CCW PACKET - Revised with Corrected CAFR Presentation

COUNCIL COMMITTEE OF THE WHOLE AGENDA FEBRUARY 14, 2017 - 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. PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE AGENDA ADDITIONS/DELETIONS 1. REVIEW OF SCHUTTE PARK MASTER PLAN (STAFF RECOMMENDS APPROVAL OF THE SCHUTTE PARK MASTER PLAN) 2. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM QUARTERLY UPDATE (OCTOBER, NOVEMBER, AND DECEMBER) (COMMITTEE ACTION NOT REQUIRED) 3. ADJOURNMENT OF PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING UTILITY COMMITTEE AGENDA ADDITIONS/DELETIONS 1. DISCUSSION - OVERVIEW OF ELECTRIC RATES 2. QUARTERLY REVIEW OF UTILITY RELATED CAPITAL INVESTMENT PLAN (CIP) (ELECTRIC AND WATER/WASTEWATER)(OCTOBER, NOVEMBER, AND DECEMBER) (COMMITTEE ACTION NOT REQUIRED) 3. UPDATES (COMMITTEE ACTION NOT REQUIRED ON THE BELOW ITEMS) A. GREEN ENERGY FUNDING AND PROGRAMMING B. NATIONAL POLLUTION DISCHARGE ELIMINATION SYSTEM (NPDES) MUNICIPAL SEPARATE STORM SEWER SYSTEMS (MS4) PERMIT 4. ADJOURNMENT OF UTILITY COMMITTEE MEETING

COUNCIL COMMITTEE OF THE WHOLE AGENDA - FEBRUARY 14, 2017 Page 2 LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE AGENDA ADDITIONS/DELETIONS 1. PROPOSED AMENDMENTS TO CHAPTER 17, TITLE 22 OF THE DELAWARE CODE RELATING TO MUNICIPAL TAX INCREMENT FINANCING AND CHAPTER 18, TITLE 22 OF THE DELAWARE CODE RELATING TO MUNICIPAL SPECIAL DEVELOPMENT DISTRICTS (JOHN PARADEE) 2. EXPIRATION OF DOWNTOWN DOVER PARTNERSHIP (DDP) LOAN GUARANTEE EXTENSION (DURING THEIR MEETING OF JULY 14, 2014, COUNCIL APPROVED THE EXTENSION OF THE DOWNTOWN DOVER PARTNERSHIP (DDP) LOAN GUARANTEE WITH PNC BANK THROUGH MARCH 1, 2017) (STAFF RECOMMENDS AN EXTENSION OF THE CITY GUARANTEE OF THE DOWNTOWN DOVER PARTNERSHIP LOANS FOR A PERIOD OF THREE (3) YEARS EFFECTIVE MARCH 1, 2017 ON THE LOANS BETWEEN PNC BANK AND THE PARTNERSHIP) 3. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 2016 (STAFF RECOMMENDS ACCEPTANCE OF THE REPORT) 4. PRESENTATION - COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) (STAFF RECOMMENDS ACCEPTANCE OF THE REPORT) 5. STATUS OF OTHER POST-EMPLOYMENT BENEFITS (OPEB) AND PENSION FUNDS (COMMITTEE ACTION NOT REQUIRED) 6. ADJOURNMENT OF LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING ADJOURNMENT OF COUNCIL COMMITTEE OF THE WHOLE MEETING /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\COMMITTEE-AGENDAS\2017\02-14-2017 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.

ACTION FORM PROCEEDING: Parks, Recreation and Community Enhancement Committee DEPARTMENT OF ORIGIN: Planning/Parks and Recreation DATE SUBMITTED: February 1, 2017 PREPARED BY: Ann Marie Townshend, AICP, Director of Planning & Community Development SUBJECT: Review of Schutte Park Master Plan REFERENCE: N/A RELATED PROJECT: City of Dover Recreation Needs Assessment REVIEWED BY: Scott Koenig, P.E., City Manager EXHIBITS: Schutte Park Master Plan EXPENDITURE REQUIRED: None with this action AMOUNT BUDGETED: $100,000 FUNDING SOURCE (Dept./Page in CIP & Budget): 147-1500-525.40-31 TIME TIMETABLE: Following approval of concept, staff will proceed with getting costs for the stormwater and entrance design and construction cost estimates. RECOMMENDED ACTION: Staff recommends that the Committee recommend approval of the Schutte Park Master Plan. BACKGROUND AND ANALYSIS Following the completion of the Recreation Needs Assessment, the Planning Office, Public Works Department, and Parks and Recreation Department began work on a master plan for Schutte Park. This master plan was to include the development of multi-purpose fields, completion of the loop pathway system, and other amenities that were identified in the Recreation Needs Assessment. Staff developed a conceptual plan, which was shared at a public workshop on July 20, 2016. Following review of the public feedback, staff worked on additional design. The results of this work are attached for the Committee’s review. Once the design is endorsed, staff will work with the Public Works Department to complete the stormwater and entrance design and to develop cost estimates for each phase. This will likely be done by one of the City’s engineering consultants.

Schutte Park Master Plan February 14, 2017 Overview The Schutte Park Master Plan is a product of the City of Dover Recreation Needs Assessment. This primary planning document for all of the city parks was approved by City Council on August 10, 2015. Among the implementation strategies named in this plan is a recommendation that master plans be developed for each of Dover’s three anchor parks (Schutte Park, Silver Lake Park, and Dover Park). The master plan for Schutte Park is the first of the three to be developed. The Needs Assessment included a public process to determine park users’ priorities in the future development of the anchor parks. Many of the specific recommendations of the Schutte Park Master Plan, including the finished loop trail, new athletic fields, additional parking, fitness stations and skate park come directly from the Needs Assessment. The primary purpose of the master plan is to organize these desired amenities into an attractive and efficient park design that park visitors will enjoy returning to again and again. Development of the master plan was ongoing throughout 2016, and included a public workshop on July 20, 2016 to gather feedback on a draft design. The public workshop led to several important changes to the design, including a reduction in new parking on the west side of the park and the addition of restrooms and water fountains. Development also included consultation with outside experts, who produced the concepts included in this plan for the skate park and a disc golf course. More detailed design of these two amenities is needed based on the particular needs and desires of their users. Phasing The master plan includes four phases, detailed below: PHASING Phase Description Anticipated Timeframe -Finish loop trail; plant additional trees and wooded areas and install benches along paths -Install disc golf course Phase 1 -Pave and stripe existing parking lots; use pervious 2017-2018 pavement for parking spaces -Grade and seed west of Former Wyoming Mill Rd; begin using additional field space -Construct multi-use artificial turf field and entrance plaza Phase 2 -Plant rain garden between pond and softball fields; 2019-2020 wooded area east of pond -Add additional storage space -Construct new parking and event plaza using shared paving near intersection of Wyoming Mill Rd and Hazlettville Rd -Install outdoor exercise equipment along loop trail Phase 3 2021-2022 -Install bathrooms and water fountains adjacent to event plaza -Plant rain garden south of future skate park; wooded area east of new parking lot -Construct new park shelter adjacent to event plaza Phase 4 2023-2024 -Construct skate park adjacent to event plaza

Estimates of the area to be developed in each phase are as follows: AREA/QUANTITY ESTIMATES Phase 1 Phase 2 Phase 3 Phase 4 Total New trails 75,320 S.F. / 5,954 S.F. / 6,742 S.F. / 88,016 S.F. / 7,532 L.F. 595 L.F. 674 L.F. N/A 8,802 L.F. New Drive aisles 91,295 S.F. N/A 26,918 S.F. N/A 118,213 S.F. Pervious Parking 62,991 S.F. / 16,776 S.F. 79,767 S.F. / N/A N/A Spaces 378 spaces / 94 spaces 472 spaces Plazas N/A 1,292 S.F. 10,499 S.F. N/A 11,791 S.F. 858 S.F. 437 S.F. 558 S.F. New structures N/A (park 1,853 S.F. (sheds) (bathroom) shelter) Artificial Turf Field N/A 97,275 S.F. N/A N/A 97,275 S.F. Skate Park N/A N/A N/A 8,100 S.F. 8,100 S.F. New trees 665 116 71 N/A 853 New light poles 65 5 47 N/A 117 Plan Documents 1. Existing Conditions Map 2. Phase 1 Plan 3. Phase 2 Plan 4. Phases 3 & 4 Plan 5. Renderings 6. Skate park concepts 7. Disc golf route 8. Rain garden examples 9. Shared pavement examples 10. Draft plan of 7/20/16 (for comparison purposes only)

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Schutte Park Master Plan Whole Park View '" "'

Pitts Center and artificial turf field, looking northwest *Renderings are illustrative, and do not show final site details (furnishings, pavement patterns, etc.)

