Acta

COUNCIL FINANCIAL WORKSHOP A Council Financial Workshop was held on January 7, 2013 at 5:40 p.m. with Council President Leary presiding. Council members present were Mr. Anderson, Mr. Dixon, Mr. Lynn (departed at 8:44 p.m.), Mr. Perza, Mr. Bonar, Mrs. Williams, Mr. Hare, and Mr. Hutchison. Council staff members present were Police Chief Hosfelt, Mrs. Mitchell, Mr. Koenig, and Mrs. McDowell. Mayor Carey was also present. AGENDA ADDITIONS/DELETIONS By unanimous consent, the agenda was accepted as presented. REQUEST TO CHANGE DATE OF DEDICATION OF MARTIN LUTHER KING JR. BOULEVARD TO SATURDAY, JANUARY 19, 2013 Mr. Scott Koenig, City Manager, advised members that Reverend Michael Rogers and Reverend Rita Paige had recently approached him requesting that the date of the dedication ceremony for Martin Luther King Jr. Boulevard be changed from Monday, January 21, 2013 to Saturday, January 19, 2013 to coincide with the annual Martin Luther King Jr. Day Parade. He stated that arrangements had been made to change the parade route to include the Martin Luther King Jr. Boulevard location, arriving at 12:15 p.m., and that a brief ceremony had been scheduled there at 12:30 p.m. He indicated that Reverend Rogers and Reverend Paige were working on a program for the event to include speakers, etc., and would provide this information to the City once it was finalized. Mr. Koenig explained that there was some concern regarding the availability of dignitaries on the originally scheduled date (Monday), requested Council’s consideration of the proposal to change the date, and advised members that he anticipated the program to be made available to members during their Regular Meeting of January 14, 2013. In response to Mr. Hare, Mr. Koenig stated that although there were some logistical issues, Senator Bushweller had offered to pay for informational and ceremonial signs to be used for this event. Mr. Anderson moved for approval of the request to change the official date of the dedication of Martin Luther King Jr. Boulevard to Saturday, January 19, 2013, seconded by Mr. Dixon and unanimously carried. INTRODUCTION BY COUNCIL PRESIDENT LEARY Council President Leary advised members that during the last few budget cycles, Council had discussed little besides the City’s unfunded liabilities during the Annual Retreat due to the increasing importance of this issue and its effect on the budget. As a result, there had not been much opportunity to discuss other matters, such as sidewalks, playgrounds, etc., as was done in previous years. It was his hope that by conducting a separate workshop on the unfunded liabilities, members would have the opportunity to discuss other matters during the Retreat. Council President Leary noted that there has been national debate regarding Social Security, Medicare, etc., which he felt paralleled the City’s issues, explaining that the City made commitments many years ago to pay pension and medical benefits when employees typically retired at 65 and lived

