Acta

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE The Legislative, Finance, and Administration Committee meeting was held on March 12, 2012 at 6:02 p.m. with Councilman Hare presiding in the absence of Chairman McGlumphy. Members present were Mr. Anderson (arrived at 6:23 p.m.), Dr. Jones, and Mr. Shevock. Members of Council present were Mr. Bonar, Mr. Hutchison, Mr. Lynn (departed at 6:37 p.m.), and Mrs. Williams. AGENDA ADDITIONS/DELETIONS Dr. Jones moved for approval of the agenda, as presented, seconded by Mr. Shevock and unanimously carried. Recommendation of Civilian Pension Board - Cost of Living Adjustment (COLA) Mrs. Donna Mitchell, Controller/Treasurer, reported that during their meeting of February 9, 2012, the Civilian Pension Board considered a Cost of Living Adjustment (COLA) for current retirees and surviving spouses, with the following motion being made by Mr. Lester Blakeman: That all members of the Civilian Pension Plan who retired on or before June 30, 2007 receive a 4% cost of living adjustment effective January 1, 2013, that the retirement income of a retired member of the Civilian Pension Plan shall be increased by 2% per annum every January 1, and that this increase in retirement pay shall be cumulative and the previous year’s increase shall be included in the retired member’s retirement income for the purposes of calculating the annual 2% increase, and that the first 2% increase would be effective on January 1, 2014. It was noted that although the motion did not specifically include surviving spouses, this was the intent of the maker, and that Mr. Blakeman’s calculation of the increase presented to the Board was $126,335, which included all retirees, not only those retired on or before June 30, 2007. Mrs. Mitchell noted that no funding sources for a COLA have been identified by staff at this time. However, she advised members that Mr. Blakeman had provided the Pension Board with three (3) recommendations for funding the increase, as follows: 1) a one-half cent increase in electric rates; 2) collection of property tax receivables; and 3) use of excess budget balance. Mrs. Mitchell also advised members that staff could not support an automatic cost of living provision. She stated that staff understood the rationale behind the motion; however, she indicated that retirement plans have been moving away from this provision in general, as demonstrated by the City’s other retirement plans. She indicated that all of the State of Delaware Pension Plans with these provisions are now closed. Should Council approve the 4% Cost of Living Adjustment for the Civilian Pension Plan, staff recommended that the City Manager be directed to budget each year for the cost of the COLA as follows: General Fund $52,400, Water/Wastewater Fund $5,300, and Electric Fund $40,800. Mrs. Mitchell explained that these amounts would fund a COLA only for the individuals who retired on or before June 30, 2007, as stated in Mr. Blakeman’s motion. Responding to Mr. Hare, Mrs. Mitchell stated that, as indicated in the minutes of the Civilian Pension Board Meeting of February 8, 2012, the motion failed by a roll call vote of four (4) no

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF MARCH 12, 2012 PAGE 2 (Dr. McGlumphy, Mr. Bonar, Mr. Koenig, and Mrs. Mitchell) and three (3) yes (Mr. Blakeman, Mr. Clendaniel, and Mrs. Hettinger). In response to Dr. Jones, Mrs. Mitchell stated that retirees received a stipend in 2009. She explained that, at that time, $100,000 was allocated to retirees based on age and, as a result, older retirees received higher amounts. Mr. Lynn questioned the cost of providing a one-time COLA to retirees. Responding, Mrs. Mitchell indicated that a one-time 4% COLA for retirees would cost $98,500; however, she explained that if a 4% COLA were added to the base pension for retirees, the City would be required to budget for this additional $98,500 each year. Prior to 2009, the last adjustment provided to retirees was in 2006. In response to Mr. Shevock, Mrs. Mitchell stated that in January 2012, the State of Delaware provided a 2% COLA to their retirees and that the last COLA provided by the State was in 2006. As mentioned by Mr. Hare, Mrs. Mitchell confirmed that the State of Delaware pensioners are not provided with Medicare Part B reimbursement. Mrs. Williams questioned the cost of the retirees’ Medicare Part B reimbursement benefit as compared to the cost of a COLA. Mrs. Mitchell stated that she did not have that information readily available and it would require calculations; however, she offered to provide it to members at a later date. (Clerk’s Office Note: Following the meeting, Mrs. Mitchell advised the City Clerk’s Office that the current cost of Medicare Part B premium reimbursements for all City of Dover