Western plaza and park shelter, looking west

Northwest entrance to park, looking south

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Schutte Park Master Plan Disc Golf Plan

Rain Garden examples Source: hƩp://www.nature.org/ouriniƟaƟves/regions/northamerica/unitedstates/newjersey/explore/rain-gardens-1.xml

Shared pavement examples Characteristics: -textured pavements with flush curbing to reinforce priority of pedestrians -street furniture (bollards, planters, etc.) to delineate car-traveled way and pedestrian-only space Source: hƩp://nacto.org/publicaƟon/urban-street-design-guide/streets/residenƟal-shared-street/ Broad Street, Victoria, BC West Broadway, Eugene, OR

DRAFT PLAN 7/20/2016 Rain Garden Rain Garden Skate Park

CDBG Quarterly Report October, November, December 2016 CDBG FY16 Projects The following projects are underway. Homeownership Assistance Program CDBG funds will be used to provide homeownership assistance to first-time homebuyers who purchase affordable housing in the City of Dover. One family has purchased a home, and two families are under contract to purchase homes. Dover Interfaith Mission for Housing CDBG funds will be used to provide operations cost for the shelter. Sixty-two 62% of funds have been expended year to date. Connections Community Support Program CDBG funds will be used to provide rapid re-housing/rental assistance services for homeless households within the City. Milford Housing Homeowner Rehabilitation/Emergency Home Repair Programs CDBG funds will be used to rehabilitate existing owner occupied housing in the City that is in violation of the City’s Housing Code and complete emergency home repairs to eliminate housing conditions that threaten the health and safety of low income homeowners. Bids have been advertised for two (2) single family homes to be rehabbed in the city, and emergency home repairs have been completed for three (3) families. Habitat for Humanity CDBG funds will be used to rehabilitate a vacant property to sell to a low income family and provide affordable housing in the City of Dover.

Parks, Recreation, and Community Enhancement 2/14/2017 Status of FY-16 Program Funds Spent - Fiscal Year 7/1/16- 6/30/17 2016 Grant Projects Project Details Total Grant Funds Expended Unencumbered Balance Funds will be utilized for settlement assistance for Homeownership Assistance Program $50,000 $50,000 $0 properties purchased in the City Funds will be utilized for rapid re-housing/rental Connections $7,208 $0 $7,208 assistance for low income persons Funds will be used for Dover Interfaith Mission for Housing $22,000 $13,774 $8,227 operation cost Funds will be utilized for Milford Housing Development Corp emergency home repairs. $55,000 $0 $55,000 Project underway Funds will be utilized for rehabbing owner Milford Housing Development Corp $25,000 $7,430 $17,569 occupied homes. Project underway Funds will be utilized to rehab a single family Habitat for Humanity $30,000 $0 $30,000 home for a low income family Total $189,208 $71,204 $118,004

City of Dover Capital Investment Plan Project Tracking Report Quarterly Report as of December 31, 2016 Points to Remember - * Original Project Budget = Original Total Project Budget initially included in approved annual budget. * Latest Project Budget = Revised Total Project Budget included in most recent approved annual budget or one of the following: bond resolution, revolving fund loan agreement, Council approved budget amendment, or City Manager approved amendment as per the Budget Amendment Procedure. * Current Fiscal Year - Revised Fiscal Year Budget = Current Year approved project budgets plus carry forward balances of unspent budgets in the prior fiscal year. Project Carry Forward balances will be submitted to City Council for amendment in January 2010. Can also be amended with City Manager approval per the Budget Amendment Procedure. * Water Quality, Inflow/Infiltration, Distribution Upgrades and New Development projects are budgeted as a blanket project and once individual projects are identified and estimated they are created using an allocation of the overall budgeted amount. * Status and Comments provided by City Manager. Community Water & Total Current Year Budget Funding Sources General Transportation Wastewater Electric CIP Budget Balance $ 1,425,000 $ 5,500 $ 3,437,200 $ 2,707,400 $ 7,575,100 General Billings for Reimbursement of Expense 105,000 - - 900,000 1,005,000 Debt Financing - - 3,284,000 - 3,284,000 State Community Transportation Funds - 500,000 - - 500,000 Transfer from WW Impact Fee Reserve - - 402,000 - 402,000 Transfer from General Fund 1,859,400 - - - 1,859,400 Transfer from Operating Funds - - 2,000,000 2,731,200 4,731,200 Transfer from Parkland Reserve 80,000 - - - 80,000 Grant Receipt - - - 5,000 5,000 Interest Income 5,000 - 20,000 40,000 65,000 Total Funding Sources (Unaudited) $ 3,474,400 $ 505,500 $ 9,143,200 $ 6,383,600 $ 19,506,700 1

City of Dover General Fund - Major CIP Projects Quarterly Report as of December 31, 2016 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project % Original Revised Fiscal % Project Project Project To Date Budget Budget Fiscal Year Fiscal Year YTD Budget Budget Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Balance Spent Status Comments 1 FY 2015 2 PR1402 M Schutte Park Land Improvements $ 100,000 $ 190,000 $ 49,700 $ 140,300 26.2% $ 100,000 $ 100,000 $ - $ 100,000 0.0% 3 ST1504 Old PW2 Site Improvements 535,000 603,500 573,543 29,957 95.0% - 106,700 76,695 30,005 71.9% In Process Design work ongoing 85% level 4 Totals - FY 2015 $ 635,000 $ 793,500 $ 623,243 $ 170,257 78.5% $ 100,000 $ 206,700 $ 76,695 $ 130,005 37.1% 5 6 FY 2016 7 ST1601 FY16 Street and Alley Program $ 1,000,000 $ 859,400 $ 717,708 $ 141,692 83.5% $ - $ 401,700 $ 260,043 $ 141,657 64.7% Complete Final invoices to be paid 8 ST1603 Valve Replacement - Silver Lake Dam 60,000 97,600 97,513 87 0.0% - 93,900 93,862 38 100.0% Complete 9 ST1604 Salt Storage Barn (originally proj ST1301) 50,000 135,000 12,562 122,438 9.3% - 122,400 - 122,400 0.0% In Process Project awarded, to begin in Spring 10 CT1669 Persimmon Park Place Drainage Study 24,600 24,600 23,661 940 96.2% - 10,900 9,916 985 91.0% In Process 99% complete with project 11 Totals - FY 2016 $ 1,134,600 $ 1,116,600 $ 851,444 $ 265,156 76.3% $ - $ 628,900 $ 363,820 $ 265,080 57.9% 12 13 FY 2017 14 --- Vehicles & Equipment $ 695,200 $ 854,600 $ 369,404 $ 485,196 43.2% $ 695,200 $ 854,600 $ 369,404 $ 485,196 43.2% In Process 15 --- Library Wall - 15,000 - 15,000 0.0% - 15,000 - 15,000 0.0% 16 CM1701 401 & 415 Water Street Properties - 485,000 411,362 73,638 84.8% - 485,000 411,362 73,638 84.8% In Process 17 FR1700 R Annual Contribution for Ladder 1 145,700 145,700 145,614 86 99.9% 145,700 145,700 145,614 86 99.9% Complete 18 PR1701 Dover Park - Master Plan 50,000 50,000 - 50,000 0.0% 50,000 50,000 - 50,000 0.0% 19 PR1704 Small Park Improvements 15,000 15,000 - 15,000 0.0% 15,000 15,000 - 15,000 0.0% 20 PD1701 Video Storage Array 12,500 12,500 - 12,500 0.0% 12,500 12,500 - 12,500 0.0% 21 ST1701 R FY17 Street and Alley Program 900,000 812,000 - 812,000 0.0% 900,000 812,000 - 812,000 0.0% In Process Proj awarded, awaiting paperwork 22 ST1702 Misc Emerg Street/Stormwater Repairs - 123,000 51,172 71,828 41.6% - 123,000 51,172 71,828 41.6% In Process Project open and ongoing 23 ST1703 Silver Lake Dam Improvements 126,000 126,000 - 126,000 0.0% 126,000 126,000 - 126,000 0.0% In Process Design to begin by 11/15 24 Totals - FY 2017 $ 1,944,400 $ 2,638,800 $ 977,552 $ 1,661,248 37.0% $ 1,944,400 $ 2,638,800 $ 977,552 $ 1,661,248 37.0% 25 26 Grand Totals $ 3,714,000 $ 4,548,900 $ 2,452,239 $ 2,096,662 53.9% $ 2,044,400 $ 3,474,400 $ 1,418,067 $ 2,056,333 40.8% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is re-budgeted to start over each fiscal year. G = Grant funded project B/L = To be financed through bonds or commercial loan. 2

City of Dover Community Transportation - Major CIP Projects Quarterly Report as of December 31, 2016 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project % Original Revised Fiscal % Project Project Project To Date Budget Budget Fiscal Year Fiscal Year YTD Budget Budget Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Balance Spent Status Comments 1 FY 2014 & Prior 2 ST0232 Pat Lynn Drive/D.H.S. Storm Drain Pipe $ 155,200 $ 190,300 $ 184,778 $ 5,522 97.1% $ - $ 5,500 $ - $ 5,500 0.0% 3 TE0601 Lincoln Park Center 900,000 602,400 523,277 79,123 86.9% 79,100 79,100 - 79,100 0.0% 4 Totals - FY 2014 & Prior $ 1,055,200 $ 792,700 $ 708,055 $ 84,645 89.3% $ 79,100 $ 84,600 $ - $ 84,600 0.0% 5 6 FY 2016 7 CT1627 FY16 Paving Projects - Boggs Drive $ 247,400 $ 247,400 $ 139,762 $ 107,638 56.5% $ 107,600 $ 107,600 $ - $ 107,600 0.0% In Process Scheduled to begin in Spring 8 CT1681 Pedestrian Enhancement-Mallard Pond Pathway 50,000 100,000 71,093 28,907 71.1% 50,000 100,000 71,093 28,907 71.1% In Process Lighting being installed in coming weeks 9 Totals - FY 2016 $ 297,400 $ 347,400 $ 210,855 $ 136,545 60.7% $ 157,600 $ 207,600 $ 71,093 $ 136,507 34.2% 10 11 FY 2017 12 CT1714 Paving Project - Paper Alley $ 15,000 $ 15,000 $ - $ 15,000 0.0% $ 15,000 $ 15,000 $ - $ 15,000 0.0% In Process Scheduled to begin in Spring 13 CT1731 E Water Street Brick 85,000 85,000 1,000 84,000 1.2% 85,000 85,000 1,000 84,000 1.2% Complete Awaiting final invoice 14 CTxxxx Unapplied CT Projects (placeholder) 500,000 242,400 - 242,400 0.0% 163,300 113,300 - 113,300 0.0% 15 Totals - FY 2017 $ 600,000 $ 342,400 $ 1,000 $ 341,400 0.3% $ 263,300 $ 213,300 $ 1,000 $ 212,300 0.5% 16 17 Grand Totals $ 1,952,600 $ 1,482,500 $ 919,910 $ 562,590 62.1% $ 500,000 $ 505,500 $ 72,093 $ 433,407 14.3% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is re-budgeted to start over each fiscal year. C = Project funded by combination of CT Funds and General Fund B/L = To be financed through bonds or commercial loan. 3

