager. The City Controller/Treasurer serves as an ex-officio member. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. The City purchases health insurance from the State of Delaware through a cooperative purchasing arrangement permitted by State Code. The State Office of Benefits provides the City with the medical insurance premiums by type of coverage and carrier during the budget cycle each year. The City also pays a five percent risk premium and contract administration fee for each contract in addition to the premium. Any premiums paid over or under the benefits paid out for City employees revert to the State. Membership of the plan consisted of the following at June 30, 2017: Retirees and beneficiaries receiving benefits 268 Terminated plan members entitled to but not yet receiving the benefits 7 Active plan members 338 Total 613 Substantially all City employees become eligible for post-retirement benefits if they reach retirement age while working for the City. The costs of providing these benefits are shared between the City and the retired employee. 82

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Employee Benefits and Contributions The City maintains contracts with each of the following collective bargaining units.  The International Brotherhood of Electric Workers (IBEW) union contract period is July 1, 2017 through June 30, 2021. The City and bargaining unit completed negotiations as of December 2017 with Council’s approval during January 2018 meeting.  The American Federation of State, County, and Municipal Employees (AFSCME), Council 81 contract period is October 30, 2014 through June 30, 2017. The City and bargaining unit are under negotiation for a new contract term as of the issuance of the City’s financial reports.  The Fraternal Order of Police Lodge #15 (FOP) union contract period is July 1, 2015 through June 30, 2018.  The Dover Organization of Employees (DOE) union contract period is July 1, 2015 through June 30, 2018. The eligibility provisions for early retirement are as follows: SUMMARY OF PRINCIPAL PLAN PROVISIONS Benefits for Civilians: A. Covered Groups: Full-time DOE (formerly IUE), IBEW, AFSCME and non-union employees and their dependents are covered. B. Eligibility: Satisfaction of either of the following eligibility requirements: 1. Unreduced Retirement: Attainment of the earlier of the following conditions: a. Later of attainment of age 65 and completion of 10 years of service. b. If hired prior to May 1, 1994, later of attainment of age 50 and completion of 20 years of service. c. If hired prior to May 1, 1994, completion of 25 years of service. d. If hired on or after May 1, 1994, later of attainment of age 55 and completion of 80 points (age plus service). 2. Reduced Retirement: For DOE, AFSCME and non-union members hired prior to July 1, 1994, attainment of age 55 and completion of 10 years of service. Other members who meet this condition have the option to pay 100% of the premiums for coverage. 3. Vested Termination: For DOE, AFSCME and non-union members hired prior to July 1, 1994, completion of 10 years of service. Coverage commences upon attainment of age 65. Coverage is not available to other members. 4. Active Death: Surviving spouses of members eligible for an unreduced pension upon death or for DOE and non-union members hired prior to July 1, 1994, completion of 10 years of service. C. Premium Cost Sharing: Cost-sharing varies by employee group, date of retirement and/or date of hire as follows: 83

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements SUMMARY OF PRINCIPAL PLAN PROVISIONS (Continued) 1. Non-Union Employees: a. None if retired prior to July 1, 1991 b. 0% for individual coverage and 25% for spouse coverage if retired on or after July 1, 1991 and prior to July 1, 2012 c. 15% for individual and spouse coverage if retired on or after July 1, 2012 2. DOE Employees: a. None if retired prior to September 1, 1991 b. 0% for individual coverage and 25% for spouse coverage if retired on or after September 1, 1991 and prior to June 1, 2013 c. 15% for individual and spouse coverage if hired prior to December 22, 2015, upon direct retirement with an unreduced pension d. 20% for individual coverage if hired on or after December 22, 2015, upon direct retirement with an unreduced pension. The retiree will have the option to purchase dependent coverage under the City’s group rate plan at full cost to the employee/retiree. 3. IBEW Employees: a. 0% for individual coverage and 25% for spouse coverage if hired prior July 1, 1986 b. 0% for individual coverage and 100% for spouse coverage if hired on or after July 1, 1986 and prior to July 1, 2014 c. 20% for individual coverage and 100% for spouse coverage if hired on or after July 1, 2014 4. AFSCME Employees: a. 0% for individual coverage and 25% for spouse coverage if retire prior to July 1, 2015 b. 15% for individual and spouse coverage if hired prior to May 20, 2014 and retire on or after July 1, 2015 c. 20% for individual coverage and 100% for spouse coverage if hired on or after May 20, 2014 D. Benefit Duration: Retiree coverage is provided for lifetime. Spouse coverage is provided for the spouse’s lifetime. E. Medicare Part B Reimbursement: Eligible retirees receive reimbursement of the Medicare Part B premium. The Medicare Part B standard rate for 2016 was $121.80; for 2017 the premiums are $109 for the standard rate and $134 for the premium rate. Spouses are not eligible for the reimbursement. Eligible retirees are: 1. Non-union employees who were hired prior to July 28, 2009. 2. IBEW employees who retired prior to July 1, 2009. 3. DOE employees who retired prior to January 31, 2010. 84

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements SUMMARY OF PRINCIPAL PLAN PROVISIONS (Continued) Benefits for Police Officers: A. Covered Groups: Full-time FOP employees and their dependents are covered. Only provisions for members hired on after September 1, 1982 are shown. B. Eligibility: Satisfaction of either of the following eligibility requirements: 1. Unreduced Retirement: Attainment of the earlier of the following conditions: a. Later of attainment of age 62 and completion of 10 years of service. b. Completion of 20 years of service. c. Later of completion of 10 years of service and 75 points (age plus service). 2. Reduced Retirement: Not applicable. 3. Vested Termination: None. 4. Active Death: Surviving spouses of members eligible for an unreduced pension upon death. C. Premium Cost Sharing: 1. None if retired prior to July 1, 1991 2. 0% for individual coverage and 25% for spouse coverage if retired on or after July 1, 1991 and prior to July 1, 2012 3. 15% for individual and spouse coverage if retire on or after July 1, 2012. 4. Employees hired on or after October 9, 2015, contribute 20% for individual coverage. The retiree will have the option to purchase dependent coverage under the City’s group rate plan at full cost to the employee/retiree. D. Benefit Duration: Retiree coverage is provided for lifetime. Spouse coverage is provided for the spouse’s lifetime. E. Medicare Part B Reimbursement: Eligible retirees receive reimbursement of the Medicare Part B premium. The Medicare Part B standard rate for 2016 was $121.80; for 2017 the premiums are $109 for the standard rate and $134 for the premium rate. Eligible retirees are members who retired prior to September 30, 2006. Employer Contributions: The City of Dover funds the other post-employment benefits for current retirees on a pay-as- you-go basis along with funding for future benefits at a rate that is approved in the annual budget, but not actuarially determined. Additional funding has also been provided on an ad hoc basis. The employer contributions towards retiree health care premiums this fiscal year are as follows: 85

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements General Government $ 3,485,231 Water/Wastewater Fund 349,838 Electric Revenue Fund 767,659 Total Benefit Provided $ 4,602,728 Transactions are recorded in the OPEB Trust for the payment of administrative and investment expenses and financed through investment earnings. City appropriations and other employer contributions for health care are recorded in the OPEB Trust. The OPEB Board of Trustees is responsible for the management of the trust investments. Contributions The contribution rates for the employer are established annually by the budgeting process of the City. Those rates include an employer contribution based on projected pay-as-you-go financing requirements as a percent of premiums, with an additional amount to prefund benefits, which is not actuarially determined. For the year ended June 30 2017, the City’s average contribution rate was 24.1% of covered-employee payroll of $19,100,537. The components of the net OPEB liability of the City at June 30, 2017, are as follows: Increase Total (Decrease) OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Changes in Net OPEB Liability (a) (b) (a) - (b) Balances as of June 30, 2016 $ 73,334,826 $ 24,043,162 $ 49,291,664 Changes for the year: Service cost 1,654,915 - 1,654,915 Interest 4,681,587 - 4,681,587 Differences between expected and actual exp (2,870,577) - (2,870,577) Effect of assumption changes or inputs (4,832,943) - (4,832,943) Benefit payments (2,662,737) (2,662,737) - Employer contributions - 4,602,728 (4,602,728) Net investment income - 3,073,693 (3,073,693) Trust administrative expenses - (3,000) 3,000 Balances as of June 30, 2017 $ 69,305,071 $ 29,053,846 $ 40,251,225 86

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Actuarial Methods and Significant Assumptions The total OPEB liability was determined by an actuarial valuation as of June 30, 2017, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Rate of return. For the year ended June 30, 2017, the annual money-weighted rate of return on investments, net of investment expense, was 12.66%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Actuarial cost method Entry Age Normal Level % of Salary Amortization method Level Dollars Amortization period 30 years Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Inflation 2.5% per year included in payroll growth Healthcare cost trend rates Pre-65 Medical / Rx Initial rate of 9% decreasing by 0.5% annually to an ultimate rate of 4.5% Post-65 Medical / Rx Initial rate of 8% decreasing by 0.5% Annually to an ultimate rate of 4.5% Mortality SOA RPH-2016 Total Dataset Mortality Table fully generational using Scale MP-2016 for all employees Changes in Actuarial Assumptions or Methods The long term expected rate of return on OPEB plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2017 are summarized in the following table: 87

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements OPEB Trust Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash 2.00% 0.50% Fixed Income 31.00% 3.55% Stocks 60.00% 8.26% Short-term Investments 0.00% 0.00% Real Estate 7.00% 7.96% Alternatives 0.00% 0.00% Long-Term Expected Rate of Return 6.50% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. Discount Rate The discount rate used to measure the total OPEB liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability, calculated using the discount rate of 6.50%, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. Other Post-Employment Benefits 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net OPEB liability $ 49,834,131 $ 40,251,225 $ 32,446,160 88

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate The following presents the net OPEB liability as of June 30, 2017, calculated using the health care trend rates assumed and what it would be using 1% higher and 1% lower health care trend rates: Health Care Trend Rates Assumptions Net OPEB Liability 1% Decrease $ 32,116,534 Current Health Care Trend Rates $ 40,251,225 1% Increase $ 50,279,418  The current pre-65 / post-65 health care trend rate starts at an initial rate of 9% / 8% (pre / post-65) decreasing by 0.5% annually to an ultimate rate of 4.5%.  The 1% decrease in health care trend rates would assume an initial rate of 8% / 7% (pre / post-65) decreasing by 0.5% annually to an ultimate rate of 3.5%.  The 1% increase in health care trend rates would assume an initial rate of 10% / 9% (pre / post-65) decreasing by 0.5% annually to an ultimate rate of 5.5%. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2017, the City recognized OPEB expense of $3,782,913 as calculated in the following chart: OPEB Expense Service cost $ 1,654,915 Interest 4,681,587 OPEB plan administrative expenses 3,000 Projected earnings on OPEB plan investments (1,624,863) Current period recognition of deferred outflows/(inflows) of resources Differences between expected and actual experience (239,215) Differences between projected and actual earnings on plan investments (289,766) Changes of assumptions (402,745) Total OPEB Expense $ 3,782,913 89

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements At June 30, 2017, the City reported deferred inflows of resources related to OPEB from the following sources: Deferred Inflows of Resources Differences between expected and actual experience $ 2,631,362 Changes in assumptions 4,430,198 Net difference between projected and actual earnings on OPEB plan investments 1,159,064 Total Deferred Inflows of Resources $ 8,220,624 Amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Year Ending June 30: 2018 $ (931,726) 2019 (931,726) 2020 (931,726) 2021 (931,726) 2022 (641,960) Thereafter (3,851,760) Funded Status and Funding Progress As of June 30, 2017, the City will disclose OPEB liabilities under GASB 74/75 for the current valuation. The prior valuation was disclosed under GASB 45. The most recent GASB 74/75 Actuarial Valuation, the plan was 41.9% funded. The total OPEB liability for benefits was $69.3 million, and the actuarial value of assets was $29.1 million, resulting in a net OPEB liability of $40.3 million for the primary government. The covered payroll (annual payroll of active employees covered by the plan) was $19.1 million. The City continues to work with its collective bargaining units for alternative benefit plan options to reduce the Actuarial Determined Liability (ADC). Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the OPEB plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long- term perspective of the calculations. In accordance with GASB 74/75, the actuarial cost method has been updated from the Projected Unit Credit linear proration to decrement to Entry Age Normal Level % of Salary. Investments are valued at market rates. The funded discount rate is 6.5%. Adjustments have been made to the City’s July 1, 2016 OPEB liability, the healthcare coverage election rate for active employees with current coverage was decreased from 100% to 80% based on City experience and the mortality tables were also updated from the RP-2000 to SOA RPH-2016 using the Scale MP-2016 for all employees. Both of these changes caused a decrease in liabilities. Payroll growth rates were also updated to reflect the most recent tables from the 90

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Delaware State Employee’s Pension valuation as of June 30, 2016. The impact of these changes was also a slight decrease in liabilities. According to the new Actuarial Standards of Practice (ASOP) number 6, that is effective for actuarial valuations with measurement dates on or after March 31, 2015, an implicit subsidy exists for health plans that commingle the experience of active participants and retirees in setting their premium rates and the non-Medicare retirees premium rates do not vary by age. Implicit subsidies for pre-Medicare benefits is the additional employer liabilities when the inherently higher health care costs for retired employees are not directly reflected in the determination of the premium rates. Pre-65 Medical / Rx trend rates have been reset to an initial rate of 9% decreasing by 0.5% annually to an ultimate rate of 4.5%. Post-65 Medical / Rx trend rates have been reset to an initial rate of 8% decreasing by 0.5% annually to an ultimate rate of 4.5%. This change caused a slight increase in liabilities. 17. DEFERRED COMPENSATION PLAN Effective November 14, 1983, the City added a self-directed 457 Deferred Compensation Plan to its employee benefit options. The plan is administered by the International City Management Retirement Corporation (RC). The assets are held in the name of each participant with the ICMA (International City/County Management Associations) Retirement Trust. Employees are eligible to make contributions to the plan not to exceed the ceiling set by federal regulations. The City later added an alternative investment firm for the Deferred Compensation Plan with Nationwide Retirement Solutions. In May 1994, the City offered to employees the 457 Deferred Compensation Plan as their pension plan in lieu of participation in the General Employee Pension Plan. At that time 41 employees opted out of the Defined Benefit Pension Plan and enrolled in the Deferred Compensation Plan. The ICMA 457 Deferred Compensation Plan has assets of $8,664,178 (market value) as of June 30, 2017, with 142 active employees contributing $449,759. The Nationwide plan has assets of $3,569,844 (market value) as of June 30, 2017 with 19 active employees contributing $90,844. Quarterly statements are mailed to each participant by the plan administrators. All administration fees are borne by the participants. All contributions are 100% vested upon election of the plan. Employees are eligible to withdraw or rollover to another plan the employer and employee benefits upon separation of service. Withdrawals prior to age 59½ could be subject to penalty. Employees who participate in the defined benefit plan are also eligible for the 457 Deferred Compensation Plan. No matching employer contribution is made to the 457 Deferred Compensation Plan. As of June 30, 2017, there are 338 employees eligible to enroll in the 457 Deferred Compensation Plan. 18. RETIREMENT PLANS The City participates and/or manages four retirement plans on behalf of its employees. Three of the pension plans are defined benefit plans and one is a defined contribution plan. Two of the defined benefit plans are closed to new hires. All full-time employees are required to enroll in a pension plan. During fiscal year 2017 the total wages were $22.4 million and the total pensionable wages were $20 million for all full-time employees. The number of employees eligible for pension benefits as of June 30, 2017 is 338. 91

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements A. Defined Contribution Plan Effective July 1, 2000, the City implemented an IRC 401a Money Purchase Plan “401a Plan,” a self-directed defined contribution plan, as an alternative choice for pension benefits. The contribution and funding requirements of the plan are both established and amended by the City. The plan is administered by the International City Management Retirement Corporation (RC). The assets are held in the name of each participant with the ICMA (International City/County Management Associations) Retirement Trust. Quarterly statements are mailed to each participant by RC. All administration fees are borne by the participants. The City provides a 3% match of the employees required contribution to the 401a Plan, and up to an additional 3% to the 401a Plan for a potential total contribution of 6%, if the employee contributes up to an additional 3% to their 457 Plan (see note 17 – Deferred Compensation Plan). The Dover Organization of Employees (DOE) union contract renewed effective July 1, 2015 through June 30, 2018. The contract changed the mandatory minimum employee contribution (MMEC) as well as the City’s minimum matching contribution as follows: Minimum Effective Date Employee Contribution City’s Match (Up To) March 27, 2016 4% 7% July 1, 2016 5% 8% The 401a Plan and 457 Plan contributions are calculated on base wages plus on-call pay, pay adjustments, and scheduled overtime. All full-time regular employees are eligible, excluding law enforcement personnel. Personnel that have elected the defined contribution plan are not eligible for the defined benefit plan. All contributions are 100% vested upon election of the plan. To be eligible for benefit payments, the participant must meet the same eligibility requirements as the participants in the defined benefit plan. Employees are eligible to withdraw or rollover to another plan the employer and employee benefits upon separation of service. Withdrawals prior to age 59 ½ could be subject to penalty. As of June 30, 2017, there were 157 full-time employees enrolled in the 401a plan. The City contributed a total of $361,268 on wages of approximately $6.3 million. Employees contributed $266,156 to the 401a Money Purchase Plan. The market value of the 401a plan assets totaled $5,734,375 as of June 30, 2017. 92

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements B. Defined Benefit Plans The City participates in three defined benefit pension plans: City of Dover Police Pension Plan (closed), City of Dover General Employee Pension Plan (closed), and State of Delaware County and Municipal Police Pension Plan. The City of Dover Police Pension Plan, a single employer defined benefit plan, covers all uniformed police officers hired prior to September 1, 1982. The City of Dover General Employee Pension Plan, a single employer defined benefit plan, covers all eligible full-time permanent employees, other than police officers hired prior to September 29, 2009. The State of Delaware County and Municipal Police Pension Plan, a multi-employer cost sharing defined benefit plan, covers all uniformed police officers hired on or after September 1, 1982. The City makes employer contributions to all three plans. The City holds on behalf of the Pension Boards of Trustees the assets of the two single- employer defined benefit plans and, accordingly, is required to prepare pension trust fund financial statements using the accrual basis of accounting. Investments are reported at fair value based on quoted market prices. Receivables and payables represent year end accruals of short-term receipts or charges. The administration of plan assets for both the Police Pension Plan and the General Employee Pension Plan is conducted by the Pension Boards as described in the subsequent disclosures. Separate pension fund financial statements for each plan have not been issued; accordingly, they are presented as required by GASB Statement No. 34, as follows: The City of Dover, Delaware Combining Statement of Pension Trust Fund Net Position June 30, 2017 Police General Pension Pension Totals ASSETS: Cash and cash equivalents $ 908,583 $ 2,214,573 $ 3,123,156 Investments at fair value - Mutual Funds 12,627,908 37,576,362 50,204,270 Total Assets 13,536,491 39,790,935 53,327,426 Net position held in trust for pension benefits $ 13,243,119 $ 39,364,426 $ 52,607,545 93

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements The City of Dover, Delaware Combining Statement of Changes in Pension Trust Fund Net Position For the Year Ended June 30, 2017 Police General Pension Pension Totals Additions Net investment income $ 1,433,258 $ 4,350,779 $ 5,784,037 City's contribution - payroll based - 2,876,657 2,876,657 City's contribution - lump sum 670,000 - 670,000 Employee contribution - 202,175 202,175 State contributions 444,317 - 444,317 Other 4,029 - 4,029 Total Additions to Net Position 2,551,604 7,429,611 9,981,215 Deductions Benefit payments 1,528,191 3,746,045 5,274,236 General administration 4,979 17,677 22,656 Total Deductions From Net Position 1,533,170 3,763,722 5,296,892 Change in net position 1,018,434 3,665,889 4,684,323 Net Position - Beginning 12,224,685 35,698,537 47,923,222 Net Position - Ending $ 13,243,119 $ 39,364,426 $ 52,607,545 Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each plan are recognized when due, pursuant to formal commitments, to provide contributions. Benefits or refunds are recognized when due and payable in accordance with the terms of each plan. Investment management and consultant fees are paid from the Pension Trust Funds. All actuarial costs are paid from other City funds. i. City of Dover Police Pension Plan Plan Description This contributory pension plan began on January 1, 1970 under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71 through 62-84. The contribution and funding requirements of the plan are established by the City and may be amended by the City Council. It is a closed plan. The last active employee retired June 29, 2006. An officer’s pension right is vested upon the completion of 15 years of continuous service. As of June 30, 2017, there are 47 retirees and beneficiaries receiving benefits. Fully vested employees who have completed 20 to 25 years of continuous service are entitled to annual benefits equal to 2.5% of their average earnings for each year of continuous service. The maximum benefit is 62.5% of average earnings. If a participant terminates after completing 15 years of service, the participant will be eligible for a deferred benefit commencing at age 60 with a benefit accrued at the date of termination. In place of this vesting, participants may elect to receive their accumulated contributions. Disability benefits are paid to a participant who is totally or partially disabled in the performance of his or her duties. The total duty-connected disability benefit is payable monthly and equal to 94

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements 75% of the monthly rate of earning at the time of disability. The partial duty-connected disability benefit is the accrued benefit at the date of disability if not less than 50% of average earnings. Disability benefits cease if the participant recovers or dies. If the disabled participant reaches his normal retirement date, the benefit is reduced by one-third. Survivor’s benefits are payable monthly in an amount equal to 75% of the participant’s rate of earnings, for a duty related death. Survivor’s benefits are payable monthly in an amount not to exceed 25% of the participant’s rate of earnings, for a non-duty related death, if the participant has completed 10 years of service. If a retired participant dies, his or her spouse receives 50% of the benefit. All benefits under the plan, including survivor’s benefits, are increased 2% per annum. There have been no changes in benefits during the valuation period by City Council. Plan Administration Management of the plan investments are fully vested with the City of Dover Police Pension Board as established in the City Code, which consists of three elected by plan members, two Council members appointed by the Council President, the Chief of Police, and the City Manager. The City Controller/Treasurer serves as an ex-officio member. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. Funding Policy The City intends to continue to fund the actuarial determined contributions (ADC) as provided for in the actuarial valuation. The current year contributions are based on the parameters set forth in the interim actuarial valuation report as of June 30, 2017 in accordance with GASB Statement No. 67/68. The funding may be impacted by differences in actual experience and the actuarial assumptions. The employer contributions are considered by the actuaries in their determination of the actuarial determined contribution. In addition, the City has adopted in its financial policies to have any surplus in the budget balances of the prior year be transferred to the retirement benefit plans to further reduce the net pension liability. The State contributes to the pension fund on behalf of the City based on 1) an allocation to the City based on a 0.25% surcharge on insurance policies issued in the state and the number of officers employed and 2) 75% matching grant for the annual cost of living increase (COLA) granted to police retirees on January 1 each year. For the fiscal year ending June 30, 2017, the State contributed $444,317. The ADC conforms to the entry age normal cost method as defined in GASB Statement No. 67/68. The City has interim valuations completed each year between the required biennial valuations to monitor the progress of the net pension liability. The City’s actuary is Nyhart of Indianapolis, Indiana. The ADC is being amortized using a level dollar method. The amortization period is 8 years for the 2017 fiscal year and will decline by 1 each year until 1 year. Total contributions to the plan for the fiscal year ending June 30, 2017 were $1.1 million, which would be 91.6% of the ADC. The Actuarially Determined Contribution is based on a closed 10-year level dollar amortization of the Unfunded Actuarial Accrued Liability (UAAL). The Schedule of Changes in the Net Pension Liability, and a Schedule of Employer Contributions are presented as Required Supplementary Information (RSI) following the notes to the financial statements. 95

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Net Pension Liability As of June 30, 2017, the most recent measurement date for the actuarial valuation, the plan was 69.03% funded. The total pension liability for benefits was $19.2 million, and the fiduciary net position was $13.2 million, which resulted in a net pension liability (NPL) of $6.0 million for the primary government. There are no active officers, therefore there is no covered payroll or ratio of the net pension liability to cover payroll. Key methods and assumptions used in calculating the total pension liability in the latest actuarial valuation, are presented below: Rate of return. For the year ended June 30, 2017, the annual money-weighted rate of return on investments, net of investment expense, was 12.34%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Actuarial Methods and Significant Assumptions Valuation date July 1, 2016 Actuarial cost method Entry Age Normal Amortization method Level Dollars Amortization period Closed Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases none, no remaining active participants Includes inflation at none, no remaining active participants Automatic Cost of living (retirees) 2.0% Mortality RP-2014 Blue Collar with generational improvements from 2006 based assumptions from 2016 SS Admin Trustee’s Report Changes in Actuarial Assumptions or Methods The long term expected rate of return on pension plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2017 are summarized in the following table: 96

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Police Pension Fund Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash 4.00% 0.50% Fixed Income 29.00% 3.55% Stocks 59.00% 8.28% Short-term Investments 0.00% 0.00% Real Estate 8.00% 7.96% Alternatives 0.00% 0.00% Long-Term Expected Rate of Return 6.50% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. Police Pension Fund Changes in Net Pension Liability Increase Total (Decrease) Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) Balances as of June 30, 2016 $ 19,387,871 $ 12,224,685 $ 7,163,186 Changes for the year: Interest on total pension liability 1,210,545 - 1,210,545 Effect of assumptions changes or inputs 115,749 - 115,749 Benefit payments (1,528,191) (1,528,191) - Employer contributions - 1,118,346 (1,118,346) Net investment income - 1,433,258 (1,433,258) Administrative expenses - (4,979) 4,979 Balances as of June 30, 2017 $ 19,185,974 $ 13,243,119 $ 5,942,855 Discount Rate The discount rate used to measure the total pension liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the 97

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability, calculated using the discount rate of 6.50%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. Police Pension Fund 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net pension liability $ 7,925,784 $ 5,942,855 $ 4,145,671 Pension Expense, Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2017, the City recognized pension expense of $636,069 calculated in the following chart: Police Pension Expense July 1, 2016 to June 30, 2017 Interest on total pension liability $ 1,210,545 Projected earnings on pension plan investments (781,123) Administrative expenses 7,979 Member contributions - Current period recognition of deferred outflows/(inflows) of resources Changes of assumptions 115,749 Differences between projected and actual earnings on plan investments 85,919 Total Pension Expense $ 639,069 98

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements As of June 30, 2017, the City reported deferred outflows/(inflows) of resources related to pension from the following sources: Police Pension Plan Deferred Outflows of Resources Net difference between projected and actual earnings $ 534,975 Deferred Inflows of Resources Net difference between projected and actual earnings $ (521,708) Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Police Pension Plan Fiscal Year Ending June 30: 2018 $ 85,919 2019 85,917 2020 (28,142) 2021 (130,427) ii. City of Dover General Employee Pension Plan Plan Description The City of Dover General Employee Pension Plan started on July 1, 1967, under the authority of the City Council, Municipal Code, Chapter 2, Article IV, Division 7, General Employee Pension Plan, Sections 2-321 through 2-370, and was made contributory on July 1, 1983. Employees contribute 3.5% of gross salary, exclusive of unscheduled overtime. An employee’s pension right is vested upon completion of 10 years of continuous service. As of the interim valuation date, June 30, 2017, 107 employees and 205 retirees participate in the plan. The General Employee Pension Plan is comprised of the following: Retired and beneficiaries currently receiving benefits 205 Active employees Fully Vested 91 Non-Vested 16 Deferred vested 19 The percentage of covered payroll which employees contribute is stated in the City Code, and is considered by the actuaries in their determination of the actuarial determined contribution for service cost. For the year ended June 30, 2017, gross payroll earnings of $6.2 million were reported to and covered by this plan. An employee hired before May 1, 1994 is eligible for normal retirement benefits under this plan, when he/she attains the age of 65 with 10 years of continuous service. This same employee is eligible for early retirement when he/she attains the age of 50 with 20 years of continuous service or has completed 25 years of service. Employees hired on or after May 1, 1994 who 99

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements attained age 55 and whose attained age plus years of continuous service is equal to or greater than 80 are eligible for early-unreduced retirement benefits under this plan. The monthly benefits are 1/50 of the average actual monthly earnings multiplied by years and months of credited service upon retirement (highest 36 consecutive months in his/her final 10 years of continuous service). The monthly benefit shall not be less than $200 per month. Benefits are paid for the lifetime of the participant. Upon the death of the participant, 50% of the payments to which the participant was or would have been entitled shall be made to his eligible survivor. An employee may also take an early-reduced retirement on any date following the attainment of age 55 and the completion of 10 years of continuous service. However, the early retirement benefit is calculated in the same manner as the normal retirement benefit, at a reduced rate of one-half percent for each month computed from the date of early retirement to age 65 years. If an employee terminated before becoming vested in the plan, they are eligible to withdraw this total contribution with interest compounded annually. Survivor's benefits are payable to eligible survivors of a participant who dies after completing 10 years of continuous service. The amount of the death benefit is equal to 50% of the retirement benefit the participant would have received had he retired the day before he died. A participant is vested in the pension plan after completing 10 years of continuous service, with survivor benefits commencing when the employee would have attained the age of 65. The benefit is calculated using the normal retirement benefit formula and service at date of termination. Effective September 29, 2009 the City Council voted to close the General Employees’ Pension plan to new hires. There have been no changes in benefits during the valuation period by City Council. Plan Administration Management of the plan investments are fully vested with the City of Dover Employees’ Pension Board as established in the City Code, which consists of three elected by plan members, two Council members appointed by the Council President, the City Controller/Treasurer, and the City Manager. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. Funding Policy The City intends to fund the actuarial determined contributions (ADC) as provided for in the actuarial valuation. The City uses the percentage of payroll determined by the actuary for its contributions. The funding may be impacted by differences in actual experience and the actuarial assumptions. The employer contributions are considered by the actuaries in their determination of the actuarial determined contribution. In addition, the City has adopted in its financial policies to have any surplus in the personnel related budget balances of the prior year be transferred to the retirement benefit plans to further reduce the net pension obligation. The City makes payroll based contributions for active members in the plan. The Actuarially Determined Contribution is based on a closed 15-year level dollar amortization of the Unfunded Actuarial Accrued Liability (UAAL). The Schedule of Changes in the Net Pension Liability, and a Schedule of Employer Contributions are presented as Required Supplementary Information (RSI) following the notes to the financial statements. 100

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Net Pension Liability As of June 30, 2017, the most recent measurement date for the interim actuarial valuation, the plan was 65.10% funded. The total pension liability for benefits was $60.5 million, and the fiduciary net position was $39.4 million, which resulted in a net pension liability (NPL) of $21.1 million for the primary government. The covered payroll (annual payroll of active employees covered by the plan) was $5.6 million and the ratio of the NPL to the covered payroll was 374.39%. Rate of return. For the year ended June 30, 2017, the annual money-weighted rate of return on investments, net of investment expense, was 12.50%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Key methods and assumptions used in calculating the total pension liability are presented in the following chart: Actuarial Methods and Significant Assumptions Valuation date July 1, 2016 Actuarial cost method Entry Age Normal Amortization method Level Dollar Amortization period Closed; smooths gains and losses over a 5-year period Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases 3.0% Includes inflation at 2.5% Mortality RP-2014 Blue Collar with generational improvements from 2006 based on 2016 SS Admin Trustee’s Report Changes in Actuarial Assumptions or Methods The long-term expected rate of return on pension plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2017 are summarized in the following table: 101