retirees is $117,500 annually and the cost of a 4% COLA increase for employees who retired prior to 2007 would be $98,500.) Mr. Blakeman, 209 Falmouth Way, member of the Civilian Pension Board, thanked the Director/Controller and the City Clerk’s Office for their support and assistance. He provided members with several documents (Attachment #1), as follows: A) List of Retirement Payments Being Issued to Members of the Civilian Pension Plan; B) Reasons for Unfunded Liability (Council President Leary advised members that at one point in the 1990s, the pension fund was almost fully funded.); C) City of Dover Finance Department Pay Plan and Benefit Comparisons - Contract Wage Increase (Mr. Blakeman noted that the addition of the far left column reflects Consumer Price Index increases and the far right column reflects Social Security increases); D) General Pension Plan Cost of Living Adjustment History; E) Example of Effects of a 2% COLA for Police and 0% COLA for Civilians, which included an excerpt from the Comprehensive Annual Financial Report (CAFR) as to when these pension plans started and a Statement of Changes in Pension Trust Fund Net Assets (He noted that the average pension for General Fund retirees is $16,371 and that the average pension for Police Fund retirees is $30,336.); F) Electric Revenue - Sample Increases by Year and Costs to Customers; G) Real Estate Transfer for Sample Revenue Increases; and H) An Excerpt from State Law (77 Del. Laws, c. 130, §3, which states the City’s ability to create a pension and includes a paragraph mentioning the City’s authority to institute a property transfer tax. Mr. Blakeman felt that, due to the paragraph being located within the text granting the City the ability to create a pension,

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF MARCH 12, 2012 PAGE 3 it would not be inappropriate to utilize general revenue from the property transfer tax to fund the pension plan.) Mr. Blakeman explained that this information was distributed to members to provide them additional facts to consider during their deliberations of this matter. Mr. Shevock noted that there are several residents who could not afford any increase in electric rates, and that there would be many complaints from local realtors if there were an increase in the transfer tax, explaining that attempts are being made to bring businesses to the area and that an increase would be a deterrent. Responding, Mr. Blakeman stated his understanding of such concerns; however, he reminded members that police retirees receive an annual COLA and that civilian retirees questioned why police retirees would be treated differently. Although 75% of the COLA for police retirees is paid by the State, he noted that the City budgets for the remaining 25%. He advised members that there are several retirees who receive a very small pension amount each month and that this problem for them is compounded each year that a COLA is not provided. Mr. Shevock felt that additional information should be provided regarding the City’s deficit prior to making any decision regarding the possibility of a COLA. Mr. Hutchison reiterated that no current police officer will retire under the City’s plan and receive a 2% COLA. Confirming, Mr. Blakeman stated that the City’s Police Pension is a closed plan; however, he noted that current members will continue to receive a 2% COLA each year. He reminded members that employees who retired in 1970 and who have been without a COLA for the past several years have seen their pensions eroded by the cost of living. Noting that the Civilian Pension Board had two (2) parts to their motion, Dr. Jones questioned if members would be receptive to a one-time COLA adjustment. Responding, Mr. Blakeman stated that retirees would be grateful for any action in this regard, explaining that retirees are also affected by the economic times. He reiterated that it was also the desire of the civilian members of the Pension Board to bring to Council’s attention the disparity between the two (2) pension plans. In addition, he reminded members that prior to the last one (1) or two (2) years, active employees have been provided substantial salary increases. Mr. Bonar applauded Mr. Blakeman for his work on this matter and the retirees for their attendance and participation at the Pension Board Meeting; however, he noted the difficult economic times for the City. He felt that approval of an automatic COLA at this time would be irresponsible of City Council. However, he felt that a one-time COLA might be an acceptable solution. Mr. Hutchison felt that Council has the responsibility to review this matter and make decisions. He reminded members that Council would be holding their Annual Retreat on March 26, 2012 and suggested the possibility of further discussion regarding this matter at that time. Mr. Anderson also relayed appreciation to Mr. Blakeman for the research provided and stated that he was “disturbed” that the City had not provided retirees with an increase for several years. Although he stated he could not support a 4% COLA at this time, he felt that once the City has moved through the next fiscal year, Council should take action to address this matter. It was his