City of Dover Electric Improvement & Extension Fund - Major CIP Projects Quarterly Report as of December 31, 2016 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project % Current Revised Fiscal % Project Project Project To Date Budget Budget Fiscal Year Fiscal Year YTD Budget Budget Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Balance Spent Status Comments 1 FY 2014 2 EG1407 Metering System Upgrades $ 150,000 $ 90,000 $ 79,636 $ 10,364 88.5% $ - $ 90,000 $ 79,636 $ 10,364 88.5% In Process Complete, working punch list with contractor 3 EE1415 R Metering Infrastructure 150,000 150,000 - 150,000 0.0% - 150,000 - 150,000 0.0% In Process 4 EG1416 M VanSant Capacity Increase 1,500,000 774,100 761,487 12,613 98.4% - 45,000 32,339 12,661 71.9% Complete 5 Totals - FY 2014 $ 1,800,000 $ 1,014,100 $ 841,123 $ 172,977 82.9% $ - $ 285,000 $ 111,975 $ 173,025 39.3% 6 7 FY 2015 8 EE1500 69 kV Rebuild - Horsepond Road $ 330,500 $ 330,500 $ 142,712 $ 187,788 43.2% $ - $ 250,600 $ 62,802 $ 187,798 25.1% In Process 40% complete; weather hold 9 EE1513 M Town Point Distribution Feeders 1,650,000 1,650,000 725,857 924,143 44.0% 350,000 350,000 214,379 135,621 61.3% In Process Phase 2 about 80% complete 10 Totals - FY 2015 $ 1,980,500 $ 1,980,500 $ 868,569 $ 1,111,931 43.9% $ 350,000 $ 600,600 $ 277,181 $ 323,419 46.2% 11 12 FY 2016 Contractor to begin work Spring 2017. Outage 13 EG1612 Van Sant Exhaust Plenum Replacement $ 469,000 $ 469,000 $ 429,958 $ 39,042 91.7% $ - $ 46,300 $ 7,299 $ 39,001 15.8% In Process begins March 3, 2017 14 EG1613 McKee Unit 3 Stack Repairs 485,000 342,600 304,469 38,131 88.9% - 340,000 301,845 38,155 88.8% Complete Awaiting final report from Contractor 15 EE1605 69 kV Cable Replacement - North Street 565,700 565,700 - 565,700 0.0% - 135,000 - 135,000 0.0% In Process Eng work underway 16 EE1607 Horsepond URD - Distribution Feeders 67,000 67,000 49,450 17,550 73.8% - 62,500 - 62,500 0.0% Complete Additional funds were not needed 17 EE1617 Oak Grove Trailer Park - Dist Upgrade 77,400 77,400 889 76,511 1.1% - 77,400 889 76,511 1.1% In Process On hold; other projects 18 EE1627 Dover East Estates - Dist Upgrade 125,500 125,500 - 125,500 0.0% - 125,500 - 125,500 0.0% In Process On hold; other projects 19 EE1631 North Street OH to UG 170,000 170,000 - 170,000 0.0% - 170,000 - 170,000 0.0% In Process Eng work underway 20 Totals - FY 2016 $ 1,959,600 $ 1,817,200 $ 784,766 $ 1,032,434 43.2% $ - $ 956,700 $ 310,033 $ 646,667 32.4% 21 22 FY 2017 23 --- R Vehicles & Equipment $ 165,800 $ 188,800 $ 20,703 $ 168,097 11.0% $ 165,800 $ 188,800 $ 20,703 $ 168,097 11.0% In Process Waiting on contract specifications 24 --- Economic Development Program - 50,000 - 50,000 0.0% - 50,000 - 50,000 0.0% 25 --- Replace Weyandt Hall Door - 10,000 - 10,000 0.0% - 10,000 - 10,000 0.0% 26 --- Compressor Replacement - 13,000 - 13,000 0.0% - 13,000 - 13,000 0.0% 27 --- R New Developments 1,500,000 1,500,000 620,445 879,555 41.4% 1,500,000 1,500,000 353,251 1,146,749 23.6% In Process 28 EE1700 SCADA Master Hardware Replacement 150,000 150,000 35,631 114,369 23.8% 150,000 150,000 35,631 114,369 23.8% In Process Coordinating delivery 29 EE1707 LED Lighting Upgrades 17,500 17,500 - 17,500 0.0% 17,500 17,500 - 17,500 0.0% In Process 30 EE1708 R Ampacity Standardization 25,000 25,000 - 25,000 0.0% 25,000 25,000 - 25,000 0.0% In Process 31 EE1709 Substation Relay Upgrade 125,000 125,000 4,882 120,118 3.9% 125,000 125,000 4,882 120,118 3.9% In Process 32 EE1710 Meeting House Branch Pole Relocation 450,000 450,000 - 450,000 0.0% 450,000 450,000 - 450,000 0.0% On Hold 33 EE1711 R Transmission Line Maintenance Program 75,000 75,000 - 75,000 0.0% 75,000 75,000 - 75,000 0.0% In Process 34 EE1712 R Lighting Project 50,000 50,000 - 50,000 0.0% 50,000 50,000 - 50,000 0.0% In Process 35 EE1713 R Fault Indicators 10,000 10,000 9,935 65 99.4% 10,000 10,000 9,935 65 99.4% Complete 36 EE1714 UPS System Replacement 25,000 25,000 - 25,000 0.0% 25,000 25,000 - 25,000 0.0% In Process Bid awarded; coordinating install 37 EE1715 R Distribution Capacitors and Controls 50,000 50,000 2,082 47,918 4.2% 50,000 50,000 2,082 47,918 4.2% In Process Awaiting quote from GE. Establish list of parts 38 EG1701 Van Sant Unit 11 Major Inspection 400,000 400,000 5,840 394,160 1.5% 400,000 400,000 5,840 394,160 1.5% In Process needed and bid out to other vendors. 39 EG1702 R McKee Run Unit 3 Boiler Systems 382,000 382,000 - 382,000 0.0% 382,000 382,000 382,000 0.0% In Process 40 EG1703 R McKee Run Bldg Equipment Replacement 59,000 59,000 - 59,000 0.0% 59,000 59,000 - 59,000 0.0% In Process Purchase in Feb, install in March Received quotes; researching suppliers for new 41 EG1704 McKee Run Hydrogen Purity Analyzer 96,000 96,000 - 96,000 0.0% 96,000 96,000 - 96,000 0.0% In Process equipment 42 EG1707 R McKee Run Auxiliary System Components 128,000 128,000 30,937 97,063 24.2% 128,000 128,000 30,937 97,063 24.2% In Process 43 EG1709 Unit 3 Cooling Water Line Repairs 469,000 469,000 10,867 458,133 2.3% 469,000 469,000 10,867 458,133 2.3% In Process Inspection complete. Work done in Fall 2017 44 EG1710 R Plant Syst Safety & Compl Improvements 112,000 112,000 3,177 108,823 2.8% 112,000 112,000 3,177 108,823 2.8% In Process Fencing to be replaced in Spring 2017 45 EG1711 R Preservation of Structures 131,000 131,000 - 131,000 0.0% 131,000 131,000 - 131,000 0.0% In Process 46 EG1712 Remote Start Capability at VanSant - 25,000 - 25,000 0.0% - 25,000 - 25,000 0.0% 47 48 49 Totals - FY 2017 $ 4,420,300 $ 4,541,300 $ 744,498 $ 3,796,802 16.4% $ 4,420,300 $ 4,541,300 $ 477,304 $ 4,063,996 10.5% 50 51 Grand Totals $ 10,160,400 $ 9,353,100 $ 3,238,956 $ 6,114,144 34.6% $ 4,770,300 $ 6,383,600 $ 1,176,493 $ 5,207,107 18.4% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. B = Bonded Project T = Transfer from blanket New Development original budget R = Recurring project - a project that begins and ends each fiscal year and is re-budgeted to start over each fiscal year. S = State fully or partially reimbursed project G = Grant funded project 4