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements General Employee Pension Plan Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash 4.50% 0.50% Fixed Income 28.50% 3.62% Stocks 59.00% 8.28% Real Estate 8.00% 7.96% Long-Term Expected Rate of Return 6.50% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. General Employee Pension Fund Changes in Net Pension Liability Increase Total (Decrease) Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) Balances as of June 30, 2016 $ 58,807,821 $ 35,698,537 $ 23,109,284 Changes for the year: Service cost 433,052 - 433,052 Interest on total pension liability 3,728,910 - 3,728,910 Effect of economic/demographic gains or losses 40,689 - 40,689 Effect of assumptions changes or inputs 1,200,614 - 1,200,614 Benefit payments (3,746,045) (3,746,045) - Employer contributions - 2,876,657 (2,876,657) Member contributions - 202,175 (202,175) Net investment income - 4,350,779 (4,350,779) Administrative expenses - (17,677) 17,677 Balances as of June 30, 2017 $ 60,465,041 $ 39,364,426 $ 21,100,615 Discount Rate The discount rate used to measure the total pension liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made 102

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements at the current contribution rate and that contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability, calculated using the discount rate of 6.50%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. General Employee Pension Fund 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net pension liability $ 28,536,637 $ 21,100,615 $ 14,478,931 Pension Expense, Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2017, the City recognized pension expense of $2,514,584 as calculated in the following chart: General Employee Pension Expense July 1, 2016 to June 30, 2017 Service cost $ 433,052 Interest on total pension liability 3,728,910 Administrative expenses 17,677 Member contributions (202,175) Projected earnings on pension plan investments (2,298,146) Current period recognition of deferred outflows/(inflows) of resources Differences between expected and actual experience (173,917) Differences between projected and actual earnings on plan investments 165,696 Changes of assumptions 843,487 Total Pension Expense $ 2,514,584 103

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements As of June 30, 2017, the City reported deferred outflows/(inflows) of resources related to pension from the following sources: General Employee Pension Plan Deferred Outflows of Resources Changes in assumptions City contributions sebsequent to the $ 1,226,461 Differences between expected and actual experience 30,517 Net difference between projected and actual earnings 1,438,325 Total Deferred Outflows of Resources $ 2,695,303 Deferred Inflows of Resources Differences between expected and actual experience $ (203,957) Net difference between projected and actual earnings (1,642,106) Total Deferred Inflows of Resources $ (1,846,063) Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: General Employee Pension Plan Fiscal Year Ending June 30: 2018 $ 664,853 2019 409,233 2020 185,679 2021 (410,525) iii. Delaware Public Employee Retirement System - County and Municipal Police and Firefighters’ Pension Plan Plan Description and Contribution Information The City participates in the “County and Municipal Police and Firefighters’ Pension Plan” (the Plan) is a cost sharing multiple-employer defined-benefit plan established in the Delaware code. The City’s uniformed police officers whose employment with the City started on or after September 1, 1982 under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71 can participate in this plan. The General Assembly is responsible for setting benefits, contributions and amending plan provisions; administrative rules and regulations are adopted and maintained by the Board of Pension Trustees (the Board). The management of the Plan is the responsibility of the Board. The Board is comprised of five members appointed by the Governor and confirmed by the State Senate, plus two ex-officio members. The daily operation is the responsibility of the Office of Pensions. Although most of the assets of the plan are commingled with other Plans for investment purposes, the Plan’s assets may be used only for the payment of benefits to the members of the Plan in accordance with the terms of the Plan. 104

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements The Plan’s service benefits calculation is 2.5% of final average monthly compensation multiplied by years of credited service up to 20 years, plus 3.5% of final average monthly compensation multiplied by years of service in excess of 20 years. For this plan, final average monthly compensation is the monthly average of the highest three consecutive years of compensation. Vesting is at five years of credited service and retirement age is 62 with five years of service; age plus credited service (but not less than 10 years) equals 75; or 20 years of credited service. As of June 30, 2017, city membership in this plan is comprised of the following: Retired and beneficiaries currently receiving benefits 57 Active employees: Fully Vested 5 years 53 Non-Vested 41 The following are brief descriptions of the Plan. For a more complete description, please refer to the DPERS CAFR on the web at http://accounting.delaware.gov/2016cafr.pdf. County and Municipal Police and Firefighters’ Pension Plan Retirement Age 62 with 5 years of service; age plus credited service (but not less than 10 years) equals 75; or 20 years of credited service. Disability Benefits Duty – Total Disability – 75% of final average compensation plus 10% for each dependent not to exceed 25% for all dependents. Duty – Partial Disability – Calculated the same as Service Benefits, subject to minimum 50% of final average compensation. Non-Duty – Same as Service Benefits, total disability subject to a minimum 50% of final average monthly compensation plus 5% of each dependent not to exceed 20% for all dependents. Partial disability is subject to a minimum of 30% of final average monthly compensation. Survivor Benefits If employee is receiving a pension, then eligible survivor receives 50% of pension; if employee is active, eligible survivor receives 50% of pension the employee would have received at age 62. If the member is killed in the line of duty, the eligible survivor receives 75% of the member’s compensation. Contributions: Employer – Determined by Board of Pension Trustees. Employer contributions were 13.77%, 13.8% and 14.2% of earnings for the Fiscal Year 2017, 2016 and 2015, respectively. The City’s contributions to the plan for years ended June 30, 2015, 2016 and 2017 were $933,750, $977,587 and $980,117, respectively, and were equal to the required contributions for each year. Total eligible full-time wages covered by the State plan were $7.18 million this fiscal year. Member – 7% of compensation. 105

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Basis of Presentation The Schedules of Employer Allocations and Pension Amounts by Employer (collectively, the Schedules) present amounts that are considered elements of the financial statements of DPERS or its participating employers. Accordingly, they do not purport to be a complete presentation of the financial position or changes in financial position of DPERS or the participating employers. Employer Allocation Percentage Methodology The amounts assigned to each employer in the Schedule of Pension Amounts by Employer is each employer’s proportional share of the net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense (the Collective Pension Amounts) determined in accordance with Governmental Accounting Standards Board No. 68, Accounting and Financial Reporting for Pensions (GASB 68). Management has elected to allocate the employer’s proportionate shares of the collective pension amounts based on the percentage of actual employer contributions as documented in the Schedule of Employer Allocations. The City’s proportionate share percentage is 9.0042% for the current fiscal year, 9.9607% for the prior year and the change is a decrease of 0.9565%. Pension Liabilities, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources related to Pensions At June 30, 2017, the City reported a net pension liability of $1,431,281 for its proportionate share of the collective net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the percentage of actual employer contributions. The components of the proportionate share of the net pension liability of the Plan as of June 30, 2017 were as follows (dollar values expressed in thousands): County and Municipal Police & Firefighter's Pension Plan (dollar values expressed in thousands) (3) The Employers' (1) (2) proportionate Total Plan fiduciary share of the proportionate proportionate net pension share of the share of the liability (asset) Year pension liability net position (1)-(2) 2016 $ 27,030 $ 25,599 $ 1,431 2015 26,679 27,204 (525) 2014 23,298 24,340 (1,042) 106

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements The City recognized pension expense of $1,398,082 for the year ended June 30, 2017, associated with membership within the Delaware State Police Pension Plan. As of June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: County and Municipal Police & Firefighter's Pension Plan Deferred Outflows of Resources Differences between expected and actual experience $ 244,375 Projected and actual plan investment differences 1,480,278 Change in proportion 15,679 City contributions sebsequent to the measurement date 976,828 Total Deferred Outflows of Resources $ 2,717,160 Deferred Inflows of Resources Differences between expected and actual experience $ (243,760) Changes in assumptions (376,291) Change in proportion (85,597) Total Deferred Inflows of Resources $ (705,648) The City’s contributions of $976,828 are subsequent to the measurement date and therefore are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ending June 30, 2018. The additional amounts shown as Deferred Outflows of Resources totaling $1,740,332 should be recognized (amortized) over the average of the expected remaining service lives of all plan members, which is 10 years. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: County and Municipal Police & Firefighter's Pension Plan Fiscal Year Ending June 30: 2018 $ 251,496 2019 251,496 2020 251,496 2021 251,496 2022 251,496 Thereafter (222,796) 107

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements The components of collective pension expense for the year ending June 30, 2016 are as follows: County and Municipal Police & Firefighter's Pension Expense June 30, 2016 Service cost $ 1,276,255 Member contributions (479,744) Administrative expenses 12,156 Interest on the total pension liability 1,830,554 Projected earnings on plan investments (1,818,578) Changes in benefit terms 395,374 Recognition of deferred outflow and inflows of resources: Changes in assumptions in the measurement of total pension liability (41,779) Differences between expected and actual experience 90 Differences between projected and actual earnings on plan investments 223,754 Total Pension Expense $ 1,398,082 The proportionate share of the total pension liability for the June 30, 2016 measurement date was determined by an actuarial valuation as of June 30, 2015, with update procedures used to roll forward the total pension liability to June 30, 2016. These actuarial valuations used the following actuarial assumptions: Actuarial Assumptions Investment rate of return/Discount rate1 7.2% Projected salary increases1 2.5% + Merit Cost-of-living adjustments 0.0% Inflation is included at 2.5%, the total pension liabilities are measured based on assumptions pertaining to the interest rates, inflation rates, and employee demographic behavior in future years. The assumptions used were based on the results of an actuarial experience study conducted in 2016. It is likely that future experience will not exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the larger the impact on future financial statements. Key assumption changes include a reduction in the inflation assumption from 3.0% to 2.5% and a change to use updated mortality tables. Mortality assumptions are based on the RP – 2014 tables with gender adjustments for healthy annuitants and disabled retirees and an adjusted version on MP-2015 mortality improvement scale on a fully generational basis. Projected benefit payments do not include the effects of projected ad hoc cost-of-living adjustments (ad hoc COLAs) as they are not substantively automatic. The primary considerations relevant to making this determination include the historical pattern of granting the changes and the consistency in the amounts of the changes. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset 108

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by an asset allocation percentage, which is based on the nature and mix of current and expected plan investments, and by adding expected inflation. Best estimates of geometric real rates of return for each major asset class included in the Plan’s current and expected asset allocation are summarized in the following table: County and Municipal Police & Firefighter's Pension Plan Long-Term Expected Rate of Return Long-Term Expected Real Asset Rate of Return Allocation Asset class: Domestic equity 5.7% 34.0% International equity 5.7 14.7 Fixed income 2.0 25.0 Alternative investments 7.8 20.9 Cash and equivalents - 5.4 Discount Rate The discount rate for all plans used to measure the total pension liability was 7.2%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rates and that contributions from employers will be made at rates determined by the Board of Pension Trustees, actuarially determined. Based on those assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability (asset) of the Plan, calculated using the discount rate of 7.2%, as well as what the Plans’ net pension liability (asset) would be if it were calculated using a discount rate that is one-percentage-point lower or one-percentage-point higher than the current rate (dollar values expressed in thousands): County and Municipal Police & Firefighter's Pension Plan (dollar amounts expressed in thousands) 1% Current 1% Decrease Discount Rate Increase 6.20% 7.20% 8.20% City of Dover's proportionate share of the net pension liability (asset) $ 5,694 $ 1,431 $ (2,043) 109

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Notes to Financial Statements Separately issued financial statements for DPERS are available from the pension office at: McArdle Building, Suite 1 860 Silver Lake Blvd Dover, DE 19904 Or at the following web address: www.delawarepensions.com Following is the total of the City of Dover’s pension liabilities, pension assets, deferred outflows of resources and deferred inflows of resources related to pensions, and the pension expense and expenditures for the fiscal year ended June 30, 2017: 2017 Police General DPERS Total Net Pension Liabilities 5,942,855 21,100,615 1,431,281 28,474,751 Deferred Outflows of Resources 534,975 2,695,304 2,717,161 5,947,440 Deferred Inflows of Resources 521,708 1,846,064 705,648 3,073,420 Pension Expense 639,069 2,514,584 1,398,082 4,551,735 110

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D CITY OF DOVER, DELAWARE GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Non-GAAP Basis) For the Year Ended June 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance $ 4,493,900 $ 5,424,800 $ 5,424,751 $ (49) REVENUES: Fines & Police Revenue 700,000 700,000 615,769 (84,231) 911 Fee 63,300 63,300 63,337 37 Interest Earnings 90,000 90,000 154,464 64,464 Library Revenues - General 70,300 70,300 67,647 (2,653) Library Revenues - County Reimb. 312,600 312,600 312,914 314 Business Licenses 1,467,000 1,467,000 1,462,390 (4,610) Permits & Other Licenses 1,662,100 1,662,100 2,069,711 407,611 Miscellaneous Revenues 56,800 56,800 117,085 60,285 Police Extra Duty Fees 525,000 525,000 497,167 (27,833) Property Taxes 12,895,100 12,895,100 12,895,597 497 Recreation Revenue 150,000 150,000 169,011 19,011 Franchise Fees 680,000 680,000 690,749 10,749 Transfer Tax 1,672,700 1,672,700 1,633,559 (39,141) Sanitation Fees 2,538,300 2,538,300 2,514,645 (23,655) Garrison Farm Rent 94,500 94,500 95,739 1,239 Court of Chancery Fees 1,100,000 1,100,000 1,343,020 243,020 Interfund Service Receipts Water/Wastewater 1,653,800 1,673,400 1,583,025 (90,375) Interfund Service Receipts Electric 3,564,900 3,625,900 3,425,044 (200,856) Grants: Green Energy Grant 98,500 98,500 98,500 - Miscellaneous Grants 25,000 25,000 11,390 (13,610) Police Pension Grant 500,000 500,000 444,317 (55,683) Transfer from Police Grant Funds 258,600 258,600 239,838 (18,762) Transfer from Municipal Street Aid 673,100 673,100 673,432 332 Transfer from Civil Traffic Penalties 496,900 496,900 463,616 (33,284) Transfer from Cable Franchise and CI Reserves - - 1,800 1,800 Transfer from Water/Wastewater Fund 875,000 875,000 875,000 - Transfer from Electric Fund 10,000,000 10,000,000 10,000,000 - Total Revenues 42,223,500 42,304,100 42,518,766 214,666 TOTAL BEGINNING BALANCE & REVENUES $ 46,717,400 $ 47,728,900 $ 47,943,517 $ 214,617 (Continued) 112

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D (Continued) VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) EXPENDITURES: Tax Assessor $ 244,000 $ 247,400 $ 216,255 $ 31,145 Fire 721,700 721,700 686,942 34,758 Library 1,635,000 1,666,700 1,593,123 73,577 Recreation 750,900 757,300 728,665 28,635 Life Safety 485,200 490,000 436,248 53,752 Code Enforcement 421,100 437,200 417,072 20,128 Planning Commission 546,800 547,100 513,403 33,697 Public Inspections 697,900 693,300 652,999 40,301 Police 16,875,200 17,076,000 17,003,568 72,432 Streets 1,163,500 1,070,400 944,399 126,001 Sanitation 2,032,800 2,044,200 2,017,216 26,984 Engineering 207,000 207,000 219,198 (12,198) Allocated Expenditures: City Clerk 412,300 416,200 414,556 1,644 Council 141,100 141,100 118,768 22,332 Grounds Maintenance 1,201,300 1,210,700 1,051,229 159,471 City Manager 792,400 795,400 784,898 10,502 Information Technology 716,300 720,000 655,014 64,986 Finance 1,011,100 1,020,000 1,014,522 5,478 Public Services-Administration 680,000 682,300 635,504 46,796 Facilities Management 607,100 651,000 632,830 18,170 Procurement and Inventory 585,100 585,100 565,043 20,057 Fleet Maintenance 776,300 815,600 841,345 (25,745) Customer Services 1,143,800 1,246,200 1,041,697 204,503 Human Resources 392,500 404,800 423,699 (18,899) Mayor 74,000 74,000 76,423 (2,423) Insurance 700,000 700,000 689,797 10,203 Contribution to Downtown Dover Partnership 150,000 150,000 150,000 - Miscellaneous Grant Expense 25,000 25,000 15,815 9,185 Other Employment Expenses 400,700 115,400 - 115,400 Bank & Credit Card Fees 15,000 15,000 15,011 (11) Retiree Benefits 2,039,700 2,039,700 2,039,700 - Subtotal 37,644,800 37,765,800 36,594,939 1,170,861 Debt Service - Principal and Interest 685,300 685,300 692,268 (6,968) Transfer to Capital Asset Reserve - 253,400 253,400 - Transfer to Capital Fund for Projects 1,859,400 2,344,400 2,344,400 - Transfer to Police Pension Fund 670,000 670,000 670,000 - Transfer to Uncollectible Reserve 50,000 50,000 50,000 - Transfer to Inventory Reserve 10,000 10,000 10,000 - Appropriation to Police Pension Fund 500,000 500,000 444,317 55,683 Street Lights 804,000 804,000 811,992 (7,992) Total Expenditures 42,223,500 43,082,900 41,871,316 1,211,584 Budget Balance 4,493,900 4,646,000 6,072,201 (1,426,201) Total Budget Balance & Expenditures $ 46,717,400 $ 47,728,900 $ 47,943,517 $ (214,617) Budget Balance - Working Capital $ 6,072,201 Perspective and GAAP (Non-GAAP) Differences: Reserve for Encumbrances (121,429) Fair Value of Investment Adjustment (27,637) Deferred Revenues - Non-spendable (228,830) Inventory & Prepaids - Non-spendable (165,700) Unassigned Fund Balance $ 5,528,605 113

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D Police Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands) Fiscal Year Ending June 30, 2017 2016 2015 2014 Total Pension Liability Interest on total pension liability $ 1,211 $ 1,281 $ 1,311 $ 1,325 Effect of economic/demographic (gains) or losses - (836) 286 25 Effect of assumption changes or inputs 116 - 932 - Benefit payments (1,528) (1,528) (1,557) (1,548) Net change in total pension liability (201) (1,083) 972 (198) Total pension liability, beginning 19,387 20,471 19,499 19,697 Total pension liability, ending (a) $ 19,186 $ 19,388 $ 20,471 $ 19,499 Fiduciary Net Position Employer contributions $ 1,118 $ 1,093 $ 1,386 $ 1,229 Investment income net of investment expenses 1,433 279 283 1,583 Benefit payments (1,528) (1,528) (1,557) (1,548) Administrative expenses (4) (4) (6) (20) Net change in plan fiduciary net position 1,019 (160) 106 1,244 Fiduciary net position, beginning 12,225 12,385 12,279 11,035 Fiduciary net position, ending (b) $ 13,244 $ 12,225 $ 12,385 $ 12,279 Net pension liability, ending = (a) - (b) $ 5,942 $ 7,163 $ 8,086 $ 7,220 Fiduciary net position as a % of total pension liability 69.03% 63.05% 60.50% 62.97% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. Police Pension Fund Schedule of Employer Contributions Contribution as Fiscal Year Actuarially Actual Contribution a Percentage of Ended Determined Employer Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll 2017 $ 1,176,462 $ 1,118,346 $ 58,116 $ - N/A 2016 1,212,000 1,093,278 118,722 - N/A 2015 1,176,422 1,385,789 (209,367) - N/A 2014 1,155,110 1,229,363 (74,253) - N/A 2013 1,155,796 1,074,599 81,197 - N/A 2012 979,132 668,274 310,858 - N/A 2011 1,082,956 633,636 449,320 - N/A 2010 786,436 496,587 289,849 - N/A 2009 520,505 725,492 (204,987) - N/A 2008 358,807 721,202 (362,395) - N/A 2007 485,055 746,985 (261,930) - N/A 114

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D Police Pension Plan Net Pension Liability June 30, 2017 June 30, 2016 Total pension liability $ 19,185,974 $ 19,387,871 Fiduciary net position 13,243,119 12,224,685 Net pension liability 5,942,855 7,163,186 Fiduciary net position as a % of total pension liability 69.03% 63.05% Covered payroll - - Net pension liability as a % of covered payroll N/A N/A The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and was then projected forward to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. Rate of return. For the year ended June 30, 2017, the annual money-weighted rate of return on investments, net of investment expense, was 12.34%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Actuarial Methods and Significant Assumptions Valuation date July 1, 2016 Actuarial cost method Entry Age Normal Amortization method Level dollar Amortization period Closed Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases none, no remaining active participants Includes inflation at none, no remaining active participants Automatic Cost of living (retirees) 2.0% Mortality RP-2014 Blue Collar with fully generational Improvements from 2006 based on assumptions From the 2016 Social Security Admin Trustee’s Report 115

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D General Employee Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands) Fiscal Year Ending June 30 2017 2016 2015 2014 Total Pension Liability Service cost $ 433 $ 401 $ 459 $ 484 Interest on total pension liability 3,729 3,719 3,861 3,810 Effect of economic/demographic (gains) or losses 41 (267) (422) 111 Effect of assumption changes or inputs 1,200 - 1,956 - Benefit payments (3,746) (3,718) (3,700) (3,654) Net change in total pension liability 1,657 135 2,154 751 Total pension liability, beginning 58,808 58,673 56,519 55,768 Total pension liability, ending (a) $ 60,465 $ 58,808 $ 58,673 $ 56,519 Fiduciary Net Position Employer contributions $ 2,877 $ 3,090 $ 3,420 $ 3,473 Member contributions 202 202 209 212 Investment income net of investment expenses 4,351 850 955 4,153 Benefit payments (3,746) (3,718) (3,700) (3,654) Administrative expenses (18) (16) (19) (20) Net change in plan fiduciary net position 3,666 408 865 4,164 Fiduciary net position, beginning 35,699 35,291 34,426 30,263 Fiduciary net position, ending (b) $ 39,365 $ 35,699 $ 35,291 $ 34,427 Net pension liability, ending = (a) - (b) $ 21,100 $ 23,109 $ 23,382 $ 22,092 Fiduciary net position as a % of total pension liability 65.10% 60.70% 60.15% 60.91% Covered payroll $ 5,636 $ 5,504 $ 5,864 $ 5,971 Net pension liability as a % of covered payroll 374.39% 419.88% 398.73% 370.03% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 116

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D General Employee Pension Plan Schedule of Employer Contributions Contribution as Fiscal Year Actuarially Actual Contribution a Percentage of Ended Determined Employer Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll 2017 $ 2,824,098 $ 2,876,657 $ (52,559) $ 5,635,987 51.04% 2016 3,025,982 3,089,409 (63,427) 5,504,387 56.13% 2015 2,983,776 3,419,512 (435,736) 5,864,089 58.31% 2014 2,628,694 3,472,736 (844,042) 5,970,703 58.16% 2013 3,217,964 9,788,571 (6,570,607) 7,076,322 138.33% 2012 3,130,022 3,142,951 (12,929) 7,974,057 39.41% 2011 3,149,493 3,347,728 (198,235) 8,256,751 40.55% 2010 2,564,767 2,270,623 294,144 8,786,981 25.84% 2009 2,356,529 2,491,393 (134,864) 8,716,361 28.58% 2008 2,269,802 2,908,080 (638,278) 8,006,103 36.32% General Employee Pension Plan Net Pension Liability June 30, 2017 June 30, 2016 Total pension liability $ 60,465,041 $ 58,807,821 Fiduciary net position 39,364,426 35,698,537 Net pension liability 21,100,615 23,109,284 Fiduciary net position as a % of total pension liability 65.10% 60.70% Covered payroll 5,635,987 5,504,387 Net pension liability as a % of covered payroll 374.39% 419.83% The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and was then projected forward to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. Rate of return. For the year ended June 30, 2017, the annual money-weighted rate of return on investments, net of investment expense, was 12.5%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 117

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D Actuarial Methods and Significant Assumptions Valuation date July 1, 2016 Actuarial cost method Entry Age Normal Amortization method Level dollar Amortization period Closed; smooths gains and losses over a 5-year period Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases 3.0% Includes inflation at 2.5% Mortality RP-2014 Mortality Table with fully generational Improvements from 2006 based on assumptions From the 2016 Social Security Admin Trustee’s Report County & Municipal Police and Firefighter's Pension Plan Schedule of the City of Dover's Proportionate Share of the Net Pension Liability Fiscal Year Ending 2016 2015 2014 City's proportion of the net pension liability(asset) 9.0042% 9.6070% 9.6334% City's proportionate share of the net pension liability(asset) $ 1,431,281 $ (524,958) $ (1,042,117) City's covered payroll $ 7,117,770 $ 7,060,453 $ 6,582,053 City's proportionate share of the net pension liability(asset) as a 20.11% (7.44%) (15.83%) percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability 105.59% 101.97% 104.47% GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the City will present information for those years for which information is available. County & Municipal Police and Firefighter's Pension Plan Schedule of City of Dover's Contributions Fiscal Year Ending 2016 2015 2014 Contractually required contribution $ 977,587 $ 933,750 $ 990,588 Contributions in relation to the contractually required contribution (977,587) (933,750) (990,588) Contribution deficiency (excess) $ - $ - $ - City's covered payroll $ 7,117,770 $ 7,060,453 $ 6,582,053 Contributions as a percentage of covered-employee payroll 13.73% 13.23% 15.05% This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2014 is not available. 118

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D OPEB Trust Fund Schedule of Changes in Net OPEB Liability, Related Ratios Fiscal Year Ending June 30, 2017 (In thousands) Total OPEB Liability Service cost $ 1,655 Interest 4,682 Effect of economic/demographic (gains) or losses (2,871) Effect of assumption changes or inputs (4,833) Benefit payments (2,663) Net change in total OPEB liability (4,030) Total OPEB liability, beginning 73,335 Total OPEB liability, ending (a) $ 69,305 Fiduciary Net Position Employer contributions $ 4,603 Investment income net of investment expenses 3,074 Benefit payments (2,663) Administrative expenses (3) Net change in plan fiduciary net position 5,011 Fiduciary net position, beginning 24,043 Fiduciary net position, ending (b) $ 29,054 Net OPEB liability, ending = (a) - (b) $ 40,251 Fiduciary net position as a % of total OPEB liability 41.90% Covered employee payroll $ 19,101 Net OPEB liability as a % of covered payroll 210.70% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 119

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D OPEB Trust Fund Schedule of City’s Contributions Fiscal Year Ending June 30, 2017 (In Thousands) 2017 Actuarially determined contribution (ADC) $ 4,644 Contributions in relation to the ADC (4,603) Contributions deficiency / (excess) $ 41 Covered-employee payroll $ 19,101 Contributions as a percentage of covered-employee payroll 24.1% This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, governments should present information for those years for which information is available. Rate of return. For the year ended June 30, 2017, the annual money-weighted rate of return on investments, net of investment expense, was 12.66%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Actuarial Methods and Significant Assumptions Valuation date June 30, 2017 Actuarial cost method Entry Age Normal Level % of Salary Amortization method Level Dollars Remaining amortization period 30 years Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Inflation 2.5% per year included in payroll growth Healthcare cost trend rates Pre-65 Medical / Rx Initial rate of 9% decreasing by 0.5% annually to an ultimate rate of 4.5% Post-65 Medical / Rx Initial rate of 8% decreasing by 0.5% Annually to an ultimate rate of 4.5% Mortality SOA RPH-2016 Total Dataset Mortality Table fully generational using Scale MP-2016 for all employees 120

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Required Supplementary Information – Part D NOTES TO REQUIRED SUPPLEMENTARY INFORMATION GOVERNMENTAL BUDGETS A. Budgetary Basis of Accounting The City prepares its budget for the General Fund revenue on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. Encumbrances are established when purchase orders are issued and accounted for as a reservation of fund balance at year-end. The budget is amended in the subsequent year for the outstanding encumbrances of the prior year. The modified accrual basis of accounting is used for the fund financial statements. General Fund actual revenues were higher than the final budget by $214,666 with increases in franchise fees, interest earnings, library revenues – county reimbursement, permits and other licenses, property taxes, recreation revenues, and court of chancery fees. The major sources of decreases in revenues was attributed to police fines, transfer tax, sanitation fees, inter-fund transfer receipts, miscellaneous grants, police pension grant receipts, transfers from police grant funds and civil traffic penalties. Expenditures were lower than budget by $1,211,584 due to lower than budgeted expense across several functions a result of personnel reductions through attrition and retirements. The net result is an increase of $1,426,201 to the General Fund ending fund balance. B. Budget Amendments During this fiscal year, the City Council amended the budget one time. This budget amendment or supplemental appropriation ordinance was primarily for the following purposes: 1. To re-appropriate budget balances for ongoing capital projects. 2. To amend the grant budgets, reserve accounts for the actual results of the prior fiscal year, and all carried forward budget balances for the major operating funds from the prior fiscal year, as well as program revenues and expenses based on the analyses provided by a mid-year review. 3. To amend significant changes in program revenues, expenses and ending fund balances based on actual amounts. 121

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FINANCIAL SECTION PART E SUPPLEMENTARY INFORMATION Combined Fund Schedules Budgetary Schedules 123

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E FINANCIAL STATEMENTS GENERAL FUND COMBINING SCHEDULES The Governmental Capital Projects Fund is combined with the General Fund in the Basic Financial Statements. The combining schedules are presented in the supplementary information. The budgetary comparison for the Governmental Capital Projects Fund has its own separate budget and is presented in this section to show legal compliance. The perspective difference between the basis of budgeting and GAAP is explained in the reconciliation of the basis of budgeting to GAAP. 125

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E The City of Dover, Delaware Combining General Fund Balance Sheet June 30, 2017 General Total General Capital Projects General Fund Fund Funds Assets: Cash and Cash Equivalents $ 2,285,434 $ 539,737 $ 2,825,171 Restricted Cash and Cash Equivalents - 462,391 462,391 Investments 4,957,703 3,014,503 7,972,206 Restricted Investments 18,538 - 18,538 Receivables, net Accounts 675,486 - 675,486 Taxes 51,194 - 51,194 Due from Other Funds 408,553 164,144 572,697 Prepaid Items 63,364 - 63,364 Inventory, at Cost 102,335 - 102,335 Total Assets $ 8,562,607 $ 4,180,775 $ 12,743,382 Liabilities: Accounts Payable $ 1,473,417 $ 580,100 $ 2,053,517 Deferred Revenue 41,606 57,825 99,431 Due to Other Funds 4,788 10,175 14,963 Other 225,061 - 225,061 Total Liabilities 1,744,872 648,100 2,392,972 Deferred Inflows of Resources: Unavailable revenue 228,830 - 228,830 Total Deferred Inflows of Resources 228,830 - 228,830 Fund Balances: Non-Spendable Inventory and Prepaids 165,700 - 165,700 Library Endowment 5,000 - 5,000 Patronage Stock 16,594 - 16,594 Restricted Library Endowment 1,944 - 1,944 Verizon Cable Franchise 6,035 - 6,035 Committed Contingency 743,598 - 743,598 Parkland Reserve - 336,260 336,260 Encumbrances 121,429 1,240,354 1,361,783 Assigned Capital Projects - 1,956,061 1,956,061 Unassigned 5,528,605 - 5,528,605 Total Fund Balances 6,588,905 3,532,675 10,121,580 Total Liabilities and Fund Balances $ 8,562,607 $ 4,180,775 $ 12,743,382 126