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF MARCH 12, 2012 PAGE 4 feeling that it was unfair for retirees to bear the brunt of the budgetary shortfall when others were not subjected to it for the past several years. Mrs. Mitchell advised members that the concerns of staff were not in regard to providing a COLA but in regard to ensuring that it is funded. The funding source would be a decision required of Council. Mr. Hare suggested that such a COLA be “tied to” another system, such as the State or Federal governments and that the City should negotiate for the COLA by eliminating Medicare Part B reimbursement. After much discussion, Mr. Bonar suggested that this matter be tabled by the Committee and that staff be requested to add this for Council’s consideration for discussion during the Council Retreat consideration of possible funding to provide a one-time COLA. Mr. Anderson moved to recommend tabling consideration of a Cost of Living Adjustment (COLA) for retirees and that staff include this item to be discussed during the Council Retreat to consider possible funding to provide a one-time COLA. The motion was seconded by Dr. Jones and unanimously carried. Approval of Transfer of Additional Reciprocal Borrowing Funds Members were advised that Kent County collects a special Library Tax from each County property owner who does not reside within a municipality. This tax is used to reimburse the municipal libraries in the County for each item loaned to a County resident who is not a resident of a municipality. Mrs. Donna Mitchell, Controller/Treasurer, advised members that in 2011, residual library tax was distributed at a rate of $30,000 to each municipal library to be used for capital purposes. The Dover City Council approved transfer of the City’s allotment to the Library Reserve Fund. In 2012, residual tax was disbursed by the Kent County Levy Court at a rate of $15,000 per library. Staff recommended approval of a transfer in the amount of $15,000 from the General Fund (contributed by Kent County residual reciprocal borrowing funds) to the Library Reserve Fund for the capital project. It was noted that this item has been included in the proposed budget amendment scheduled to be considered later in the evening and that if it was not approved, it would be removed from the proposed budget amendment. Dr. Jones moved to recommend approval of staff’s recommendation to transfer $15,000 (residual reciprocal borrowing funds contributed by Kent County) from the General Fund to the Library Reserve Fund, seconded by Mr. Anderson and unanimously carried.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF MARCH 12, 2012 PAGE 5 Proposed Ordinance #2012-09 - Budget Amendments for Fiscal Year 2012 Members reviewed Proposed Ordinance #2012-09 - Budget Amendments for Fiscal Year 2012. Mrs. Donna Mitchell, Controller/Treasurer, advised members that the proposed budget amendment included adjustments to the Beginning Budget Balances for the major operating and capital funds now that the City’s audit has been completed. It also included a transfer to the Other Post- Employment Benefits (OPEB) Trust toward the unfunded liabilities in the following amounts, as approved by Council action on September 12, 2011: General Fund $239,532; Water/Wastewater Fund $372,417; Electric Fund $573,547. Members were provided details regarding additional adjustments included in the proposed ordinance. In response to Mr. Anderson, Mrs. Mitchell confirmed that there was a shortfall of 7.8%; however, there are several vacant positions which will result in more than enough savings to cover the shortfall. She explained that the proposed amendments affect only the operating funds and that no projects will be affected. Mr. Shevock moved to recommend adoption of proposed Ordinance #2012-09 - Budget Amendments for Fiscal Year 2012 (Attachment #2), seconded by Mr. Anderson and unanimously carried. Public Comment Period There was no one present wishing to address members. Mr. Anderson moved for adjournment, seconded by Dr. Jones and unanimously carried. Meeting Adjourned at 6:40 P.M. William F. Hare Acting Chairman WFH/DD/jg/js/tm S:\AGENDAS & MINUTES\Committee-Minutes\2012\03-12-2012 LF&A.wpd Attachments to Original Attachment #1 - Research Information Provided by Mr. Lester Blakeman (Lettered A-G) Attachment #2 - Proposed Ordinance #2012-09 - Budget Amendments for Fiscal Year 2012