City of Dover Water/Wastewater Improvement & Extension Fund - Major CIP Projects Quarterly Report as of December 31, 2016 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project % Original Revised Fiscal % Project Project Project To Date Budget Budget Fiscal Year Fiscal Year YTD Budget Budget Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Balance Spent Status Comments 1 FY 2008 Awaiting approval of proposed Memorandum of 2 WD0804 M 1.0 MG Elevated Water Storage $ 4,196,600 $ 2,556,000 $ 87,827 $ 2,468,173 3.4% $ - $ 2,468,200 $ - $ 2,468,200 0.0% In Process Understanding from owner 3 Totals - FY 2008 $ 4,196,600 $ 2,556,000 $ 87,827 $ 2,468,173 3.4% $ - $ 2,468,200 $ - $ 2,468,200 0.0% 4 5 FY 2013 6 WW1303 Westover PS $ 768,800 $ 1,403,900 $ 859,327 $ 544,573 61.2% $ - $ 593,000 $ 48,437 $ 544,563 8.2% In Process Construction to restart in April 7 Totals - FY 2014 $ 768,800 $ 1,403,900 $ 859,327 $ 544,573 61.2% $ - $ 593,000 $ 48,437 $ 544,563 8.2% 8 9 FY 2015 10 WW1503 Hazlettville Road Interceptor $ 755,000 $ 774,100 $ 659,432 $ 114,668 85.2% $ - $ 618,900 $ 504,221 $ 114,680 81.5% In Process Awaiting final punch list items 11 WW1507 Retreat Pump Station Replacement 412,500 483,900 343,231 140,669 70.9% - 447,500 306,900 140,600 68.6% In Process 95% complete construction 12 Totals - FY 2015 $ 1,167,500 $ 1,258,000 $ 1,002,663 $ 255,337 79.7% $ - $ 1,066,400 $ 811,121 $ 255,280 76.1% 13 14 FY 2016 15 WD1609 M WTP Process Improvements $ 1,050,000 $ 1,375,000 $ 324,095 $ 1,050,905 23.6% $ 1,200,000 $ 1,200,000 $ 78,043 $ 1,121,957 6.5% In Process Design work continuing 16 WW1603 Rolling Acres PS Replacement 424,000 424,000 39,173 384,827 9.2% 372,000 396,100 11,279 384,821 2.8% In Process Project awarded 1/23/17, contract pending 17 WW1605 Delaware Avenue Sanitary Sewer Ext 25,000 33,000 - 33,000 0.0% - 33,000 - 33,000 0.0% In Process Project to begin in mid February 18 Totals - FY 2016 $ 1,499,000 $ 1,832,000 $ 363,268 $ 1,468,732 19.8% $ 1,572,000 $ 1,629,100 $ 89,322 $ 1,539,778 5.5% 19 20 FY 2017 21 --- R Vehicles & Equipment $ 222,600 $ 268,700 $ 46,055 $ 222,645 17.1% $ 222,600 $ 268,700 $ 46,055 $ 222,645 17.1% In Process 22 --- Economic Development Program - 100,000 - 100,000 0.0% - 100,000 - 100,000 0.0% WD1700/ Meters have been ordered. Staff replacing large 23 WW1700 R Meter Replacement Project 400,000 400,000 59,564 340,436 14.9% 400,000 400,000 59,564 340,436 14.9% In Process meters as time allows 24 WD1701 R Wellhead Redevelopment 85,000 85,000 - 85,000 0.0% 85,000 85,000 - 85,000 0.0% In Process Wells currently being evaluated 25 WD1704 New Fence - Well #6 - 40,000 - 40,000 0.0% - 40,000 - 40,000 0.0% Complete Awaiting invoice processing 26 WD1705 R Future Well Installation 100,000 100,000 14,907 85,093 14.9% 100,000 100,000 14,907 85,093 14.9% In Process Design is underway for new well 27 WD1706 R SCADA Equipment Tech Upgrade 88,000 88,000 - 88,000 0.0% 88,000 88,000 - 88,000 0.0% In Process Materials scheduled to be ordered soon. 28 WQ1702 R Water Quality Improvements 720,800 330,800 - 330,800 0.0% 720,800 330,800 - 330,800 0.0% In Process 29 WQ1701 Bradford Street Survey - 28,000 - 28,000 0.0% - 28,000 - 28,000 0.0% Complete 30 WQ1703 Misc Emerg Water Repairs - 80,000 13,193 66,807 16.5% - 80,000 13,193 66,807 16.5% In Process Project open and ongoing 31 WQ1704 S New Street Water Main Rplcmnt - 247,000 - 247,000 0.0% - 247,000 - 247,000 0.0% In Process Work began in mid December, 25% complete 32 WW1702 Misc Emerg Sanitary Sewer Repairs 75,000 300,000 73,719 226,281 24.6% 75,000 300,000 73,719 226,281 24.6% In Process Project open and ongoing 33 WW1703 Lepore Road Sanitary Sewer Upgrade 50,000 50,000 16,905 33,095 33.8% 50,000 50,000 16,905 33,095 33.8% In Process Design is underway, awaiting 75% design submittal 34 WW1704 Delaware Tech PS Replacement 52,000 52,000 - 52,000 0.0% 52,000 52,000 - 52,000 0.0% In Process Design is underway, 50% design complete 35 WW1705 Silver Lake PS Replacement 52,000 52,000 - 52,000 0.0% 52,000 52,000 - 52,000 0.0% In Process Design is underway, design to follow Del Tech 36 WW1706 Walker Woods PS Replacement 52,000 52,000 - 52,000 0.0% 52,000 52,000 - 52,000 0.0% In Process Design is underway, 50% design complete 37 II1700 R Inflow/Infiltration Removal 1,121,000 777,500 - 777,500 0.0% 1,121,000 777,500 - 777,500 0.0% In Process Other projects under review by DelDOT 38 II1701 North Street Gravity Sewer Repair - 335,500 203,130 132,370 60.5% - 335,500 203,130 132,370 60.5% In Process Awaiting final pavement patch 39 Totals - FY 2017 $ 3,018,400 $ 3,386,500 $ 427,473 $ 2,959,027 12.6% $ 3,018,400 $ 3,386,500 $ 427,473 $ 2,959,027 12.6% 40 41 Grand Totals $ 10,650,300 $ 10,436,400 $ 2,740,559 $ 7,695,841 26.3% $ 4,590,400 $ 9,143,200 $ 1,376,353 $ 7,766,847 15.1% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is budgeted to start over each fiscal year. No carry forward. SL = State Loan Project - construction phase is financed I = Impact Fee (partially) financed project T = Transfer from blanket WQ or I&I original budget 5

Dover GREEN ENERGY SUMMARY AS OF 1/27/2017 Dover Green Energy Funds Total Collected Green Energy Funds Ever $ 1,372,599.15 As January 27, 2017 Monthly Deposits and Payments DEMEC Admin Fee Paid $ 90,453.80 Starting Balance $ 74,256.80 State Annual Admin Fee Total Paid $ 26,675.07 Deposit* $ 30,537.63 Grants Paid $ 546,163.25 Outgoing Payments *Grants/Fees Reserved and Amounts Owed $ 858.75 DEMEC Admin Fee* $ 3,053.76 Dover Library Green Building Improvements Cost $ 1,500,000.00 State 2016 Admin Fee $ - Dover Library Reimbursements paid to Dover to date $ 495,908.32 New Reservations/Fees $ - Energy Depot Program Costs Paid $ 68,746.68 Energy Depot $ 1,692.13 Efficiency Program Incentives Paid $ 37,268.34 Library Reimbursement $ - Solar Electric Power Association (SEPA) Dues Paid $ 6,476.41 SEPA Dues $ - Dover GEF Account Balance minus Grants/Fees Owed $ 100,048.54 Dover GEF Account Balance $ 100,048.54 Funds Necessary for Dov. Lib. Payment due June 1 $ 98,500.00 *Deposits during this period represent through December 2016 Funds Necessary for Library June 1 Payment $ (1,548.54) *Grants are paid in a manner to ensure sufficient funds for the June 1 Lib. payment are collected When "Funds Necessary for Library June 1 Payment" line is negative then sufficient funds have been collected to satisfy the June 1 Payment. Completed projects and fees can be paid with the surplus. COMPLETED PROJECTS ONLY DNREC FEE OWED Status Applicant Type Grant Reservation Request Review Fee COMPLETED PROJECTS ONLY DNREC FEE OWED Michael J Kopp Geo-Res Paid $ 37.50 COMPLETED PROJECTS ONLY DNREC FEE OWED Frank Daniels Geo-Res Paid $ 26.25 COMPLETED PROJECTS ONLY DNREC FEE OWED Perrry T. Boulter Geo-Res Paid $ 225.00 COMPLETED PROJECTS ONLY DNREC FEE OWED Ms. Lee Herrera Res-Geo Paid $ 172.50 COMPLETED PROJECTS ONLY DNREC FEE OWED John Crowley Res-Geo Paid $ 225.00 COMPLETED PROJECTS ONLY DNREC FEE OWED Lloyd Schmid Res-Geo Paid $ 172.50 Total $ 858.75 RESERVED BUT INCOMPLETE PROJECTS Status Applicant Type Grant Reservation Request Review Fee Total $ - $ - ENERGY DEPOT FEES - (quarterly) Paid Fee Period Amount 3/3/2008 Start-up Fees $ 5,872.50 4/15/2008 Start-up Fees $ 1,957.50 4/15/2008 Mar, Apr, May 2008 $ 1,692.13 7/22/2008 June, July, Aug 2008 $ 1,692.13 10/10/2008 Sept, Oct, Nov 2008 $ 1,692.13 1/2/2009 Dec 08, Jan, Feb 2009 $ 1,692.13 4/3/2008 Mar, Apr, May 2009 $ 1,692.13 7/1/2009 June, July, Aug 2009 $ 1,692.13 9/11/2009 Sept, Oct, Nov 2009 $ 1,692.13 1/4/2010 Dec 09, Jan, Feb 2010 $ 1,692.13 3/29/2010 Mar, Apr, May 2010 $ 1,692.13