COUNCIL FINANCIAL WORKSHOP OF JANUARY 7, 2013 PAGE 2 to be 70 years of age or so. He noted that this was not an unsound system at the time, from an actuarial standpoint; however, this was no longer the case, since individuals often retire at a much younger age and live longer. PENSION FUNDS - UPDATE ON FUNDING STATUS AND ACTUARIAL REQUIRED CONTRIBUTIONS AS OF JUNE 30, 2012 Mrs. Donna Mitchell, Controller/Treasurer, reviewed a Presentation entitled - Council Financial Workshop - January 7, 2013 (Exhibit #1 - Pages 2-17). Police Pension Fund In reviewing the Police Pension Fund (Pages 2-5 of Exhibit #1), Mrs. Mitchell noted that the amount of Benefit Payments reflected was greater than the contributions. She reminded members that this was a closed plan (City’s old Police Pension Plan) and no active employees were enrolled. She stated that, according to the last actuarial study, there were 48 retirees or beneficiaries in the plan, with 50% in the 55-65 age bracket. As noted on Page 4, Mrs. Mitchell explained that the Net Pension Asset at the beginning of the year was an accumulation of all prior year differences resulting from over-funding or under-funding of the plan by the City, and the overall difference accumulated to an asset. Since the City under-funded the plan this year, she stated that the Net Pension Asset had been reduced. She indicated that $668,274 listed in contributions included the State’s contribution in the amount of $561,772 and the City’s in the amount of $95,000. Mrs. Mitchell explained that the Net Pension Asset had continued to decrease and that it would be necessary for the City to fund approximately $200,000 next year and $400,000 thereafter, which would impact the budget. General Pension Fund In reviewing the General Pension Fund (Pages 6-10 of Exhibit #1), Mrs. Mitchell noted that there were 194 retirees or beneficiaries participating in the plan, 81 active employees who were fully vested, and 68 active employees who were non-vested. She indicated that there were 14 deferred vested individuals who terminated with 10 years of service and would be eligible for pensions when they attain 65 years of age. She stated that approximately 48% of the members of the General Pension Fund were in the 55-65 age bracket, according to the last actuarial study conducted. Responding to Council President Leary, Mrs. Mitchell confirmed that the General Pension Plan was closed to new employees in 2009. Other Post-Employment Benefits (OPEB) - Update on Funding Status and Actuarial Required Contributions as of June 30, 2012 Referring to the Other Post-Employment Benefits (OPEB) Fund (Pages 11-14 of Exhibit #1), Mrs. Mitchell noted that there were 252 retirees and beneficiaries currently receiving benefits, 14 terminated plan members who were entitled to benefits, and 331 active eligible plan members, for a total of 597 participants. She explained that this total would continue to grow as employees retire and begin receiving benefits, and their positions would be filled with new employees who would become active eligible plan members.

COUNCIL FINANCIAL WORKSHOP OF JANUARY 7, 2013 PAGE 3 In reviewing the figures on Page 13, Mrs. Mitchell reminded members that amounts with brackets were assets and those without brackets were obligations. She explained that the Annual Required Contribution, the level the City should have funded at, with adjustments, was $7,528,602; however, the City funded (Employer Contributions) $5,645,311 and was, therefore, short $1,883,291. Referring to the Net OPEB Obligation (asset) at the beginning of the year, Mrs. Mitchell explained that this number reflects the accumulated differences from prior years which add to the liability. Responding to Mr. Koenig, City Manager, Mrs. Mitchell clarified that the data provided was from the year ending June 30, 2012. She explained that the information was provided for each fund and noted that the Electric Fund had an asset at the end of the year because the City was able to contribute a large lump sum. She stated that, in comparison, the General Fund (Governmental Activities), which reflected an obligation of $11,179,542 at the end of the year, was more of a problem. She stated that these numbers were determined on a Generally Accepted Accounting Principles (GAAP) basis. Referring to the Statement of Net Assets on Page 37 (Exhibit #2) of the 2012 Comprehensive Annual Financial Report (CAFR), Mrs. Mitchell explained that the General Fund (Governmental Activities) balance reflected a deficit of $6,759,433 because of the OPEB obligation. She further explained that this fund balance was determined on a GAAP basis, which requires the inclusion of all long-term assets and debt, as well as all obligations. Comparatively, Mrs. Mitchell referred to the Governmental Funds Balance Sheet on Page 39 (Exhibit #3) of the CAFR, and explained that the unassigned fund balance of $3,007,983 was determined on a non-GAAP basis, which members were accustomed to using during the budget process. She further explained that the Reconciliation of Governmental Fund Balances to Government-Wide Net Assets on Page 40 (Exhibit #4) of the CAFR accounted for the differences between the Governmental Fund Balance Sheet and the Statement of Net Assets. In response to Mr. Leary, Mrs. Mitchell stated that Moody’s and Fitch require the GAAP, so they will look at the deficit of $6,759,433. Referring to the OPEB Trust Schedule of Funding Status and Progress on Page 14 of Exhibit #1, Mrs. Mitchell explained that the OPEB funding level difference was related to the implementation of the new standards in 2009. She stated that the standard was changed from a pay-as-you-go basis to force local governments to recognize the OPEB expense when an employee is working and earning it, so that when an employee retires, the funds are available to cover it. She noted that the change brought local governments in line with the private industry. Mrs. Mitchell reviewed the Summary of Retirement Benefit Liabilities and Annual Required Contributions (Pages 15-17 of Exhibit #1). Referring to Page 16, she noted that if the City were fully funding the Annual Required Contribution (ARC) on a budgetary basis, $8,668,116 would need to be set aside in the General Fund, $733,242 in the Water/Wastewater Fund, and $2,361,175 in the Electric Fund. She stated that the total of the Actuarial Accrued Liability (AAL) is $156,664,000, the total Actuarial Value of Assets is $40,074,666, and the total ARC for all the plans is $11,762,533.