ATTACHMENT #1 LF&A Committee Meeting of March 12, 2012

ATTACHMENT #2 LF&A Committee Meeting of March 12, 2012 CITY OF DOVER ORDINANCE # 2012-09 2011-2012 BUDGET ORDINANCES 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 2 The amount hereinafter named in various City funds are changed from the currently approved revenues and other funds for 3 the use by several departments of the Municipal Government for the fiscal year beginning July 1, 2011 and ending June 30, 2012: 4 GENERAL FUND 5 REVENUES AND BUDGET FOR 2011-2012 6 ORIGINAL REVISED 7 2011/12 1st Budget Proposed 2011/12 8 BUDGET Adjustment Budget Adj. BUDGET 9 BEGINNING BALANCE $ 3,322,305 $ - $ 239,532 $ 3,561,837 10 REVENUES 11 FINES AND POLICE REVENUE 579,000 - - 579,000 12 911 FEE 60,000 - - 60,000 13 INVESTMENT INCOME 215,900 - - 215,900 14 LIBRARY REVENUES 44,100 - - 44,100 15 KENT COUNTY BOOK REIMBURSEMENT 390,900 - 15,000 405,900 16 BUSINESS LICENSES 1,523,675 - - 1,523,675 17 PERMITS AND OTHER LICENSES 934,000 - - 934,000 18 MISCELLANEOUS CHARGES 165,750 - - 165,750 19 POLICE EXTRA DUTY 300,000 - - 300,000 20 PROPERTY TAXES 11,133,367 - - 11,133,367 21 BID REVENUE 51,821 - - 51,821 22 RECREATION REVENUE 152,000 - - 152,000 23 FRANCHISE FEE 520,000 - - 520,000 24 TRASH FEES 2,050,000 - - 2,050,000 25 RENT REVENUE - GARRISON FARM 87,000 - - 87,000 26 COURT OF CHANCERY FEES 690,000 - - 690,000 27 REVENUES SUBTOTAL 18,897,513 - 15,000 18,912,513 28 INTERFUND SERVICE RECEIPTS 29 INTERFUND SERVICE RECEIPTS WATER/WASTEWATER 988,393 - - 988,393 30 INTRAFUND SERVICE RECEIPTS ELECTRIC 3,370,778 - - 3,370,778 31 INTERFUND SERVICE RECEIPTS SUBTOTAL 4,359,171 - - 4,359,171 32 GRANTS 33 POLICE RELATED 60,000 - - 60,000 34 CAPITAL SCHOOL DISTRICT REVENUE 73,500 - - 73,500 35 DEMA HOMELAND SECURITY GRANT - - 104,676 104,676 36 POLICE PENSION GRANT 620,000 - - 620,000 37 RECREATION GRANT - - 35,383 35,383 38 UNIVERSAL RECYCLING GRANT - 79,873 - 79,873 39 GRANTS SUBTOTAL 753,500 79,873 140,059 973,432 40 TRANSFERS FROM 41 TRANSFER TAX 900,000 - - 900,000 42 MUNICIPAL STREET AID 526,814 - 131,760 658,574 43 CIVIL TRAFFIC PENALTIES 1,000,000 - - 1,000,000 44 WATER/WASTEWATER 424,508 - - 424,508 45 ELECTRIC 7,876,288 - - 7,876,288 46 TRANSFERS FROM SUBTOTAL 10,727,610 - 131,760 10,859,370 47 TOTAL REVENUES $ 34,737,794 $ 79,873 $ 286,819 $ 35,104,486 48 TOTAL BEGINNING BALANCE AND REVENUES $ 38,060,099 $ 79,873 $ 526,351 $ 38,666,323

2011-2012 BUDGET ORDINANCES - CONTINUED GENERAL FUND - REVENUES AND BUDGET FOR 2011-2012 49 ORIGINAL REVISED 50 2011/12 1st Budget Proposed 2011/12 51 BUDGET Adjustment Budget Adj. BUDGET 52 DEPARTMENT EXPENSES 53 CITY CLERK $ 296,393 $ - $ - $ 296,393 54 COUNCIL 120,699 - - 120,699 55 TAX ASSESSOR 213,175 - - 213,175 56 FIRE 684,725 - - 684,725 57 GROUNDS MAINTENANCE 979,922 - - 979,922 58 LIBRARY 1,159,087 - - 1,159,087 59 RECREATION 789,701 - 33,443 823,144 60 LIFE SAFETY 449,226 - 23,870 473,096 61 CODE INFORCEMENT 284,489 - - 284,489 62 PLANNING 422,781 - - 422,781 63 INSPECTIONS 553,907 - - 553,907 64 ECONOMIC DEVELOPMENT 223,717 - - 223,717 65 POLICE 12,955,807 - - 12,955,807 66 POLICE EXTRA DUTY 430,600 - - 430,600 67 STREETS 782,810 - 131,245 914,055 68 SANITATION 2,330,976 79,873 - 2,410,849 69 CITY MANAGER 622,127 - - 622,127 70 INFORMATION TECHNOLOGY 685,871 - - 685,871 71 FINANCE 852,283 - - 852,283 72 PUBLIC SERVICES - ADMINISTRATION 472,692 - - 472,692 73 FACILITIES MANAGEMENT 952,693 - - 952,693 74 CENTRAL SERVICES 693,339 - - 693,339 75 FLEET MAINTENANCE 695,422 - - 695,422 76 CUSTOMER SERVICES 928,112 - - 928,112 77 HUMAN RESOURCES 384,758 - - 384,758 78 MAYOR 81,154 - - 81,154 79 DEPARTMENT SUBTOTALS 29,046,466 79,873 188,558 29,314,897 80 OTHER EXPENSES 81 DEBT SERVICE 327,270 - - 327,270 82 INSURANCE 550,000 - - 550,000 83 RETIREES HEALTH CARE 1,374,709 - - 1,374,709 84 OPEB UNFUNDED LIABILITY - - 239,532 239,532 85 PENSION UNFUNDED LIABILITY 1,450,000 - - 1,450,000 86 POLICE PENSION FUND 620,000 - - 620,000 87 POLICE PENSION UNFUNDED LIABILITY 95,000 - - 95,000 88 UNCOLLECTIBLES - TRASH AND OTHER 10,000 - - 10,000 89 STREET LIGHTS 960,000 - - 960,000 90 OTHER EXPENSE SUBTOTAL 5,386,979 - 239,532 5,626,511 91 TRANSFERS 92 TRANSFER TO CAPITAL FUND - PROJECTS 623,847 - 146,760 770,607 93 TRANSFER TO CAPITAL FUND - RESERVE 200,000 - 200,000 94 TRANSFERS SUBTOTAL 823,847 - 146,760 970,607 95 CURRENT YEAR BALANCE $ 2,802,807 $ - $ (48,499) $ 2,754,308 96 TOTAL CURRENT YEAR BALANCE AND EXPENDITURES $ 38,060,099 $ 79,873 $ 526,351 $ 38,666,323 97 The City Manager is hereby authorized, without further approval of the City Council, to make interdepartmental transfers of up 98 to five percent of the amount hereinafter appropriated to any department with the exception of any transfers prohibited by 99 City Procedure #F306.