6/30/2010 June, July, Aug 2010 $ 1,692.13 10/4/2010 Sept, Oct, Nov 2010 $ 1,692.13 1/3/2011 Dec 2010, Jan, Feb 2011 $ 1,692.13 4/5/2011 Mar, Apr, May 2011 $ 1,692.13 7/8/2011 June, July, Aug 2011 $ 1,692.13 10/4/2011 Sept, Oct, Nov 2011 $ 1,692.13 1/3/2012 Dec 2011; Jan, Feb 2012 $ 1,692.13 4/5/2012 Mar, Apr, May 2012 $ 1,692.13 7/2/2012 June, July, Aug 2012 $ 1,692.13 9/25/2012 Sept, Oct, Nov 2012 $ 1,692.13 11/30/2012 Dec 12, Jan, Feb 2013 $ 1,692.13 2/25/2013 Mar, Apr, May 2013 $ 1,692.13 7/22/2013 June, July, Aug 2013 $ 1,692.13 8/26/2013 Sept, Oct, Nov 2013 $ 1,692.13 12/3/2013 Dec 13. Jan, Feb 2014 $ 1,692.13 3/4/2014 Mar, Apr, May 2014 $ 1,692.13 6/4/2014 June, July, Aug 2014 $ 1,692.13 9/4/2014 Sept, Oct, Nov 2014 $ 1,692.13 12/1/2014 Dec 14, Jan, Feb 2015 $ 1,692.13 3/9/2015 Mar, Apr, May 2014 $ 1,692.13 6/11/2015 June, July, Aug 2015 $ 1,692.13 9/1/2015 Sept, Oct, Nov 2015 $ 1,692.13 12/11/2015 Dec 15. Jan, Feb 2016 $ 1,692.13 3/1/2016 Mar, Apr, May 2016 $ 1,692.13 6/1/2016 June, July, Aug 2016 $ 1,692.13 9/1/2016 Sept, Oct, Nov 2016 $ 1,692.13 12/28/2016 Dec 15. Jan, Feb 2017 $ 1,692.13 Total $ 68,746.68 Solar Energy Professionals Association (SEPA) - (2015 and Forward participation is through AMP at no additional charge) Paid Membership Fee Amount 3/19/2012 2012 Annual Membership $ 2,158.81 1/31/2013 2013 Annual Membership $ 2,158.80 1/27/2014 2014 Annual Membership $ 2,158.80 Total $ 6,476.41

COLLECTOR-DISTRIBUTOR ROAD MODIFICATION TO THE SCARBOROUGH ROAD INTERCHANGE I. Background/History -DelDOT’s 2007 U.S. Route 13 Corridor Study -Continuing Growth & Development in the U.S. Route 13 Corridor is Straining the Existing Roadway Infrastructure -The Delaware General Assembly’s 2015 Bond Bill Directives II. DelDOT’s 2016 Feasibility Study -The CD Road Modification is Feasible -The CD Road Modification Will Relieve Congestion, Improve Circulation, and Enhance Traffic Safety -The CD Road Modification Will Foster and Accommodate Continued Economic Growth and Development III. Next Steps/Costs & Funding -Wetlands Delineation Performed -Toll Study Conducted -Public-Private Initiative (Chapter 20, Title 2 of the Delaware Code) -$31,200,000 Estimated Project Cost is Self-Funded -Tax Increment Financing (TIF) and Special Development District (SDD) Legislation IV. Project Has Broad Support/Need to Maintain Momentum -City of Dover -Kent Economic Partnership -Central Delaware Chamber of Commerce -Dover/Kent County MPO Prioritization Process -Continued Support from the Community is Critical

SPONSOR: DELAWARE HOUSE OF REPRESENTATIVES 149th GENERAL ASSEMBLY HOUSE BILL NO. ___ AN ACT TO AMEND CHAPTER 17, TITLE 22 OF THE DELAWARE CODE RELATING TO MUNICIPAL TAX INCREMENT FINANCING. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE: Section 1. AMEND Section 1702(k), Chapter 17, Title 22 of the Delaware Code by striking the figure “50,000” and substituting in lieu thereof the figure “35,000”. Section 2. This Act shall become effective upon its enactment into law. SYNOPSIS This amendment to the definition of “municipality” in the Municipal Tax Increment Financing Act would allow the City of Dover to take advantage of the economic development opportunities afforded by the Act.

SPONSOR: DELAWARE HOUSE OF REPRESENTATIVES 149th GENERAL ASSEMBLY HOUSE BILL NO. ___ AN ACT TO AMEND CHAPTER 18, TITLE 22 OF THE DELAWARE CODE RELATING TO MUNICIPAL SPECIAL DEVELOPMENT DISTRICTS. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE: Section 1. AMEND Section 1801(4), Chapter 18, Title 22 of the Delaware Code by striking the figure “50,000” and substituting in lieu thereof the figure “35,000”. Section 2. This Act shall become effective upon its enactment into law. SYNOPSIS This amendment to the definition of “municipality” in 22 Del. C. § 1801(4) would allow the City of Dover to take advantage of the economic development opportunities afforded by Municipal Special Development Districts.

ACTION FORM PROCEEDING: Legislative, Finance & Administration Committee AGENDA ITEM NO.: DEPARTMENT OF ORIGIN: Finance DATE SUBMITTED: 02/14/17 PREPARED BY: Donna Mitchell, Controller/Treasurer SUBJECT: Downtown Dover Partnership – Loan Guarantee, City of Dover APPROVALS: Council Committee of the Whole and City Council EXHIBITS: EXPENDITURE REQUIRED: N/A AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): Loan Payments to be paid from DDP’s tenant lease payments. TIMETABLE: Upon approval RECOMMENDED ACTION: Staff recommends an extension of the City guarantee of the Downtown Dover Partnership loans for a period of three years effective 3/1/17 on the loans between PNC Bank and the Partnership. BACKGROUND AND ANALYSIS The Downtown Dover Partnership has two PNC loans with a City loan guarantee. These loans are collateralized by the Partnerships property holdings and payments are covered through the rents on the properties. The City provides the guarantee as the loan to asset value is not greater than 80%. The balances and interest rate on these loans are as follows. Original Loan Loan Balance 120 & 144 So. Governors Ave. $1.3 Million $1.2 Million Loockerman St. (EZ Pass) $1.3 Million $1.2 Million As provided above, staff is recommending extending the guarantee on the PNC loans.

Presentation to the City Council February 14, 2017

Engagement Team Leadership CLIENT SERVICE SB & Company, LLC  William Seymour, Engagement Partner  Sisilia Mo, Audit Partner QUALITY KNOWLEDGE 2

Scope of Services CLIENT SERVICE  Audit of June 30, 2016, Comprehensive Annual Financial Report  Available for year-round consultation QUALITY KNOWLEDGE 3

Summary of the Results CLIENT SERVICE • Issued an unmodified opinion on the financial statements • We did not discover any instances of fraud • Discovered no material weakness in internal controls • Received full cooperation from management QUALITY KNOWLEDGE 4

FORCAM Audit Approach CLIENT SERVICE “Focus on Risk, Controls and Misstatement” QUALITY KNOWLEDGE 5

Significant Risk Areas CLIENT SERVICE Significant Risk Areas  Cash reconciliations  Investment valuation  Collectability of receivables QUALITY  Accounts payable  Pension Liabilities  OPEB Liabilities  Revenue recognition KNOWLEDGE  Expenditures control 6

Assessment of Control Environment CLIENT SERVICE Area Points to Consider Our Assessment  Key executive integrity, ethical, and behavior  Control consciousness and operating style  Commitment to competence Control Environment  Board’s participation in governance and oversight  Organizational structure, responsibility, and authority  HR policies and procedures  Mechanisms to anticipate, identify, and react to significant events Risk Assessment  Processes and procedures to identify changes in GAAP, business practices, and QUALITY internal control  Existence of necessary policies and procedures  Clear financial objectives with active monitoring  Logical segregation of duties Control Activities  Adequate safeguards of documents, records, and assets  Assess controls in place Not effective KNOWLEDGE Suggested improvements Effective 7

Assessment of Control Environment CLIENT SERVICE (continued) Area Points to Consider Our Assessment  Adequate performance reports produced from information systems  Information systems are connected with business strategy  Commitment of HR and finance to develop, test, and monitor IT systems and Information and programs Communication  Business continuity and disaster plan for IT  Established communication channels for employees to fulfill responsibilities  Adequate communication across organization QUALITY  Periodic evaluations of internal controls Monitoring  Implementation of improvement recommendations Not effective Suggested improvements Effective KNOWLEDGE 8

Evaluation of Key Processes CLIENT SERVICE Process Function Our Assessment  Cash Management  Investment Accounting  Investment Monitoring Treasury  Investment Valuation  Investment Policy  Reconciliation  Methodology Estimation  Information QUALITY  Calculation  Accounting Principles and Disclosure  Closing the Books Financial Reporting  Report Preparation  General Ledger and Journal Entry Processing  Verification and Review of Results  Purchasing Expenditures  Receiving  Accounts Payable and Cash Disbursement KNOWLEDGE Not effective Suggested improvements Effective 9

Evaluation of Key Processes (continued) CLIENT SERVICE Process Function Our Assessment  Hiring  Attendance Reporting Payroll  Payroll Accounting and Processing  Payroll Disbursements  Separation QUALITY  Billing  Cash Receipts Revenue  Revenue Recognition  Cutoff  Physical Custody Fixed Assets  Asset and Construction in Process Accounting  Depreciation Not effective KNOWLEDGE Suggested improvements Effective 10