COUNCIL FINANCIAL WORKSHOP OF JANUARY 7, 2013 PAGE 4 Referring to Page 17, Mrs. Mitchell reminded members that the City is in the fourth year of the 10-year phase in plan for OPEB. Governmental Accounting Standards Board (GASB) Statement No. 67 - Financial Reporting for Pension Plans and Statement No. 68 - Accounting and Financial Reporting for Pensions Mrs. Mitchell reviewed the Governmental Accounting Standards Board (GASB) Statements 67 & 68 (Pages 18-29 of Exhibit #1) and explained that the Board was changing the current standards (GASB 25 and 27). She stated that the GASB 67 would become effective in FY2014 and GASB 68 in FY2015. Mrs. Mitchell noted that, as reported on the Statement of Activities included on Page 38 (Exhibit #5) of the CAFR, the expenses for OPEB were approximately $6,534,630. She explained that this statement was reconciled with the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds, included on Page 41 (Exhibit #6) of the CAFR using the Reconciliation of the Statement of Revenue, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities on Page 42 of the CAFR (Exhibit #7). Referring to the Statement of Net Assets - Proprietary Funds on Page 43 of the CAFR (Exhibit #8), Mrs. Mitchell noted that the same reconciliation was performed for the Water/Wastewater and Electric Revenue Funds. She advised members that these were the areas of reporting that would be changing with the new GASB 67 and 68 requirements. Responding to Mrs. Williams, Mrs. Mitchell reiterated that the new GASB 67 and 68 would result in a change in reporting; however, she assured members that the funding could remain the same. In response to Mr. Hutchison regarding changes to the Police Pension Plan, Mrs. Mitchell confirmed that next year the City would have to include approximately $200,000; whereas, the City had been previously budgeting $95,000 per year. She noted that part of this was due to a reduction in grant money from the State. She indicated that the required amount would increase to approximately $400,000 in the following year. She recommended that the City dedicate any budget balances and carry forward toward the unfunded liability, as had been done in the past. She suggested that these funds be applied to the Police Pension Plan to allow it to become whole and run as it should, with the remainder of funds to be applied to the General Pension Plan. Responding to Mr. Perza, Mrs. Mitchell stated that, to her knowledge, the City had funded the Pension Plans based on actuarial studies and followed the actuary’s recommendations. The OPEB requirements became effective in 2009, so the City, along with everyone else, started these funding requirements from “ground zero.” She explained that her argument to the rating agencies was that the City had a plan and took proactive measures. She reminded members that the City set aside $6M in reserve before implementing the OPEB trust standards. As a result, when the City started the trust, the City already had $6M, which reflected the City’s proactive measures. Responding to Mr. Leary regarding measures that could be taken to address the unfunded liability, Mrs. Mitchell explained the importance of being mindful of employee benefits, noting that this would affect employees who are concerned about possible changes to their benefits. She reiterated that the OPEB costs should not all be the responsibility of the City’s citizens or its employees and