2011-2012 BUDGET ORDINANCES - CONTINUED 100 GOVERNMENTAL CAPITAL PROJECTS FUND 101 REVENUES AND BUDGET FOR 2011-2012 102 REVENUES 103 ORIGINAL REVISED 104 2011/12 1st Budget Proposed 2011/12 105 BUDGET Adjustment Budget Adj. BUDGET 106 BEGINNING BALANCE - PROJECTS $ 195,191 $ - $ 61,201 $ 256,392 107 BEGINNING BALANCE - LIBRARY - 100,962 - 100,962 108 REVENUES 109 STATE GRANTS 5,597,505 1,519,678 - 7,117,183 110 DEMEC GRANT - 215,000 - 215,000 111 BTOP & GREENHOUSE GAS REDUCTION GRANTS - 90,000 - 90,000 112 KENT COUNTY LIBRARY CONTRIBUTION - 1,000,000 - 1,000,000 113 LIBRARY GREEN ENERGY/BRIDGE LOAN 2,334,889 365,111 - 2,700,000 114 CONSTRUCTION LOAN FOR LIBRARY - 274,961 - 274,961 115 TRANSFER FROM LIBRARY RESERVE 3,262,615 (671,831) - 2,590,784 116 FRIENDS OF THE LIBRARY DONATION - 210,000 - 210,000 117 LOAN PROCEEDS - STREETS, CITY HALL 2,000,000 - - 2,000,000 118 TRANSFER FROM GENERAL FUND FOR PROJECTS 623,847 - - 623,847 119 INTEREST EARNINGS 10,900 - - 10,900 120 TOTAL REVENUES $ 13,829,756 $ 3,002,919 $ - $ 16,832,675 121 TOTAL BEGINNING BALANCE AND REVENUES $ 14,024,947 $ 3,103,881 $ 61,201 $ 17,190,029 122 EXPENSE SUMMARY 123 ORIGINAL REVISED 124 2011/12 1st Budget Proposed 2011/12 125 DEPARTMENT EXPENSES BUDGET Adjustment Budget Adj. BUDGET 126 FIRE $ 244,820 $ - $ - $ 244,820 127 LIBRARY 11,195,009 3,103,881 - 14,298,890 128 RECREATION 30,000 - - 30,000 129 POLICE 65,000 - - 65,000 130 STREETS 1,230,027 750,000 - 1,980,027 131 SANITATION 136,500 - - 136,500 132 FACILITIES MAINTENANCE - 220,000 - 220,000 133 INFORMATION TECHNOLOGY 6,400 - - 6,400 134 LOAN ISSUANCE COSTS - 30,000 - 30,000 135 EXPENSES SUBTOTAL 12,907,756 4,103,881 - 17,011,637 136 CURRENT YEAR BALANCE - LOAN PROCEEDS 1,000,000 (1,000,000) - - 137 CURRENT YEAR BALANCE 117,191 - 61,201 178,392 138 TOTAL CURRENT YEAR BALANCES AND EXPENSES $ 14,024,947 $ 3,103,881 $ 61,201 $ 17,190,029 139 The City Manager is hereby authorized, without further approval of the City Council, to make interdepartmental transfers of up 140 to five percent of the amount hereinafter appropriated to any department with the exception of any transfers prohibited by 141 City Procedure #F306.

2011-2012 BUDGET ORDINANCES - CONTINUED 142 WATER/WASTEWATER FUND 143 REVENUES AND BUDGET FOR 2011-2012 144 REVENUES 145 ORIGINAL REVISED 146 2011/12 1st Budget Proposed 2011/12 147 BUDGET Adjustment Budget Adj. BUDGET 148 BEGINNING BALANCE - WATER $ 2,385,027 $ - $ 182,145 $ 2,567,172 149 BEGINNING BALANCE - WASTEWATER 1,741,242 - 190,272 1,931,514 150 BEGINNING BALANCE - KCSA (1,757,484) - 514,241 (1,243,243) 151 TOTAL BEGINNING BALANCES 2,368,785 - 886,658 3,255,443 152 BASE REVENUE 153 WATER FEES 4,603,400 - - 4,603,400 154 WASTEWATER FEES 3,756,700 - - 3,756,700 155 WASTEWATER ADJUSTMENT FEES 3,090,900 - - 3,090,900 156 GROUNDWATER INFLOW ADJUSTMENT 1,386,900 - - 1,386,900 157 WATER TANK SPACE LEASING 307,600 - - 307,600 158 SEWER IMPACT FEES 323,000 - - 323,000 159 WATER IMPACT FEES 357,000 - - 357,000 160 INTEREST - WATER 10,600 - - 10,600 161 INTEREST - WASTEWATER 17,200 - - 17,200 162 MISCELLANEOUS SERVICE FEE 58,000 - - 58,000 163 TOTAL REVENUES 13,911,300 - - 13,911,300 164 TOTAL BEGINNING BALANCE AND REVENUES $ 16,280,085 $ - $ 886,658 $ 17,166,743 165 EXPENSE SUMMARY 166 ORIGINAL REVISED 167 2011/12 1st Budget Proposed 2011/12 168 DEPARTMENT EXPENSES BUDGET Adjustment Budget Adj. BUDGET 169 ENGINEERING AND INSPECTION $ 622,230 $ - $ - $ 622,230 170 WATER CONSTRUCTION 440,088 - - 440,088 171 WATER DEPARTMENT 382,655 - - 382,655 172 WATER TREATMENT PLANT 1,543,114 - - 1,543,114 173 WASTEWATER DEPARTMENT 959,735 - - 959,735 174 KENT COUNTY