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E The City of Dover, Delaware Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund (Non-GAAP Basis) For the Year Ended June 30, 2017 General Total General Capital Projects General Fund Fund Funds Revenues Fines $ 679,106 $ - $ 679,106 Library Revenue- General 67,647 - 67,647 Library Revenue County Reimbursement 312,914 - 312,914 Licenses and Permits 3,532,101 - 3,532,101 Sanitation Fees and Rebates 2,514,645 - 2,514,645 Miscellaneous Services 1,569,751 115,529 1,685,280 Property Taxes 12,895,597 - 12,895,597 Grants Received 554,207 31,350 585,557 Court of Chancery Fees 1,343,020 - 1,343,020 Investment Income 139,453 17,004 156,457 Total Revenues 23,608,441 163,883 23,772,324 Expenditures Current: General Government 1,562,040 461,716 2,023,756 Library Services 1,593,123 13,872 1,606,995 Public Safety and Law Enforcement 20,311,146 439,049 20,750,195 Public Works 1,658,456 178,602 1,837,058 Recreational Services 728,665 5,296 733,961 Streets and Sanitation Services 2,961,615 1,314,032 4,275,647 Engineering services 219,198 - 219,198 Financial Administration 764,622 - 764,622 Garage and Stores 461,688 39,871 501,559 Insurance 295,923 - 295,923 Retiree Health Care 2,039,700 - 2,039,700 Community and Economic Development 150,000 - 150,000 Street Lights 811,992 - 811,992 Debt Service: Principal Retirement 573,497 - 573,497 Interest and Fiscal Charges 118,771 - 118,771 Total Expenditures 34,250,436 2,452,438 36,702,874 Excess (deficiency) of Revenues over Expenditures (10,641,995) (2,288,555) (12,930,550) Other Financing Sources and Uses Reserve Transfers (251,600) 109,300 (142,300) Interfund Transfers 11,541,045 2,344,400 13,885,445 Total other Financing Sources and Uses 11,289,445 2,453,700 13,743,145 Net Change in Fund Balances 647,450 165,145 812,595 Fund Balances at Beginning of Year 5,424,751 1,472,016 6,896,767 Fund Balances at End of Year $ 6,072,201 $ 1,637,161 $ 7,709,362 Perspective and GAAP (Non-GAAP) Differences: Fair Value of Investment Adjustment $ (27,637) $ (16,797) $ (44,434) Deferred Revenues - Non-spendable (228,830) - (228,830) Inventory & Prepaids - Non-spendable (165,700) - (165,700) Encumbrance Reserve (121,429) (1,240,354) (1,361,783) Capital Asset - Assigned - (380,010) (380,010) Unassigned Fund Balance $ 5,528,605 $ - $ 5,528,605 127

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE GOVERNMENTAL CAPITAL PROJECTS FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget & Actual (Non-GAAP Basis) For the Year Ended June 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 383,900 $ 1,472,100 $ 1,472,016 $ (84) REVENUES: State Grant - Other 105,000 105,000 31,350 (73,650) Transfer from General Fund for Projects 1,859,400 2,344,400 2,344,400 - Transfer from Parkland Reserve 80,000 80,000 - (80,000) Income from Sale of Assets - 109,100 93,907 (15,193) Interest Earnings 5,000 5,000 17,004 12,004 Miscellaneous Receipts - 16,700 185,712 169,012 Total Revenues 2,049,400 2,660,200 2,672,373 12,173 TOTAL BEGINNING BALANCE & REVENUES $ 2,433,300 $ 4,132,300 $ 4,144,389 $ 12,089 EXPENDITURES: City Clerk $ - $ - $ 8,741 $ (8,741) Fire 145,700 145,700 145,614 86 Grounds Maintenance 58,200 149,900 149,735 165 Library - 15,000 13,872 1,128 Life Safety 29,500 29,500 - 29,500 Police 299,800 299,800 293,435 6,365 Procurement and Inventory - - 12,480 (12,480) Public Services - Administration - 4,400 4,354 46 Recreation 165,000 165,000 5,296 159,704 Streets 1,026,000 2,027,600 1,056,066 971,534 Sanitation 261,500 261,500 257,966 3,534 City Manager - 502,800 452,975 49,825 Facilities Management 27,700 27,200 24,513 2,687 Fleet Maintenance 31,000 31,000 27,391 3,609 Subtotal 2,044,400 3,659,400 2,452,438 1,206,962 Transfer to Parkland Reserve - - 5,000 (5,000) Transfer to Capital Asset Reserve - - 49,790 (49,790) Total Expenditures 2,044,400 3,659,400 2,507,228 1,152,172 Budget Balance - Working Capital 388,900 472,900 1,637,161 (1,164,261) Budget Balance & Expenditures $ 2,433,300 $ 4,132,300 $ 4,144,389 $ (12,089) Budget Balance - Working Capital $ 1,637,161 Perspective and GAAP (Non-GAAP) Differences: Fair value of investment adjustment (16,797) Assigned to Capital assets 1,576,051 Committed to Parks & Recreation improvements 336,260 Reserve for Encumbrances (1,240,354) Total Fund Balances $ 2,292,321 128

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS Special Revenue Funds include the group of funds classified as grant funds and a Realty Transfer Tax Fund. The proceeds from specific revenue sources are restricted to specified expenditure purposes. The City adopts budgets for selected Special Revenue Funds. Combining and individual statements appear in this section. POLICE GRANTS The City of Dover Police Department receives various grants from the State of Delaware for public and highway safety and the U.S. Department of Justice for local law enforcement. All grant transactions are recorded in this fund. LIBRARY GRANTS The City of Dover Public Library receives various grants from the State of Delaware, Kent County, and the Federal Government. Activities associated with these grants are recorded in this fund. MUNICIPAL STREET AID The State of Delaware has passed legislation to share a portion of Delaware’s motor fuel tax revenue with local municipalities through grants. The amount of the grant the City receives depends on its population and miles of streets maintained. The grant is used for street light expense within the City. CDBG HOUSING GRANTS & NEIGHBORHOOD STABILIZATION PROGRAM The City receives a U.S. Department of Housing and Urban Development Entitlement Grant for the Community Development Block Grant Program. This is to provide decent housing, a suitable living environment and expand economic opportunities primarily for people of low and moderate incomes. Combined with the CDBG Fund is the Neighborhood Stabilization Program (NSP) that provides assistance in the redevelopment of residential properties that have been abandoned and foreclosed upon to stabilize residential communities. 129

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS (continued) STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS The State of Delaware Department of Transportation grants provide funds for specific street projects in the City. State law provides funds to the State’s elected officials for suburban street aid, which officials can then provide to their respective districts. The City receives these funds for designated street projects and records all transactions for this fund. SUBSTANCE ABUSE PREVENTION GRANT The State of Delaware General Assembly Grant-In-Aid Program provides funds to implement a substance abuse prevention program for at-risk and/or disadvantaged youths in the City of Dover. ELECTRONIC RED-LIGHT SAFETY PROGRAM (ERLSP) The State of Delaware Department of Transportation provides a grant to municipalities that implement the Electronic Red- L i g h t Safety Program. Under this program, the City is granted a portion of the fines collected from drivers who are ticketed for running red lights installed with electronic photo identification equipment within the City limits. REALTY TRANSFER TAX Delaware Code states that realty transfer tax realized by the City shall be segregated from the general fund and the funds shall be expended solely for the capital and operating costs of public safety services, economic development programs, public works services, capital projects and improvements, infrastructure projects and improvements and debt reduction. 130

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE POLICE GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 295,300 $ 513,000 $ 512,917 $ (83) Interest earned - - 2,553 2,553 Grants received 319,000 519,200 347,330 (171,870) TOTAL REVENUES & BEGINNING BALANCE 614,300 1,032,200 862,800 (169,400) EXPENDITURES: Personnel 81,100 81,100 43,042 (38,058) Program expenses/supplies 284,000 519,000 328,721 (190,279) Telephone/fax 16,000 16,000 18,045 2,045 Training/Conference/Food/Travel 17,000 58,100 35,229 (22,871) Consulting/audit fees 1,000 1,000 - (1,000) Contractual services 5,000 83,000 73,328 (9,672) TOTAL EXPENDITURES 404,100 758,200 498,365 (259,835) Other financing uses: Operating transfers - out (82,000) (250,000) (239,838) 10,162 BALANCE CARRIED TO NEXT YEAR $ 128,200 $ 24,000 $ 124,597 $ 100,597 133

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE LIBRARY GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 17,300 $ 37,600 $ 37,525 $ (75) Grants received: State 305,500 297,100 297,027 (73) Grants received: Other - - 1,000 1,000 Grants received: Federal 2,500 2,500 2,920 420 TOTAL REVENUES & BEGINNING BALANCE 325,300 337,200 338,472 1,272 EXPENDITURES: Program expenditures/supplies (Fed Grant) 2,500 2,500 3,000 500 Program expenditures/supplies (State Grant) 27,500 30,000 25,871 (4,129) Office Supplies 30,800 30,800 28,512 (2,288) Printing/duplicating 12,500 14,000 13,592 (408) Postage 100 200 116 (84) Books 150,600 150,300 148,908 (1,392) Furniture/Fixtures 10,500 12,500 10,299 (2,201) Audio visual supplies 77,200 77,200 73,181 (4,019) Training/conference/food/travel 5,300 6,000 4,427 (1,573) Office equipment repairs 6,300 6,300 4,084 (2,216) Office equipment lease 2,000 2,000 1,939 (61) Computer software - 1,000 917 (83) Computer hardware - 4,400 4,720 320 TOTAL EXPENDITURES 325,300 337,200 319,566 (17,634) BALANCE CARRIED TO NEXT YEAR $ - $ - $ 18,906 $ 18,906 134

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE MUNICIPAL STREET AID FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 100 $ 100 $ 100 $ - State Grant - Operations 673,100 673,100 673,051 (49) Interest Earned - - 381 381 TOTAL REVENUES & BEGINNING BALANCE 673,200 673,200 673,532 332 Other financing uses: Operating transfers-out (673,100) (673,100) (673,432) (332) BALANCE CARRIED TO NEXT YEAR $ 100 $ 100 $ 100 $ - 135

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE HOUSING PROGRAMS - CDBG & NSP SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance CDBG $ 2,100 $ 2,100 $ 2,013 $ (87) Beginning balance NSP - - 15,325 15,325 Federal grant received 236,500 279,700 196,991 (82,709) TOTAL REVENUES & BEGINNING BALANCE 238,600 281,800 214,329 (67,471) EXPENDITURES: Prior year closing cost/down payment program 900 900 - 900 Prior year MHDC home repair 22,300 22,300 22,273 27 Prior year Milford housing H/O rehab 13,400 13,400 13,386 Prior year Connection Community Supply 2,500 2,500 2,439 61 Prior year Ncall Research Inc. 1,000 1,000 991 9 Prior year Habitat for Humanity 3,000 3,000 2,953 47 Current year closing cost/down payment program 50,000 80,000 69,102 10,898 Current year Connection Community Supply 7,200 7,300 506 6,794 Current year Dover interfaith ministry 22,000 22,000 22,000 - Current year MHDC home repair 25,000 25,000 10,083 14,917 Current year Habitat for Humanity 30,000 - - - Current year Milford housing H/O rehab 55,000 55,000 19,168 35,832 Current year salaries 47,300 47,300 34,090 13,210 NSP salaries - - 1,402 (1,402) NSP expense - - 7,619 (7,619) TOTAL EXPENDITURES 279,600 279,700 206,012 73,688 CDBG BALANCE CARRIED TO NEXT YEAR $ (41,000) $ 2,100 $ 2,013 $ 87 NSP BALANCE CARRIED TO NEXT YEAR $ - $ - $ 6,304 $ (6,304) 136

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 92,100 $ 90,700 $ 90,699 $ (1) Grants received: State 500,000 500,000 262,038 (237,962) Interest earned - - 306 306 TOTAL REVENUES & BEGINNING BALANCE 592,100 590,700 353,043 (237,657) EXPENDITURES: Program expenditures grant related 500,000 505,500 282,130 (223,370) TOTAL EXPENDITURES 500,000 505,500 282,130 223,370 BALANCE CARRIED TO NEXT YEAR $ 92,100 $ 85,200 $ 70,913 $ (14,287) CITY OF DOVER, DELAWARE SUBSTANCE ABUSE PREVENTION PROGRAM SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 60,300 $ 99,500 $ 99,453 $ (47) Grants revenue 28,000 28,000 28,030 30 Recreation revenue 33,000 50,000 53,301 3,301 TOTAL REVENUES & BEGINNING BALANCE 121,300 177,500 180,784 3,284 EXPENDITURES: Temporary help/benefits 60,200 60,200 57,630 (2,570) Program expenditures/supplies 55,000 55,000 35,714 (19,286) TOTAL EXPENDITURES 115,200 115,200 93,344 (21,856) BALANCE CARRIED TO NEXT YEAR $ 6,100 $ 62,300 $ 87,440 $ 25,140 137

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E FINANCIAL SCHEDULES PROPRIETARY FUND TYPES ENTERPRISE FUNDS The following schedules pertaining to the major enterprise funds are not required under GAAP, but are included for public review of budgetary compliance. Accordingly, no reconciliation to the GAAP financial statements is provided. WATER/WASTEWATER FUND The Water/Wastewater Fund accounts for all operating activity of the Water/Wastewater Utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, sewerage treatment fees, debt service, and transfers to other funds and the Improvement and Extension Fund. The Water/Wastewater Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized. ELECTRIC REVENUE FUND The Electric Revenue Fund accounts for all operating activity of the electric utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, purchased power cost, debt service, and transfers to other funds and the Improvement and Extension Fund. The Electric Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized. 138

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE WATER/WASTEWATER FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Water $ 566,500 $ 881,300 $ 881,297 $ (3) Beginning Balance - Wastewater $ 663,200 719,200 719,132 (68) TOTAL BEGINNING BALANCES 1,229,700 1,600,500 1,600,429 (71) REVENUES: Water fees 5,800,000 5,800,000 5,776,109 (23,891) Wastewater fees 3,800,000 3,800,000 3,718,736 (81,264) Wastewater Treatment Fees 3,000,000 3,000,000 2,912,661 (87,339) Groundwater adjustment 1,938,000 1,938,000 1,863,151 (74,849) Miscellaneous services 63,000 63,000 86,136 23,136 Water tank space rent 366,200 366,200 376,228 10,028 Interest earnings 20,000 20,000 15,655 (4,345) Sewer Impact Fees 228,000 228,000 611,800 383,800 Water Impact Fees 252,000 252,000 672,147 420,147 Total Revenues 15,467,200 15,467,200 16,032,623 565,423 TOTAL BEGINNING BALANCES & REVENUES $ 16,696,900 $ 17,067,700 $ 17,633,052 $ 565,352 EXPENSES: Engineering & Inspection $ 516,500 $ 521,900 $ 468,009 53,891 Water 655,400 670,200 632,138 38,062 Water Treatment Plant 1,727,400 1,744,000 1,766,528 (22,528) Wastewater 962,400 983,500 902,857 80,643 Kent County Treatment Fee 4,130,000 4,130,000 3,720,047 409,953 Interfund Service Fees 1,653,800 1,673,400 1,583,025 90,375 Retirees Health Care 192,400 192,400 192,400 - OPEB Unfunded Liability - 101,800 101,800 - Debt Service - Water 590,300 590,300 521,226 69,074 Debt Service - Wastewater 636,900 636,900 611,408 25,492 Other Employment Expenses 21,200 3,300 - 3,300 Bank & CC Fees 25,000 25,000 24,979 21 Bond Issuance Cost 40,000 40,000 - 40,000 Other Appropriations: Transfer to Water I/E 1,000,000 980,000 980,000 - Transfer to Wastewater I/E 1,000,000 980,000 980,000 - Transfer to Impact Fee Reserve - Water - - 312,560 (312,560) Transfer to Impact Fee Reserve - Wastewater - - 458,643 (458,643) Transfer to General Fund from Water 500,000 500,000 500,000 - Transfer to General Fund from Wastewater 375,000 375,000 375,000 - Transfer to Contingency Reserve Water 60,000 60,000 60,000 - Transfer to Contingency Reserve Wastewater 110,000 131,100 131,100 - Transfer to Electric I/E 231,200 231,200 231,200 - Total Expenses 14,427,500 14,570,000 14,552,920 17,080 Budget Balance - Water 1,103,100 1,331,500 1,680,473 (348,973) Budget Balance - Wastewater 1,166,300 1,166,200 1,399,659 (233,459) Total Budget Balances - Working Capital 2,269,400 2,497,700 3,080,132 (582,432) TOTAL BUDGET BALANCES & EXPENSES $ 16,696,900 $ 17,067,700 $ 17,633,052 $ (565,352) 139

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance -Water $ 1,179,900 $ 3,584,500 $ 4,855,807 $ 1,271,307 Beginning Balance -Wastewater 952,600 3,129,800 1,858,376 (1,271,424) TOTAL BEGINNING BALANCES 2,132,500 6,714,300 6,714,183 (117) REVENUES: Interest earnings 25,000 25,000 99,619 74,619 Investment Management Fees (5,000) (5,000) (6,776) (1,776) Income from sale of assets - - 37,128 37,128 Transfer from Water WW for Water 1,000,000 980,000 980,000 - Transfer from Water WW for Wastewater 1,000,000 980,000 980,000 - Transfer from Water Impact Fee Reserve 190,800 190,800 100,580 (90,220) Transfer from Wastewater Impact Fee Reserve 211,200 211,200 38,682 (172,518) State Loan Fund-Water 2,400,000 2,400,000 - (2,400,000) State Loan Fund-Wastewater 884,000 884,000 - (884,000) Total Revenues 5,706,000 5,666,000 2,229,233 (3,436,767) TOTAL BEGINNING BALANCES & REVENUES $ 7,838,500 $ 12,380,300 $ 8,943,416 $ (3,436,884) EXPENSES: Engineering & Inspection $ 30,400 $ 30,400 $ 26,831 $ 3,569 Water 1,338,800 3,908,100 1,067,067 2,841,033 Wastewater 2,021,200 4,004,700 1,920,157 2,084,543 Water Treatment Plant 1,200,000 1,200,000 84,808 1,115,192 Total Expenses 4,590,400 9,143,200 3,098,863 6,044,337 Budget Balance - Water 2,226,700 2,042,000 4,836,082 (2,794,082) Budget Balance - Wastewater 1,021,400 1,195,100 1,008,471 186,629 Total Budget Balances - Working Capital 3,248,100 3,237,100 5,844,553 (2,607,453) TOTAL BUDGET BALANCES & EXPENSES $ 7,838,500 $ 12,380,300 $ 8,943,416 $ 3,436,884 0 0 0 0 140

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE ELECTRIC REVENUE FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 13,302,200 $ 19,896,400 $ 19,896,366 $ (34) REVENUES: Direct base sales 77,193,200 77,193,200 80,624,181 3,430,981 Purchased power adjustment - - (1,845,936) (1,845,936) Rental income 223,000 223,000 188,388 (34,612) Miscellaneous services 548,600 548,600 601,854 53,254 Utility tax 1,287,900 1,287,900 1,322,014 34,114 Green Energy 128,000 128,000 131,788 3,788 Interest earned - operating 47,900 47,900 217,958 170,058 Total Revenues 79,428,600 79,428,600 81,240,247 1,811,647 TOTAL BEGINNING BALANCE & REVENUES $ 92,730,800 $ 99,325,000 $ 101,136,613 $ 1,811,613 EXPENSES: Power Supply & Generation Hedged Energy $ 16,557,600 $ 16,557,600 $ 20,338,793 $ (3,781,193) Power Supply Management 931,000 931,000 834,996 96,004 Capacity Charges 10,160,600 10,160,600 10,483,145 (322,545) Dover Sun Park Energy 2,313,900 2,313,900 2,443,675 (129,775) Solar Renewal Energy Credits 363,400 363,400 347,662 15,738 Renewable Energy Credits 673,400 673,400 207,025 466,375 RGGI 129,300 129,300 38,140 91,160 PJM Charges - Energy 12,357,900 12,357,900 5,355,344 7,002,556 PJM Charges - Transmission & Fees 7,603,800 7,603,800 5,674,932 1,928,868 Total Power Supply 51,090,900 51,090,900 45,723,712 5,367,188 Plant Operations 6,280,700 6,280,700 5,889,771 390,929 Generation Fuels 302,600 302,600 1,260,590 (957,990) Capacity Credits (7,355,100) (7,355,100) (7,362,685) 7,585 PJM Spot Market Energy (804,900) (804,900) (1,425,961) 621,061 PJM Credits (360,000) (360,000) (679,113) 319,113 Total Generation (1,936,700) (1,936,700) (2,317,398) 380,698 Utility Tax 1,287,900 1,287,900 1,322,015 (34,115) Administration 929,700 934,200 798,795 135,405 Transmission/Distribution 3,605,700 3,616,300 3,577,338 38,962 Electrical Engineering 1,247,900 1,250,900 1,071,541 179,359 Systems Operations 651,700 662,100 635,939 26,161 Meter Reading 378,600 379,600 381,696 (2,096) Provision for Uncollectible 250,000 250,000 250,000 - Retirees Health Care 600,000 600,000 600,000 - OPEB Trust Contribution - 109,300 109,300 - Green Energy Payment to DEMEC 128,000 128,000 131,788 (3,788) Bank & CC Fees 275,000 275,000 296,905 (21,905) Interest on Deposits 21,000 21,000 16,480 4,520 Intrafund Service Fees 3,564,900 3,625,900 3,425,044 200,856 Other Appropriations: - Electric Capital Project Fund 2,500,000 2,500,000 2,500,000 - General Fund 10,000,000 10,000,000 10,000,000 - Debt Service 1,618,000 1,618,000 1,610,945 7,055 Future Capacity Reserve 750,000 2,750,000 2,750,000 - Rate Stabilization Fund 1,250,000 3,250,000 3,250,000 - Depreciation Reserve 750,000 2,750,000 2,750,000 - Other Employment Expenses 58,900 29,400 - 29,400 TOTAL EXPENSES 79,021,500 85,191,800 78,884,100 6,307,700 Budget Balance - Working Capital 13,709,300 14,133,200 22,252,513 (8,119,313) TOTAL BUDGET BALANCE & EXPENSES $ 92,730,800 $ 99,325,000 $ 101,136,613 $ (1,811,613) 141

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE ELECTRIC IMPROVEMENT AND EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 5,540,500 $ 9,314,400 $ 9,314,351 $ (49) TOTAL BEGINNING BALANCES 5,540,500 9,314,400 9,314,351 (49) REVENUES: Transfer from Electric Revenue Fund 2,500,000 2,500,000 2,500,000 - Grants Revenue - - 20,000 20,000 Miscellaneous Receipts 5,000 5,000 - (5,000) Interest Earnings 40,000 40,000 111,646 71,646 Income from Sale of Assets - 28,000 41,592 13,592 General Service Billing 900,000 900,000 726,054 (173,946) Transfer from Water/Wastewater Fund 231,200 231,200 231,200 - Total Revenues 3,676,200 3,704,200 3,630,492 (73,708) TOTAL BEGINNING BALANCES & REVENUES $ 9,216,700 $ 13,018,600 $ 12,944,843 $ (73,757) EXPENSES: Power Plant $ 1,842,800 $ 2,389,100 $ 905,624 $ 1,483,476 Transmission/Distribution 1,975,000 2,170,400 628,567 1,541,833 Engineering 910,700 1,736,300 968,755 767,545 Meter Reading 41,800 64,800 17,993 46,807 Administration - 23,000 - 23,000 ERP System 1,000,000 1,000,000 58,252 941,748 Total Expenses 5,770,300 7,383,600 2,579,191 4,804,409 Budget Balance - Improvement & Extension Fund 3,446,400 5,635,000 10,365,652 (4,730,652) Total Budget Balances - Working Capital 3,446,400 5,635,000 10,365,652 (4,730,652) TOTAL BUDGET BALANCES & EXPENSES $ 9,216,700 $ 13,018,600 $ 12,944,843 $ 73,757 142

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E FINANCIAL SCHEDULES PROPRIETARY FUND TYPES INTERNAL SERVICE FUNDS WORKERS’ COMPENSATION INSURANCE FUND The City has created this fund to account for the revenues and expenses related to a self-insured Workers’ Compensation Fund. The revenues are received from the City's various funds. These funds contribute to the Workers’ Compensation Fund an amount based on salaries at a pre- determined assessment rate. Claims paid, reinsurance cost and third-party administrator's fees are charged to this fund. Budgetary schedule is included for public review of budgetary compliance. CITY OF DOVER, DELAWARE INTERNAL SERVICE FUND - WORKERS' COMPENSATION SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2017 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) OPERATING REVENUES: Beginning Balance $ 1,256,300 $ 1,251,900 $ 1,256,956 $ 5,056 Interest Earned 25,000 25,000 20,395 (4,605) City Contribution 855,400 855,400 834,236 (21,164) Miscellaneous Revenue - - 104,159 104,159 TOTAL REVENUES $ 2,136,700 $ 2,132,300 $ 2,215,746 $ 83,446 OPERATING EXPENSES: Program Expenses $ 475,000 $ 475,000 $ 786,595 $ (311,595) Contractual Services 25,000 25,000 16,118 8,882 Insurance 105,500 105,500 112,003 (6,503) State of Delaware - Self-Insurance Tax 39,000 39,000 43,349 (4,349) TOTAL EXPENSES $ 644,500 $ 644,500 $ 958,065 $ (313,565) BUDGET BALANCE - CARRY FORWARD $ 1,492,200 $ 1,487,800 $ 1,257,681 $ (230,119) 143

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E FINANCIAL STATEMENTS FIDUCIARY FUND TYPES AGENCIES DOWNTOWN DOVER PARTNERSHIP The City established the Downtown Dover Partnership as an agency for the development of the downtown urban area. FOURTH OF JULY CELEBRATION COMMITTEE The Fourth of July Celebration Committee is designed to provide recreation enjoyment and educational events commemorating the birth of our nation. 144

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Supplementary Information – Part E CITY OF DOVER, DELAWARE COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2017 BALANCE BALANCE JUNE 30, 2016 ADDITIONS DEDUCTIONS JUNE 30, 2017 DOWNTOWN DOVER PARTNERSHIP ASSETS: Cash $ 548,327 $ 713,714 $ 563,631 $ 698,410 Receivables 134 3,856 411 3,579 Prepaid Items 94 987 94 987 Total Assets $ 548,555 $ 718,557 $ 564,136 $ 702,976 LIABILITIES: Vouchers Payable 16,442 $ 255,914 $ 252,680 $ 19,676 Deposit Payable 27,432 - - 27,432 Due to Agencies 504,681 151,187 - 655,868 Total Liabilities $ 548,555 $ 407,101 $ 252,680 $ 702,976 4TH OF JULY CELEBRATION COMMITTEE ASSETS: Cash $ 28,302 $ 11,542 $ 5,033 $ 34,811 Prepaid items 500 2,201 500 2,201 Total Assets $ 28,802 $ 13,743 $ 5,533 $ 37,012 LIABILITIES: Vouchers Payable $ - $ 4,543 $ 4,543 $ - Due to Agencies 28,802 11,542 3,332 37,012 Total Liabilities $ 28,802 $ 16,085 $ 7,875 $ 37,012 TOTAL-ALL AGENCY FUNDS ASSETS: Cash & Investments $ 576,629 $ 725,256 $ 568,664 $ 733,221 Receivables 134 3,856 411 3,579 Prepaid Items 594 3,188 594 3,188 Total Assets $ 577,357 $ 732,300 $ 569,669 $ 739,988 LIABILITIES: Vouchers Payable $ 16,442 $ 260,457 $ 257,223 $ 19,676 Deposit Payable 27,432 - - 27,432 Due to Agencies 533,483 162,729 3,332 692,880 Total Liabilities $ 577,357 $ 423,186 $ 260,555 $ 739,988 145

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STATISTICAL SECTION This section of the City of Dover’s Comprehensive Annual Financial Report represents detailed information as a context for understanding what the statements, note disclosures and required supplementary information says about the Government’s overall financial health.