COUNCIL FINANCIAL WORKSHOP OF JANUARY 7, 2013 PAGE 5 expressed the need to develop a balance in this regard to “share the pain.” In addition, she explained the importance of establishing and adhering to a funding plan, although Council would have the flexibility to take action counter to this plan each year. Mr. Koenig reminded members that the General Pension Plan was closed and that there were several employees who were members of the 457 and/or the Deferred Compensation Plan, which are “pay as you go” plans. He indicated that the only members of the Police Pension Plan were 48 retirees. Referring to the General Pension Plan, he explained that 194 people were receiving pensions in addition to active employees who are enrolled in the plan, resulting in growth of the liability. It was his feeling that the City should resolve Police Pension Plan liability issues first, followed by the General Pension Plan, and the City could then begin to work on OPEB liability issues. He indicated that it was very simple to calculate the liability for the Police and General Pension Plans; however, due to the new standards and the new health care law, it was difficult to determine the City’s true liability for OPEB. Elaborating, Mrs. Mitchell stated that the new health care law and contract negotiations would affect the OPEB liability. She stated that the actuary had agreed that there were too many unknowns to determine the liability at this time and that it could improve or become worse. Mr. Koenig advised members that in discussions, employees expressed their feeling that the City was at fault for not budgeting the required amounts and that employees should not have to suffer as a result. Responding to Mr. Anderson, Mrs. Mitchell stated that the City’s contributions were based on actuarial studies. She did not anticipate any change in benefits in either Pension Plan that would have an impact and felt that any change would be due to actuarial results versus assumptions. She assured members that the City had taken and would continue to take appropriate action to address liability issues; however, it was her feeling that OPEB should be given more attention in this regard. Mr. Bonar felt that staff should submit recommendations to City Council to begin the process of addressing the OPEB liability and that Council should take any action necessary. Responding, Mrs. Mitchell stated that, as previously indicated by Mr. Koenig, the City should first resolve the Pension Plans’ liability issues and continue to follow the actuarial analysis for the OPEB, since the Pension Plans were closer to being resolved. Once the Pension Plans were resolved, focus could be given to the OPEB. She advised members that this was discussed with the actuary, who concurred with staff’s recommendations. She reminded members that the City did not know what effects the federal legislation would have on health care or the results of employee contract negotiations. Mrs. Williams requested that staff utilize laymen’s terms when making presentations to City Council, noting the difficulties in understanding accounting terminology and the frequent need to request staff to provide further explanation. Council President Leary reminded members that this was not just a City of Dover problem but a national problem and expressed his opinion that the City had been proactive in addressing the issues.

COUNCIL FINANCIAL WORKSHOP OF JANUARY 7, 2013 PAGE 6 Mr. Hare noted that an $83M liability needed to be addressed and that Council, along with staff, would have to make difficult decisions. By unanimous consent, members took a brief recess. Meeting recessed at 6:45 p.m. and reconvened at 6:54 p.m. City of Dover Facilities - Maintenance and Capital Improvements Mr. Scott Koenig, City Manager, reviewed a Presentation - City of Dover Facilities Discussion, January 2013 (Exhibit #9), which included the 2006 Space Needs Study results. In response to Mrs. Williams, referring to Page 7 of Exhibit #9 depicting Weyandt Hall, Mr. Koenig stated that the State of Delaware utilizes 1,295 sq. ft. of the facility and has a multi-year lease, renewable in five (5) year increments. He noted that the State was in its third year of a five (5) year lease. Referring to the concept of a bond issue, as suggested by Council President Leary, Mr. Bonar stated that although he agreed that it would be a good idea, he had concern with the public’s perception and obtaining their support. Prior to moving forward with the Master Plan, Mr. Hutchison suggested that staff work with the State of Delaware to develop a long-term lease agreement for the Weyandt Building, as well as the old library. He noted that rather than purchasing several buildings, the State of Delaware preferred to lease. He felt that if staff were successful in obtaining long-term leases for those buildings, this would benefit the City in moving forward with the Master Plan. Responding to Mrs. Mitchell, Controller/Treasurer, Mr. Bonar stated that although any required renovations could be negotiated with the State when developing the leases, the State would typically expect the City to make necessary repairs and/or renovations. After much discussion, Council President Leary noted that this would be a good time to talk to the State and also a good time to examine this issue from a capital market perspective. Mr. Anderson relayed concern regarding public support for this project, explaining that due to the economy, many City residents were having difficulty paying their utility bills, purchasing groceries, etc. As a result, he did not foresee supporting this idea for the next couple of years. In response to Mrs. Williams’ suggestion to utilize the old library, Mr. Koenig explained that the ultimate desire would be for all City staff to be located in the same facility. Mr. Hare suggested that if the City were to move forward with the expansion of City Hall, it should be done without any cost to the citizens. Council President Leary reminded members that the biggest mistake in building the new Library was that it did not go to referendum. He suggested that staff make a presentation to the public, explaining the situation and that a referendum vote be held.