TREATMENT CHARGE 4,235,400 - - 4,235,400 175 TOTAL DEPARTMENT EXPENSES 8,183,222 - - 8,183,222 176 OTHER EXPENSES 177 DEBT SERVICE - WATER 320,853 - - 320,853 178 DEBT SERVICE - WASTEWATER 416,083 - - 416,083 179 RETIREES HEALTH CARE 190,830 - - 190,830 180 UNCOLLECTIBLES 5,000 - - 5,000 181 OPEB UNFUNDED LIABILITY - - 372,417 372,417 182 PENSION UNFUNDED LIABILITY 228,400 - - 228,400 183 INTRAFUND SERVICE FEES 1,228,596 - - 1,228,596 184 INVENTORY/FIXED ASSET WRITEOFFS 10,000 - - 10,000 185 TOTAL OTHER EXPENSES 2,399,762 - 372,417 2,772,179 186 TRANSFER TO 187 GENERAL FUND FROM WATER 238,842 - - 238,842 188 GENERAL FUND FROM WASTEWATER 185,666 - - 185,666 189 WATER IMP AND EXT 750,000 - - 750,000 190 WASTEWATER IMP AND EXT 1,000,000 - - 1,000,000 191 SEWER IMPACT FEE RESERVE - - - - 192 WATER IMPACT FEE RESERVE 36,147 - - 36,147 193 TRANSFER TO CONTINGENCY WASTEWATER 8,000 - - 8,000 194 CAPITAL ASSET RESERVE WATER 100,000 - - 100,000 195 CAPITAL ASSET RESERVE WASTEWATER 300,000 - - 300,000 196 TRANSFER TO SUBTOTAL 2,618,655 - - 2,618,655 197 CURRENT YEAR BALANCE - WATER 2,738,400 - - 2,738,400 198 CURRENT YEAR BALANCE - WASTEWATER 1,855,130 - - 1,855,130 199 CURRENT YEAR BALANCE - KCSA (1,515,084) - 514,241 (1,000,843) 200 CURRENT YEAR BALANCE SUBTOTALS 3,078,446 - 514,241 3,592,687 201 TOTAL CURRENT YEAR BALANCES AND EXPENSES $ 16,280,085 $ - $ 886,658 $ 17,166,743 202 The City Manager is hereby authorized, without further approval of the City Council, to make interdepartmental transfers of up 203 to five percent of the amount hereinafter appropriated to any department with the exception of any transfers prohibited by 204 City Procedure #F306.

2011-2012 BUDGET ORDINANCES - CONTINUED 205 WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND 206 REVENUES AND BUDGET FOR 2011-2012 207 REVENUES 208 ORIGINAL REVISED 209 2011/12 1st Budget Proposed 2011/12 210 BUDGET Adjustment Budget Adj. BUDGET 211 BEGINNING BALANCE - WATER $ 1,139,872 $ - $ 397,902 $ 1,537,774 212 BEGINNING BALANCE - WASTEWATER 303,476 - 36,197 339,673 213 TOTAL BEGINNING BALANCES 1,443,348 - 434,099 1,877,447 214 REVENUES 215 STATE LOAN-WATER 2010 ISSUE - 1,923,489 - 1,923,489 216 STATE LOAN-WASTEWATER 2009 ISSUE 1,800,000 (178,728) (361,422) 1,259,850 217 STATE LOAN-WASTEWATER 2011 ISSUE - 765,060 - 765,060 218 TRANS FR WATER/WASTEWATER FOR WATER 750,000 - - 750,000 219 TRANS FR WATER/WASTEWATER FOR WASTEWATER 1,000,000 - - 1,000,000 220 TRANSFER FROM IMPACT FEE RESERVE 262,840 604,192 - 867,032 221 FEDERAL/STATE GRANTS - - 222 TOTAL REVENUES 3,812,840 3,114,013 (361,422) 6,565,431 223 TOTAL BEGINNING BALANCE AND REVENUES $ 5,256,188 $ 3,114,013 $ 72,677 $ 8,442,878 224 EXPENSE SUMMARY 225 ORIGINAL REVISED 226 2011/12 1st Budget Proposed 2011/12 227 DEPARTMENT EXPENSES BUDGET Adjustment Budget Adj. BUDGET 228 WATER $ 766,240 $ 2,320,228 $ - $ 3,086,468 229 WASTEWATER 3,404,900 813,076 - 4,217,976 230 WATER TREATMENT PLANT 22,900 - - 22,900 231 WATER CONSTRUCTION 30,100 - - 30,100 232 TOTAL DEPARTMENT EXPENSES 4,224,140 3,133,304 - 7,357,444 233 CURRENT YEAR BALANCE - WATER 1,070,632 (396,739) 397,902 1,071,795 234 CURRENT YEAR BALANCE - WASTEWATER (38,584) 377,448 (325,225) 13,639 235 TOTAL CURRENT YEAR BALANCES 1,032,048 (19,291) 72,677 1,085,434 236 TOTAL CURRENT YEAR BALANCES AND EXPENSES $ 5,256,188 $ 3,114,013 $ 72,677 $ 8,442,878 237 The City Manager is hereby authorized, without further approval of the City Council, to make interdepartmental transfers of up 238 to five percent of the amount hereinafter appropriated to any department with the exception of any transfers prohibited by 239 City Procedure #F306.