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section STATISTICAL SECTION This part of the City of Dover ’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government ’s overall financial health. FINANCIAL TRENDS These schedules contain t rend information to help the reader understand how the City’s financial performance and well -being have changed over time. REVENUE CAPACITY These schedules contain information to help the reader assess the City ’s most significant local revenue source, pro perty tax. DEBT CAPACITY These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City ’s ability to issue additional debt in the future. DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the reader understand the environment within which the City ’s financial activities take place. OPERATING INFORMATION These schedules contain service and infrastructure data to help the reader understand how the information in the City ’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 149

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 5 City of Dover, Delaware Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) Fiscal Property Transfer Year Tax Tax Total 2017 $ 12,895,597 $ 1,634,707 $ 14,530,304 2016 12,846,772 2,191,915 15,038,687 2015 11,176,763 1,713,788 12,890,551 2014 11,094,479 1,543,626 12,638,105 2013 11,126,395 1,107,686 12,234,081 2012 11,050,198 1,373,103 12,423,301 2011 10,904,908 1,461,983 12,366,891 2010 10,029,584 867,692 10,897,276 2009 10,075,401 1,197,425 11,272,826 2008 9,557,982 3,515,422 13,073,404 NOTES 1. Property Tax rate of $.4050 per $100 of 100% assessed value (See Table 6 for tax rates). Revenues include payments in lieu of taxes, farm land roll back and penalties. 2. Transfer Taxes equal 1.5% of the real property sales value. 156

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 6 City of Dover, Delaware Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years REAL PROPERTY Ratio of Direct Less: Total Taxable Tax Fiscal Total Assessed Exempt Total Taxable Estimated Value to Total Rate Year Value Properties Assessed Value Actual Value Assessed Value Per $100 2017 $ 4,493,113,000 $ 1,336,802,000 $ 3,156,311,000 $ 4,493,113,000 70.25% $ 0.4050 2016 4,443,188,600 1,335,276,500 3,107,912,100 4,443,188,600 69.95% 0.4050 2015 4,584,108,050 1,376,954,490 3,207,153,560 4,584,108,050 69.96% 0.3378 2014 4,525,547,960 1,365,654,100 3,159,893,860 4,525,547,960 69.82% 0.3378 2013 4,510,303,860 1,328,807,500 3,181,496,360 4,510,303,860 70.54% 0.3378 2012 4,469,369,160 1,300,061,400 3,169,307,760 4,469,369,160 70.91% 0.3378 2011 4,363,518,360 1,226,879,300 3,136,639,060 4,363,518,360 71.88% 0.3378 2010 4,139,869,700 1,232,858,580 2,907,011,120 4,139,869,700 70.22% 0.3300 2009 4,124,562,920 1,225,269,600 2,899,293,320 4,124,562,920 70.29% 0.3300 2008 3,406,762,915 616,277,700 2,790,485,215 3,406,762,915 81.91% 0.3300 Source: Tax Assessor's Office, City of Dover. NOTES 1. There is no tax on personal properties. Therefore, no figures are presented. 2. In 2010, the City property values were reassessed, effective for tax year 2011. The tax rate was increased from $ .330 to $ .3378 per $100. Had the tax rate been rolled back to a revenue neutral rate, the rate would have been $ .3108 per $100. The revised rate represents a $ .027 rate increase. 3. In 2015, the City property values were reassessed, effective for tax year 2016. The tax rate was increased from $ .3378 to $ .4050 per $100. Had the tax rate been rolled back to a revenue neutral rate, the rate would have been $ .3499 per $100. The revised rate represents a $ .0672 increase. 157

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 7 City of Dover, Delaware NOTES Property Tax Rates - All Direct and Overlapping Governments with the Capital School District 1. Section 48 of the City of (Per $100 of Assessed Value) Dover charter provides Last Ten Fiscal Years that the amount of money to be raised through property taxes shall not exceed 2% of the total taxable assessment. Direct Overlapping City Capital Vo-Tech Total 2. Kent County Property Fiscal of Kent School School Direct & tax rates reflect the 1987 Year Dover County District District Overlapping reappraisal of properties in Kent County. 2017 $ 0.4050 $ 0.300 $ 1.807 $ 0.1484 $ 2.660 2016 0.4050 0.300 1.812 0.1415 2.658 3. In 2010, the City property 2015 0.3378 0.300 1.822 0.1372 2.597 values were reassessed, 2014 0.3378 0.300 1.850 0.1372 2.625 effective for tax year 2011 2013 0.3378 0.300 1.909 0.1372 2.684 Tax rate increased to $.3378 2012 0.3378 0.300 1.832 0.1351 2.605 2011 0.3378 0.300 1.832 0.1351 2.605 4. In 2015, the City property 2010 0.3300 0.310 1.769 0.1304 2.539 values were reassessed, 2009 0.3300 0.310 1.543 0.1219 2.305 effective for tax year 2016 2008 0.3300 0.250 1.480 0.1219 2.182 Tax rate increased to $.4050 Sources: Tax Assessor's Office - City Receiver of Taxes Office - Kent County Property Tax Rates - FY 2017 All Direct & Overlapping Governments City of Dover Kent County Capital School Vo-Tech School 158

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 8 City of Dover, Delaware Principal Tax Payers Current Year and Nine Years Ago PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL 2017 TAXABLE 2008 TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAX PAYERS VALUATION RANK VALUATION VALUATION RANK VALUATION Dover Downs Prop, Inc. $147,924,900 1 3.29% $112,541,900 1 4.03% Dover Mall LP/Dover Commons 89,824,700 2 2.00% 75,714,000 2 2.71% Dover Medical Center 27,069,300 3 0.60% - - - Dover South Coast Partnership 23,071,400 4 0.51% 14,470,300 8 0.52% Kraft-General Foods Corp. 21,534,700 5 0.48% 20,624,800 3 0.74% Leander Lakes LLC 17,559,000 6 0.39% 11,015,800 - 0.39% GM Country Club, LLC 15,788,600 7 0.35% 11,415,800 - 0.41% Multi Residential M, LLC 14,415,500 8 0.32% - - - Blue Hen Apt, LLC 13,813,100 9 0.31% - - - Millers Dover Downs 13,573,400 10 0.30% 14,837,900 7 0.53% Dover Bay Court Plaza - - - 19,062,300 4 0.68% Berks City Real Estate, LLC - - - 18,034,400 5 0.65% Dover East Estates - - - 11,647,200 9 0.42% K.W. Lands/Sheraton/Hampton - - - 15,691,800 10 0.56% $ 384,574,600 8.56% $325,056,200 11.65% Total taxable assessed valuation for current year is $ 4,493,113,000 Total taxable assessed valuation for ten years ago is $ 2,790,485,215 Source: Tax Assessor's Office, City of Dover 159

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 9 City of Dover, Delaware Property Tax Levies and Collections Last Ten Fiscal Years Total Collected Within Collection Collected in Total Collection Fiscal Tax the Fiscal Year as Percentage Subsequent Collections as Percentage Year Levy of the Levy of Levy Years to Date of Levy 2017 $ 12,478,630 $ 12,401,338 99.4% $ - $ 12,401,338 99.38% 2016 12,437,857 12,204,948 98.1% 229,236 12,434,184 98.13% 2015 10,737,703 10,612,272 98.8% 124,801 10,737,073 99.99% 2014 10,696,886 10,493,954 98.1% 202,895 10,696,849 100.00% 2013 10,594,623 10,398,888 98.2% 195,698 10,594,586 100.00% 2012 10,549,631 10,280,930 97.5% 268,664 10,549,594 100.00% 2011 10,481,734 10,166,681 97.0% 315,053 10,481,734 100.00% 2010 9,525,034 9,314,327 97.8% 210,707 9,525,034 100.00% 2009 9,512,522 9,206,158 96.8% 306,364 9,512,522 100.00% 2008 9,074,777 8,937,384 98.5% 137,393 9,074,777 100.00% Source: City of Dover Assessor & Customer Service Reports. $13 $11 Millions $9 $7 $5 $3 $1 $(1) 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 NOTES 1. Section 48 of the City of Dover charter provides that the maximum budget to be raised through property taxes shall not exceed 2% of the total taxable assessment. 2. Total Tax Levy represents the annual tax billings, quarterly billings and adjustments from tax appeals. 3. The table excludes payments in lieu of taxes and farm land roll back taxes. 160

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 11 City of Dover, Delaware Ratio of Net General Obligation Bonded Debt To Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Ratio of Net Net Net Bonded Bonded Taxable Gross Net Debt To Debt Fiscal Assessed Bonded Bonded Assessed Per Year Population Value Debt Debt Value Capita 2017 37,686 $3,104,441,800 $ 6,209,368 $ 6,209,368 0.20% 164.77 2016 37,453 $3,061,687,700 $ 6,782,865 $ 6,782,865 0.22% 181.10 2015 37,618 3,169,706,860 7,336,689 7,336,689 0.23% 195.03 2014 37,540 3,159,893,860 4,049,758 4,049,758 0.13% 107.88 2013 36,492 3,181,496,360 4,478,997 4,478,997 0.14% 122.74 2012 36,267 3,169,307,760 2,085,815 2,085,815 0.07% 57.51 2011 36,047 3,136,639,060 1,499,143 1,499,143 0.05% 41.59 2010 36,559 2,907,011,120 1,550,000 1,550,000 0.05% 42.40 2009 35,997 2,899,293,320 1,550,000 1,550,000 0.05% 43.06 2008 35,503 2,790,485,215 2,080,000 2,080,000 0.07% 58.59 Source: City of Dover Financial Records, Tax Assessor’s Office and Delaware Population Consortium Annual Population Projections. NOTES 1. This table includes all long-term general obligation bonded debt only. The Enterprise Funds have no general obligation debt. 2. Assessed value reflects the net billable tax base and does not include the exempt value, exemption for Senior Citizens and exemption for disability. 162

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 12 City of Dover, Delaware Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years Ratio of Debt Service Total Total to Total Fiscal Debt General General (1) Year Principal Interest Service Expenditures Expenditures 2017 $ 573,497 $ 118,771 $ 692,268 $ 44,378,544 1.56% 2016 553,824 118,565 672,389 46,477,667 1.45% 2015 848,069 114,243 962,312 45,484,211 2.12% 2014 429,239 122,812 552,051 39,646,120 1.39% 2013 296,003 73,071 369,074 40,517,512 0.91% 2012 275,000 52,734 327,263 47,743,864 0.69% 2011 270,000 65,225 335,225 38,898,945 0.86% 2010 260,000 68,410 328,410 32,786,465 1.00% 2009 365,000 77,319 442,319 33,766,292 1.31% 2008 350,000 87,468 437,468 35,703,156 1.23% Source: City of Dover Financial Records. NOTES 1. The General Expenditures include all operating items, capital items and debt service. 163

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 13 City of Dover, Delaware Computation of Direct and Overlapping Debt with the Capital School District June 30, 2017 Percentage Amount Net Debt Applicable to Applicable to Jurisdiction Outstanding City of Dover City of Dover City of Dover $ 6,209,368 100% $ 6,209,368 Kent County (1) 58,483,764 0% N/A Capital School District (2) 55,616,655 N/A TOTAL $ 120,309,787 $ 6,209,368 Sources: City of Dover Financial Records, Kent County Levy Court - Accounting Department and Capital School District - Administration Department. NOTES 1. Kent County: Total debt for Kent County is $58,483,763.53 as of June 30, 2017. Although Kent County's bonds are general obligation bonds, $54,411,247.58 is payable from the Kent County Sewer Fund(s) or other committed sources. 2. Capital School District: As of June 30, 2017, the net outstanding debt was $55,616,655 . Percentage and amount applicable to the City is not available. 164

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 15 City of Dover, Delaware Revenue Bond Coverage - Electric Revenue Bonds Last Ten Fiscal Years Available Fiscal Gross Operating For Debt Debt Service Requirements of Each Fiscal Year Year Revenue Expenses Service Principal Interest Total Coverage 2017 $ 83,943,882 $ 54,748,915 $ 29,194,967 $ 695,000 $ 883,954 $ 1,578,954 18.49 2016 80,846,658 54,418,343 26,428,315 2,365,000 918,704 3,283,704 8.05 2015 79,769,994 66,521,873 13,248,121 2,260,000 1,036,954 3,296,954 4.02 2014 79,476,865 68,594,189 10,882,676 2,170,000 1,131,854 3,301,854 3.30 2013 90,876,162 68,546,508 22,329,654 2,110,000 1,205,554 3,315,554 6.73 2012 93,650,277 71,607,021 22,043,256 2,060,000 1,260,054 3,320,054 6.64 2011 102,734,764 84,195,802 18,538,962 2,370,000 1,609,192 3,979,192 4.66 2010 100,316,323 86,089,451 14,226,872 2,260,000 1,716,134 3,976,134 3.58 2009 101,562,292 89,853,449 11,708,843 1,840,000 1,753,447 3,593,447 3.26 2008 97,354,991 82,132,360 15,222,631 1,780,000 828,076 2,608,076 5.84 Source: City of Dover Financial Records. NOTES 1. Coverage required by the bond resolution is 1.25. 4. Figures presented in this table compare the net revenue available for debt service to the debt service requirements of the same fiscal year. 2. Calculation of gross revenue for fiscal year 2017 is as follows: Gross Revenue: 5. In July 2008, the City issued Electric Revenue bonds in the Operating Revenues $ 83,614,278 amount of $22,200,000. Fiscal year 2009 includes $1,026,999 of Interest Earned-Operating Funds 329,604 interest related to this bond issue. Total Gross Revenue $ 83,943,882 6. In November 2011, the City issued Electric Revenue Refunding 3. Direct operating expenses do not include depreciation expense. Bonds in the amount of $8,810,000 to refund the 2014 Series. This refunding reduced the principal payable by $2,620,000. 166

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 16 City of Dover, Delaware Revenue Bond Coverage - Water/Wastewater Bonds Last Ten Fiscal Years Maximum Requirements Net Revenue Maximum Direct Available Debt Fiscal Gross Operating For Debt Service Actual Year Revenue Expenses Service Requirement Coverage 2017 $ 15,354,263 $ 8,906,722 $ 6,447,541 $ 1,132,806 5.69 2016 15,005,695 9,621,676 5,438,408 1,132,806 4.80 2015 14,385,625 9,250,346 5,637,043 1,132,806 4.98 2014 13,307,253 9,326,405 3,980,848 1,132,806 3.51 2013 13,282,782 8,841,757 4,441,025 1,019,315 4.36 2012 13,647,145 9,063,553 4,583,592 993,837 4.61 2011 13,758,048 9,222,105 4,535,943 416,423 10.89 2010 11,204,911 10,319,728 885,183 416,423 2.13 2009 11,067,901 9,510,814 1,557,087 797,708 1.95 2008 11,594,402 8,763,407 2,830,995 797,748 3.55 Source: City of Dover Financial Records. NOTES 1. Coverage required by bond resolution is 1.20. 2. The maximum debt service requirement presented above covers all revenue bond requirements. Rates were increased in 2011 for debt service coverage on multi-year projects. 3. Direct operating expenses do not include depreciation expense for coverage purposes as per the bond indenture. 4. In Fiscal year 2013, various capital projects were completed. These capital projects were financed by three state revolving fund loans issued in 2009, 2010 & 2011 in the amount of $5.9 million, $2.4 million and $0.8 million, respectively, resulting in an increase in debt service. 5. In Fiscal year 2014, the City issued Water and Sewer Revenue Bonds in the amount of $6,125,000. These bonds were issued to refund the Series 2003 Water and Wastewater Revenue bonds and provide $4,005,960 for two capital projects. 167

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 17 City of Dover, Delaware Top 10 Water and Wastewater Utility Customers Fiscal Year Ended June 30, 2017 Water % of % of Consumption Total Revenue Total Customer (Tgal) Consumption Billed Revenue Garrison Energy Center, LLC 328,533 18.6% $ 985,599 17.06% Procter & Gamble, Co. 57,486 3.3% 172,458 2.99% Delaware State University 49,568 2.8% 148,704 2.57% Dover Downs, Inc. 43,011 2.4% 129,033 2.23% Kraft Foods Global, Inc. 32,817 1.9% 98,451 1.70% Kent General Hospital 28,600 1.6% 85,800 1.49% Tidewater Utilities 26,207 1.5% 78,621 1.36% Bayhealth Medical Center 18,059 1.0% 54,177 0.94% Edgewell Personal Care Brand 14,460 0.8% 43,380 0.75% Dover East Estates, LLP 14,301 0.8% 42,903 0.74% Totals for Top 10 Customers 613,042 34.7% 1,839,126 31.84% All Other 1,153,022 65.29% 3,936,983 68.16% Total for System 1,766,064 100.00% $ 5,776,109 100.00% Wastewater % of % of Consumption Total Revenue Total Customer (Tgal) Consumption Billed Revenue Dover Downs, Inc. 43,111 3.4% $ 178,911 3.10% Kraft Foods Global, Inc. 38,875 3.1% 161,331 2.79% Procter & Gamble, Co. 30,067 2.4% 124,778 2.16% Kent General Hospital 28,430 2.2% 117,985 2.04% HBI Inc - Vendor Service Line 23,827 1.9% 98,882 1.71% Garrison Energy Center, LLC 21,300 1.7% 88,395 1.53% NRG Energy Center Dover, LLC 16,730 1.3% 69,430 1.20% Bayhealth Medical Center 15,293 1.2% 63,466 1.10% Dover East Estates, LP 14,401 1.1% 59,764 1.03% State of Delaware 14,169 1.1% 58,801 1.02% Totals for Top 10 Customers 246,203 19.3% 842,832 14.59% All Other 1,027,884 80.68% 4,739,055 85.41% Total for System 1,274,087 100.00% $ 5,581,887 100.00% NOTES: 1. Both the Water and Wastewater revenue billed amounts for each vendor, do not include the monthly flat rate of $2.50. 2. The total Revenue amounts for both Water and Wastewater include the monthly flat rates. 168

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 18 City of Dover, Delaware Top 10 Electric Utility Customers Fiscal Year Ended June 30, 2017 % of Total Revenue % of Total Customer Kwh Kwh Billed Revenue Dover Air Force Base 94,855,431 12.9% $ 5,210,392 6.6% Kraft Foods Global Inc 71,835,930 9.7% 3,830,916 4.8% Edgewell Personal Care Brands 61,299,296 8.3% 3,781,903 4.8% Delaware State University 44,097,297 6.0% 2,529,049 3.2% Bay Health/Kent General 39,798,622 5.4% 2,250,755 2.8% Dover Downs Inc 36,276,246 4.9% 2,077,228 2.6% State of Delaware 24,036,367 3.3% 1,637,062 2.1% Proctor and Gamble Company 20,668,954 2.8% 1,106,253 1.4% Capital School District 15,082,048 2.0% 1,146,828 1.4% Wesley College 10,185,069 1.4% 630,117 0.8% Totals for Top 10 Customers 418,135,260 56.7% 24,200,502 30.5% All Other 318,879,069 43.3% 55,212,592 69.5% Total for System 737,014,329 100.0% $ 79,413,094 100.0% Note: The revenue billed includes direct base sales and utility Tax. 169

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 19 City of Dover, Delaware Demographic and Economic Statistics Last Ten Calendar Years Per Capita Personal Personal Median School Unemployment Year Population Income Income Age Enrollment Rate 2017 37,686 $ 827,207,700 $ 21,950 30.0 6,523 6.2% 2016 37,453 842,783,433 22,213 30.2 6,486 5.7% 2015 37,618 730,354,200 19,445 31.3 6,665 7.4% 2014 37,540 788,039,680 20,992 29.8 6,527 6.4% 2013 36,492 821,361,936 22,508 31.1 6,344 9.6% 2012 36,267 828,258,924 22,697 33.2 6,984 9.3% 2011 36,047 818,158,759 22,379 31.3 7,185 9.9% 2010 36,559 712,212,015 19,445 32.9 7,117 10.2% 2009 35,997 712,212,015 19,445 32.9 6,996 10.2% 2008 35,503 702,100,615 19,445 32.9 6,977 5.7% Population Source: City Count Personal Income Source: Estimation based on Population times Per Capita Personal Income Per Capita Personal Income Source: U.S. Census Bureau, 2011-2015 American Community Survey 5-Year Estimates Median Age Source: 2011-2015 American Community Survey 5-Year Estimates Capital School Enrollment Source: Includes kindergarten through 12th grade, as of Summer 2017 Unemployment Rate Source: Delaware Department of Labor Statistics Not Seasonally Adjusted, June 2017 170

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 20 City of Dover, Delaware Major Employers Current Year and Nine Years Ago 2016 4th Quarter 2007 4th Quarter Percentage of Percentage of Name Numbers of Total City Number of Total City Employees Rank Employment Employees Rank Employment Government 18,866 1 28.2% 18,390 1 28.8% Retail trade 9,702 2 14.5% 10,425 2 16.3% Health care & social assistance 9,666 3 14.5% 7,639 3 12.0% Accommodation & food services 5,613 4 8.4% 4723 4 7.4% Manufacturing 4,953 5 7.4% 3699 5 5.8% Arts, entertainment, & recreation 2,707 6 4.1% 2122 9 3.3% Construction 2,527 7 3.8% 3428 6 5.4% Transportation & warehousing 2,408 8 3.6% 2,786 7 4.4% Admin and waste services 2,144 9 3.2% 2,399 8 3.8% Professional & technical services 1,945 10 2.9% 1,468 10 2.3% 60,531 90.6% 57,079 89.3% Total - All Industries 66,800 63,907 Source: Delaware Department of Labor/Office of Occupational and Labor Market Information/Payroll Data/Quarterly Census of Employment and Wages (Geography information is available by County only, not by City) Note: The names of the top employers & number of employees is confidential and may not be disclosed to the public pursuant to 20 CFR (Code of Federal Regulations) Part 603. As a result, the employment information provided is by industry. 171

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 21 City of Dover, Delaware Full-time Equivalent City Government Employees by Function - Budgeted Last Ten Fiscal Years 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Assessor 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.5 4.5 4.5 City Clerk 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 City Manager 4.0 4.0 4.0 4.0 3.0 5.0 5.0 5.0 5.0 5.0 Customer Services 13.0 14.0 14.0 15.0 14.0 14.0 15.0 16.0 16.0 16.0 Facilities Management 5.0 7.0 7.0 7.0 9.0 12.0 13.0 13.0 13.0 13.0 Finance 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 Fire 5.0 5.0 6.0 8.0 6.0 6.0 6.0 6.0 6.0 6.0 Fleet Maintenance 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Human Resources 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 Information Technology 4.0 4.0 5.0 5.0 5.0 5.0 7.0 8.0 8.0 8.0 Library 13.0 13.0 14.0 13.0 13.0 12.0 17.5 18.0 18.0 18.0 Mayor 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Parks and Recreation 5.0 5.0 5.0 5.0 5.0 6.0 8.0 8.0 8.0 8.0 Police Civilian 33.0 33.0 31.0 31.0 29.0 29.0 29.0 29.0 29.0 29.0 Police Law Enforcement 101.0 101.0 93.0 93.0 93.0 93.0 91.0 90.0 93.0 93.0 Procurement & Inventory 3.0 3.0 3.0 4.0 4.0 6.0 6.0 8.0 8.0 8.0 Public Works, Administration 6.0 6.0 5.0 5.0 6.0 5.0 4.0 4.0 4.0 5.0 Planning, Inspections 6.0 6.0 6.0 6.0 7.0 7.0 7.0 7.0 7.0 16.0 Planning, Life Safety 3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 - Economic Development - 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 - Public Works, Engineering 3.0 3.0 3.0 - - - - - - - Planning 6.0 6.0 5.0 4.5 4.5 5.0 5.0 6.0 6.0 5.0 Planning, Code Enforcement 5.0 5.0 5.0 5.0 4.0 4.0 4.5 5.0 5.0 - Community Development - - - 0.5 0.5 1.0 1.0 1.0 1.0 1.0 Public Works, Grounds Maintenance 13.0 13.0 13.0 14.0 14.0 14.0 15.0 16.0 16.0 16.0 Public Works, Sanitation 10.0 10.0 11.0 11.0 11.0 13.0 12.0 13.0 13.0 13.0 Public Works, Streets 8.0 8.0 8.0 8.0 10.0 11.0 11.0 11.0 11.0 11.0 General Fund Total 271.0 277.0 269.0 270.0 269.0 279.0 289.0 298.5 301.5 298.5 Public Utilities, Electric Administration 5.0 4.0 3.0 3.0 3.0 4.0 4.0 4.0 4.0 4.0 Public Utilities, Electric Engineering 10.0 10.0 10.0 10.0 10.0 10.0 10.0 12.5 12.5 12.5 Public Utilities, Electric System OPS 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 Public Utilities, Electric Meter Reading 4.0 4.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 5.0 Public Utilities, Electric Transmission & Distribution 24.0 24.0 24.0 24.0 24.0 25.0 25.0 28.0 28.0 28.0 Electric Fund Total 48.0 47.0 45.0 45.0 45.0 47.0 47.0 53.5 53.5 54.5 Public Utilities, Construction - - 3.0 3.0 5.0 6.0 6.0 7.0 7.0 7.0 Public Utilities, Wastewater Engineering 5.0 5.0 5.0 5.0 6.0 6.0 6.0 8.0 8.0 8.0 Public Utilities, Wastewater Management 11.0 11.0 11.0 11.0 10.0 10.0 9.0 11.0 11.0 11.0 Public Utilities, Water Management 6.0 6.0 4.0 4.0 5.0 4.0 4.0 5.0 5.0 5.0 Public Utilities, Water Treatment Plant 13.0 13.0 11.0 11.0 10.0 10.0 10.0 10.0 10.0 10.0 Water Meter Reading - - - - - - - 1.0 1.0 1.0 Water/Wastewater Fund Total 35.0 35.0 34.0 34.0 36.0 36.0 35.0 42.0 42.0 42.0 Total Full-Time Equivalents 354.0 359.0 348.0 349.0 350.0 362.0 371.0 394.0 397.0 395.0 Source: City of Dover Budget 172

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2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 City of Dover, Delaware Summary of Insurance As of June 30, 2017 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Property Blanket Building & Contents (Special Form, RC, Agreed Amount) $159,301,144 $10,000 Deductible Personal Property of Others $250,000 Earthquake $2,000,000 $50,000 Deductible Flood Zones X or C $2,000,000 $50,000 Deductible Flood Zones (Zones unidentifiable) $100,000 Deductible Zones located A, B Shaded X, V & D are excluded Blanket Business Earnings & Expense $200,000 Business Income from Dependent Properties $250,000 Accounts Receivable $250,000 Civil Authority - 30 days Claims Data Expense $25,000 Covered Leasehold Interest $100,000 Debris Removal (Additional Amount) $250,000 Deferred Payments $25,000 EDP Data & Media $50,000 Employee Tools ($2,500 item) $25,000 Expediting Expenses $250,000 Exhibitions (Property Damage) $50,000 Extra Expense $25,000 Fine Arts $250,000 Fire Department Services Charge Included Fire Protective Equipment Discharge Included Fungus, Wet Rot, Bacteria $25,000 Green Building Alternatives 1% / Max. $100,000 each building Green Building Reengineering & Recertification $25,000 Loss of Master Key $25,000 Newly Acquired or Constructed -Buildings Each $2,000,000 each building -Personal Property at each loc. $1,000,000 Non-Owned Detached Trailers $25,000 Ord & Law Coverage A $250,000 Ord & Law Coverage B $250,000 Ord & Law Coverage D Included up to Extra Expense Limit Outdoor Property $250,000 Outside Signs –Described – Premium $100,000 Personal Affects $250,000 Personal Property at Undescribed Premises $50,000 (Continued) 175

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 – Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Personal Property in Transit out of Coverage Territory $25,000 Pollution cleanup & removal $100,000 Preservation of Property-Direct $250,000 -Direct loss or damage to moved Prop. Included Reward Coverage $25,000 Stamps, Tickets and Letters of Credit $5,000 Stored Water $25,000 Theft or Damage to Rented Property Included Undamaged Parts of Stock in Process $50,000 Valuable Papers on Premises $100,000 Valuable Papers off Premises $100,000 Appurtenant Buildings and Structures $100,000 Overseas Business Travel Personal Property $25,000 Utility Service Direct Damage $50,000 Confiscated Property $100,000 Street Lights – Each Item $2,500 Street Lights – Per Occur $50,000 Street Signs – Each Item $2,500 Street Signs – Per Occur $50,000 Traffic Signs and Lights - Each $2,500 Traffic Signs and Lights - Per Occur $50,000 Stadium Lights – Each Item $2,500 Stadium Lights – Per Occur $50,000 Spoilage Coverage Extension $10,000 Sewer or Drain Backup $250,000 Boiler & Machinery Coverage Limit Property Limit Deductible $10,000 Expediting Expenses $250,000 Hazardous Substance $250,000 Spoilage $250,000 Ammonia Contamination $250,000 Inland Marine Contractors Equipment – Replacement Cost - 90% Co-Insurance Employee Tools $94,725 Not to exceed $18,000 per item Unlisted Items/equipment $100,000 Not to exceed $5,000 per item Leased or Rented Items $100,000 Not to exceed $100,000 per item New Acquired contractors equipment $250,000 Rental Cost (per Item) $5,000 Loss to any one Replacement Item $100,000 Listed Items $175,170 Basic Deductible $1,000 Employee Tool Deductible $250 Flood Deductible $50,000 (Continued) 176

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Earthquake Deductible $50,000 Windstorm Deductible $10,000 Crime Employee Theft per Loss $500,000 $500 Deductible Forgery or Alteration $100,000 $1,000 Deductible Inside the Premises – Theft of Money & Securities $35,000 $500 Deductible Robbery or Safe Burglary of Other Property $25,000 $500 Deductible Outside the Premises $30,000 $500 Deductible Computer Fraud $100,000 $1,000 Deductible Money Orders & Counterfeit Currency $100,000 $1,000 Deductible Faithful Performance of Duty Coverage Endorsement – Governmental Employees Liability Coverage: Commercial General Liability Each Occurrence Limit $1,000,000 General Aggregate Limit $3,000,000 Products Completed Operations Aggregate $3,000,000 Limit Personal & Advertising Injury Each Person $1,000,000 Damages to Premises Rented to You Limit (Any One Premises) $100,000 Medical Expenses $0 Sewer Back Up $1,000,000 (resulting from negligence) Failure to Supply $1,000,000 Each Abuse or Molestation Offense Limit $1,000,000 Abuse or Molestation Aggregate Limit $2,000,000 Statutory Cap Limits of Coverage Endorsement Delaware Each Occurrence Statutory Cap Limit $300,000 Employee Benefit Plans Administration Liability - Claims Made Retroactive Date: None Aggregate Limit $3,000,000 Each Employee Limit $1,000,000 Deductible $1,000 Law Enforcement Liability - Occurrence Aggregate Limit $3,000,000 Each Wrongful Act Limit $1,000,000 Each Wrongful Act Deductible $15,000 Statutory Cap Limits of Insurance Endorsement Delaware Statutory Cap Limit $300,000 (Continued) 177

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Public Entity Management Liability - Claims Made Retroactive Date: 7/1/1996 Aggregate Limit $3,000,000 Each Wrongful Act Limit $1,000,000 Deductible $25,000 Employment Practices Liability - Claims Made Retroactive Date: 7/1/1996 Aggregate Limit $2,000,000 Each Wrongful Employment Practice Offense Limit $1,000,000 Deductible $25,000 Business Auto Policy Coverage: Automobile Liability $1,000,000 Personal Injury Protection $300,000 Uninsured/Underinsured Motorist $40,000 (Physical Damage Applies to Police & Specified Electric & Sanitation Trucks) $500 Comp Deduct/$1,000 Collision Deduct Non-owned Liability $1,000,000 Hired Auto Liability $1,000,000 Employees as Additional Insured Hired Auto Physical Damage $90,000 Hired Car Physical Damage Deductibles Comprehensive Deductible $250 Collision Deductible $250 Statutory Cap Limits of Coverage Endorsement Delaware Statutory Cap Limit $300,000 Excess Crime Policy Coverage: Excess Crime Employee Theft per Loss $500,000 excess of $500,000 (Over Policy# 630OB165227) (Continued) 178

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Umbrella Excess Liability Coverage: Umbrella General Aggregate Limit $6,000,000 Each Wrongful Act Limit $6,000,000 Each Wrongful Employment Practice Offense Limit $6,000,000 Products & Completed Work Aggregate Limit $6,000,000 Personal and Advertising Injury Any One Person or Organization Limit $6,000,000 Each Occurrence Limit $6,000,000 Retained Limit Any One Occurrence or Event $10,000 Umbrella Underlying Policies: General Liability $1,000,000 Employment Benefits $1,000,000 Auto Liability $1,000,000 Law Enforcement Liability $1,000,000 Public Entity Management $1,000,000 Employment Practices Liability Employers Liability (Safety Nat’l) $1,000,000 Cyber Liability Coverage: Cyber Liability – Claims Made Retroactive Date: 12/01/2012 Aggregate Limit $1,000,000 Third-Party Liability Network & Information Security Each Wrongful Act Limit $1,000,000 Deductible $10,000 First-Party Liability Security Breach Notification & Remediation Expenses Sublimit $500,000 Deductible $10,000 Crisis Management Service Expenses $500,000 Deductible $10,000 Pollution Liability Coverage: Pollution Liability Each Pollution Event Limit $5,000,000 Aggregate Policy Limit $10,000,000 Crisis Management Expense Aggregate Limit $50,000 (Continued) 179

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Green Remediation Aggregate Limit $50,000 Green Standards Aggregate Limit $50,000 Deductibles $25,000 Each Pollution Event Claims Made Retroactive Date 4/1/1997 Includes: 2 Underground Storage Tanks-710 Williams St., Dover, DE & 2 Power Plants Excess Workers’ Compensation Coverage: Employers Liability Limit: $1,000,000 Specific Limit: Statutory Aggregate Excess Limit: $2,000,000 $600,000 Retention (Police) $500,000 Retention (All Other) Workers’ Compensation-TPA Services (Charges based on claim count, this number could fluctuate) Travel Accident Policy Principal Sum: $100,000 $0 Deductible Covered Positions: The Mayor, HR Director, Police Chief, Police Major, Police Captains, IT Director, PW Director, Water/Wastewater Manager, PW Operations Manager, Electric Director, Engineering and System Operations, Line Crew Foreman, City Manager, Assistant City Manager, Planning Director, Principal Planner, Fire Marshall, City Clerk, Assistant City Clerk, Controller, Assistant Finance Director, Library Director, Assistant Library Director, Tax Assessor, Economic Development Director and Council Members of the Policyholder. Bond - Self Insured Workers’ Compensation - State of Delaware Limit: $750,000 Bond - Public Officials Bond - Donna Mitchell – Treasurer Limit: $100,000 Bond - Public Officials Bond - Traci McDowell – City Clerk/Assistant Treasurer Limit: $100,000 Power Plants – Property & Boiler and Machinery (2 policies 50/50) Locations: McKee Run Generating Plant VanSant Station Policy #1 XL Insurance Company – $50,000,000 per Occurrence (50% Carrier Capacity Limit of $100,000,000) Coverages: 50% policy limit: $50,000,000 Per Occurrence (Continued) 180