COUNCIL FINANCIAL WORKSHOP OF JANUARY 7, 2013 PAGE 7 Mr. Bonar felt that although staff’s requests were very well grounded, he loathed the idea of spending money at this time for a new building. However, he noted that in five (5) years, there would be a dire need to take some action in this regard. As a result, he suggested that Council take staff’s ideas under advisement at this time and that Mr. Koenig explore the matter to determine the options available. In doing so, he suggested that staff take into consideration the idea of renovating the old library. He also suggested that there be a thorough discussion of this matter and an examination of the true costs involved. Mr. Hare suggested that this matter not be considered a priority of staff; however, he suggested that staff work on this project when time permitted. By unanimous consent, the meeting adjourned at 7:33 P.M. TRACI A. McDOWELL CITY CLERK All orders, ordinances, and resolutions adopted by City Council during their Regular Meeting of January 14, 2013, are hereby approved. CARLETON E. CAREY, SR. MAYOR /TM/jg S:\AGENDAS-MINUTES-PACKETS\Council-Minutes\2013\01-07-2013 FINANCIAL WORKSHOP.wpd Exhibits Exhibit #1 - Presentation - Council Financial Workshop - Update on Funding Status of Pension Plans and OPEB as of June 30, 2012 Exhibit #2 - Statement of Net Assets included as Page 37 of the CAFR Exhibit #3 - Governmental Funds Balance Sheet included as Page 39 of the CAFR Exhibit #4 - Reconciliation of Governmental Fund Balances to Government-Wide Net Assets, included as Page 40 of the CAFR Exhibit #5 - Statement of Activities included as Page 38 of the CAFR Exhibit #6 - Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds, included as Page 41 of the CAFR Exhibit #7 - Reconciliation of the Statement of Revenue, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities included as Page 42 of the CAFR Exhibit #8 - Statement of Net Assets - Proprietary Funds included as Page 43 of the CAFR Exhibit #9 - Presentation - City of Dover Facility Discussion, January 2013

EXHIBIT #1 Council Financial Workshop on 01/07/2013 City of Dover Council Financial Workshop January 7, 2013 • Update on Funding Status of Pension Plans and OPEB as of June 30, 2012 EXHIBIT #1 • GASB 67 & GASB 68 – Revised Pension Standards Council Financial Workshop on 01/07/2013

City of Dover Police Pension Plan 2

Police Pension Plan Closed Plan – 48 retirees and beneficiaries; Approximately 50% in 55 – 65 age bracket as of last full actuarial valuation 3

Police Pension Plan City contribution has remained at $95,000 for several years. State Grant made up the remainder of the required contribution. FY13 will need to increase City appropriation. 4

5

City of Dover General Pension Plan 6

General Pension Plan Retired & beneficiaries receiving benefits = 194 Active employees: Fully vested 81; Non-vested 68 Deferred vested: 14 (terminated w/10 yrs) Approximately 48% in 55 – 65 age bracket as of last full actuary valuation Payroll for this plan is approximately $8.0 million 7

General Pension Plan 8

General Pension Plan 9

10

City of Dover Other Postemployment Benefits 11

Other Postemployment Benefits Retirees & beneficiaries receiving benefits 252 Terminated plan members entitled to benefits 14 Active eligible plan members 331 Total 597 12

Other Postemployment Benefits 13

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City of Dover Summary of Retirement Benefit Liabilities and Annual Required Contributions Interim Actuarial Report Dated 11/1/2011 With Full Funding Requirements (no-phase in period for OPEB) 15

16

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Governmental Accounting Standards Board Statements 67 & 68 Council Financial Workshop - January 7, 2013 18