Evaluation of Key Processes (continued) CLIENT SERVICE Process Function Our Assessment  Assess Internal and External Risk  Regulatory Compliance Compliance  Monitor Compliance  Grant Compliance QUALITY  Computer Operations Information  Segregation of Duties and Management Oversight Technology  Information Security and Transaction Authorization  Program Integrity and Change Management Not effective KNOWLEDGE Suggested improvements Effective 11

Observations CLIENT SERVICE  Consideration of hiring of internal auditor to perform periodical performance and compliance audits  Finalization of contracts prior to execution of actions QUALITY KNOWLEDGE 12

Accounting Update CLIENT SERVICE  GASB 72, Fair Value Measurement and Application  Adopted in current year  Additional disclosure on investments valuation methodology  GASB 77, Tax Abatement Disclosure  Effective FY 2017 QUALITY  New disclosure about tax abatement agreements  GASG 74 and 75, Other Postemployment Benefits  GASB 74 effective FY 2017 and GASB 75 effective FY18  Reporting net OPEB liabilities on government-wide financial statements  Additional footnote and required supplemental information similar to pension accounting KNOWLEDGE  Additional disclosure on effect on net OPEB liability would include both a discount rate +/- 1 percent and a healthcare cost trend rate +/- 1 percent 13

REQUIRED COMMUNICATIONS KNOWLEDGE QUALITY CLIENT SERVICE

Required Communications CLIENT SERVICE 1. Auditor’s Responsibilities Under Generally Accepted Auditing Standards (GAAS) The financial statements are the responsibility of management. Our audit was designed in accordance with auditing standards generally accepted in the United States of America, and provide for reasonable, rather than absolute, assurance that the financial statements are free of material misstatement. 2. Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of QUALITY accounting policies and their application. The significant accounting policies used by management are described in the notes to the financial statements. 3. Auditor’s Judgments About the Quality of Accounting Policies We discuss our judgments about the quality, not just the acceptability, of accounting policies selected by management, the consistency of their application, and the clarity and completeness of the financial statements, which include related disclosures. We have reviewed the significant accounting policies adopted by the City of Dover, Delaware (the City) and KNOWLEDGE have determined that these policies are acceptable accounting policies. 15

Required Communications (continued) CLIENT SERVICE 4. Audit Adjustments We are required to inform the City’s oversight body about adjustments arising from the audit (whether recorded or not) that could in our judgment either individually or in the aggregate have a significant effect on the entity’s financial reporting process. We also are required to inform the City’s oversight body about unadjusted audit differences that were determined by management to be individually and in the aggregate, immaterial. There were no passed adjustments identified during the audit process. QUALITY 5. Fraud and Illegal Acts We are required to report to the City’s oversight body any fraud and illegal acts involving senior management and fraud and illegal acts (whether caused by senior management or other employees) that cause a material misstatement of the financial statements. Our procedures identified no instances of fraud or illegal acts. 6. Material Weaknesses in Internal Control We are required to communicate all significant deficiencies in the City’s systems of internal controls, KNOWLEDGE whether or not they are also material weaknesses. There were no material weaknesses noted during the audit. 16

Required Communications (continued) CLIENT SERVICE 7. Other Information in Documents Containing Audited Financial Statements None. 8. Disagreements with Management on Financial Accounting and Reporting Matters None. 9. Serious Difficulties Encountered in Performing the Audit None. 10. Major Issues Discussed with Management Prior to Acceptance QUALITY None. 11. Management Representations We received certain written representations from management as part of the completion of the audit. 12. Consultation with Other Accountants To our knowledge, there were no consultations with other accountants since our appointment as the City’s independent public accountants. 13. Independence KNOWLEDGE As part of our client acceptance process, we go through a process to ensure we are independent of the City. We are independent of the City. 14. Non-attest Service We did not perform any non-attest service for the City. 17

Required Communications (continued) CLIENT SERVICE 15. Our Responsibility Related to Fraud  Plan and perform the audit to obtain reasonable assurance that there is no material misstatement caused by error or fraud;  Comply with AU-C Section 240: Consideration of Fraud in a Financial Statement Audit  Approach all audits with an understanding that fraud could occur in any entity, at any time, by anyone; and  Perform mandatory procedures required by GAAS and our firm policies. QUALITY Examples of Procedures Performed  Discuss thoughts and ideas on where the financial statements might be susceptible to material misstatement due to fraud;  Understand pressures on the financial statement results;  Understand the tone and culture of the organization;  Look for unusual or unexpected transactions, relationships, or procedures;  Discussions with individuals outside of finance;  Evaluate key processes and controls; and KNOWLEDGE  Consider information gathered throughout the audit. 18

Responsibility for Mitigating Fraud CLIENT SERVICE Management:  CFO/Controller: controls to deter and detect fraud Financial  General Misconduct by Fraudulent Counsel/Compliance: Member(s) of Financial Sr. Management Reporting monitoring of the Board External Auditor Costs & Misappropriation of  Evaluate management programs and Expenses Assets Avoided by QUALITY controls to deter and detect fraud for Fraud Audit Committee: identified risks Revenue & Expenditures &  Evaluate management  Reasonable assurance that financial Assets Obtained Liabilities identification of fraud risk statements are free of material by Fraud for an Improper misstatement due to fraudulent financial Purpose  Evaluate implementation reporting or misappropriation of assets of fraud controls  Compliance with fraud standard (SAS 99)  Reinforce “tone at the top”  Conversations with finance and operations personnel  Conduct special investigations  Disaggregated analytics  Surprise audit procedures KNOWLEDGE  Journal entry testing 19

SBC’s Service Pledge to You CLIENT SERVICE We will consistently deliver a Quality Product and Quality Service so that we have the opportunity to establish a Quality Relationship with you, allowing us to provide you with Quality Knowledge for your continual success. Only after we have provided you with the knowledge that enables your business to grow and prosper, we have hit the bullseye! Our commitment to you is the execution of our QUALITY Bullseye Philosophy. We execute this philosophy for every client, on every engagement, every time. KNOWLEDGE 20

Engagement Team Contact Information CLIENT SERVICE William Seymour, CPA – Engagement Partner  Over 18 years of experience  Former member of Arthur Andersen, LLP Experience serving many government entities  Reviewer for GFOA Certificate of Achievement for Excellence in Financial Reporting Program  Member of AICPA Government Quality Center Office: 410-584-1404 Cell: 443-220-4401 Fax: 410-584-0061 Email: wseymour@sbandcompany.com Executive Assistant: April Campagna QUALITY Office: 410-584-9303 Email: acampagna@sbandcompany.com Sisilia Mo, CPA – Audit Partner  Extensive experience performing financial statement audits for various entities, especially for government entities  Develops training programs and performs trainings on audit performance skills and industry-specific issues  Reviewer for GFOA Certificate of Achievement for Excellence in Financial Reporting Program Office: 410-584-2202 Cell: 443-739-0808 Fax: 410-584-0061 Email: smo@sbandcompany.com KNOWLEDGE Executive Assistant: April Campagna Office: 410-584-9303 Email: acampagna@sbandcompany.com 21

Baltimore Office: Washington, D.C. Office: 200 International Circle 1299 Pennsylvania Avenue, NW Suite 5500 Suite 1120 Hunt Valley, Maryland 21030 Washington, D.C. 20004 410.584.0060 202.803.2335 KNOWLEDGE QUALITY CLIENT SERVICE

CITY OF DOVER Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2016

2 FY 2016 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 $ 8,949,366 $ 7,500,153 $ 16,449,519 Net Position Beginning 24,094,252 167,049,585 191,143,837 Net Position Ending $ 33,043,618 $ 174,549,738 $ 207,593,356 The most significant activities that affected the positive changes in Net Position were: • The transfer of Net Pension Liability of $5.4 million for indirect interdepartmental allocation of expense from the Governmental activities to the Business-type activities • Electric Revenue Fund experienced a decrease of $7,353,700 due to declining supply prices as compared to the prior year

3 Capital Assets Capital Asset Summary information Water/Wastewater General Fund Fund Electric Fund Total Asset Beginning Balance $ 97,006,951 $ 86,892,622 $ 189,703,140 $ 373,602,713 New Assets 5,702,654 4,982,587 4,987,819 15,673,060 Disposed Assets (602,824) (774,516) (2,646,854) (4,024,194) Asset Ending Balance 102,106,781 91,100,693 192,044,105 385,251,579 Net Accumulated Depreciation (40,998,742) (33,496,540) (108,366,795) (182,862,077) Net Capital Assets $ 61,108,039 $ 57,604,153 $ 83,677,310 $ 202,389,502 Current Year Depreciation $ 3,284,341 $ 1,998,040 $ 5,713,104 $ 10,995,485 Major Assets added this fiscal year: • General Fund • Garrison Oak Tech Park street and storm sewer infrastructure $4.6 million • Other street paving and curb work $1.8 million • Vehicles and equipment totaling $1.0 million • Additions to CIP of $3.1 million • Water/Wastewater Fund • Garrison Oak Tech Park water and sewer infrastructure $8.6 million • Two pump station replacements $0.8 million • Vehicles and equipment totaling $0.5 million • Electric Fund • General Scott Switchgear $0.8 million • Units 1, 2 & 3 upgrades and modifications at McKee Run $1.9 million • Additions to CIP of $2.5 million • Vehicles and equipment totaling $0.5 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 $ 48,232,958 $ 16,263,624 $ 27,401,361 $ 91,897,943 No new New Debt 2,327,952 2,387,563 3,559,978 8,275,493 Reduction of Debt (8,408,960) (911,426) (2,724,621) (12,045,007) bonds LT Debt Ending Balance $ 42,151,950 $ 17,739,761 $ 28,236,718 $ 88,128,429 were • General Fund change in long-term debt is due to: issued • $1.3 million increase offset by $1.4 million decrease in compensated absences in FY • $1.0 million increase in OPEB Obligation 2016 • $6.5 million decrease in Net Pension Liability • Final payment was made on the 2014 G.O. refunding bonds (refunded 2003 G.O. Bonds) • Water/Wastewater Fund change in long-term debt is due to: • Increases to compensated absences and OPEB Obligation of $121,166 & $83,077 respectively • $2.2 million increase for Net Pension Liability • Normal decrease for principal payments • Electric Fund change in long-term debt is due to: • $3.3 million increase for Net Pension Liability • $297,795 increase in compensated absences • Normal decrease for principal payments • Final payment was made on the 2010 refunding bonds (refunded 2004 revenue bonds)