2017 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Agreed Amount, Special Extra Expense: $2,000,000 Errors & Omissions $2,000,000 Expediting Cost: $1,000,000 Property in the Course of Construction: $5,000,000 Earthquake: $20,000,000 Flood: $10,000,000 Debris Removal $2,500,000 Property in Transit $2,500,000 Demolition & Increase Cost of Construction $10,000,000 Deductibles: $750,000 per Occurrence, except; $100,000 per Occurrence as respects Transit, In respect of Time Element loss (Extra Expense): 45 days per Occurrence, except; 72 hours per Occurrence in respect of Service Interruption Policy #2 Ace American Insurance Company – $50,000,000 per Occurrence (50% Carrier Capacity Limit of $100,000,000) Coverages: 50% policy limit: $50,000,000 Per Occurrence Agreed Amount, Special Extra Expense: $2,000,000 Errors & Omissions $2,000,000 Expediting Cost: $1,000,000 Property in the Course of Construction: $5,000,000 Earthquake: $20,000,000 Flood: $10,000,000 Debris Removal $2,500,000 Property in Transit $2,500,000 Demolition & Increase Cost of Construction $10,000,000 Deductibles: $750,000 per Occurrence, except; $100,000 per Occurrence as respects Transit, In respect of Time Element loss (Extra Expense): 45 days per Occurrence, except; 72 hours per Occurrence in respect of Service Interruption 181

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City of Dover Post Retirement Benefit Liabilities As of July 1, 2017 for the Plan Year June 30, 2019

City of Dover Post Retirement Benefit Liabilities As of July 1, 2017 for the Plan Year June 30, 2019 General Pension Water/ General Wastewater Electric City Fund Fund Fund Total Funding Liability $ 33,916,402 $ 5,031,922 $ 21,919,276 $ 60,867,600 Actuarial Value of Assets (18,964,641) (3,326,166) (18,569,818) (40,860,625) Unfunded Liability $ 14,951,761 $ 1,705,756 $ 3,349,458 $ 20,006,975 Funded % 55.9% 66.1% 84.7% 67.1% Normal Cost $ 165,437 $ 31,911 $ 54,563 $ 251,911 Amortization Payment 1,821,615 211,051 425,035 2,457,701 Interest at 6.5% 129,158 15,793 31,174 176,125 Actuarially Determined Contribution $ 2,116,210 $ 258,755 $ 510,772 $ 2,885,737 Estimated Applicable Payroll $ 3,646,715 $ 584,622 $ 1,747,882 $ 5,979,219 Normal Cost % of Payroll 4.54% 5.46% 3.12% 4.21% Amortization & Interest % of Payroll 53.49% 38.80% 26.10% 44.05% Total FY19 Percentage of Payroll 58.03% 44.26% 29.22% 48.26% Other Post Employment Benefits - Retirement Health Insurance Water/ General Wastewater Electric City Fund Fund Fund Total Funding Liability $ 50,616,558 $ 5,406,880 $ 13,281,633 $ 69,305,071 Actuarial Value of Assets (22,109,789) (1,760,270) (5,183,787) (29,053,846) Unfunded Liability $ 28,506,769 $ 3,646,610 $ 8,097,846 $ 40,251,225 Funded % 43.7% 32.6% 39.0% 41.9% Normal Cost $ 1,086,489 $ 77,128 $ 58,252 $ 1,221,869 Amortization Payment 2,049,742 262,205 582,265 2,894,212 Interest at 6.5% 203,855 22,057 41,633 267,545 Actuarially Determined Contribution - Prelim $ 3,340,086 $ 361,390 $ 682,150 $ 4,383,626 Expected Benefit Payments - Retiree's 2,233,989 310,811 858,376 3,403,176 Actuarially Determined Contribution - Final $ 5,574,075 $ 672,201 $ 1,540,526 $ 7,786,802 Estimated Applicable Payroll $ 14,939,651 $ 1,426,100 $ 2,734,786 $ 19,100,537 Trust Funding as a % of Covered Payroll 13.70% 2.20% 2.00% 6.40% Net Trust Funding $ 2,046,732 $ 31,374 $ 54,696 $ 2,132,802 Estimated Claim Payments - Retiree's 2,233,989 310,811 858,376 3,403,176 Total Estimated OPEB Funding $ 4,280,721 $ 342,185 $ 913,072 $ 5,535,978 Police Pensions City of State of City of Dover City Dover Delaware Pro-Rata Share Total Funding Liability $ 18,862,607 $ 300,194,000 Actuarial Value of Assets (13,777,724) (284,298,000) Unfunded Liability $ 5,084,883 $ 15,896,000 $ 1,431,281 Funded % 73.0% 94.7% Normal Cost $ - $ 1,269,000 $ 1,269,000 Amortization Payment 986,268 986,268 Interest at 6.5% 64,107 64,107 Actuarially Determined Contribution $ 1,050,375 $ 2,319,375 Estimated Applicable Payroll $ 7,607,900 Normal Cost % of Payroll 16.68% Note - State Plan FY18 % of Payroll was 11.42% or $819,900; An increase of $449,100. Attributed to lower investment earnings, lowered rate of return to 7.0%; Salary increases for 81% of active employees were greater over the assumed increase by approximately 4.6%; Assumption 2.5% plus merit

ACTION FORM PROCEEDING: Council Committee of the Whole DEPARTMENT OF ORIGIN: Finance DATE SUBMITTED: 03/01/2018 PREPARED BY: Lori Peddicord, Controller/Treasurer SUBJECT: Project Carry-Forward Budget Balances & Proposed Budget Amendments REVIEWED BY: City Manager and Controller/Treasurer APPROVALS: Council Committee of the Whole/Legislative, Finance, and Administration Committee EXHIBITS: Exhibit A – Capital Investment Plan Amendments EXPENDITURE REQUIRED: As per the attached Exhibit and Draft Ordinance AMOUNT BUDGETED: N/A TIME TIMETABLE: Upon Council approval RECOMMENDED ACTION: Staff recommends approval of the proposed Budget Amendments for Fiscal Year 2018. BACKGROUND AND ANALYSIS The proposed budget amendment includes adjustments to the Beginning Budget Balances for all funds and Capital Project budgets (see Exhibit A). It also includes any adjustments related to Council Actions taken to date on changes in project budgets or operating items that were not included in the original budget. Financial Policy transfers of favorable carry forward balances are as follows: • The General Fund includes a transfer to the Capital Asset Reserve of $214,700 attributed to favorable revenues. • Personnel favorability in FY 17 is included to be transferred to the General Pension Fund in the amounts of $570,600 for General Fund; $144,800 for the Water/Wastewater Fund and $234,500 for the Electric Fund. • Personnel favorability in FY 17 is included to be transferred to the Police Pension Fund in the amount of $50,000 for General Fund. • Budget balance for the General fund was over the 12% threshold which equates to approximately $75,000 which is used to fund legal fees $47,300, City Manager contractual services of $27,700 and Human Resources Diversity & Inclusion training $79,900 additionally $10,000 was transferred from Council’s budget to help cover costs for the Diversity & Inclusion training. Additional adjustments are as follows: • No revenue increases are being projected at this time. There are a couple of revenue changes in the Capital Funds for projects that were carried forward and are funded by reserves and grants. • Increases to Division budgets for vacation sell-back, retirement payout, and education assistance with a corresponding decrease to Other Employment Expenses across all applicable funds. • Favorable variance in Grounds Maintenance has been transferred to Recreation for the new Recreation Director in the amount of $40,800. • Carryforward $80,000 of unspent Streets Department material and supplies and administration expense from FY 2017 to be used to clean up Schutte Park. • Governmental Capital Projects Fund - Increases in Grant and Parkland Reserve revenues $30,000 each

for the Dover Park Master Plan which is carried forward from prior year $50,000 and increased by $10,000. An additional increase in Parkland Reserve revenue of $800 for Continental Park play area with corresponding increases in expense in the Recreation Department for Dover Park Master Plan $60,000 and $800 for Continental Park play area. • Project balances are carried over from last fiscal year as reflected in the Capital Investment Plan Amendments Schedule (exhibit A – page preceding Draft Ordinance) with the additional adjustments to the FY 18 Budgets as follows: o Increase in Governmental Capital Project Fund expenditures in City Clerk Department for Broadcast and production equipment. o Transfer from Streets to Sanitation $42,000 to repair vehicle #445. o Increase of $27,000 in IT Department capital outlay for Network Infrastructure covered by sale of assets $21,800 and interest earned $5,200. o Added transfer to Parkland Reserve $25,800 which includes $2,809 Parkland Revitalization fund raising and $22,914 in lieu of parkland for Grande Apts. o Transfer to WWW I & E Fund was reduced by $27,000 since the Metering project was moved to the operating fund because these types of expenses are not capitalizable. o Increase in WWW I & E Fund Misc. Revenues $32,400 to install an air scrubber at PS #7. Half of the cost is funded by Kent County total cost is $64,800; includes a corresponding increase in Water Department expense of $64,800. o Includes in Water Treatment Plant Expense an increase of $2,468,200 approved by Council for Water Treatment Plant Process Improvements; $1,115,200 carried forward from prior year and $1,353,000 added from current year budget balance. o Transfer of expense from Electric Fund Power Supply $250,000 to Contractual Services – RFP’s $150,000 for rate study and to Legal Expenses $100,000 for purchased power agreements with the IRP. o Grant Funds have been adjusted to reflect new programs and/or adjustments to current grants.

Exhibit A City of Dover Fiscal Year 2017/2018 Budget First Amendment Capital Investment Plan Amendments Fiscal Year 2017 Original Revised Prior Carry FY 2018 Revised CIP CIP Fiscal Year Forward Year FY 18 CIP Project # Title Budget Budget Expenses Balance Budget Budget --- Broadcast and Production Equipment $ - $ - $ 8,740.50 $ 156,200.00 $ - $ 156,200.00 PR1701 Dover Park Master Plan 50,000 50,000 - 50,000 10,000 60,000 ST1504 Old PW2 Site Improvements 106,700 181,500 103,553 77,900 - 77,900 ST1701 FY17 Street and Alley Program 900,000 878,800 119,155 759,600 - 759,600 ST1703 Silver Lake Dam Improvements 126,000 126,000 14,550 111,500 - 111,500 Streets Division $ 1,182,700 $ 1,236,300 $ 245,999 $ 1,155,200 $ 10,000 $ 1,165,200 Total General Capital Project Fund $ 1,182,700 $ 1,236,300 $ 245,999 $ 1,155,200 $ 10,000 $ 1,165,200 Total Increase in General Cap Proj Fund $ 1,155,200 CT1627 FY16 Paving Projects $ 107,600 $ 107,600 $ 62,995 $ 44,600 $ - $ 44,600 CT1703 Paving Project - Wyoming Avenue 200,000 200,000 30,105 169,900 - 169,900 CT1714 Paving Project - Paper Alley 15,000 15,000 - 15,000 - 15,000 TE0601 TCSP Lincoln Park 79,100 79,100 - 79,100 - 79,100 Total Community Transportation Fund $ 401,700 $ 401,700 $ 93,101 $ 308,600 $ - $ 308,600 Total Increase in Comm Transportation Fund $ 308,600 Compressor $ 12,800 $ 12,800 $ - $ 10,700 $ - $ 10,700 WD1705 Future Well Installation 100,000 100,000 28,430 71,600 - 71,600 Water Division $ 112,800 $ 112,800 $ 28,430 $ 82,300 $ - $ 82,300 Total Increase in Water Division $ 82,300 Compressor $ 12,800 $ 12,800 $ - $ 10,700 $ - $ 10,700 WW1303 Westover Pump Station Upgrade 593,000 594,500 75,141 519,400 - 519,400 WW1603 Rolling Acres Pump Station Replacement 396,100 450,600 11,279 439,300 25,900 465,200 WW1704 Delaware Tech Pump Station 52,000 52,000 19,006 33,000 - 33,000 WW1705 Silver Lake Pump Station Replacement 52,000 52,000 31,809 20,200 - 20,200 WW1706 Walker Woods Pump Station Replacement 52,000 52,000 34,610 17,400 - 17,400 II1800 Inflow/Infiltration Removal - - - - (25,900) (25,900) Wastewater Division $ 1,157,900 $ 1,213,900 $ 171,845 $ 1,040,000 $ - $ 1,040,000 Total Increase in Wastewater Division $ 1,040,000 WD1609 WTP Process Improvements $ 1,200,000 $ 1,200,000 $ 84,808 $ 1,115,200 $ 1,353,000 $ 2,468,200 Water Treatment Plant $ 1,200,000 $ 1,200,000 $ 84,808 $ 1,115,200 $ 1,353,000 $ 2,468,200 Total Increase in WTP $ 1,115,200 Total Water/Wastewater I & E Fund $ 2,470,700 $ 2,526,700 $ 285,083 $ 2,237,500 $ 1,353,000 $ 3,590,500 Total Increase in Water/Wastewater I & E Fund $ 2,237,500 EG1701 VanSant Unit 11 Major Overhaul $ 400,000 $ 400,000 $ 5,840 $ 394,200 $ 1,548,000 $ 1,942,200 EG1704 Unit #3 Hydrogen Analyzer 96,000 96,000 - 82,400 - 82,400 EG1712 Remote Start Capability at VanSant 10,800 50,800 31,893 12,000 - 12,000 Electric Generation $ 506,800 $ 546,800 $ 37,733 $ 488,600 $ 1,548,000 $ 2,036,600 Total Increase in Electric Generation $ 488,600 FIN Purchase of ERP System $ 1,000,000 $ 1,000,000 $ 58,252 $ 941,700 $ 1,500,000 $ 2,441,700 $ 1,000,000 $ 1,000,000 $ 58,252 $ 941,700 $ 1,500,000 $ 2,441,700 EE1617 Oak Grove Trailer Park - Distr Upgrade $ 77,400 $ 77,400 $ 45,739 $ 31,700 $ - $ 31,700 EE1627 Dover East Estates - Distribution Upgrade 125,500 125,500 112,662 12,800 - 12,800 EE1631 North Street OH to UG 170,000 170,000 164,489 5,500 5,500 EE1709 Substation Relay Upgrade 125,000 125,000 4,882 120,100 - 120,100 Engineering Division $ 497,900 $ 497,900 $ 327,772 $ 170,100 $ - $ 170,100 Total Increase in Engineering $ 170,100 --- 2018 Ram 1500 (2) $ - $ - $ - $ 36,000 $ - $ 36,000 Metering Division $ - $ - $ - $ 36,000 $ - $ 36,000 Total Increase in Metering $ 36,000 Total Electric I & E Fund $ 2,004,700 $ 2,044,700 $ 423,756 $ 1,636,400 $ 3,048,000 $ 4,684,400 Total Increase in Electric I & E Fund $ 1,636,400 Total Carryforward balances from FY 2017 $ 5,337,700

CITY OF DOVER ORDINANCE # 2018-02 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 2 The amount hereinafter named aggregating Forty Nine Million Three Thousand Two Hundred dollars 3 ($49,003,200) or so much thereof as may be necessary are hereby appropriated from current revenues 4 and other funds for the use by several departments of the Municipal Government for the fiscal year 5 beginning July 1, 2017 and ending June 30, 2018: 6 GENERAL FUND 7 CASH RECEIPT SUMMARY FOR 2017-2018 8 2017/18 2017/18 9 BUDGET REVISED 10 BEGINNING BALANCE $ 4,597,100 $ 6,072,200 11 RECEIPTS 12 FINES AND POLICE REVENUE 746,600 746,600 13 LIBRARY REVENUES 100,000 100,000 14 KENT COUNTY BOOK REIMBURSEMENT 300,000 300,000 15 BUSINESS LICENSES 1,467,000 1,467,000 16 PERMITS AND OTHER FEES 1,956,000 1,956,000 17 MISCELLANEOUS CHARGES 57,000 57,000 18 POLICE EXTRA DUTY 500,000 500,000 19 PROPERTY TAXES 13,025,600 13,025,600 20 RECREATION REVENUE 150,000 150,000 21 FRANCHISE FEE 688,100 688,100 22 SANITATION FEES 3,080,400 3,080,400 23 RENT REVENUE - GARRISON FARM 96,900 96,900 24 COURT OF CHANCERY FEES 1,350,000 1,350,000 25 INVESTMENT INCOME 138,000 138,000 26 RECEIPTS SUBTOTAL 23,655,600 23,655,600 27 INTERFUND SERVICE RECEIPTS 28 INTERFUND SERVICE RECEIPTS W/WW 1,716,100 1,716,100 29 INTERFUND SERVICE RECEIPTS ELECTRIC 3,660,100 3,660,100 30 INTERFUND SERVICE RECEIPTS SUBTOTAL 5,376,200 5,376,200 31 GRANTS: 32 POLICE RELATED/EXTRA DUTY 60,000 60,000 33 POLICE PENSION GRANT 415,000 415,000 34 GREEN ENERGY GRANT 98,500 98,500 35 MISC GRANT REVENUE 25,000 31,500 36 HISTORIC DISTRICT GRANT 6,500 37 GRANTS SUBTOTAL 605,000 605,000 38 TRANSFERS FROM: 39 TRANSFER TAX 1,209,300 1,209,300 40 MUNICIPAL STREET AID 673,100 673,100 41 CIVIL TRAFFIC PENALTIES 511,800 511,800 42 WATER/WASTEWATER 900,000 900,000 43 ELECTRIC 10,000,000 10,000,000 44 TRANSFERS FROM SUBTOTAL 13,294,200 13,294,200 45 TOTAL REVENUES 42,931,000 42,931,000 46 TOTAL BEGINNING BALANCE & REVENUE $ 47,528,100 $ 49,003,200 1

47 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 48 GENERAL FUND - EXPENDITURES AND BUDGET BALANCE FOR 2017-2018 49 2017/18 2017/18 50 DEPARTMENT EXPENSES BUDGET REVISED 51 CITY CLERK $ 436,700 $ 440,700 52 COUNCIL 155,100 145,100 53 TAX ASSESSOR 238,500 241,200 54 FIRE 774,900 774,900 55 GROUNDS MAINTENANCE 1,142,000 1,101,200 56 LIBRARY 1,708,300 1,715,800 57 RECREATION 764,200 811,500 58 LIFE SAFETY 499,600 500,900 59 CODE ENFORCEMENT 449,700 452,100 60 PLANNING 563,400 568,000 61 INSPECTIONS 721,000 724,800 62 POLICE 16,483,900 16,713,300 63 POLICE EXTRA DUTY 560,000 560,000 64 STREETS 1,119,400 1,202,100 65 SANITATION 2,563,900 2,566,600 66 CITY MANAGER 751,500 820,500 67 INFORMATION TECHNOLOGY 777,400 781,200 68 FINANCE 1,038,900 1,038,900 69 PUBLIC WORKS - ADMINISTRATION 718,300 720,100 70 FACILITIES MANAGEMENT 629,700 633,200 71 PUBLIC WORKS - ENGINEERING 277,700 278,800 72 PROCUREMENT & INVENTORY 605,100 610,600 73 FLEET MAINTENANCE 838,200 840,200 74 CUSTOMER SERVICE 1,169,500 1,174,700 75 HUMAN RESOURCES 436,600 538,600 76 MAYOR 119,300 119,300 77 DEPARTMENT SUBTOTALS 35,542,800 36,074,300 78 OTHER EXPENSES 79 DEBT SERVICE 443,100 443,100 80 CONTRIBUTION TO DDP 150,000 150,000 81 MISCELLANEOUS GRANT RELATED EXP 25,000 25,000 82 INSURANCE 735,000 735,000 83 RETIREES HEALTH CARE 2,063,000 2,063,000 84 OTHER EMPLOYMENT EXPENSES 367,500 70,900 85 BANK & CREDIT CARD FEES 21,000 21,000 86 UNCOLLECTIBLES - TRASH AND OTHER 100,000 100,000 87 STREET LIGHTS 810,000 810,000 88 OTHER EXPENSE SUBTOTAL 4,714,600 4,418,000 89 TRANSFERS 90 TRANSFER TO CAPITAL FUND - PROJECTS 1,368,700 1,368,700 91 TRANSFER TO THE CAPITAL ASSET RESERVE - 214,700 92 APPROP. TO THE POLICE PENSION FUND 761,500 811,500 93 APPROP. POLICE PENSION - STATE GRANT 415,000 415,000 94 APPROP. TO THE GENERAL PENSION FUND 48,400 619,000 95 TRANSFER TO INVENTORY WRITE-OFFS 10,000 10,000 96 TRANSFERS SUBTOTAL 2,603,600 3,438,900 97 TOTAL EXPENDITURES 42,861,000 43,931,200 98 CURRENT YEAR BALANCE 4,667,100 5,072,000 99 TOTALS $ 47,528,100 $ 49,003,200 100 The City Manager is hereby authorized, without further approval of the City Council, to make 101 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 102 department with the exception of any transfers prohibited by City Procedure #F306. 103 ADOPTED: 2

104 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 105 GOVERNMENTAL CAPITAL PROJECTS FUND 106 REVENUES AND BUDGET FOR 2017-2018 107 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 108 The amount hereinafter named aggregating Three Million Seven Hundred Thirty One Thousand Three Hundred dollars 109 ($3,731,300) or so much thereof as may be necessary are hereby appropriated from current revenues and other 110 funds for the use by several departments of the Municipal Government for the fiscal year beginning July 1, 2017 111 and ending June 30, 2018: 112 REVENUES 113 2017/18 2017/18 114 BUDGET REVISED 115 BEGINNING BALANCE - PROJECTS $ 412,900 $ 1,637,200 116 REVENUES 117 STATE GRANTS - Other 33,000 63,000 118 INTEREST EARNINGS 8,300 8,300 119 TRANSFER FROM GENERAL FUND 1,368,700 1,368,700 120 TRANSFER FROM PARKLAND RESERVE 205,000 235,800 121 TRANSFER FROM CAPITAL ASSET RESERVE 418,300 418,300 122 SUBTOTAL PROJECT RECEIPTS 2,033,300 2,094,100 123 TOTAL FUNDING SOURCES 2,033,300 2,094,100 124 TOTAL BEGINNING BALANCE AND REVENUES $ 2,446,200 $ 3,731,300 125 EXPENSE SUMMARY 126 2017/18 2017/18 127 EXPENDITURES BUDGET REVISED 128 CITY CLERK $ - $ 156,200 129 FIRE 145,700 145,700 130 GROUNDS 62,500 62,500 131 RECREATION 271,000 331,800 132 POLICE 379,900 379,900 133 STREETS 1,070,000 1,977,000 134 SANITATION - 42,000 135 INFORMATION TECHNOLOGY 36,600 63,600 136 FACILITIES MANAGEMENT 25,100 25,100 137 DEPARTMENT SUBTOTAL 1,990,800 3,183,800 138 TRANSFERS 139 TRANSFER TO PARKLAND RESERVE - 25,800 140 TRANSFERS SUBTOTAL - 25,800 141 TOTAL EXPENDITURES 1,990,800 3,209,600 142 BUDGET BALANCE 455,400 521,700 143 TOTAL BUDGET BALANCE & EXPENDITURES $ 2,446,200 $ 3,731,300 144 The City Manager is hereby authorized, without further approval of the City Council, to make 145 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 146 department with the exception of any transfers prohibited by City Procedure #F306. 147 ADOPTED: 4

148 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 149 GOVERNMENTAL CAPITAL ASSET RESERVE 150 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 151 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 152 The amount hereinafter named aggregating One Million Eight Hundred Nine Thousand Three Hundred 153 dollars ($1,809,300) or so much thereof as may be necessary are hereby appropriated from current 154 revenues and other funds for the use by several departments of the Municipal Government for the fiscal 155 year beginning July 1, 2017 and ending June 30, 2018: 156 CASH RECEIPTS 157 2017/18 2017/18 158 BUDGET REVISED 159 BEGINNING BALANCE $ 1,525,700 $ 1,576,100 160 RECEIPTS 161 INTEREST EARNINGS 18,500 18,500 162 TRANSFER FROM GENERAL FUND - 214,700 163 TOTAL RECEIPTS 18,500 233,200 164 TOTALS $ 1,544,200 $ 1,809,300 165 EXPENSE SUMMARY 166 2017/18 2017/18 167 BUDGET REVISED 168 TRANSFER TO GOVERNMENTAL CAPITAL PROJECTS FUND $ 418,300 $ 418,300 169 CARRY FORWARD TO NEXT YEAR 1,125,900 1,391,000 170 TOTALS $ 1,544,200 $ 1,809,300 171 The City Manager is hereby authorized, without further approval of the City Council, to make 172 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 173 department with the exception of any transfers prohibited by City Procedure #F306. 174 ADOPTED: 5

175 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 176 PARKLAND/RECREATION RESERVE 177 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 178 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 179 The amount hereinafter named aggregating Three Hundred Forty One Thousand Two Hundred dollars 180 ($341,200) or so much thereof as may be necessary are hereby appropriated from current revenues and 181 other funds for the use by several departments of the Municipal Government for the fiscal year 182 beginning July 1, 2017 and ending June 30, 2018: 183 OPERATING REVENUES 184 2017/18 2017/18 185 BUDGET REVISED 186 BEGINNING BALANCE $ 376,300 $ 336,300 187 INTEREST INCOME 4,900 4,900 188 TOTALS $ 381,200 $ 341,200 189 OPERATING EXPENSES 190 2017/18 2017/18 191 BUDGET REVISED 192 TRANSFER TO GOVERNMENTAL CAPITAL PROJECTS FUND $ 205,000 $ 235,800 193 CURRENT YEAR BALANCE 176,200 105,400 194 TOTALS $ 381,200 $ 341,200 195 The City Manager is hereby authorized, without further approval of the City Council, to make 196 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 197 department with the exception of any transfers prohibited by City Procedure #F306. 198 ADOPTED: 6

199 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 200 WATER/WASTEWATER FUND 201 REVENUES AND BUDGET FOR 2017-2018 202 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 203 The amount hereinafter named aggregating Eighteen Million Five Hundred Nineteen Thousand Two Hundred 204 dollars ($18,519,200) or so much thereof as may be necessary are hereby appropriated from current revenues 205 and other funds for the use by several departments of the Municipal Government for the fiscal year 206 beginning July 1, 2017 and ending June 30, 2018: 207 2017/18 2017/18 208 BUDGET REVISED 209 BEGINNING BALANCE - WATER $ 1,330,900 $ 1,680,500 210 BEGINNING BALANCE - WASTEWATER 1,166,800 1,399,700 211 TOTAL BEGINNING BALANCES 2,497,700 3,080,200 212 BASE REVENUE 213 WATER SERVICES 5,914,600 5,914,600 214 WASTEWATER SERVICES 3,768,000 3,768,000 215 WASTEWATER TREATMENT SERVICES 2,952,900 2,952,900 216 GROUNDWATER INFLOW ADJUSTMENT 1,899,700 1,899,700 217 WATER TANK SPACE LEASING 391,400 391,400 218 WATER IMPACT FEES 231,000 231,000 219 WASTEWATER IMPACT FEES 209,000 209,000 220 INTEREST - WATER 5,700 5,700 221 INTEREST - WASTEWATER 5,700 5,700 222 MISCELLANEOUS SERVICE FEE 61,000 61,000 223 TOTAL REVENUES 15,439,000 15,439,000 224 TOTAL BEGINNING BALANCES AND REVENUES $ 17,936,700 $ 18,519,200 7

225 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 226 WATER/WASTEWATER FUND - EXPENSES AND BUDGET BALANCE FOR 2017-2018 227 2017/18 2017/18 228 DIRECT EXPENSES BUDGET REVISED 229 ENGINEERING & INSPECTION $ 517,800 $ 523,300 230 WATER DEPARTMENT 635,700 650,300 231 WASTEWATER DEPARTMENT 962,800 981,000 232 WATER TREATMENT PLANT 1,780,500 1,791,100 233 DIRECT EXPENDITURE SUBTOTAL 3,896,800 3,945,700 234 OTHER EXPENSES 235 DEBT SERVICE - WATER 524,600 524,600 236 DEBT SERVICE - WASTEWATER 612,800 612,800 237 RETIREES HEALTH CARE 242,200 242,200 238 OTHER EMPLOYMENT EXPENSES 25,900 4,000 239 PENSION UNFUNDED LIABILITY - 144,800 240 KENT COUNTY TREATMENT CHARGE 3,926,500 3,926,500 241 INTERFUND SERVICE FEES 1,716,100 1,716,100 242 BANK & CREDIT CARD FEES 26,000 26,000 243 BOND ISSUE COSTS 40,000 40,000 244 OTHER EXPENSES SUBTOTAL 7,114,100 7,237,000 245 TRANSFER TO: 246 GENERAL FUND FROM WATER 500,000 500,000 247 GENERAL FUND FROM WASTEWATER 400,000 400,000 248 WATER IMP AND EXT 1,600,000 1,586,500 249 WASTEWATER IMP AND EXT 1,600,000 1,586,500 250 GENERAL EMPLOYEES PENSION 7,500 7,500 251 TRANSFER TO SUBTOTAL 4,107,500 4,080,500 252 TOTAL EXPENSES 15,118,400 15,263,200 253 BUDGET BALANCES 254 BUDGET BALANCE WATER 1,575,600 1,849,400 255 BUDGET BALANCE WASTEWATER 1,242,700 1,406,800 256 BUDGET BALANCE SUBTOTALS 2,818,300 3,256,200 257 TOTAL CURRENT YEAR BALANCES AND EXPENSES $ 17,936,700 $ 18,519,400 258 The City Manager is hereby authorized, without further approval of the City Council, to make 259 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 260 department with the exception of any transfers prohibited by City Procedure #F306. 261 ADOPTED: 8

262 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 263 WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND 264 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 265 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 266 The amount hereinafter named aggregating Nine Million One Hundred Forty Three Thousand Two Hundred 267 dollars ($9,143,200) or so much thereof as may be necessary are hereby appropriated from current revenues 268 and other funds for the use by several departments of the Municipal Government for the fiscal year 269 begining July 1, 2017 and ending June 30, 2018: 270 CASH RECEIPTS 271 2017/18 2017/18 272 BUDGET REVISED 273 BEGINNING BALANCE - WATER $ 2,042,000 $ 4,836,100 274 BEGINNING BALANCE - WASTEWATER 1,195,100 1,008,500 275 TOTAL BEGINNING BALANCES 3,237,100 5,844,600 276 REVENUES 277 MISC REVENUES - 32,400 278 TRANS FR OPERATING FUND - WATER 1,600,000 1,586,500 279 TRANS FR OPERATING FUND - WW 1,600,000 1,586,500 280 INTEREST INCOME 93,200 93,200 281 TOTAL REVENUES 3,293,200 3,298,600 282 TOTAL BEGINNING BALANCES & REVENUES $ 6,530,300 $ 9,143,200 283 EXPENSE SUMMARY 284 2017/18 2017/18 285 EXPENSES BUDGET REVISED 286 WATER $ 1,608,400 $ 1,742,000 287 WASTEWATER 1,543,000 2,569,500 288 WATER TREATMENT PLANT - 2,468,200 289 TOTAL EXPENSES 3,151,400 6,779,700 290 BUDGET BALANCE - WATER 2,080,200 2,275,200 291 BUDGET BALANCE - WASTEWATER 1,298,700 88,300 292 CURRENT YEAR BALANCE SUBTOTALS 3,378,900 2,363,500 293 TOTAL BUDGET BALANCES & EXPENSES $ 6,530,300 $ 9,143,200 294 The City Manager is hereby authorized, without further approval of the City Council, to make 295 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 296 department with the exception of any transfers prohibited by City Procedure #F306. 297 ADOPTED: 9