Effective Dates • Effective dates o GASB 67 • Effective for PLAN fiscal years beginning after June 15, 2013 (e.g., FYE June 30, 2014) o GASB 68 • Effective for EMPLOYER’S fiscal years beginning after June 15, 2014 (e.g., FYE June 30, 2015) • Replaces GASB 25 & 27 – Current standards 19

What Is Not Changing? • Current Funding Policy contributions do not change • GASB does not dictate funding requirements 20

What is Changing? • New Terminology o Total Pension Liability (TPL) • Actuarial Accrued Liability o Fiduciary Net Position (FNP) • Market value of plan assets o Net Pension Liability (NPL) • TPL less FNP; aka the Unfunded Actuarial Accrued Liability o Actuarially Determined Contribution (ADC) o Annual Required Contribution (ARC) is gone o Net Pension Obligation (NPO) is gone 21

What is Changing? • Recognition of Unfunded Actuarial Accrued Liability (UAL) on employer balance sheets • Reporting no longer based on accounting; separate functions o Current Calculation: Annual Required Contribution (ARC) Less: Actual Contributions Net Pension Obligation (NPO) o New Calculation: Total Pension Liability (TPL) Less: Fiduciary Net Position (FNP) Net Pension Liability (NPL) 22

What is Changing? • Illustration of employer balance sheet o Current Calculation: Annual Required Contribution (ARC) $3,200,000 Less: Actual Contributions (3,200,000) Net Pension Obligation (NPO) $ 0 o New Calculation: Total Pension Liability (TPL) $55,000,000 Less: Fiduciary Net Position (FNP) (22,000,000) Net Pension Liability (NPL) $33,000,000 23

What is Changing? • Measurement of Plan Obligations o One mandated actuarial valuation method for determining benefit obligations o Potential Interest Rate Changes • Ability to use expected long-term annual investment return is limited • Actuary to determine if/when plan assets will become “exhausted” • Use Bifurcated discount rates if assets become exhausted • Discounting of expected benefit payments from exhaustion date based on long-term, tax-free muni bonds • Recent estimate of muni bond rates in 3.5% - 4.0% range • Plan Assets o No allowance for asset smoothing 24

What is Changing? • Pension expense recognition accelerated o Employers recognize the change in their NPL (net pension liability) in current period o Unrecognized gains / losses are realized over a shorter time period • Expected remaining service • Investments gains/losses amortized over 5 years • Expanded Disclosures o Detailed year to year changes of assets and liabilities o Sensitivity analysis • Impact of different discount rates on unfunded liability o 10-year schedules to required supplementary information 25

What is Changing? • Police Plan Special Funding Situation o State Aid “Contributions” made by the State o GASB requires governments that are non-employer entities to recognize in their own financial statements a proportionate share of the NPL and pension expense o Potentially a portion of the police pension liability will be allocated to the State 26

What does it all mean? • No impact on current funding policy contributions; Highly recommend development of a formal funding policy, separate from the financial reporting calculations; In the past, the ARC became the de facto funding policy • Potential increase in plan’s benefit obligation o Not expected to be significant for General Employee Plan o May be significant for Police Plan since contributions have been about 60% of required in past few years • Immediate recognition of asset gains / losses on balance sheet o Currently smoothing gains/losses over 5 years o Can result in significant changes in NPL from year to year • Volatility - Expense • Impact of Plan Changes recognized immediately • Gain/Loss recognized over expected remaining service • Investment gain/loss amortized over 5 years 27

Other Post Employment Benefits • GASB 45 Issued June 2004 o Aligned accounting / financial reporting similar to defined benefit under GASB 25/27 • GASB currently deliberating improving existing standard of accounting and financial reporting for postemployment benefits o “One objective of this project is to improve accountability and the transparency of financial reporting in regard to the financial effects of employers’ commitments and actions related to OPEB.” o Similar language used for GASB 67/68 project • Conclusion: Similar financial reporting requirements / measurements are on the horizon for OPEB plan subject to GASB 45 28