5 Governmental Statement of Revenues, Expenses and Transfers Total net change across all funds: Water/Wastewater General Fund Fund Electric Fund Total Revenues $ 24,022,570 $ 15,229,776 $ 81,545,330 $ 120,797,676 Expenses (38,405,636) (11,925,299) (61,054,151) (111,385,086) Transfers- Operating 14,339,821 (850,000) (10,000,000) 3,489,821 Transfers - Pension - (2,183,320) (3,262,183) (5,445,503) Net changes $ (43,245) $ 271,157 $ 7,228,996 $ 7,456,908 General Fund Revenues $1,567,700 General Fund Expenses $280,901 $594,300 $122,813 $2,114,199 $659,418 $67,078 $352,599 $804,246 $3,525,992 $465,843 $1,430,640 $2,527,478 $919,086 $14,339,821 $1,874,534 $166,579 $6,081,813 $783,976 $20,798,762 $232,067 $12,893,566 $1,602,389 $1,239,300 $650,538 Fines Library Revenue - General General Government Library services Library Revenue County Reimb. Licenses and Permits Public Safety Public Works Recreation Services Street/Sanitation Services Sanitation Fees and Rebates Miscellaneous Services Engineering Services Financial Administration Property Taxes Grants Received Garage and Stores Insurance Court of Chancery Fees Investment Income Retiree Health Care Employee Pension Approp Transfers Street Lights Debt Service:

6 Business-type Statement of Revenues, Expenses and Transfers

7 Original vs. Final Budgets – Major Operating Funds General Fund All Funds Original Budget Final Budget • Beginning Fund Balance adjusted to audited balance Revenues $ 41,327,100 $ 41,936,100 • Revenues adjusted to actual/trending amounts Expenditures/Expenses (41,201,300) (42,262,600) • Expenses adjusted for unanticipated expenses/project carryforwards Net Change $ 125,800 $ (326,500) General Fund Beginning Fund Balance 3,977,500 4,820,400 • Interest earned adjusted up from $35K to $140K (actual $172K) Ending Fund Balance $ 4,103,300 $ 4,493,900 • Transfer taxes adjusted up from $1.3M to $2.1M (actual $2.2M) • Library – County adjusted down from $450K to $313K (actual $353K) • Electric Inter-fund Service adj. down from $3.7M to $3.6M (actual $3.6M) Water Fund Original Budget Final Budget • Added transfer to Capital Asset Reserve $229,600 Revenues $ 6,824,900 $ 5,995,000 • Police Pension Appropriation adjusted up from $570K to $676.5K Expenses (6,637,900) (6,501,400) • Added $594,300 General Pension Appropriation Net Change $ 187,000 $ (506,400) • Added $240,000 for New Street Property Acquisitions Beginning Fund Balance 861,600 1,072,900 Water & Wastewater Fund Ending Fund Balance $ 1,048,600 $ 566,500 • Water fees adjusted down from $6.2M to $5.4M (actual $5.5M) • Wastewater fees adjusted down from $969K to $841K (actual $774K) • Wastewater Treatment expense adjusted down approx. $30K Wastewater Fund • Groundwater Adjustment exp. adjusted down $101K Original Budget Final Budget Revenues $ 8,902,800 $ 9,042,500 • WTP expenses adjusted down from $1.9M to $1.7M (actual was $1.6M) Expenses (8,613,100) (8,586,200) • Retiree H/C adjusted down from $179K to $60K Net Change $ 289,700 $ 456,300 • Inter-fund Service Fees adjusted down by $72,500 Beginning Fund Balance 293,400 206,900 • Bank fees and credit card expense adjusted down by $21,200 Ending Fund Balance $ 583,100 $ 663,200 • Added Appropriation to Pension Fund $248,400 Electric Fund • Transfer from Rate Stabilization Fund decreased from $3.0M to $750K Electric Fund • Direct Base Sales adjusted up from $78.3M to $78.5M (actual $77.9M) Original Budget Final Budget • Miscellaneous Services adjusted up from $597K to $911K (actual $842K) Revenues 83,536,000 81,830,400 • OPEB Trust Contribution of $1,030,000 removed from budget Expenses (80,568,700) (76,865,700) • Retirees H/C adjusted down from $538K to $58K Net Change $ 2,967,300 $ 4,964,700 • T&D expense adjusted down from $4.1M to $3.4M (actual $3.3M) Beginning Fund Balance 6,177,600 8,337,500 • Added transfer to Rate Stabilization Fund $394,800 Ending Fund Balance $ 9,144,900 $ 13,302,200

8 General Fund Budget General Fund Final General Fund Budget Actual Revenues $ 41,936,100 $ 42,674,501 Expenditures/Expenses (42,262,600) (42,070,164) Net Change $ (326,500) $ 604,337 Beginning Fund Balance 4,820,400 4,820,414 Ending Fund Balance $ 4,493,900 $ 5,424,751 General • The General Fund is the primary operating fund and the Fund fund largest source of day-to-day service delivery. balance • The budget balance in the fund is $5,424,751, and is 12.7% increased by of 2016 general fund revenues. $604,337 to • The overage will be allocated to unfunded retirement an ending liabilities or as otherwise designated. balance of Significant favorable variances are as follows: $5,424,751 • $320,549 Permits & Other License fees • $148,900 Court of Chancery fees • $98,429 Police extra duty fees Significant unfavorable variances are as follows: • $300,000 Transfer to Uncollectible reserve • $78,020 Police Department expense • Medical supplies, uniforms, Insurance, Training, Contractual Services & Auto repairs

9 Governmental Capital Projects Fund Governmental Capital Projects Fleet Maintenance $84,234 $84,500 Fund City Manager $- $24,700 Ending fund balance Sanitation $402,484 $449,000 was favorable by $1,088,116. Of this Streets $2,918,713 $3,735,000 amount, $882,000 will be carried forward to the Recreation $70,514 $73,900 next year. Projects that will be Police $268,501 $302,700 carried forward include: $56,411 • Grounds - 2 Dump Life Safety $55,700 trucks $68,352 • Streets – truck w/ Grounds Maintenance $185,200 dump $445,594 Fire • Salt Storage barn $445,800 • Street Program $- $500,000 • Persimmon Park $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 Place drainage • City Manager vehicle Governmental Capital Projects Fund Actual Governmental Capital Projects Fund Budget

10 Proprietary Funds – Water/Wastewater Budget Water Fund Water Fund Wastewater Fund Wastewater Fund Final Budget Actual Final Budget Actual Revenues $ 5,995,000 $ 6,070,159 $ 9,042,500 $ 8,804,718 Expenses (6,501,400) (6,261,777) (8,586,200) (8,292,480) Net Change $ (506,400) $ (191,618) $ 456,300 $ 512,238 Water Fund Beginning Fund Balance 1,072,900 1,072,915 206,900 206,896 balance Ending Fund Balance $ 566,500 $ 881,297 $ 663,200 $ 719,134 decreased by $191,618 Fund balance for the Water Utility at the end of the year is $881,297 which is a favorable variance of $314,797: • Water fees came in over budget by $90,461 • Miscellaneous service fees came in under budget by approx. $6,700 • Water impact fees came in under budget by $15,370 Offset by: • Water department expenses came in under budget by $32,024 Wastewater • Water Treatment Plant expenses came in under budget by $95,847 Fund balance Fund balance for the Wastewater Utility at the end of the year is $719,132, which increased by is a favorable variance of $55,932 $512,238 • Wastewater fees came in under budget by $78,303 • Water Treatment Fees came in under budget by $60,769 Offset by: • Transfer to impact fee reserve of $54,389

11 Proprietary Funds – Water/Wastewater I & E Fund Water/Wastewater Capital Outlay • Both the Water and Wastewater fund balances have $6,000,000 reduced from the prior year from $9,542,032 in $5,396,100 $5,299,100 2015 to $6,714,183 in 2016 since Garrison Oak $5,000,000 Tech Park a Multi-year project is now completed • Some projects in this fund have been modified from $4,000,000 previous plans which resulted in a transfer of $3,045,887 $3,000,000 $1,271,343 back to the impact fee reserve since the money was no longer needed $1,810,487 $2,000,000 • Some projects in this fund were not completed and $330,900 $1,271,343 the balances are being carried forward to FY 2017 $1,000,000 in the amount of $4,222,800, some of the larger $246,052 $- projects are as follows: $- Water Wastewater Water Treatment Transfer back to • $2,468,200 1.0 MG Storage Tank – Denny’s Road Plant Imp Fee • $593,000 Westover Pump-station upgrade Reserve • $618,900 Hazlettville Road interceptor Budget Actual • $447,500 Retreat Pump-station upgrade • There continues to be large budget balances due to delay of projects and various other issues like: • Land acquisition • Bid prices over budget – going out to re-bid • 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 $ 81,830,400 $ 81,176,596 Expenses (76,865,700) (69,617,696) Net Change $ 4,964,700 $ 11,558,900 Beginning Fund Balance 8,337,500 8,337,466 Ending Fund Balance $ 13,302,200 $ 19,896,366 The Electric Fund balance for the Electric Utility at the end of the year is Fund fund $19,986,366 which is a favorable variance of $6,594,166 primarily due to the following favorable variances: balance has • Power Supply and Generation $6,765,549 a favorable • Administration $122,903, attributed mainly to lower costs for legal variance of expense and contractual services $6,594,166 • Transmission and Distribution $157,615, resulting from lower labor costs, contractual services and materials & supplies • Other Employment Expenses $353,400 Offset by unfavorable variances as follows: • Direct Base Sales $648,863 • Interfund service fees $54,269