298 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 299 WATER/WASTEWATER IMPACT FEE RESERVE 300 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 301 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 302 The amount hereinafter named aggregating Four Million Two Hundred Thirty Nine Thousand Four Hundred 303 dollars ($4,239,400) or so much thereof as may be necessary are hereby appropriated fromcurrent revenues 304 and other funds for the use by several departments of the Municipal Government for the fiscal year 305 beginning July 1, 2017 and ending June 30, 2018: 306 CASH RECEIPTS 307 2017/18 2017/18 308 BUDGET REVISED 309 BEGINNING BALANCE - WATER $ 249,800 $ 652,500 310 BEGINNING BALANCE - WASTEWATER 2,909,500 3,540,600 311 TOTAL BEGINNING BALANCES 3,159,300 4,193,100 312 RECEIPTS 313 INTEREST EARNINGS - WATER 4,200 4,200 314 INTEREST EARNINGS - WASTEWATER 42,100 42,100 315 TOTAL RECEIPTS 46,300 46,300 316 TOTALS $ 3,205,600 $ 4,239,400 317 EXPENSE SUMMARY 318 2017/18 2017/18 319 BUDGET REVISED 320 CURRENT YEAR BALANCE - WATER $ 254,000 $ 656,700 321 CURRENT YEAR BALANCE - WASTEWATER 2,951,600 3,582,700 322 CURRENT YEAR BALANCE SUBTOTALS 3,205,600 4,239,400 323 TOTALS $ 3,205,600 $ 4,239,400 324 The City Manager is hereby authorized, without further approval of the City Council, to make 325 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 326 department with the exception of any transfers prohibited by City Procedure #F306. 327 ADOPTED: 10

328 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 329 WATER/WASTEWATER CONTINGENCY RESERVE 330 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 331 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 332 The amount hereinafter named aggregating Five Hundred Thirty Seven Thousand Six Hundred dollars 333 ($537,600) or so much thereof as may be necessary are hereby appropriated from current revenues 334 and other funds for the use by several departments of the Municipal Government for the fiscal year 335 beginning July 1, 2017 and ending June 30, 2018: 336 CASH RECEIPTS 337 2017/18 2017/18 338 BUDGET REVISED 339 BEGINNING BALANCE - WATER $ 251,600 $ 251,700 340 BEGINNING BALANCE - WASTEWATER 278,200 278,300 341 TOTAL BEGINNING BALANCES 529,800 530,000 342 RECEIPTS 343 INTEREST EARNINGS - WATER 3,500 3,500 344 INTEREST EARNINGS - WASTEWATER 4,100 4,100 345 TOTAL RECEIPTS 7,600 7,600 346 TOTALS $ 537,400 $ 537,600 347 BUDGET SUMMARY 348 2017/18 2017/18 349 BUDGET REVISED 350 CURRENT YEAR BALANCE - WATER $ 255,100 $ 255,200 351 CURRENT YEAR BALANCE - WASTEWATER 282,300 282,400 352 CURRENT YEAR BALANCE SUBTOTALS 537,400 537,600 353 TOTAL EXPENSES AND CURRENT YEAR BALANCES $ 537,400 $ 537,600 354 The City Manager is hereby authorized, without further approval of the City Council, to make 355 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 356 department with the exception of any transfers prohibited by City Procedure #F306. 357 ADOPTED: 11

358 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 359 ELECTRIC REVENUE FUND 360 REVENUES AND BUDGET FOR 2017-2018 361 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: The amount hereinafter named aggregating Ninety Seven Million Nine Hundred Fifty Thousand dollars 362 363 ($97,950,000) or so much thereof as may be necessary are hereby appropriated from current revenues and other 364 funds for the use by several departments of the Municipal Government for the fiscal year beginning July 1, 2017 365 and ending June 30, 2018: 366 2017/18 2017/18 367 BUDGET REVISED 368 BEGINNING BALANCE $ 20,290,200 $ 22,252,500 369 DISTRIBUTION OF EARNINGS - PCA CREDIT (6,176,700) (6,176,700) 370 BEGINNING BALANCE - ADJUSTED 14,113,500 16,075,800 371 BASE REVENUE 372 DIRECT SALES TO CUSTOMER 79,656,000 79,656,000 373 UTILITY TAX 1,236,200 1,236,200 374 MISCELLANEOUS REVENUE 531,200 531,200 375 RENT REVENUE 104,500 104,500 376 GREEN ENERGY 130,000 130,000 377 INTEREST EARNINGS 216,300 216,300 378 TOTAL REVENUES 81,874,200 81,874,200 379 TOTAL BEGINNING BALANCE & REVENUES $ 95,987,700 $ 97,950,000 12

380 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 381 ELECTRIC REVENUE FUND EXPENSES AND BUDGET BALANCE FOR 2017-2018 382 2017/18 2017/18 383 EXPENSES BUDGET REVISED 384 POWER SUPPLY $ 22,807,900 $ 22,557,900 385 SOLAR ENERGY 2,661,300 2,661,300 386 SOLAR RENEWAL ENERGY CREDITS 371,200 371,200 387 POWER SUPPLY MANAGEMENT 835,000 835,000 388 REC'S (Renewable Energy Credits) 578,300 578,300 389 RGGI (Regional Greenhouse Gas Init.) 64,000 64,000 390 PJM CHARGES - ENERGY 6,024,400 6,024,400 391 PJM CHARGES - TRANSMISSION & FEES 6,900,200 6,900,200 392 CAPACITY CHARGES 10,482,500 10,482,500 393 SUB-TOTAL POWER SUPPLY 50,724,800 50,474,800 394 PLANT OPERATIONS 6,146,500 6,146,500 395 GENERATIONS FUELS 817,400 817,400 396 PJM SPOT MARKET ENERGY (958,100) (958,100) 397 PJM CREDITS (535,400) (535,400) 398 CAPACITY CREDITS (7,120,100) (7,120,100) 399 GENERATION SUBTOTAL (1,649,700) (1,649,700) 400 POWER SUPPLY & GENERATION SUBTOTAL 49,075,100 48,825,100 401 DIRECT EXPENDITURES 402 TRANSMISSION/DISTRIBUTION 3,599,600 3,609,700 403 ELECTRICAL ENGINEERING 1,226,400 1,247,900 404 ADMINISTRATION 797,000 777,000 405 METER READING 392,500 393,500 406 SYSTEMS OPERATIONS 644,700 656,700 407 DIRECT EXPENDITURE SUBTOTALS 6,660,200 6,684,800 408 OTHER EXPENSES: 409 UTILITY TAX 1,236,200 1,236,200 410 ALLOW FOR UNCOLLECTIBLES 250,000 250,000 411 CONTRACTUAL SERVICES - RFP'S 100,000 250,000 412 LEGAL EXPENSES 25,000 125,000 413 RETIREES HEALTH CARE 820,300 820,300 414 OTHER EMPLOYMENT EXPENSES 105,200 80,600 415 PENSION UNFUNDED LIABILITY 1,000,000 1,234,500 416 OPEB UNFUNDED LIABILITY 1,000,000 1,000,000 417 GREEN ENERGY PAYMENT TO DEMEC 130,000 130,000 418 INTERFUND SERVICE FEES 3,660,100 3,660,100 419 INTEREST ON DEPOSITS 21,000 21,000 420 BANK & CREDIT CARD FEES 295,000 295,000 421 DEBT SERVICE 1,605,500 1,605,500 422 OTHER EXPENSES SUBTOTAL 10,248,300 10,708,200 423 TRANSFER TO: 424 IMPROVEMENT & EXTENSION 5,000,000 5,000,000 425 GENERAL FUND 10,000,000 10,000,000 426 RATE STABILIZATION RESERVE 5,200,000 5,200,000 427 TRANSFER TO SUBTOTAL 20,200,000 20,200,000 428 TOTAL EXPENSES 86,183,600 86,418,100 429 BUDGET BALANCE - WORKING CAPITAL 9,804,100 11,531,900 430 TOTALS $ 95,987,700 $ 97,950,000 431 The City Manager is hereby authorized, without further approval of the City Council, to make 432 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 433 department with the exception of any transfers prohibited by City Procedure #F306. 434 ADOPTED: 13

435 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 436 ELECTRIC UTILITY IMPROVEMENT AND EXTENSION FUND 437 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 438 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 439 The amount hereinafter named aggregating Fifteen Million Eight Hundred Forty Five Thousand Five Hundred 440 dollars ($15,845,500) or so much thereof as may be necessary are hereby appropriated from current revenues 441 and other funds for the use by several departments of the Municipal Government for the fiscal year 442 beginning July 1, 2017 and ending June 30, 2018: 443 REVENUES 444 2017/18 2017/18 445 BUDGET REVISED 446 BEGINNING BALANCE $ 6,600,300 $ 10,365,700 447 REVENUES 448 TRANSFER FROM ELECTRIC 5,000,000 5,000,000 449 GENERAL SERVICE BILLING 370,000 370,000 450 INTEREST EARNINGS 109,800 109,800 451 TOTAL REVENUES 5,479,800 5,479,800 452 TOTALS $ 12,080,100 $ 15,845,500 453 EXPENSE SUMMARY 454 2017/18 2017/18 455 EXPENSES BUDGET REVISED 456 ELECTRIC ADMINISTRATION $ 8,500 $ 8,500 457 ELECTRIC GENERATION 2,328,000 2,816,600 458 TRANSMISSION AND DISTRIBUTION 1,725,500 1,725,500 459 ELECTRICAL ENGINEERING 1,315,000 1,485,100 460 ELECTRIC METERING - 36,000 461 ERP SYSTEM 1,500,000 2,441,700 462 TOTAL EXPENSES 6,877,000 8,513,400 463 BUDGET BALANCE 5,203,100 7,332,100 464 TOTAL BUDGET BALANCE & EXPENSES $ 12,080,100 $ 15,845,500 465 The City Manager is hereby authorized, without further approval of the City Council, to make 466 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 467 department with the exception of any transfers prohibited by City Procedure #F306. 468 ADOPTED: 1

469 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 470 ELECTRIC UTILITY CONTINGENCY RESERVE 471 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 472 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 473 The amount hereinafter named aggregating Eight Hundred Seventy Six Thousand Three Hundred dollars 474 ($876,300) or so much thereof as may be necessary are hereby appropriated from current revenues and 475 other funds for the use by several departments of the Municipal Government for the fiscal year 476 beginning July 1, 2017 and ending June 30, 2018: 477 CASH RECEIPTS 478 2017/18 2017/18 479 BUDGET REVISED 480 BEGINNING BALANCE $ 863,500 $ 862,500 481 RECEIPTS 482 INTEREST EARNINGS 13,800 13,800 483 TOTAL RECEIPTS 13,800 13,800 484 TOTALS $ 877,300 $ 876,300 485 EXPENSE SUMMARY 486 2017/18 2017/18 487 BUDGET REVISED 488 CURRENT YEAR BALANCE $ 877,300 $ 879,300 489 TOTALS $ 877,300 $ 876,300 490 The City Manager is hereby authorized, without further approval of the City Council, to make 491 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 492 department with the exception of any transfers prohibited by City Procedure #F306. 493 ADOPTED: 15

494 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 495 ELECTRIC UTILITY DEPRECIATION RESERVE 496 SOURCES AND USE OF FUNDS FOR 2017-2018 497 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 498 The amount hereinafter named aggregating Thirteen Million Two Hundred Forty Seven Thousand 499 dollars ($13,247,000) or so much thereof as may be necessary are hereby appropriated from 500 current revenues and other funds for the use by several departments of the Municipal Government 501 for the fiscal year beginning July 1, 2017 and ending June 30, 2018: 502 CASH RECEIPTS 503 2017/18 2017/18 504 BUDGET REVISED 505 BEGINNING BALANCE $ 13,042,800 $ 13,038,300 506 INTEREST EARNINGS 208,700 208,700 507 TOTALS $ 13,251,500 $ 13,247,000 508 BUDGET SUMMARY 509 2017/18 2017/18 510 BUDGET REVISED 511 CURRENT YEAR BALANCE $ 13,251,500 $ 13,247,000 512 TOTALS $ 13,251,500 $ 13,247,000 513 The City Manager is hereby authorized, without further approval of the City Council, to make 514 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 515 department with the exception of any transfers prohibited by City Procedure #F306. 516 ADOPTED: 16

517 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 518 ELECTRIC UTILITY FUTURE CAPACITY RESERVE 519 SOURCES AND USE OF FUNDS FOR 2017-2018 520 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 521 The amount hereinafter named aggregating Thirteen Million Four Hundred Four Thousand Four Hundred 522 dollars ($13,404,400) or so much thereof as may be necessary are hereby appropriated from current revenues 523 and other funds for the use by several departments of the Municipal Government for the fiscal year 524 beginning July 1, 2017 and ending June 30, 2018: 525 CASH RECEIPTS 526 2017/18 2017/18 527 BUDGET REVISED 528 BEGINNING BALANCE $ 13,197,700 $ 13,193,200 529 INTEREST EARNINGS 211,200 211,200 530 TOTALS $ 13,408,900 $ 13,404,400 531 BUDGET SUMMARY 532 2017/18 2017/18 533 BUDGET REVISED 534 CURRENT YEAR BALANCE $ 13,408,900 $ 13,404,400 535 TOTALS $ 13,408,900 $ 13,404,400 536 The City Manager is hereby authorized, without further approval of the City Council, to make 537 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 538 department with the exception of any transfers prohibited by City Procedure #F306. 539 ADOPTED: 17

540 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 541 ELECTRIC UTILITY INSURANCE STABLIZATION RESERVE 542 SOURCES AND USE OF FUNDS FOR 2017-2018 543 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 544 The amount hereinafter named aggregating Seven Hundred Eighty Seven Thousand One Hundred 545 dollars ($787,100) or so much thereof as may be necessary are hereby appropriated from current revenues 546 and other funds for the use by several departments of the Municipal Government for the fiscal year 547 beginning July 1, 2017 and ending June 30, 2018: 548 CASH RECEIPTS 549 2017/18 2017/18 550 BUDGET REVISED 551 BEGINNING BALANCE $ 775,800 $ 774,700 552 INTEREST EARNINGS 12,400 12,400 553 TOTALS $ 788,200 $ 787,100 554 BUDGET SUMMARY 555 2017/18 2017/18 556 BUDGET REVISED 557 CURRENT YEAR BALANCE $ 788,200 $ 787,100 558 TOTALS $ 788,200 $ 787,100 559 The City Manager is hereby authorized, without further approval of the City Council, to make 560 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 561 department with the exception of any transfers prohibited by City Procedure #F306. 562 ADOPTED: 18

563 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 564 ELECTRIC UTILITY RATE STABLIZATION RESERVE 565 SOURCES AND USE OF FUNDS FOR 2017-2018 566 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 567 The amount hereinafter named aggregating Sixteen Million Seven Thousand Six Hundred dollars 568 ($16,007,600) or so much thereof as may be necessary are hereby appropriated from current 569 revenues and other funds for the use by several departments of the Municipal Government 570 for the fiscal year beginning July 1, 2017 and ending June 30, 2018: 571 CASH RECEIPTS 572 2017/18 2017/18 573 BUDGET REVISED 574 BEGINNING BALANCE $ 10,635,500 $ 10,637,400 575 INTEREST EARNINGS 170,200 170,200 576 TRANSFER FROM ELECTRIC OPERATING FUND 5,200,000 5,200,000 577 TOTALS $ 16,005,700 $ 16,007,600 578 BUDGET SUMMARY 579 2017/18 2017/18 580 BUDGET REVISED 581 CURRENT YEAR BALANCE $ 16,005,700 $ 16,007,600 582 TOTALS $ 16,005,700 $ 16,007,600 583 The City Manager is hereby authorized, without further approval of the City Council, to make 584 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 585 department with the exception of any transfers prohibited by City Procedure #F306. 586 ADOPTED: 19

587 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 588 WORKERS COMPENSATION FUND 589 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 590 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 591 The amount hereinafter named aggregating Two Million One Hundred Eighty Four Thousand Five Hundred 592 dollars ($2,184,500) or so much thereof as may be necessary are hereby appropriated from current 593 revenues and other funds for the use by several departments of the Municipal Government for the 594 fiscal year beginning July 1, 2017 and ending June 30, 2018: 595 OPERATING REVENUES 596 2017/18 2017/18 597 BUDGET REVISED 598 BEGINNING BALANCE $ 1,487,800 $ 1,257,700 599 INTEREST INCOME 22,500 22,500 600 PREMIUM FROM CITY 904,300 904,300 601 TOTALS $ 2,414,600 $ 2,184,500 602 OPERATING EXPENSES 603 2017/18 2017/18 604 BUDGET REVISED 605 PROGRAM EXPENSES/SUPPLIES - CLAIMS $ 565,000 $ 565,000 606 INSURANCE 110,800 110,800 607 STATE OF DEL - SELF INSURANCE TAX 39,000 39,000 608 CONTRACTUAL SERVICES 25,000 25,000 609 TOTAL EXPENSES 739,800 739,800 610 CURRENT YEAR BALANCE 1,674,800 1,444,700 611 TOTALS $ 2,414,600 $ 2,184,500 612 The City Manager is hereby authorized, without further approval of the City Council, to make 613 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 614 department with the exception of any transfers prohibited by City Procedure #F306. 615 ADOPTED: 20

616 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 617 COMMUNITY TRANSPORTATION IMPROVEMENT FUND 618 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 619 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 620 The amount hereinafter named aggregating Five Hundred Seventy Thousand Nine Hundred dollars 621 ($570,900) or so much thereof as may be necessary are hereby appropriated from current revenues and 622 other funds for the use by several departments of the Municipal Government for the fiscal year 623 beginning July 1, 2017 and ending June 30, 2018: 624 OPERATING REVENUES 625 2017/18 2017/18 626 BUDGET REVISED 627 PRIOR YEAR BALANCE $ 85,200 $ 70,900 628 GRANTS REVENUE 500,000 500,000 629 TOTALS $ 585,200 $ 570,900 630 OPERATING EXPENSES 631 2017/18 2017/18 632 BUDGET REVISED 633 PROGRAM EXP. GRANT RELATED $ 500,000 $ 500,000 634 CURRENT YEAR BALANCE 85,200 70,900 635 TOTALS $ 585,200 $ 570,900 636 The City Manager is hereby authorized, without further approval of the City Council, to make 637 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 638 department with the exception of any transfers prohibited by City Procedure #F306. 639 ADOPTED: 21

640 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 641 LIBRARY GRANT FUND 642 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 643 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 644 The amount hereinafter named aggregating Three Hundred One Thousand Five Hundred dollars 645 ($301,500) or so much thereof as may be necessary are hereby appropriated from current revenues 646 and other funds for the use by several departments of the Municipal Government for the fiscal year 647 beginning July 1, 2017 and ending June 30, 2018: 648 OPERATING REVENUES 649 2017/18 2017/18 650 BUDGET REVISED 651 PRIOR YEAR BALANCE $ - $ 18,900 652 STATE GRANT 281,700 280,800 653 FEDERAL GRANT 2,500 1,800 654 TOTALS $ 284,200 $ 301,500 655 OPERATING EXPENSES 656 2017/18 2017/18 657 BUDGET REVISED 658 STATE GRANTS 659 FURNITURE/FIXTURES $ 1,500 $ 5,500 660 OFFICE SUPPLIES 30,000 28,000 661 PRINTING AND DUPLICATING 13,000 13,700 662 PROGRAM EXPENSES/SUPPLIES 23,500 25,500 663 BOOKS 126,400 128,800 664 COMPUTER SOFTWARE 2,100 2,500 665 COMPUTER HARDWARE 1,000 5,300 666 AUDIO VISUAL SUPPLIES 74,700 79,000 667 POSTAGE 100 200 668 TRAINING/CONF/FOOD/TRAV 2,500 4,200 669 OFF EQP/REPAIRS & MAINT 4,900 4,000 670 OTHER EQUIP - LEASE 2,000 2,100 671 SUBTOTAL EXPENSES STATE GRANTS 281,700 298,800 672 FEDERAL GRANTS 673 PROGRAM EXPENSES/SUPPLIES 2,500 2,700 674 SUBTOTAL EXPENSES FEDERAL GRANTS 2,500 2,700 675 GRAND TOTAL EXPENSES 284,200 301,500 676 CURRENT YEAR BALANCE - - 677 TOTALS $ 284,200 $ 301,500 678 The City Manager is hereby authorized, without further approval of the City Council, to make 679 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 680 department with the exception of any transfers prohibited by City Procedure #F306. 681 ADOPTED: 22

682 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 683 POLICE GRANTS FUND 684 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 685 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 686 The amount hereinafter named aggregating Seven Hundred Ninety Three Thousand Five hundred dollars 687 ($793,500) or so much thereof as may be necessary are hereby appropriated from current revenues 688 and other funds for the use by several departments of the Municipal Government for the fiscal year 689 beginning July 1, 2017 and ending June 30, 2018: 690 OPERATING REVENUES 691 2017/18 2017/18 692 BUDGET REVISED 693 PRIOR YEAR BALANCE $ 72,400 $ 121,600 694 STATE AND FEDERAL GRANTS RECEIVED 358,000 671,900 695 TOTALS $ 430,400 $ 793,500 696 OPERATING EXPENSES 697 2017/18 2017/18 698 BUDGET REVISED 699 EXPENDITURES 700 PERSONNEL EXPENDITURES 701 CADET PROGRAM SALARIES $ 11,900 $ 11,900 702 CADET PROGRAM FICA 900 900 703 CADET PROGRAM W/COMP 700 700 704 MATERIALS AND SUPPLIES 705 POLICE EQUIPT & PROG SUPP 312,000 365,900 706 ADMINISTRATIVE EXPENDITURES 707 CELL PHONE CHARGES 20,000 20,000 708 CONTRACTUAL SERVICES - 210,000 709 TRAINING 15,000 25,000 710 AUDIT FEES 1,000 1,000 711 TOTAL EXPENDITURES 361,500 635,400 712 OTHER FINANCING USES 713 OPERATING TRANSFERS-OUT 60,000 100,000 714 TOTAL FINANCING USES 60,000 100,000 715 CURRENT YEAR BALANCE 8,900 58,100 716 TOTALS $ 430,400 $ 793,500 717 The above budget represents the combination of all State & Federal Grants. 718 The City Manager is hereby authorized, without further approval of the City Council, to make 719 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 720 department with the exception of any transfers prohibited by City Procedure #F306. 721 ADOPTED: 23

722 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 723 CDBG GRANT FUND 724 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 725 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 726 The amount hereinafter named aggregating Three Hundred Twenty Thousand Eight Hundred dollars 727 ($320,800) or so much thereof as may be necessary are hereby appropriated from current revenues 728 and other funds for the use by several departments of the Municipal Government for the fiscal year 729 beginning July 1, 2017 and ending June 30, 2018: 730 OPERATING REVENUES 731 2017/18 2017/18 732 BUDGET REVISED 733 PRIOR YEAR BALANCE $ 2,100 $ 2,100 734 CDBG GRANTS RECEIVED 216,700 318,700 735 TOTALS $ 218,800 $ 320,800 736 OPERATING EXPENSES 737 2017/18 2017/18 738 BUDGET REVISED 739 EXPENDITURES 740 PRIOR YEAR CONNECTION SUPP PROGRAM $ - $ 6,800 741 PRIOR YEAR CLOSING COST/DOWN PAYMENT PROGRAM - 11,800 742 PRIOR YEAR MHDC HOMEOWNER REHAB. - 35,900 743 PRIOR YEAR MHDC EMERGENCY HOME REPAIR - 15,000 744 PRIOR YEAR ADMIN EXPENSE - 18,800 745 CURRENT YEAR CLOSING COST/DOWN PAYMENT PROGRAM 60,000 70,000 746 CURRENT YEAR CONNECTION SUPP PROGRAM 3,000 3,000 747 CURRENT YEAR DOVER INTERFAITH MINISTRY 24,000 24,000 748 CURRENT YEAR MHDC EMERGENCY HOME REPAIR 25,000 26,000 749 CURRENT YEAR HABITAT FOR HUMANITY 21,300 21,300 750 CURRENT YEAR MHDC HOMEOWNER REHAB. 40,000 40,000 751 CURRENT YEAR ADMIN EXPENSE 43,400 46,100 752 TOTAL EXPENDITURES 216,700 318,700 753 CURRENT YEAR BALANCE 2,100 2,100 754 TOTALS $ 218,800 $ 320,800 755 The City Manager is hereby authorized, without further approval of the City Council, to make 756 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 757 department with the exception of any transfers prohibited by City Procedure #F306. 758 ADOPTED: 24

759 2017-2018 BUDGET ORDINANCES - FIRST AMENDMENT 760 SUBSTANCE ABUSE GRANTS FUND 761 CASH RECEIPTS/REVENUES AND BUDGET FOR 2017-2018 762 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 763 The amount hereinafter named aggregating One Hundred Forty Eight Thousand Four Hundred dollars 764 ($148,400) or so much thereof as may be necessary are hereby appropriated from current revenues 765 and other funds for the use by several departments of the Municipal Government for the fiscal year 766 beginning July 1, 2017 and ending June 30, 2018: 767 OPERATING REVENUES 768 2017/18 2017/18 769 BUDGET REVISED 770 PRIOR YEAR BALANCE $ 45,300 $ 87,400 771 STATE GRANTS RECEIVED 28,000 28,000 772 RECREATION REVENUE 33,000 33,000 773 TOTALS $ 106,300 $ 148,400 774 OPERATING EXPENSES 775 2017/18 2017/18 776 BUDGET REVISED 777 EXPENDITURES 778 TEMPORARY HELP/BENEFITS $ 67,700 $ 67,700 779 PROGRAM EXPENSES/SUPPLIES 35,000 35,000 780 TOTAL EXPENDITURES 102,700 102,700 781 CURRENT YEAR BALANCE 3,600 45,700 782 TOTALS $ 106,300 $ 148,400 783 The above budget represents the combination of all State & Federal Grants. 784 The City Manager is hereby authorized, without further approval of the City Council, to make 785 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 786 department with the exception of any transfers prohibited by City Procedure #F306. 787 ADOPTED: 25

ACTION FORM PROCEEDING: Legislative, Finance and Administrative Committee DEPARTMENT OF ORIGIN: Human Resources DATE SUBMITTED: March 1, 2018 PREPARED BY: Kim Hawkins, Human Resources Director SUBJECT: Diversity and Inclusion Study Request for Proposal (RFP) REVIEWED BY: Donna Mitchell, City Manager EXPENDITURE REQUIRED: $49,450 - $97,400 AMOUNT BUDGETED: $17,500 FUNDING SOURCE (Dept./Page in CIP & Budget): $7,500 from the Human Resources Budget and $10,000 from the City Council’s Budget. If approved in the FY18 budget additional funding would need to be secured from FY18 budget savings. If approved for the FY19 budget, expense can be included in the budget planning process. TIME TIMETABLE: Approximately six (6) months RECOMMENDED ACTION: Authorize funding up to $97,400 to support the full scope of the RFP. BACKGROUND AND ANALYSIS A Request for Proposal (RFP) for Diversity and Inclusion was issued on October 31, 2017 with a bid opening on November 29, 2017. Five (5) submissions were received. After the closing, the University of Delaware was contacted to determine their interest in the project. Following discussions with the University, they submitted their response on February 8, 2018. Below is a summary of the RFP details and the submissions. The scope and deliverables of the RFP are as follows: SCOPE OF SERVICES The purpose of these consulting services will be to determine:  Workforce availability, based on EEOC job categories, within the entire city of Dover geographic area,  Recommendations to improve diversity efforts in regards to recruiting for civilian and sworn police officers and cadets,  Strengths and weakness of the employment, recruitment and selection practices and written personnel policies,  Current level of inclusion with the workforce,  Clear recommendations to improve all of the above. DELIVERABLES Consultant shall supply a written report to the Human Resources Director that shall include:  Workforce availability, based on EEOC job categories, within the entire city of Dover geographic area,  Recommendations to improve diversity efforts in regard to recruiting for civilian and sworn police officers and cadets,  Strengths and weakness of the employment, recruitment and selection practices and written personnel policies,  Current level of inclusion with the workforce,  Using the assessments results, the consultant will advise and assist the City in developing a detailed, thoughtful Diversity and Inclusion Strategic Plan.

Below is the list of firms who submitted proposals in response to Request for Proposal number 18-0012HR on November 29, 2017 at 2:00 pm. NAME COMPANY NAME COST* SUMMARY Wendy Savage JJA Consultants Minimum $59,416. Additional A strong submission was provided Moore Fairfax, VA 22030 expense for online surveys and representing key components of the RFP. interview with stakeholders and review an analyze of best practices data. (will match other service providers’ prices for the same scope of work and expected deliverables) Christina The Kaleidoscope Group $67,400 - $97,400 RFP was comprehensive and strong. Georgas Chicago, IL 60654 Difference of $30,000 is related Clarification is needed in regards to the to services to develop a D&I additional cost of $30,000. Believe it is strategy. associated with creating goals and an action plan. Kathy Murphy University of Delaware $49,450 The proposal does not include advising and assisting the City in developing a detailed and thoughtful D&I Strategic Plan. Inclusion interviews are limited to twenty (20) employees. This represents approximately 3% of the total full-time workforce. Elevate USA Elevate USA $142,000 A strong submission was provided Pompano Beach, FL representing key components of the RFP. 33062 Training, shadowing and community outreach along with outreach to vendors was included in the cost. This was not a request of the RFP. The RFP is over reaching of the scope. Denise Bailey Milligan & Co. $32,316 Milligan will review our numbers and make Philadelphia, PA 19103 suggestions. Inclusion was not included in the proposal. Zachary Scott Zachary Scott, $73,000 Scope of work focused only on numbers. Statistician Review of policies and developing and Smyrna, DE 19977 implementing improvement methods were not included in the bid. No experience with Diversity and Inclusion * Cost escalate with the inclusion of on-site visits. The selected firm must visit Dover in order to gauge the current level of inclusion from our employees. A verbal conversation would be held with JJA Consultants and The Kaleidoscope Group to learn more details about their proposals. Following the conversation, a decision on the award would be made. The University of Delaware would be considered an alternative provider if the city is willing to forgo the strategic plan.