“The new GASB standards will benefit users of these financial statements, as well as taxpayers, since state and local governments for the first time will have to report unfunded pension liabilities in their balance sheets, providing a clearer view of pension • AICPA President & CEO Barry Melancon obligations.” AICPA President & CEO Barry Melancon “…accounting changes do not alter the underlying fundamentals; $1,000 owed to a retired teacher in ten years under current standards will remain $1,000 owed in 10 years under the new standards. So policymakers should not let new numbers throw them off the path to sensible reform.” Alicia Munnell, director of the Center for Retirement Research at Boston Colllege Overall, GASB’s changes will likely make the new pension accounting measures more volatile than the funding measures. The GASB’s New Pension Accounting & Reporting Standards by Paul Zorn & James Rizzo 29

EXHIBIT #2 Council Financial Workshop on 01/07/2013

EXHIBIT #3 Council Financial Workshop on 01/07/2013

EXHIBIT #4 Council Financial Workshop on 01/07/2013

EXHIBIT #5 EXHIBIT #5 Council Financial Workshop on 01/07/2013 Council Financial Workshop on 01/07/2013

EXHIBIT #6 Council Financial Workshop on 01/07/2013

EXHIBIT #7 Council Financial Workshop on 01/07/2013

EXHIBIT #8 Council Financial Workshop on 01/07/2013

EXHIBIT #9 Council Financial Workshop on 01/07/2013 City of Dover Facility Discussion January 2013 EXHIBIT #9 Council Financial Workshop on 01/07/2013 1

Goal  In 2006, staff created a Ten Year Plan for City buildings. The intent of that plan was to create spaces and places for the City’s elected officials and employees to provide quality services to the citizens. 2

2006 Space Needs Study Results Existing Public Highest Future Department Sq. Ft. 1 – 2 Years Accessibility Immediate Long Range Sq. Ft. Priority 597 not enough space – reception Important Reception Reception area, counter 700 City Clerk area, counter space Area space, workstation, maybe Mayor’s responsibilities will be closer to Council City Manager/ Mayor 1,450 Important One additional office 1,600 Finance 1,197 One additional office Low Office for Additional office, audit 1,500 Ray Cola room Human Resources 560 Storage, interview room Somewhat Interview Additional office, interview 850 Room room 2,464 Storage, more privacy, Important Consolidation of department 3,500 Planning/Inspections separation for inspectors into one area/more inspectors Customer Service – 248 Storage None Larger office Larger office area 400 Budgets for Director Customer Service 3,502 Storage, document imaging Important Meter May actually reduce 4,400 area, conference room Readers area Public Works – 1,230 Directors office to small, larger Somewhat Office Space Large offices with one 1,550 Admin./Eng. reception area, larger additional office, move engineer’s offices, small closer to supervisors & conference room consolidate supervisors into one location 3

2006 Space Needs Study Results - Continued Existing Public Highest Future Department Sq. Ft. 1 – 2 Years Accessibility Immediate Long Range Sq. Ft. Priority Tax Assessor 551 Somewhat May need less space 500 Council Chambers 2,015 Restructure for better viewing Important Restructure for One new office 700 and media presentations better viewing & media presentations Information Windows, less space Technology 1,618 One additional office None GIS person for computers getting 1,800 smaller Police Department No space for computer/radio Important Communication and Move into 2nd floor equipment, interview room IT equipment room converted to offices Parks & Recreation 1,171 Important Relieve overcrowding Caucus Room 447 Bigger room/better media Ability to divide into 1,800 presentation 2 rooms Council 247 No private space to meet Important APD An internal office 400 Work/Meeting Room public when other needs room 4

Lack of Security June 2005 Vulnerability Assessment City Hall & Weyandt Hall  Blast Resistant Windows Needed  Install Fire Suppression System  Install Alarm System  Improve Surveillance with CCTV  Restrict Access - key entry, visitor logs, etc.  Relocate Mail Room – separate with blast hard walls  HEPA filters to Air Handling System  Add emergency back up power system 5

Weyandt Hall Square Footage Finance 1,860 Info. Technology 950 Tax Assessor 500 Customer Service 3,500 C.S. & Fin. Storage 430 Info. Technology Shop 480 Training Room 580 Total Square Footage 8,300 S.F. 6