2011-2012 BUDGET ORDINANCES - CONTINUED 240 ELECTRIC UTILITY FUND 241 REVENUES AND BUDGET FOR 2011-2012 242 REVENUES 243 ORIGINAL REVISED 244 2011/12 1st Budget Proposed 2011/12 245 BUDGET Adjustment Budget Adj. BUDGET 246 BEGINNING BALANCE $ 11,867,003 $ - $ 573,547 $ 12,440,550 247 BASE REVENUES 248 DIRECT SALES TO CUSTOMERS 95,675,500 - - 95,675,500 249 PURCHASE POWER ADJUSTMENT (6,012,000) - - (6,012,000) 250 UTILITY TAX 1,966,100 - - 1,966,100 251 GREEN ENERGY 129,000 - - 129,000 252 MISCELLANEOUS REVENUE 919,000 - - 919,000 253 RENT REVENUE 225,000 - - 225,000 254 TRANSFER FROM RATE STABILIZATION 1,000,000 - - 1,000,000 255 INTRAFUND SERVICE RECEIPTS WATER/WASTEWATER 240,203 - - 240,203 256 INTEREST EARNINGS 264,900 - - 264,900 257 TOTAL REVENUES 94,407,703 - - 94,407,703 258 TOTALS $ 106,274,706 $ - $ 573,547 $ 106,848,253 259 EXPENSE SUMMARY 260 ORIGINAL REVISED 261 2011/12 1st Budget Proposed 2011/12 262 EXPENSES BUDGET Adjustment Budget Adj. BUDGET 263 POWER SUPPLY $ 42,047,430 $ - $ - $ 42,047,430 264 POWER SUPPLY MANAGEMENT 1,170,000 - - 1,170,000 265 PJM CHARGES - LOAD 15,043,396 - - 15,043,396 266 CAPACITY CHARGES 8,506,512 - - 8,506,512 267 CONTRACTUAL SERVICES 115,000 - 150,000 265,000 268 SUB-TOTAL POWER SUPPLY 66,882,338 - 150,000 67,032,338 269 PLANT OPERATIONS 5,964,817 - - 5,964,817 270 GENERATIONS FUELS 664,641 - - 664,641 271 PJM CREDITS (1,285,675) - - (1,285,675) 272 CAPACITY CREDITS (7,388,283) - - (7,388,283) 273 GENERATION SUBTOTAL (2,044,500) - - (2,044,500) 274 TOTAL EXPENSES 64,837,838 - 150,000 64,987,838 275 DIRECT EXPENDITURES 276 TRANSMISSION/DISTRIBUTION 3,162,026 - - 3,162,026 277 ELECTRICAL ENGINEERING 1,177,060 - - 1,177,060 278 ADMINISTRATION 602,715 - - 602,715 279 METER READING 215,208 - - 215,208 280 SYSTEMS OPERATIONS 473,895 - - 473,895 281 UTILITY TAX 1,966,100 - - 1,966,100 282 DIRECT EXPENDITURES SUBTOTAL 7,597,004 - - 7,597,004 283 OTHER EXPENSES 284 ALLOW FOR UNCOLLECTIBLES 150,000 - - 150,000 285 RETIREES HEALTH CARE 646,510 - - 646,510 286 TRANSFER TO PENSION UNFUNDED LIABILITY 1,110,500 - - 1,110,500 287 OPEB UNFUNDED LIABILITY 1,115,300 - 573,547 1,688,847 288 GREEN ENERGY PAYMENT TO DEMEC 129,000 - - 129,000 289 INTRAFUND SERVICE FEES 3,370,778 - - 3,370,778 290 INTEREST ON DEPOSITS 54,500 - - 54,500 291 INVENTORY WRITE OFFS 175,000 - - 175,000 292 DEBT SERVICE 3,336,800 - - 3,336,800 293 OTHER EXPENSES SUBTOTAL 10,088,388 - 573,547 10,661,935 294 TRANSFER TO 295 IMPROVEMENT AND EXTENSION 3,500,000 - - 3,500,000 296 GENERAL FUND 7,876,288 - - 7,876,288 297 DEPRECIATION RESERVE - - - - 298 RATE STABILIZATION RESERVE - - - - 299 TRANSFER TO SUBTOTAL 11,376,288 - - 11,376,288 300 CURRENT YEAR BALANCE 12,375,188 - (150,000) 12,225,188 301 TOTALS $ 106,274,706 $ - $ 573,547 $ 106,848,253 302 The City Manager is hereby authorized, without further approval of the City Council, to make interdepartmental transfers of up 303 to five percent of the amount hereinafter appropriated to any department with the exception of any transfers prohibited by 304 City Procedure #F306.