ACTION FORM PROCEEDING: Council Committee of the Whole – Legislative, Finance & Administrative Committee DEPARTMENT OF ORIGIN: City Manager’s Office DATE SUBMITTED: 03-08-18 PREPARED BY: Donna Mitchell, City Manager SUBJECT: Ambulance Services Proposal REFERENCE: RFP Number #18-0010CM RELATED PROJECT: N/A EXPENDITURE REQUIRED: Est. $137,200 for six months ANNUAL BUDGET: FY18 $245,000 FUNDING SOURCE (Dept./Page in CIP & Budget): FY18 Budget and FY19 Budget TIME TABLE: Effective April 1, 2019 RECOMMENDED ACTION: Authorize the City Manager to execute a six-month extension of the current contract with PrimeCare Medical Transport, LLC at the rates provided in the below table. BACKGROUND AND ANALYSIS City staff issued RFP #18-0010CM on November 15, 2017 for Ambulance Services to be received by December 19, 2017. Two proposals were received from Mid-Atlantic Care, LLC and PrimeCare Medical Transport, LLC (current provider). In completing the review of the current proposals, we also reviewed their financial statements, the Center for Public Safety Management (CPSM) Report of March 2016, and previous City Council’s minutes pertaining to the Ambulance Services. I had several conversations with our Fire Marshal, Mr. Osika and Mrs. Sass to help me understand the services provided and the current contract. My findings indicate RFP #18-0010CM was not sent to national firms as recommended in the CPSM Report. We also have not followed through on Council’s motion of May 22, 2015 as follows - By unanimous consent, Council approved the Committee’s recommendation to place a discussion of the feasibility of creating a committee to study the Basic Life Safety (BLS) needs for the City of Dover on the agenda for the next Safety Advisory and Transportation Committee meeting. Staff is requesting to re-issue the Request for Proposal with the understanding the recommendations of the March 2016 Report will be included. We would also like to form an Administrative Committee of Medical and Paraprofessionals to assist the City with development and review of Ambulance Service Proposals and future contracts. The Committee would be established by the City Manager and approved by the Safety Advisory & Transportation Committee. The City Manager would be the Committee Chair, and the Emergency Management Coordinator would serve on the Committee as well. Page 1 of 2

Continued – Ambulance Services Proposal Dated Submitted: 03-08-18 While the Mid-Atlantic Care, LLC proposal is of a lower cost, we have concerns of their ability to staff crews and provide ambulances with the current contract expiring March 31. I did reach out to the CEO and COO to explain my concerns and let them know of the plans to reissue the RFP. The public safety risk is too great to change a contract without several months’ notice. A revised RFP will be drafted upon Council approval of the six-month extension of the current contract. Ambulance Services Contract Proposals – Pricing PrimeCare Medical Transport, LLC Current 6 Month Unit Number & Times Contract Extension First unit (A) 24 hours, 7 days per week No Charge No Charge Second unit (B) 7 a.m. to 11 p.m. $40.00/hr $45.00/hr 11 p.m. to 7 a.m. $60.00/hr $67.50/hr Any additional unit 7 a.m. to 11 p.m. $40.00/hr $45.00/hr 11 p.m. to 7 a.m. $60.00/hr $67.50/hr Note – the current contract has a provision for two 1-year extensions. PrimeCare has agreed to allow a six-month extension with the rates as proposed in their RFP response. Mid Atlantic Care, LLC Year Monthly Annual 2018 – 2019 $14,000.00 $168,000 2019 – 2020 $14,416.66 $173,000 2020 – 2021 $14,852.58 $178,231 Page 2 of 2

City of Dover Public Safety Fee LEGISLATIVE, FINANCE & ADMINISTRATIVE COMMIT TEE MARCH 13, 2018

FY18 Proposed Budget – May 2017 Included a discussion for a Public Safety Fee ◦ Development of a Public Safety Fee for mid-year consideration ◦ Currently use Capital Reserve for one-time budgeting of Police Vehicles and Fire Apparatus Payments ◦ Continue to defer maintenance and improvements on City facilities ◦ Deferred purchase of Sanitation Trucks Draft Ordinance ◦ Applies to Non-Profit Entities that own building structures, not applicable to unimproved land ◦ Exempts Federal, State, County & Municipal Governments ◦ Restricted use of fees for public safety capital expenditures ◦ Provides for an appeal process to review the exterior square footage if not in agreement with the City’s property records

LEGEND: Purple = Property Tax Revenue Red = Fines & Other Police Revenue Teal = Red Light Safety Program Green = Police Grants

LEGEND: Red = Police Operations Teal = Police Capital Green = Fire Operations Purple = Fire Capital

History of Capital Expenditures 2014A 2015A 2016A 2017A 2018F Police $342,125 $910,512 $268,501 $299,800 $451,500 Fire 238,515 1,115,417 445,594 145,700 295,200 Total $580,640 $2,025,929 $714,095 $445,500 $746,700 Fiscal Year 2015 inlcuded new radios and breathing apparatus for Police and Fire

Sample Comparison of Fees by Non-Profit Entity Assessed Assessed Exterior Exterior Value Value Sq. Footage Sq. Footage Entity @ $.00405 @ $.00002 @ $.01 @ $.02 Bayhealth Medical Center $418,136 $20,649 $9,012 $18,024 Caesar Rodney School District 23,164 1,144 592 1,184 Capital School District 348,611 17,215 3,863 7,726 Church of Holy Cross 53,801 2,657 1,008 2,016 Delaware State Housing Authority 45,605 2,252 1,433 2,866 Delaware State University 1,073,138 52,994 19,545 39,090 Dover Housing Authority 68,106 3,363 3,057 6,114 Dover Special School District 325,714 16,085 5,894 11,788 Modern Maturity Center 37,923 1,873 822 1,644 People's Place Properties 11,370 561 675 1,350 Presbyterian Homes Inc. 106,460 5,257 4,832 9,664 The Milford Housing Dev Corporation 42,181 2,083 863 1,726 Wesley College 201,323 9,941 5,623 11,246 Whatcoat Community Development 16,957 837 791 1,582 Wilmington University 74,866 3,697 1,075 2,150 Total Major Accounts $2,847,355 $140,608 $59,085 $118,170 % of Total 76.8% 77.2% 81.9% Total Non-Profits $3,708,175 $182,178 $72,104 $144,208 Number of Properties 135 Number of Entities 95

CITY OF DOVER PROPOSED ORDINANCE #2018-03 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL 2 MET: 3 That the Code of Ordinances of the City of Dover, Delaware, be amended by inserting a new Chapter 84 - 4 Public Safety Fee, as follows: 5 Chapter 84 - PUBLIC SAFETY FEE 6 ARTICLE I. - IN GENERAL 7 Sec. 84-1. - Definitions. 8 The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them 9 in this section, except where the context clearly indicates a different meaning: 10 Developed Property means any tax-exempt lot or portion of real property on which a dwelling, structure, 11 or building exists within the corporate limits of Dover, Delaware. 12 Responsible Party means the property owner of record. 13 Non-dedicated city funds means funds that have not been designated or reserved for specific purposes. 14 Sec. 84-2. - Purpose. 15 The purpose of this chapter is to safeguard, facilitate, and encourage the safety and welfare of the citizens 16 and businesses of the city. The city council has determined that public safety departments that are 17 sufficiently well-funded to attract and retain qualified individuals to serve as public safety officers provide 18 a multitude of economic and social benefits to the public, including but not limited to increased police 19 protection, prevention of crime, enhanced protection of property, promotion of business and industry, and 20 promotion of community spirit and growth. The city council has further determined that the resources 21 necessary to fund effective police and fire protection for every developed property within the city are 22 insufficient and that a mechanism to fund the benefits conferred on tax-exempt properties and to maintain 23 the public safety departments at acceptable service levels must be established. 24 Secs. 84-3 - 84-19. Reserved. 25 ARTICLE II. - PUBLIC SAFETY FEE. 26 Sec. 84-20. - Established. 27 There is hereby established a public safety fee for the purpose of providing supplemental funding for the 28 capital budgets of the public safety departments and for no other purpose. The public safety fees shall not 29 be used for general or other governmental or proprietary purposes of the city. 30 Sec. 84-21. - Applicability. 31 (1) All tax-exempt developed properties within the city limits, unless exempt under Sec. 84-22. - 32 Exemptions, shall be charged a public safety fee.

Proposed Ordinance #2018-03 - Chapter 84 - Public Safety Fee Page 2 33 (2) Tax-exempt properties under development shall be charged a public safety fee upon the issuance 34 of a building permit for that property. The public safety fee shall be pro-rated on a quarterly basis 35 for each fractional part of a year in which development occurs. 36 Sec. 84-22. - Exemptions. 37 The following shall be exempt from payment of the public safety fee: 38 (1) Tax-exempt developed property owned by the Federal Government, State of Delaware, Kent 39 County, and the City of Dover. 40 (2) Undeveloped properties. 41 Sec. 84-23. - Public safety fee adoption; calculation. 42 (a) Adoption. The public safety fee amount and the collection process will be examined by the city 43 manager and city council annually during the budget formulation process. All public safety fee 44 revenues and expenditures shall be distinctly and clearly noted in the city budget. The city council 45 will set and adopt the public safety fee amount as part of the annual budget. In the event that the 46 public safety fee revenues are insufficient to properly operate the public safety departments, the 47 city council may allocate additional funding from other non-dedicated city funds. 48 (b) Calculation. The public safety fee shall be calculated by multiplying the public safety fee amount 49 adopted by city council by the exterior square footage of the developed property as of July 1 of 50 each fiscal year. The city's land management and property records will be utilized to determine 51 the square footage of the developed property. 52 Sec. 84-24. - Billing; collection. 53 (a) Public safety fee billing. A public safety fee bill will be initiated: 54 (1) When a property owner uses or otherwise benefits from public safety services. There shall 55 be a rebuttable presumption that developed property benefits from public safety services. 56 (2) Upon the transfer of real estate. 57 (3) Upon the issuance of a building permit for undeveloped property. 58 (b) Public safety fee collection. The public safety fees shall be collected monthly. 59 Sec. 84-25. - Administration. 60 The city manager shall be responsible for the administration of this chapter, development of the 61 administrative procedures necessary to implement this ordinance, and the collection of public safety fees. 62 Administrative procedures adopted by the city council shall be given full force and effect and, unless clearly 63 inconsistent with this chapter, shall apply uniformly throughout the city.

Proposed Ordinance #2018-03 - Chapter 84 - Public Safety Fee Page 3 64 Sec. 84-26. - Appeals. 65 (a) Authorized. Any tax-exempt property owner which is charged a public safety fee under the 66 provisions of this chapter shall have the right to appeal the city’s interpretation of the square 67 footage of the property. 68 (b) Appeals process. 69 (1) The tax-exempt property owner must file a written appeal with the city manager within 20 70 days of the date of the public safety fee bill, such written appeal shall include a statement of 71 the facts setting forth the basis for the appeal, including whether full or partial relief is 72 sought, and an alternative calculation square foot calculation with supporting documentation. 73 Failure to file said appeal within the stated time shall constitute a waiver of the property 74 owners right to appeal. 75 (2) Within 20 days after receipt of the appeal, the city manager, or their designee, shall make a 76 written decision with respect to the appeal explaining the disposition of the appeal, the 77 rationale for the decision, and supporting documentation. 78 The city manager, or their designee, shall make all reasonable attempts to resolve appeals 79 utilizing available existing information, including the supporting documentation filed with 80 the appeal. Factors to be considered include, but are not limited to, the availability of more 81 accurate information; changed circumstances; and situations uniquely affecting the party 82 filing the appeal. If more detailed site-specific information is necessary, the city manager, 83 or their designee, may request the appellant to provide additional information. 84 If the city manager, or their designee, determines that information provided through the 85 appeal process justifies re-calculation of the public safety fee, the city manager, or their 86 designee, may authorize a square footage adjustment retroactive to the date the appeal was 87 filed. In such instances, reimbursement will be given for any overpayment, retroactive to the 88 filing date of the appeal. 89 (3) The tax-exempt property owner shall have the right to appeal the decision of the city 90 manager, or their designee, to the city council by filing a written appeal with the city clerk 91 within 20 days of the city manager’s decision. The city council shall fix a time and place for 92 hearing the appeal and shall serve a written notice of the hearing upon the person requesting 93 the appeal. Failure to file said appeal within the stated time shall constitute a waiver of the 94 property owners right to appeal. The matter shall be heard solely upon the record. In no 95 event shall a final decision be made later than 90 days after the appeal was made to the city 96 council. 97 Secs. 84-27 - 84-29. Reserved. 98 ARTICLE III. - ENFORCEMENT 99 Notwithstanding any provision herein to the contrary, the city may use any necessary measures to enforce 100 the provisions of this chapter, including but not limited to collection of charges owing. The city's 101 enforcement rights shall be cumulative.

Proposed Ordinance #2018-03 - Chapter 84 - Public Safety Fee Page 4 102 Secs. 84-30 - 84-39. Reserved. 103 ARTICLE IV. - SEVERABILITY AND EFFECTIVE DATES 104 Sec. 84-40. - Severability. 105 The sections, paragraphs, sentences, clauses and phrases of this Code are severable, and if any phrase, 106 clause, sentence, paragraph or section of this Code, or its application to any person or circumstance, shall 107 be declared unconstitutional, invalid or unenforceable by the valid judgment or decree of a court of 108 competent jurisdiction, such unconstitutionality, invalidity or unenforceability shall not affect any of the 109 remaining phrases, clauses, sentences, paragraphs or sections of this Code or their application. 110 Sec. 84-41. - Effective dates. 111 This ordinance shall become effective April 9, 2018 and billing will begin the 1st day of July 2018. 112 ADOPTED: * 113 S:\ORDINANCES\2018\DRAFT\ORDINANCE #2018-03 - PUBLIC SAFETY FEE\ORDINANCE #2018-03 - PUBLIC SAFETY FEE.wpd 114 SYNOPSIS 115 The ordinance creates a public safety fee as a funding mechanism to supplement the capital budgets 116 of the public safety departments to assist with the payment of benefits conferred on tax-exempt 117 properties. 118 (SPONSORS: HARE AND NEIL) 119 Actions History 120 03/13/2018 - Scheduled for Introduction - Council Committee of the Whole/Legislative, Finance, and Administration 121 Committee

CITY OF DOVER DEPARTMENT OF PUBLIC WORKS U.S. ROUTE 13 EAST PUMP STATION #7 EMERGENCY RESPONSE UPDATE 6-MAR-2018 • ON FEBRUARY 19, 2018, A SANITARY SEWER OVERFLOW (SSO) OCCURRED IN RELATION TO A FAILURE AT THE U.S. ROUTE 13 EAST PUMP STATION #7 (PS#7). THE SSO WAS CONTROLLED THE SAME DAY. • ENVIRONMENTAL ACTIVITIES HAVE BEEN COORDINATED WITH THE CITY’S ENVIRONMENTAL CONSULTANT AND DNREC. CLEANUP OF SEVEN (7) OVERFLOW LOCATIONS IS COMPLETE. FINAL SAMPLE RESULTS ARE PENDING. • THE CAUSE OF THE FAILURE AT PS#7 IS RELATED TO CORROSION OF COMMUNICATIONS COMPONENTS. MISSION CRITICAL COMPONENTS HAVE BEEN REPLACED. • ADDITIONAL IMPROVEMENTS ARE PLANNED INCLUDING COMPLETE COMPONENT CHANGEOUT AND PUMP REPLACEMENTS FOR SPRING 2018. • PS#7 ANTICIPATED TO BE OPERATIONALLY READY TO RESUME RECEIVING FLOW FROM KENT COUNTY THE WEEK OF 12-MAR-2018.

MEMORANDUM Department of Public Works P.O. Box 475 Dover, Delaware 19903 Phone: (302) 736-7025 Fax: (302) 736-4217 E-mail: sduca@dover.de.us TO: City Council CC: Donna S. Mitchell, CPA, City Manager Jason A. Lyon, P.E., Water / Wastewater Manager Robin Eaton, Public Works Operations Manager George O’Neal, Water / Wastewater Maintenance Supervisor FROM: Sharon J. Duca, P.E., Public Works Director / City Engineer DATE: March 6, 2018 SUBJECT: U.S. ROUTE 13 EAST PUMP STATION #7 EMERGENCY RESPONSE UPDATE The U.S. Route 13 East Pump Station #7 (PS#7) is located off the service road between Dover International Speedway and Home Depot and is approximately twenty (20) years old. On February 19, 2018 a sanitary sewer overflow (SSO) occurred in relation to a failure at PS#7. The following provides a summary of events which occurred to date in relation to the SSO and failure at PS#7. BACKGROUND On February 19, 2018, at 1:16 p.m., the City of Dover received a report from a passerby of a SSO on Leipsic Road. DPW personnel verified the SSO and confirmed that sanitary sewer mains were backed up. Upon further investigation it was determined that PS#7 was not operating and the source of the SSO within the adjacent sanitary sewer system. All six (6) pumps at the station were flooded and no alarms had been received indicating issues with station. EMERGENCY RESPONSE Additional DPW staff were called in and efforts focused on stopping the SSO and controlling the wastewater flow within the basin. The SSO was documented as controlled at 6:35 p.m. It is estimated that 978,000 gallons of wastewater were released. Key emergency response efforts included the following:  A septic hauling service contractor utilized to remove flow from the gravity sanitary sewer system within the PS#7 sanitary sewer basin. These activities were performed until the SSO ceased and the flow was controlled.  Electric Line Crew staff were dispatched to PS#7 and verified that the voltage coming out of the transformer feeding the station was good.  The City’s environmental consultant was contacted to provide environmental assistance and oversight with the SSO. They also reported the SSO, on behalf of the City as requested, to DNREC and the LEPC.

U.S. ROUTE 13 EAST PUMP STATION #7 EMERGENCY RESPONSE UPDATE March 6, 2018 Page 2 of 3  Kent County was notified of the SSO and failure of PS#7. Kent County wastewater flow was diverted away from the station and a bypass pump was provided. Due the fact that all six (6) pumps at PS#7 were submerged, and would subsequently have to be removed for maintenance, additional bypass pumps were requested from a dewatering contractor. These bypass pumps will remain onsite to ensure adequate control of flow until all critical repairs are complete.  DPW staff worked to trace the extents of the backup within the sanitary sewer system and go door to door to customers to determine if anyone was experiencing issues related to the backup. Only one (1) customer was found to be affected. (A contractor was utilized to provide commercial water damage restoration services to this customer.) ENVIRONMENTAL ACTIONS Once flow was controlled within the PS#7 sanitary sewer basin DPW staff proceeded with cleanup of areas affected by the SSO. Efforts included the removal of discharge from ditches and other overflow locations and the application of lime to help neutralize the wastewater. Assistance was provided by a septic hauling service contractor. Overall, seven (7) overflow locations were identified including areas east of the Acme, along the service road between the Acme and PS#7, east of La Tolteca, along the south side of Leipsic Road, along the old Berry Van Lines site, east of Dover International Speedway and north of Dover Pools. These efforts were complete in two (2) days. Coordination with DNREC, and reports on environmental activities, have been completed by DPW staff and the City’s environmental consultant. The consultant sampling of Silver Lake and two (2) stormwater ponds as per the DNREC approved sampling plan. Due to results received, DPW staff removed additional material from the stormwater management pond located on the old Berry Van Lines site. Lime was also applied as required. Assistance was provided by a septic hauling service contractor. Complete sampling results from Silver Lake and the stormwater pond located to the east of Route 1 are pending. Once received any further action will be determined by DNREC. DPW staff have monitored the area downstream of the spillway for any effects to fish as well as indications of odor or foaming. Monitoring efforts will continue daily until all sampling results are received and all efforts are deemed final by DNREC. To date, only one incident was identified (four dead fish) and reported to DNREC which in and of itself did not result in any additional action. STATION EVALUATION All six (6) pumps associated with PS#7 were pulled and serviced as they were submerged. Work performed included washing, baking, replacing bearings and grease, and replacing mechanical seals. The pumps were cleared from being the cause of the failure at the station. Following re-installation at the station, one (1) of the pump motors failed. This motor is currently being repaired. A second motor also incurred an issue but was addressed on site. As the pumps are twenty (20) years old, and in light of the issues recently incurred, it was decided to proceed with replacement of the vacuum primed rotating assembly for all six (6) pumps. It is anticipated that this will increase the long term reliability of the station. There is a ten (10) to twelve (12) week lead time for these units and it is projected that they will be installed in May. The electrical wiring for the pumps was also identified as effected by water damage and has been replaced. All other components at the station, including wiring and connections have been tested, inspected and evaluated. Corrosion was identified within the programmable logic controller (PLC) and therefore determined to be one of the causes for failure. A non-functioning PLC would have resulted in the loss of communications necessary for the pumps to startup to pump down the wastewater flow as well as an ability to transmit alarms

U.S. ROUTE 13 EAST PUMP STATION #7 EMERGENCY RESPONSE UPDATE March 6, 2018 Page 3 of 3 that the pumps did not turn on and the levels in the wet well were high. Corrosion of the wires for the backup float system at the connections points was also identified. The backup float system is a means to provide additional alarms of high wet well levels. The PLC and backup floats are the primary components which failed resulting in the failure of the station and the SSO. Corrosion from the hydrogen sulfide within the station was evident during the detailed troubleshooting and inspection efforts that could be performed while the station was down. Due to the hydrogen sulfide environment within the station, which has also caused odor issues, City Council and Kent County Levy Court previously approved the purchase and installation of an air scrubber for the station which has a 99% hydrogen sulfide removal requirement. Installation of the air scrubber is projected for May 2018. The scheduled installation of the air scrubber led to a two (2) phase repair and replacement plan for the station. Phase 1 included mission critical wires and components necessary to ensure station operation which included the PLC and backup float system. Phase 2 of the repair plan would consist of total replacement of all other remaining components and wires necessary to bring the station back to full efficiency due to the corrosion identified. Phase 2 is currently under development and is planned for after the air scrubber has been installed and the corrosive environment within the station reduced.

COMMUNITY DEVELOPMENT DEPARTMENT Department of Planning & Inspections P.O. Box 475 Dover, DE 19903 Phone: (302) 736- 7175 Fax (302) 736-4217 TO: Parks, Recreation, and Community Enhancement Committee FROM: Tracey N. Harvey, Planner /CDBG Administrator DATE: March 13, 2018 RE: CDBG Grant Recommendations for FY 2018 Planning Staff has provided the proposed Community Development Block Grant (CDBG) allocation recommendations for the FY 2018 CDBG grant renewal fiscal year. The proposed grant funding recommendations will be allocated to the sub-grantees that were awarded multi-year grants from the approved 2015-2019 Consolidated Plan. The proposed grant allocation for fiscal year 2018 is being estimated due to the FY 2018 appropriations bill not being enacted by Congress at this time. Staff has estimated the proposed budget at the FY17 funding level at $230,289.00. Twenty percent (20%) of the grant will be used for program administration to manage the CDBG program and up to fifteen percent (15%) of the grant will be applied towards public service activities with a maximum of $34,544.00. Staff is requesting to include a contingency provision in its Action Plan to adjust the proposed budget from the estimated funding levels to match the actual allocation amounts as close to the proposed budget as possible to eliminate the need for additional publications and the citizen participation process in order to submit the final plan to HUD by May 15, 2018. The following activities are projects to be funded with proposed recommended funding allocations by planning staff. Homeownership Assistance Program The City will provide settlement assistance up to $20,000.00 to assist up to 4 low to moderate income persons that are first time homebuyers purchase affordable housing in the City of Dover.

CDBG grant recommendations FY1 B 2 Program Administration CDBG funds will be used to oversee management, monitoring and coordination of the CDBG program in the City of Dover. Twenty percent 20% of the total grant allocation will be used to fund program administration. Dover Interfaith Mission for Housing CDBG funds will be used for operation costs for the building that will include utility and maintenance costs. This project is a public service activity and subject to the 15% cap requirement. Connections Community Support Program Connections is proposing to provide rapid re-housing assistance for up to 10 homeless households within the City of Dover. The program will assist renters with first month's security deposit as well as up to 3 months' of rent. This project is a public service activity and subject to the 15% cap requirement. Milford Housing Development Corporation (Emergency Home Repairs) CDBG funds will be used to complete emergency home repairs for single family residential owner occupied housing units that are found to be in violation of the City's Housing Code. This project will serve between 5-15 low income households. Milford Housing Development Corporation (Homeowner Rehabilitation) CDBG funds will be used to rehabilitate single family owner occupied housing units that are found to be in violation of the City's Housing Code. This project will service between 3-5 low income households. Central Delaware Habitat for Humanity CDBG funds will be used to rehabilitate up to three (3) owner-occupied homes within the designated Restoring Central Dover area to homeowners that are 80% or below the area median income. The priority is to complete exterior home repairs spending $8,333 or less on each home.

FY18 CDBG Proposed Budget 2018 Grant Projects Grant Request Current Amount Recommended Amount Homeownership Assistance Program $70,000 $70,000 $70,000 *Program Administration $46,057 $46,058 $46,057 Dover Interfaith Mission for Housing $22,000 $24,000 $22,000 Connections Community Support $15,000 $3,000 $5,000 MHDC Emergency Home Repairs $40,000 $25,986 $29,232 MHDC Homeowner Rehabilitation $60,000 $40,000 $38,000 Central Delaware Habitat for $25,000 $21,245 $20,000 Humanity Total $278,057 $230,289 $230,289 *Program Administration cannot exceed 20% of the grant *Dover Interfaith and Connections are public service activities that cannot exceed 15% of the cap

CITY OF DOVER FY 2015-2019 Multi-Year FY 2018 CDBG GRANT APPLICATION FORM 1. General Applicant Information A. Name, address and phone number of sub-recipient Tracey Harvey City of Dover 15 Loockerman Plaza Dover, DE 19901 (302) 736-7175 B. Name, position and signature of person submitting application: Tracey Harvey, Planner l/CDBG Administrator Name and position of authorizing official: Same as above. C. Name, address and phone number of Contact Person: (If different from B above) Same as above. FY 2018 only Activity: Homeownership Assistance Amount Requested: $ 70,000.00 List Source of Cash Matching Funds $None

2. Low/Moderate-Income Benefit: LOW/MODERATE- INCOME BENEFIT TABLE-Instructions The amount of benefit to low- and moderate-income persons must be calculated for each activity, as described below: 1. In column 1, list the activity. 2. In column 2, show the total number of persons that the activity will serve. 3. In column 3, show the number of low- and moderate-income persons that the activity will serve. 4. In column 4, divide column 3 by column 2 to show the percent of low- and moderate- income persons that the activity will serve. 5. In column 5, show the amount of funds requested for the activity. 6. In column 6, multiply column 4 by column 5 to show the amount of those funds that will be used to benefit low- and moderate-income persons. 7. List the sources of data used to calculate benefit in the space provided at the bottom of this page. LOW/MODERATE-INCOME BENEFIT TABLE li Acfrvi1ty o 2. Total 3.L/M 4. %LIM 5. Amount 6. Amount Persons Persons Persons Requested LIM Activity will Activity will Activity will for Activity Benefit Serve Serve Serve Settlement 4 families 4 100% $70,000.00 $70,000.00 assistance for 4 first time homebuyers

Source of Data: The Homeownership Assistance Program is advertised on the city's website and listed in the Delaware Housing Services Directory. All potential applicants must meet the HUD income limits for low to moderate income persons. 3. Management Capacity A. List the person(s) to be responsible for administering the CDBG Project: Sub-Recipient Personnel Title(s) Tracey Harvey Planner I/CDBG Administrator B. Attach resumes or other supporting documentation for the personnel of new applicants, which establishes the capacity of the personnel above to effectively manage a CDBG sub-recipient project. NIA 4. Application Work Plan Each proposed program activity must address each of the following areas. Attach a mission statement and purpose of your organization. A. Each program activity must be addressed separately. Program activities must be listed in order of priority with the program activity of highest priority first. This order of priority for program activities must be followed on all forms contained in this application. • The highest priority for this project is to provide affordable housing to low to moderate income persons. B. Each program activity must be fully described. For rehabilitation programs, this description must include the number of units to be rehabilitated, rental properties to be rehabilitated, any special population groups the rehabilitation program will address, the target area, and the need for the rehabilitation activity. • Funding for this program will be available for four (4) first time homebuyers who will be required to purchase property in the City of Dover and must complete a homeownership

counseling program with a certified HUD counselor before signing a sales contract. Assistance is provided up to $20,000 for properties purchased in the City. The City will place a second mortgage lien on the property and if within 10 years the home is sold, transferred, or the property ceases to be the borrower's principal residence, the loan becomes due and payable. The interest rate is 0% and is forgiven after 10 years. C. Provide a timetable showing monthly milestones for completion of each activity. • Funding for this program is available on a first come first serve basis and will be drawdown as the applicants purchase properties. D. Attach drawings, plans or other documentation necessary to describe program activities. NIA E. Describe each activity's conformance with the goals and objectives of the City's Consolidated Plan. • This project is consistent with Goal 3: Encourage owner occupied housing in low to moderate income areas by providing down payment and closing cost to low income persons who purchase affordable housing in the City of Dover. F. Describe the extent to which the proposed project(s) will address one or more significant priorities identified by the City's Consolidated Plan. • Housing needs was ranked number two in priorities in the 2015- 2019 Consolidated Plan. By providing homeownership assistance to first time homebuyers, this will assist in eliminating barriers to affordable housing. G. Describe the extent to which the project builds upon previous work or supplements other work that will be funded from other sources. • Annually this project is funded and each year the City reaches its goal by assisting in providing affordable housing to low to moderate income persons. Funding will be available for downtown and city-wide homeownership initiatives.

H. Describe source and amount of any funds used to leverage the City's portion of the project. Indicate when these funds will be available. Attach documentation of any match. None. 5. Each application should also describe the following: A. Describe any efforts to coordinate with businesses regarding the development of the community as it affects low/moderate-income residents of the area. • The city previously awarded small business loans to merchants in the downtown area to aid in expanding their businesses and to provide employment opportunities for low to moderate income persons. 6. Have you received a sub-recipient grant from the previous funding year? If yes give the total amount$ 70 000.00 in 2017

ADDENDUM 2018 CDBG SUB-RECIPIENT APPLICATION FORM Please choose the best option that describes the purpose of your activity from the three objectives. Suitable Living Environment Decent Housing x Economic Opportunity Please choose the best option that will describe the outcome of your activity based on the categories listed below. Availability/Accessibility Affordability x Sustainability Please provide a proposed outcome based on the information below that applies to your activity Number of persons, households, units, or beds assisted as appropriate 4 Income level of persons or households by: Very Low _ _ __ % Low 100 % Moderate % If your activity benefits a target area, please show the number of persons served and the percentage of low/mod persons served. Your close out report will require you to provide breakdowns of those served by race, ethnicity and disability.