3rd Floor - Weyandt Hall 7

Basement at Weyandt Hall 8

Wyandt Hall Major Problems Needs new HVAC system. Significant problems with climate control Roof leaks Estimated cost to replace roof & HVAC $1,646,907 in December 2011. 9

City Hall Annex & Connector Annex - 9,600 2nd Floor of Annex - 1,200 Connector - 900 Total Area - 11,700 s.f. 10

Existing City Hall  Lacks Fire Suppression System - $288,000 Authorized  Final Design of System has raised concerns and price - $75,000 to $100,000.  City Council Chambers are not handicapped accessible - $20,000 minimum to install lift; however, the space will layout poorly.  HVAC system has concerns about viable maintenance and efficiency. 11

The 2006 Council Chambers Plan  Proposed permanent change to Chambers;  Put all Council Members behind one dais;  Created a presentation area easily seen by audience and City Council;  Whole room to be ADA accessible;  59 existing public seats increased to 67. 12

New Council Chambers 13

Total City Hall & Weyandt Hall Square Footage Needed  Replace: City Hall Annex - 11,700 Weyandt Hall - 8,300 Current Square Footage - 20,000 14

City Hall –Three Story Concept 15

City Hall – 2006 Concept 16

City Hall Site Layout 17

Concept Proposal Construct 3-story West Wing to City Hall – approx. 28,800 square feet Construct 2-story connector to old City Hall – approx. 1,800 square feet Total Area Constructed – 30,600 s.f. Increase of roughly 53% 18

How Much Would IT Cost? All In Costs – Design, Demolition, Construction & Furnishing. Low Range - $ 11.4 million Medium Range - $ 12.6 million High Range - $ 13.7 million Above costs are for 37,600 s.f. 19

Weyandt Hall , Library & Parking Lot  Eventual sale will help off set cost of construction;  Valuable downtown asset;  State of Delaware is a possible buyer. 20

How do we pay for IT Long term building improvement 40 plus years Go to the Bond Market. Since the building would include Customer Service, the cost could be allocated between all funds: Electric, W/S and General 21

Questions 22

Phase III  Move Grounds Department;  Renovate City Council Chambers;  Build a new 12,830 square foot East Wing to City Hall;  Demolish annex and replace with 24,300 square foot West Wing to City Hall;  Move I/T, Finance, and Customer Service back to new wing of City Hall;  Sell Library and Weyandt Hall buildings. 23

City Hall – Proposed Floor Plan 24

Demolish Annex/ Replace West Wing  Building new 24,300 square foot West Wing;  Architecturally mirror East Wing;  Move Finance, I/T, Tax Assessor, Customer Service to City Hall for most efficient and consolidated management;  Provide enough space for 20 years of growth. 25

Build East Wing to City Hall  Build 12,830 square foot two-story East Wing;  Temporarily house City Clerk, Human Resources, Inspections & meeting rooms;  Architecturally similar to current City Hall;  Built to next generation standards for security, energy conservation, and computer technology;  Drive thru Customer Service Window. 26

City Hall – Parking & Square Footage 27

Space Needs Study Ten Year Phase Cost Matrix Current Total - Description FY 06/07 FY 07/08 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 Estimate 10 Years Move Finance to 2nd Floor 20,000 21,000 21,000 IT to 2nd Floor 18,000 18,900 18,900 Move HR to Clerk 10,000 10,500 10,500 Build Meeting Room 10,000 10,500 10,500 - Public Works Addition 180,000 198,450 198,450 Expand Planning 10,000 11,576 11,576 - Parks & Recreation 100,000 115,763 115,763 - Police 2nd Floor 123,000 149,507 149,507 - Council Chamber 338,000 431,383 431,383 A/V Communication 32,000 40,841 40,841 - Relocate Grounds Department 180,000 241,217 241,217 - City Hall East Wing 2,566,000 3,610,620 3,610,620 City Hall West Wing 4,860,000 7,180,433 Connectors 616,000 433,387 462,444 895,830 City Hall 312,000 460,966 460,966 - Total 9,375,000 60,900 198,450 127,339 149,507 472,224 241,217 4,044,007 8,103,843 13,397,487 28