2011-2012 BUDGET ORDINANCES - CONTINUED 305 ELECTRIC UTILITY IMPROVEMENT AND EXTENSION FUND 306 REVENUES AND BUDGET FOR 2011-2012 307 REVENUES 308 ORIGINAL REVISED 309 2011/12 1st Budget Proposed 2011/12 310 BUDGET Adjustment Budget Adj. BUDGET 311 BEGINNING BALANCE $ 2,561,096 $ 87,045 $ 527,234 $ 3,175,375 312 REVENUES 313 INTEREST EARNINGS 38,400 - - 38,400 314 RECEIPT FROM DEPRECIATION RESERVE 300,000 - - 300,000 315 TRANSFER FROM INSURANCE STABILIZATION 70,730 - - 70,730 316 TRANSFER FROM ELECTRIC 3,500,000 - - 3,500,000 317 TOTAL REVENUES 3,909,130 - - 3,909,130 318 TOTALS $ 6,470,226 $ 87,045 $ 527,234 $ 7,084,505 319 EXPENSE SUMMARY 320 ORIGINAL REVISED 321 2011/12 1st Budget Proposed 2011/12 322 EXPENSES BUDGET Adjustment Budget Adj. BUDGET 323 ELECTRIC GENERATION $ 1,810,410 $ 87,045 $ - $ 1,897,455 324 TRANSMISSION AND DISTRIBUTION 648,337 - - 648,337 325 ELECTRICAL ENGINEERING 1,790,716 - - 1,790,716 326 METER READING 20,000 - - 20,000 327 TOTAL EXPENSES 4,269,463 87,045 - 4,356,508 328 CURRENT YEAR BALANCE 2,200,763 - 527,234 2,727,997 329 TOTAL CURRENT YEAR BALANCE AND EXPENSES $ 6,470,226 $ 87,045 $ 527,234 $ 7,084,505 330 The City Manager is hereby authorized, without further approval of the City Council, to make interdepartmental transfers of up 331 to five percent of the amount hereinafter appropriated to any department with the exception of any transfers prohibited by 332 City Procedure #F306.

2011-2012 BUDGET ORDINANCES - CONTINUED 333 COMMUNITY TRANSPORTATION IMPROVEMENT FUND 334 REVENUES AND BUDGET FOR 2011-2012 335 REVENUES 336 ORIGINAL REVISED 337 2011/12 1st Budget Proposed 2011/12 338 BUDGET Adjustment Budget Adj. BUDGET 339 BEGINNING BALANCE $ 312,651 $ - $ 122,509 $ 435,160 340 REVENUES 341 GRANTS REVENUE - Streets & Lincoln Park 1,900,000 - - 1,900,000 342 TRANSFER FROM GENERAL FUND 350,000 (350,000) 131,760 131,760 343 LOAN PROCEEDS - STREETS - 1,750,000 - 1,750,000 344 INTEREST INCOME 2,800 - - 2,800 345 TOTAL REVENUES 2,252,800 1,400,000 131,760 3,784,560 346 TOTAL BEGINNING BALANCE AND REVENUES $ 2,565,451 $ 1,400,000 $ 254,269 $ 4,219,720 347 EXPENSE SUMMARY 348 ORIGINAL REVISED 349 2011/12 1st Budget 2011/12 350 EXPENSES BUDGET Adjustment BUDGET 351 PROGRAM EXPENSES - STREETS $ 1,300,000 $ 875,000 $ 131,760 $ 2,306,760 352 LINCOLN PARK/CLARENCE STREET PROJECT 900,000 - - 900,000 353 TOTAL EXPENSES 2,200,000 875,000 131,760 3,206,760 354 CURRENT YEAR BALANCE - BOND PROCEEDS - 875,000 - 875,000 355 CURRENT YEAR BALANCE 365,451 (350,000) 122,509 137,960 356 TOTAL CURRENT YEAR BALANCES AND EXPENSES $ 2,565,451 $ 1,400,000 $ 254,269 $ 4,219,720 357 The City Manager is hereby authorized, without further approval of the City Council, to make interdepartmental transfers of up 358 to five percent of the amount hereinafter appropriated to any department with the exception of any transfers prohibited by 359 City Procedure #F306.