CITY OF DOVER FY 2015-2019 Multi· Year FY2018 CDBG GRANT APPLICATION FORM 1. General Applicant Information A. Name Dover Interfaith Mission for Housing, Inc. (DIMH) Address ~--6~8~4~F~or~e=st~S~tr =e~e~t,~D~o~v~er~D==E--=19~9~0~ 4~~~~~~~~- Phone Nwnber 302-736-3600 ---~~~~~~~~~~~~~~~~ B. Name, position and signature of person submitting ~lication: Jeanine Klem10. Chair tU~-0k~md Name and position of authorizing official: Jeanine Kleimo. Chair C. Name, address and phone nwnber of Contact Person: (If different from B above) FY 2018 only Activity: shelter for homeless men Amount Requested: $ 22.000 Source of Cash Matching Funds $ $195 000

1. Low/Moderate-Income Benefit: LOW/MODERATE-INCOME BENEFIT TABLE- Instructions The amount of benefit to low-and moderate-income persons must be calculated for each activity as described below. Future program years may be estimated as long as 51 % of the population being served is low to moderate income. 1. In column 1, list the activity and fiscal year through 2018. 2. In column 2, show the total number of persons that the activity will serve. 3. In column 3, show the number of low- and moderate-income persons that the activity will serve. 4. In column 4, divide column 3 by column 2 to show the percent of low- and moderate- income persons that the activity will serve. 5. In column 5, show the amount of funds requested for the activity for current fiscal year only. 6. In column 6, multiply column 4 by column 5 to show the amount of those funds that will be used to benefit low-and moderate-income persons. 7. List the sources of data used to calculate benefit in the space provided at the bottom of this page. LOW/MODERATE-INCOME BENEFIT TABLE 1. Actliviity 2. Total 3.L/M 4.%UM 5. Amount 6. Amount Persons Persons Persons Requested LIM Activity will Activity will Activity will for Activity Benefit Serve Serve Serve FY 2018 400 400 100% $22,000 $22,000 Source of Data: Records for 2017 show 299 residents plus 425 resource center users.

2. Management Capacity A. List the person(s) to be responsible for administering the CDBG Project: Sub-Recipient Personnel Title(s) Karen Gradie Director Jeanine Kleimo Chair Herb Konowitz Vice Chair B. Attach resumes or other supporting documentation for the personnel of new applicants, which establishes the capacity of the personnel above to effectively manage a CDBG sub-recipient project. 4. Application Work Plan Each proposed program activity must address each of the following areas for fiscal year 2018. A. Each program activity must be addressed separately. Program activities must be listed in order of priority with the program activity of highest priority first. This order of priority for program activities must be followed on all forms contained in this application. B. Each program activity must be fully described. For rehabilitation programs, this description must include the number of units to be rehabilitated, rental properties to be rehabilitated, any special population groups the rehabilitation program will address, the target area, and the need for the rehabilitation activity. C. Provide a timetable showing monthly milestones for completion of each activity. D. Attach drawings, plans or other documentation necessary to describe program activities. E. Describe each activity's conformance with the goals and objectives of the City's Consolidated Plan.

F. Describe the extent to which the proposed project(s) will address one or more significant priorities identified by the City's Consolidated Plan. G. Describe the extent to which the project builds upon previous work or supplements other work that will be funded from other sources. H. Describe source and amount of any funds used to leverage the City's portion of the project. Indicate when these funds will be available. Attach documentation of any match. 5. Each application should also describe the following: A. Describe any efforts to coordinate with businesses regarding the development of the community as it affects low/moderate-income residents of the area. 6. Have you received a sub-recipient grant from the previous funding year? If yes give the total amount $_ ---'2=2=.0=-0"""0' - - - - - - - - ADDENDUM

Dover Interfaith Mission for Housing, Inc. A. PROGRAM ACTIVITY The program activity planned for the period 2015-2019 is the continued operation of our shelter for homeless men. The Dover Interfaith Mission for Housing (DIMH) renovated a building at 684 Forest Street with CDBG funds in 2010 and opened this 36-bed facility in September of that year. Since DIMH began providing shelter, meals, and assistance to homeless men in Dover in 2008, it has served over 2,500 individuals. 299 resided in the shelter during the year January 1-December 31, 2017. DIMH does much more than make it possible for homeless men to move in from the street: last year, 84% of those entering the shelter leave with full-time employment and housing in the community. In addition, crime and loitering are reduced, health is improved, and community is engaged in addressing the needs of less-fortunate residents is greatly expanded. Our actual "success rate" for 2017 was 84%, meaning that 84% of those in the shelter secured employment and were able to move on. While the costs of reduced crime and improved health among homeless men are difficult to quantify, DIMH is able to estimate the value of employment: With at least 200 men re-employed annually in recent years, the impact on the local economy is in excess of $3.5 million. DIMH now offers an extensive set of in-house training programs designed to enable men with various employment histories to develop the capacity needed to apply for, interview for, and secure employment along with the acquisition of personal, communications, and money-management skills. Training and employment efforts are coordinated by an executive director in collaboration with two case managers and a Resource Center coordinator, who schedules and assists a roster of volunteers. While DIMH staffing is limited, several board members are actively engaged and perform key management, administration, and training functions for the organization. Full-time staff now includes a program manager/job developer, and two case managers. B. PROGRAM ACTIVITY The 36-bed shelter requires substantial operating costs that include utilities, telephone, insurance, cleaning and office supplies, and the maintenance and occasional repair of the facility. It is these costs for which DIMH is applying for funds through CDBG. An adjacent daytime Resource Center opened recently and is available to all local homeless adults who may wish to use it as a mailing address as well as to obtain shower and laundry facilities and access to computers, phones, and counselors able to assist with employment applications and referrals to services. Since its opening in early January 2015, a constant stream of visitors use the facility, averaging 40 to 45 daily or between 400 and 500 unique individuals annually. This is a reasonable estimate of the total population of homeless adults in Greater Dover. Most of these individuals are not DIMH shelter residents but find shelter in "Code Purple" sanctuaries or on the street. It may be noted that Code Purple Kent County no longer operates under the auspices of DIMH.

C. TIMETABLE The shelter is already in operation, with a solid base of information regarding operating costs. This facility is open year-round and is typically full. The City of Dover has permitted the DIMH shelter to take in up to five extra men on cold winter nights, and this is often the case. There is no plan to change year- round operations. Paid and volunteer staffing ensure responsible oversight and management every day of the year. Each month, several new shelter residents are admitted. The program focuses on enabling the men sheltered to secure productive and self-reliant lives. Training is offered to ensure that each has a plan and is able to apply for work, open a bank account, prepare for job interviews, and so on. Checklists track the progress of each at 30, 60, and 90 days, with no one permitted to remain at DIMH unless he has complied with the requisite steps of each month's checklist. Progress in achieving the steps listed in these checklists is monitored by staff and key board managers on a weekly basis, with a fuller assessment of the progress of each guest performed monthly. D. DOCUMENTATION The shelter's operation is well-known to CDBG and City officials and regular reports are provided. During the calendar year ending December 31, 2017, 299 men resided in the shelter, with 84% successful in obtaining employment. An annual report with additional detail will be forwarded once available. E. CITY OF DOVER PLAN PRIORITIES AND PROJECT NEED The DIMH shelter clearly provides aid to special-needs persons. Those sheltered are very low-income (generally without any income at all) and are unable to meet their basic needs for shelter. Their lack of shelter certainly poses an urgent community need that poses an immediate threat to their health and welfare. In fact, demand for shelter is always highest and exceeds that which DIMH can supply during cold weather and other weather emergencies, including summer storms and prolonged periods of rain or intense heat. There is a widely-recognized deficiency within the City of Dover of affordable rental housing and of shelter for those who are homeless. DIMH cooperates with the People's Place/Whatcoat Shelter and with The Shepherd Place, with all organizations making referrals to one another to ensure the best placement and services for those most in need of shelter. DIMH efforts include the development of affordable housing for those leaving the shelter and the leasing of housing in which individuals might reside together, though these activities are not funded through CDBG. DIMH estimates that there are at least 200 men in and around the City of Dover who are homeless. This number has increased in recent years due to a combination of factors, including failure to house those with mental illness, code enforcement displacement of residents of substandard housing, rising housing costs, and continued high rates of unemployment or employment that is part-time or temporary. Many landlords will not rent to those without secure and lasting employment or who have been released from prison. As this project is already in operation, DIMH continues to build on the experience of providing shelter and services to the homeless population during the past almost ten years. A greater number of faith

communities, organizations, businesses, and individuals have come to volunteer and support the efforts of DIMH. Most notable is the fact that such volunteer support generates more than 12,000 plates of dinner annually with a zero food budget within DIMH. Additional volunteers have created and manage Code Purple emergency shelter, the operation of the daytime Resource Center, and an increasingly active and diverse program of training for shelter residents and other homeless adults. The fact that support has been provided through CDBG has enabled DIMH to raise additional funds and to borrow others needed to purchase and renovate the property at 1155 Walker Road, named Walt Bagley Hall in honor of a deceased founding board member. This project has opened and enables thirty men to move from the shelter to stable, supportive housing for which they pay a modest rent. This fee includes utilities, two meals daily, and continued education and training efforts. 12 other beds of affordable housing have also been developed in the community. DIMH is an active participant in Dover's Task Force on Homelessness, which seeks to develop and/or lease highly-affordable housing for those who still live without shelter in the Dover area. A major portion of the target population is those individuals who survive only on SSI or SSDI "disability" income of $735 monthly-an amount insufficient to rent in the private market at present. F. COMPREHENSIVE PLAN PRIORITIES ADDRESSED The Dover Interfaith Mission for Housing provides decent housing, a suitable living environment for men who would otherwise be homeless, and economic opportunity for residents as described in the annual report. 36 men are sheltered and assisted at a time, with 299 served during calendar 2017. Most are enabled to secure employment and stable housing in the community. G. And H. LEVERAGE AND PROJECT COSTS $24,000 is requested to maintain the costs of heat, electricity, telephone service, supplies, insurance, and maintenance of the DIMH shelter. This compares with annual non-personnel operating costs of approximately $50,000. The Delaware State Housing Authority provided $12,689 for operating costs for FY2018, making it possible for DIMH to cover many routine operating costs between these two grants. Any deficit is made up from private donations. When this amount requested is compared with the service provided, $24,000 may be divided by the 299 shelter guests or by the 12,410 person nights of shelter provided during calendar 2017: $24,000 would provide 12,410 person-nights of shelter at $1.93 per person per night. $24,000 would provide an average benefit of about $80 per person, 100% of whom have very low incomes. In addition to the grants for operating costs, DIMH has received a total of $200,000 in grants to support staffing and programs for a total budget of $250,000 in overall support. The request of $24,000 would, therefore, leverage another $225,000 in additional resources or more than ten times the CDBG request.

WORKPLAN The DIMH workplan continues to be the provision of shelter, meals, and assistance to homeless men to enable them to achieve lives of productivity and purpose. 36 men are sheltered at one time. Each new entrant is provided with 30 days of shelter, during which he must demonstrate that he is serious about securing employment and stability. Those who comply with the pursuit of this objective by participating in case management and the extensive training offered are permitted to extend their stay. DIMH plans to continue-at a minimum-its current staffing pattern and active board involvement in daily operations and services. Additional funding is being sought to add professional staff so that reliance on volunteer board members may decrease over time. With additional volunteers and organizations engaged on an ongoing basis, there is no reason to anticipate a decline in services and programs but, rather, an expansion of them. GOALS AND OBJECTIVES The goal of the program is to operate a safe and healthful shelter for homeless men and to assist them to obtain the food, medical attention, and other services needed to ensure their health and well-being while enabling them to become self reliant. The shelter will continue to provide 36 beds and a complement of regular training and education efforts as noted above. Homelessness results in serious health conditions and is life-threatening. Those who are homeless typically utilize emergency resources such as the hospital emergency room excessively. A few such individuals in Dover have made eight to ten emergency-room visits during the past six months, resulting in considerable cost to the community. Further, those who are homeless are unlikely to be in a position to hold jobs and to be productive individuals able to contribute to the local economy. The prevention of homelessness and the sheltering of the homeless reduces health risks and increases the productivity of those who were homeless. Clearly, homelessness poses a serious and immediate threat to the health and welfare of the community. The efforts of DIMH are a solution to this problem locally. PERFORMANCE MEASUREMENT The number of men provided with shelter, meals, and assistance and the number who secure a stable life outside the shelter are the key indicators of effective performance. As noted, DIMH provided shelter, meals and services to 299 men during 2017, with more than 200 securing employment that was sufficient to enable them to live on their own and to meet their own needs. In addition, less-measurable benefits accrued to the community that include a reduction in crime and loitering and crime as well as an increase in overall health and well-being among the most vulnerable members of the community. DIMH typically generates results along the lines of 70% or more of the shelter residents being re- employed in the community. 100 men who secure minimum-wage employment generate an economic impact of more than $1. 7 million in terms of the wages earned and then spent locally. These numbers are more reflective of recent efforts and experience.

BUILDING ON PREVIOUS WORK The DIMH shelter continues to build on the experience gained by the work of the organization over the past eight years. DIMH continues to respond to the needs of the homeless community: in recent years, Code Purple emergency cold-weather housing has been initiated under the auspices of DIMH. A daytime resource center has opened to serve additional homeless individuals with personal needs ranging from hygiene to employment assistance. An additional housing facility serves 30+ men who are able to pay modest rents but whose past instability and other challenges impede their access to housing in the private market. DIMH also collaborates with many local organizations and community efforts, including Restoring Central Dover, the creation ofthe Downtown Development District, and the implementation of programs with resources from the Delaware State Housing Authority's Strong Neighborhoods Housing Fund. COORDINATION WITH LOCAL BUSINESSES DIMH is an active member of the Central Delaware Chamber of Commerce and regularly informs its members and those of the Greater Dover Committee about DIMH efforts and achievements. Numerous businesses contribute to the DIMH shelter, providing food and other materials needed. The Downtown Dover Partnership leases the shelter facility to DIMH at a nominal rent, while the Downtown Development efforts include DIMH in its community gardens and Wednesday farmers' market program. DIMH is one of the local charities registered as a beneficiary of the Bayard Pharmacy donation program, with Bayard Pharmacy collaborating in an effort initiated by DIMH to reduce co-payments for prescription medications needed by homeless individuals. Through the Cen-Del Foundation, DIMH is accessing donations of supplies and materials from the Greater Kent Committee network of businesses. Donations of various items are received from local businesses and individuals. A growing network of food providers--with regular pickups at several local restaurants and retailers-makes it possible for DIMH to collaborate with other local organizations to ensure that the homeless in our community have access to at least one hot, nutritious meal daily. TD Bank has a special working relationship with DIMH, enabling shelter residents to open bank accounts with a $25 contribution from the bank along with training in the use and management of bank accounts. DIMH is a member of the Central Delaware Chamber of Commerce and regularly interacts with Chamber members to enlist their support as volunteers and contributors. This relationship has done much to enhance the awareness of DIMH, its mission, and the need for the community to assist the homeless. Partnerships with local builders and contractors have made it possible for DIMH to renovate Walt Bagley Hall (congregate housing facility) and a daytime Resource Center for the homeless. Dover area Rotary Clubs have been instrumental in making the Resource Center a reality. Suppliers of building materials have been cooperative in terms of providing discounts for DIMH purchase of materials for these and other projects. DIMH also works with a number of local landlords to secure housing for men moving from the shelter to independence, as DIMH references-and guarantees when needed-often make the difference in accessing private housing for former shelter residents. DIMH residents with construction skills are increasingly employed by local businesses for a variety of small renovation and repair projects.

Further, DIMH collaborates actively with local agencies and nonprofits to ensure that services are available to those engaged with DIMH housing and programs. This includes collaboration on the provision of meals, on the provision of housing for veterans through the Mayor's Challenge to End Veteran Homelessness, NCALL efforts on financial literacy and in the Restoring Central Dover initiative, the Mayor's Task Force on Homelessness, and others.

2018 CDBG SUB-RECIPIENT APPLICATION FORM Please choose the best option that describes the purpose of your activity from the three objectives. Suitable Living Environment Decent Housing -x- - Economic Opportunity Please choose the best option that will describe the outcome of your activity based on the categories listed below. AvailabilityI Accessibility x - -- Affordability Sustainability Please provide a proposed outcome based on the information below that applies to your activity Number of persons, households, units, or beds assisted as appropriate --'2=5""'0""'"+_ _ __ Income level of persons or households by: Very Low 100 % Low % Moderate % If your activity benefits a target area, please show the number of persons served and the percentage of low/mod persons served. Your close out report will require you to provide breakdowns of those served by race, ethnicity and disability.

CITY OF DOVER FY 2015-2019 Multi-Year FY 2018 CDBG GRANT APPLICATION FORM 1. General Applicant Information A. Name Connections Community Support Programs, Inc. 3 821 Lancaster Pike Wilmington, DE 19805 302-230-9103 B. Name, position and signature of person submitting application: Catherine Devaney McKay, President and CEO Name and position of authorizing official: Catherine Devaney McKay, President and CEO C. Name, address and phone number of Contact Person: (If different from B above) Same as above FY 2018 only Activity: Rapid Re-housing Amount Requested: $ 15,000 Source of Cash Matching Funds $ 15, 000 Department of Correction Heal th Care Contract 1. Low/Moderate-Income Benefit: LOW/MODERATE- INCOME BENEFIT TABLE-Instructions The amount of benefit to low-and moderate-income persons must be calculated for each activity as described below. Future program years may be estimated as long as 51 % of the population being served is low to moderate income.

1. In column 1, list the activity and fiscal year through 2018. 2. In column 2, show the total number of persons that the activity will serve. 3. In column 3, show the number of low- and moderate-income persons that the activity will serve. 4. In column 4, divide column 3 by column 2 to show the percent of low- and moderate- income persons that the activity will serve. 5. In column 5, show the amount of funds requested for the activity for clinent fiscal year only. 6. In column 6, multiply column 4 by column 5 to show the amount of those funds that will be used to benefit low-and moderate-income persons. 7. List the sources of data used to calculate benefit in the space provided at the bottom of this page. LOW/MOD ERATE-INCOME BENEFIT TABLE L ActnVJify 2. Total 3.L/M 4. %LIM 5. Amount 6. Amount Per ons Persons Persons Requested UM Activity will Activity will Activity w ill for Activity Benefit Serve erve Serve FY 2018 10 10 100% $ 15,000 $ 15,000 Source of Data: FY 2017 CMIS data for OSHA Rapid Re-housing Program 2. Management Capacity A. List the person(s) to be responsible for administering the CDBG Project: Sub-Recipient Personnel Title(s) Sara Weimer Director of I-lousing and Veterans Services 302-232-5490, ext. 4813

B. Attach resumes or other supp01ting documentation for the personnel of new applicants, which establishes the capacity of the personnel above to effectively manage a CDBG sub-recipient project. 4. Application Work Plan Each proposed program activity must address each of the following areas for fiscal year 2018. A. Each program activity must be addressed separately. Program activities must be listed in order of priority with the program activity of highest priority first. This order of priority for program activities must be followed on all forms contained in this application. Connections is proposing to provide Rapid Re-Housing assistance for up to 10 homeless households within the City of Dover annually, with the average amount of assistance per household at $3,000. Priority populations are listed below: Priority 1. Homeless Families (a) The homeless family who is in the emergency shelter for less than 30 days (b) The homeless family who has been living on the streets (cars, parking lots, places not meant for human habitation) for less than 30 days (c) The homeless family or individual who is in the emergency shelter for over 30 days (d) The homeless family or individual who has been living on the streets (cars, parking lots, places not meant for human habitation for over 30 days Priority 2. Homeless Individuals (a) The homeless individual who is in the emergency shelter for less than 30 days (b) The homeless individual who has been living on the streets (cars, parking lots, places not meant for human habitation) for less than 30 days (c) The homeless individual who is in the emergency shelter for over 30 days (d) The homeless individual who has been living on the streets (cars, parking lots, places not meant for human habitation for over 30 days Funds will be used to provide Rapid Rehousing/Rental Assistance services for households whose most recent address is inside the City of Dover limits. Our program will assist rents with first month's security deposit and up to three months of rent. Funding will also assist renters with utility deposits, as needed. Financial assistance/rental assistance will be visited at monthly case management meetings, and officially re-evaluated at the 90-day mark, at

which point, rental assistance funding will be decreased, or eliminated, based on continued .eligibility and needs. We are leveraging Connections' comprehensive case management prngram, contacts with Delaware Medicaid and the Delaware Department of Health and Social Services and Corrections, and our extensive network of partnering agencies and housing providers, to help households served through ESG rapid re-housing to meet their economic self-sufficiency goals, their goas for housing, stable employment, and abstinences from substance abuse. By working to meet all of these goals together, we also hope to prevent recidivism among men and women who have been incarcerated. We are particularly concerned about bousehold which are beaded by justice involved women with substance use conditions. These families rarely are able to stay together. By addressing all of their needs, including the need for stable housing, it is our intention to provide these families with new opportunities to live sober, productive lives. B. Each program activity must be fully described. For rehabilitation programs, this description must include the number of units to be rehabilitated, rental properties to be rehabilitated, any special population groups the rehabilitation program will address, the target area, and the need for the rehabilitation activity. Funds will be used to provide Rapid Rehousing/Rental Assistance services for households whose most recent address is inside the City of Dover Jim its. Our program will assist renters with first month's security deposit as well as up to the three months' of rent. Funding will also assist renters with utility deposits, as needed. Financial assistance/rental assistance will be visited at monthly case managements, and officially re-evaluated at the 90-day mark, at which point, rental assistance funding will be decreased, or eliminated, based on continued eligibility and needs. We are leveraging Connections' comprehensive case management program, contacts with Delaware Medicaid and the Delaware Department of Health and Social Services and Corrections, and our extensive network of partnering agencies and housing providers, to help households served through ESG rapid re-housing to meet their economic self-sufficiency goals, their goas for housing, stable employment, and abstinences from substance abuse. By working to meet all of these goals together, we also hope to prevent recidivism among men and women who have been incarcerated. We are particularly concerned about household which are headed by justice involved women with substance use conditions. These families rarely are able to stay together. By addressing all of their needs, including the need for stable housing, it is our intention to provide these families with new opportunities to live sober, productive lives. C. Provide a timetable showing monthly milestones for completion of each activity.

We are currently providing this service and will continue to provide Rapid Re-housing financial assistance to qualifying households until the funds are depleted. D. Attach drawings, plans or other documentation necessary to describe program activities. Not applicable E. Describe each activity's conformance with the goals and objectives of the City;s Consolidated Plan. Dover's most recently published Consolidated Plan states: "The primary objective of the community development program within the City of Dover is to develop viable urban communities including decent housing and a suitable living environment, and to expand economic opportunities, principally for low and moderate income persons" As it related to homeless housebold, the Plan expresses the need for affordable housing for low and moderate income household, including those who have experienced homelessness. Homelessness among families with children has been on the rise in Delaware. In fact, during a recent count of horttcless families/individuals in Delaware on one night in January 2017, 1,015 people experienced homelessness. 24% of all individuals experiencing homelessness were children under the age of 18. 22% of individuals experiencing homelessness in Delaware were in Kent County. We will focus on this population in the provision of rapid re-housing services. According to the National Alliance to End Homelessness "Years of research and experience in working to end homelessness has proven that rapid re-housing and prevention are key strategies." Rapid re-housing is also an emphasis of the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act. The r·esearch that led to this emphasis on ending homelessness as rapidly as possible clearly demonstrates that homeless households who receive immediate assistance to obtain permanent housing arc much more likely to avoid future homelessness than are those who receive emergency and/or transitional housing over a long period of time. These findings point to rapid re-housing as the most effective means of ending homelessness permanently. We intend to serve households with incomes below 30% of the area median for the City of Dover, thus helping the city to reduce homelessness and increase capacity in its emergency shelters. F. Describe the extent to which the proposed project(s) will address one or more significant priorities identified by the City's Consolidated Plan. Rapid re-housing is a strategy that has been successfully used by many

communities to reduce homelessness. It is based on the idea that most households become homeless as a result of a financial crisis that prevents them from paying the rent, or a domestic conflict that results in one member being ejected or leaving with no resource so plan for housing. Most households who become homeless have already living in independent permanent housing, and they can generally return and remain stably housed with limited assistance. Negative outcomes associated with homelessness can be minimized by limiting the period of time people experience it. By helping homeless households return to permanent housing as soon as possible, communities have been able to reduce the length of time people remain in homeless shelters. This opens beds for others who need them, and reduces the public and personal costs of homelessness. Expanding the availability of shelter beds and increasing affordable housing options for low income households are priorities identified in the City's Consolidated Plan which will be addressed by this proposal. G. Describe the extent to which the project builds upon previous work or supplements other work that will be funded from other sources. In 2011, the Delaware Interagency Council on Homeless (DISH) updated the original Plan to End Chronic Homelessness, published in 2007, to reflect the needs of all homeless populations in Delaware (not only those who were chronically homeless), but also to reflect the changes in the Federal laws, especially the HEARTH Act. HEARTH clearly emphasizes "housing first" and rapid re-housing in scattered site rentals in residential communities is a better solution than housing individuals and families in shorter-term congregate situations. The new plan emphasizes re-entering offenders and justice-involved individuals as a priority population. In addition to this population, our proposed program focuses on the priority populations which the City has identified. In this application one of our focus areas is homeless households in which the head of the household has involvement with the Delaware justice system. Individuals leaving the correctional system frequently lack a place to go when they return to their communities. Delaware has one of the highest rates of incarceration in the United States, and the number one cause is drug related crime. Substance abuse, incarceration, and related inability to find a stable job, all contribute to homelessness. The project will target homeless households with qualifying incomes, including those in which the head of the household is involved in the justice system. Housing stability is a key factor in successful reintegration, reduced recidivism, and increased community safety among people who have been incarcerated. A snapshot of re-offenders in Washington State over a three month period in 2009, show that 34% of offenders who re-offended did not have stable housing. It also show that of offenders on community

supervision (parole) who re-offended, 49%, nearly half, did not have stable housing. Ex-offenders who are placed in permanent supportive housing instead of being released without adequate housing are easier to monitor, and are guaranteed to receive the services, education and access to employment they need to achieve self-sufficiency. We will work with those who arc leaving DOC facilities to secure emergency shelter and then rapid re-housing for those who qualify. Connections will use this funding to provide rapid rehousing services for priority households, efficiently and effectively moving them into permanent, affordable, appropriate housing while providing them with comprehensive case management and supportive services to help resolve the barriers to financial independence. Connections is able to reduce the length of time that persons are homeless because of our already existing infrastructure and experience in rapid rehousing programs, and our network of healthcare, employment and housing services. Connections will be able to use existing relationships with landlords and apartment complex managers to quickly place individuals and families, and since there will be no learning curve, placements can begin immediately after funding award. We will work the Delaware's Centralized Intake system for referrals. Our performance measures will include placement of homeless individuals and families within 45 days of first contact. Rapid rehousing will also increase the number of individuals in the City of Dover to be permanently housed (thereby decreasing the number of homeless households by at least the number served, as shelter beds .and other resources will be freed up by rapidly re-housing the target households). Equally important, household will increase their abiJity to maintain their housing through substance abuse treatment, employment support, case management and other supportive services, thereby reducing the rates of homelessness recidivism. We will work with Housing Alliance Delaware to increase the number of people to be assisted by accepting all household referred by Centralized Intake in the most appropriate program or service. We are also working with Delaware Department of Corrections to link homeless households to permanent housing and employment, using ESG and other resources. Once the household finds permanent housing, we continue to provide services to them at home and in the community to make sure they do not become homeless again. H. Describe source and amount of any funds used to leverage the City's portion of the project. Indicate when these funds will be available. Attach documentation of any match.

DHSS Comprehensive Outpatient Behavioral Health service contract ($400~000) Delaware Medicaid (average billing of more than $8 million annually) 5. Each application should also describe the following: A. Describe any efforts to coordinate with businesses regarding the development of the community as it affects low/moderate-income residents of the area. We will work with hmdlords in Dover to find suitable housing for homeless households, who after a brief period of rental assistance will be able to sustain the housing on their own. 6. Have you received a sub-recipient grant from the previous funding year? Yes If yes give the total amount $7,391 .

ADDENDUM 2018 CDBG SUB-RECIPIENT APPLJCA TION FORM Please choose the best option that describes the purpose of your activity from the three objectives. Suitable Living Environment Decent Housing Economic Opportunity Please choose the best option that will describe the outcome of your activity based on the categories listed below. Availability/Accessibility Affordability Sustainability Please provide a proposed outcome based on the information below that applies to your activity Number of persons, households, units, or beds assisted as appropriate _ __ _ Income level of persons or households by: Very Low 30 % Low % Moderate % If your activity benefits a target area, please show the number of persons served and the percentage of low/mod persons served. Y out close out rep01t will require you to provide breakdowns of those served by race, ethnicity and disability.

cannE~rmns COMMUNITY SUPPORT PROGRAMS Mission Connections Community Support Programs, Inc. provides a comprehensive airay of healthcare, housing and employment opportunities that help individuals and families achieve their own goals and enhance our communities. 500 WEST 10TH STREET Ill WILMINGTON, DE 19801 D W\VW.CONNECTIONSCSP.ORG ADMINISTRATION TOLL FRIIB FAX [302-984.-3380] (866-477-5345] [302-984-3324]

........ HEALTH CARE SERVICES CONTRACT This Contract, a professional services Contract under the law of the State of Delaware, is made this G>'" day of Mngeii, 2014, by and between. Conne<?tions Community Support Programs, Inc. ("CCSP") and the State of Delaware Department of Correction ("DOC")(collectively referred to·as the "Parties"). RECITALS WHEREAS, DOC desires to procure professional healthcare services to serve the needs of the State of Delaware and its incarcerated offender population; and WHEREAS, DOC has asked prospective vendors to submit ptoposals in relation to Contract No. DOC1426~Health; and WHEREAS, CCSP submitted a proposal to provide certain health care services and such proposal was accepted by DOC; NOW, THEREFORE, in consideration for the mutual promises contained herein, the Parties enter intQ this Contract and each of the documents that comprise· this Contract as specifically ihco1porated by reference herein and revoke any prevfous Contract~ bet;ween the Parties regarding health care services, with the exception of Contract No. DOC1202- Mental Health. All references tq the "State," "Delaware," "DDOC," the «Department of Correction," or the «Department" shall be deemed as references to DOC. All references to. ·"Vendor," "CCSP," ·"Connections CSP,'' ·or "Connections Co~\lnity Support Programs, Inc.,. shall be deemed as a reference to CCSP. The terms and conditions of this Contract are c·ontained within this DOC/CCSP professional healthcare services Contract which shall include by·reference the following documents: . . - This Contract and its Exhibits; 1 .·

- The POC Request for Proposals· for Contract No. DOC1426-Health and any amendments thereto (Exhibit A); - CCSP's Letter of October 15, 2013 (Pxh:ibit'B); - CCSP's Proposal in Response to the above Exhibit A (Exhibit C). NOW THEREFORE, DOC and CCSP mutually agree as follows: 1. Contract Te1•m. ~ubject to the other temis and provisio'ns hereof, the initial term of this Contract will be for four (4) years commencing on June 1, 2014 (the ~·commencement date") and shall t~rminate, unless renewed, on June 30, 2.018 (the "natural tenhination date"). The Contract may be rep.ewed by DOC .for two (2) additional two (2) year renewal periods. 2, Co.ntract Price. DOC and CCSP agree on an annual base price of $40,602,500 for the first 13 months ("year one") of this Contract and $41,414,550 for the rtext 12 months ("year two") of this Contract. The arui.ual base price for the last 24 months ("years three and four") of the initial t~nn of this Contract may be increased by a percentage consistent . . . . ~ .. ~ . with the U.S. Department of Labor's "A.11 Item$ Consumer Price lndex for All Urban Consumers" (CPI-UJ; provided, however; that ariy such percentage increase in years three or four shall not exceed 2.5% of the annual ·base price then in effect. The Parties further agr~e the CCSP shall subip.it to J?OC an invoice _o n or ~bout the last dar of each mtmth commencin