13 Proprietary Funds – Electric I & E Fund • Electric I & E Fund balance has increased by $2,219,081. New Electric Capital Outlay Development budgeted expense of $4,000,000 $2,500,000 had actual expense of $3,500,000 $3,524,900 $3,288,000 $608,609. This expense is dependent $3,000,000 $2,299,800 $2,500,000 on developers. New Development $2,000,000 $1,740,853 revenue billed and collected $1,500,000 $964,880 $1,109,450 $1,000,000 amounted to $327,453 $500,000 $- $23,000 • Some of the projects in this fund have $- not been completed and the balances are being carried forward to FY 2017 in the amount of $1,561,200, some of the larger projects are as follows: • $270,900 VanSant Capacity Increase Budget Actual • $340,000 Unit 3 Stack Repair • $150,000 Metering Infrastructure • $250,600 69 KV Rebuild – Horsepond Rd • $135,000 69 KV North St Cable Replacement

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 $ 717,335 $ 5,527,371 Expenses (708,543) (1,707,269) increased by Transfers out - (3,489,821) $8,792 Net Change $ 8,792 $ 330,281 Beginning Fund Balance 1,248,164 429,028 Ending Fund Balance $ 1,256,956 $ 759,309 Workers Compensation • Claims payable increased by $261,532 from prior year • Claims paid decreased by $62,988 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 increased $1,552,377 from prior year in all of the Grant funds increased by except the following: $330,281 • CDBG Grant Fund • Substance Abuse Fund • ERLSP Fund

MANAGEMENT SUMMARY City of Dover, Delaware January 24, 2017 Retiree Health Benefits

Certification This report was prepared for the City of Dover to summarize the results of the GASB 45 accounting reports as of June 30, 2016, and may not be appropriate for other uses. Please contact Nyhart prior to disclosing this report to any other party or relying on its content for any purpose other than the intended use. Accounting results are based on the same data, assumptions, methods and plan provisions as described in the 6/30/2015 GASB 45 report prepared by the City’s prior actuary except as noted in the Nyhart 6/30/2016 GASB 45 report and further described in this report. The discount rate and other economic assumptions have been selected by the Plan Sponsor. To our knowledge, there have been no significant events prior to the current year’s measurement date or as of the date of this report that could materially affect the results contained herein. This report has been prepared in accordance with generally accepted actuarial principles and practice. Neither Nyhart nor any of its employees has any relationship with the plan or its sponsor that could impair or appear to impair the objectivity of this report. The undersigned are compliant with the continuing education requirements of the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States. Randy Gomez, FSA, FCA, MAAA Evi Laksana, ASA, MAAA 2

1 New actuary A lot of changes 2 Interim valuation changes and results 3 Fresh look at where things are and where they are going 3

Transition to Nyhart Key Figures Prior Actuary Nyhart Measurements as of 7/1/2014 6/30/2015 Full 6/30/2016 Limited Difference Valuation Update Actuarial Accrued Liability $51,224,524 $66,600,509 $15,373,985 Actuarial Value of Assets ($18,752,196) ($22,448,290) $3,696,094 Funded Ratio 36.6% 33.7% (2.9%) Actuarially Required Contribution $3,809,600 $5,125,687 $1,316,087 • For the transition from the prior actuary, Nyhart reviewed data, plan provisions, & assumptions summarized by the prior actuary in the 7/1/2014 valuation report. • Significant change made by Nyhart was to include the value of implicit subsidy for pre- Medicare benefits required by actuarial standards of practice. • Healthcare trend rates were modified to reflect actual plan experience from 7/1/2014 to 7/1/2015. 4

Liability Increase Key Sources Factors Actuarial Accrued Description Liability Impact Based on actual premium rate Impact of Premium Rate Experience +$4,083,000 increases from 2014/15 to 2016/17 Required by Actuarial Standards of Impact of Implicit Subsidy +$8,823,000 Practice (ASOP) #6 Net Impact +$12,906,000 ACTUARY’S The City is a participating entity in the State of Delaware community-rated health plans. Active and pre-Medicare retiree experience is blended together for these COMMENT plans and premium rates do not vary by age. This triggers the application of ASOP #6 in the valuation. Premium rates on average increased close to 25% since the prior valuation. The rate of increase was greater than expected based on the trend assumption from the prior actuary’s report. 5

Subsidy Illustration Implicit Subsidy GASB Subsidy Breakdown Per Capita Premium Implicit PPO Cost Rate Subsidy $1,200 (A) (B) (C) = (A) – (B) 289.20 Retiree $800 Only $1,083.33 $794.13 $289.20 Coverage 794.13 $400 $0 Retiree Full Premium Implicit subsidy • Example of a retiree, age 60, on the Comprehensive PPO plan. • Per Capita Costs represent estimated cost of coverage for a retiree age 60. Implicit Subsidy is the additional employer liability when the inherently higher health care cost for retired employees is not directly reflected in the determination of the premium rates. • Actuarial Standards of Practice (ASOP) 6 state an implicit subsidy exists for health plans that comingle claims experience of active employees and retirees in setting of a blended premium rate for all plan participants. 6

OPEB Trust Assets Trust Summary Market Value 6/30/2015 6/30/2016 Summary Asset Breakdown Net OPEB Assets $22,448,290 $24,043,162 June 30, 2016 5% % Mutual Funds 97.6% 95.5% % Cash/Equivalents 2.4% 4.5% 95% Asset Rate of 2.5% 2.1% Return Mutual Funds Cash/Cash Equivalents ACTUARY’S Trust asset return for FY 2016 was 2.1% versus expected 6.5% (net of trust expenses). Consistent underperformance of trust investments over an extended COMMENT ACTUARY’S period of time Under GASB 67 can and cause 68, theunder funding Net Pension of future Liability retiree is equal to thehealth benefits. unfunded liabilityNyhart at the measurement an recommends date. In determining experience studythe unfunded using forward liability, lookingthe market value of simulations beassets is COMMENT used. completed prior to GASB 74/75 implementation. 7

GASB 45 Accounting Results by Group Group General Water Electric Actuarial Accrued Liability $50,159,093 $3,990,734 $12,450,682 Actuarial Value of Assets ($11,635,925) ($1,830,545) ($8,981,820) Unfunded Actuarial Accrued Liability $38,523,168 $2,160,189 $3,468,862 Annual Required Contribution $4,476,281 $248,111 $401,2955 Employer Contribution for Pre-Funding $3,295,855 $300,009 $1,709,143 Benefit Payments ($1,419,406) ($165,748) ($539,435) Unfunded Liability as of Annual Required Contribution 6/30/2016 and Funding as of 6/30/2016 $50 $5.0 $4.48 ACTUARY’S Millions Millions $38.52 $40 $4.0 $3.29 $30COMMENT $3.0 $20 $2.0 *TPL refers to Total Pension Liability ACTUARY’S $10 $2.16 $3.47 $1.0 $0.25 $0.16 $0.40 $0.12 $0 ** The $530,00 charge includes charges due$0.0 to differences between expected and actual COMMENT General experience Electric in measurement Water of the TPL, changes of assumptions, General and differences projected and actual earnings on pension plan investments Electricbetween Water ARC Pre-Funding 8

1 Full Actuarial Update for FY 2016/17 Looking ahead 2 Review of Assumptions and GASB 74/75 Implementation 3 Long-term Projections and Planning 9

MANAGEMENT SUMMARY City of Dover, Delaware General Employee and January 24, 2017 Police Pension Plans

Certification This report was prepared for the City of Dover to summarize the results of the 7/1/2016 funding valuations and the GASB 67 & 68 accounting reports as of June 30, 2016, and may not be appropriate for other uses. Please contact Nyhart prior to disclosing this report to any other party or relying on its content for any purpose other than the intended use. Except where indicated otherwise, the funding results included in this report are based on the same data, assumptions, methods, and plan provisions as the 7/1/2016 funding valuations. As a result, these sections of the 2016 funding reports dated 12/30/2016 should be considered part of this report. Accounting results are based on the same data, assumptions, methods and plan provisions as described in the 6/30/2016 GASB 67 & 68 reports. As a result, these sections of the GASB 67 & 68 report dated 10/4/2016 and 9/23/2016 should be considered part of this report. This report has been prepared in accordance with generally accepted actuarial principles and practice. The undersigned are compliant with the continuing education requirements of the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States. Carter M. Angell, FSA, EA, MAAA Elizabeth A. Wiley, ASA 2

1 New actuary A lot of changes 2 Audit of previous results for funding and accounting 3 Fresh look at where things are and where they are going 3

Transition to Nyhart General Employees Measurements as of 7/1/2014 Prior Actuary Nyhart $ Difference % Difference Actuarial Accrued Liability $58,278,646 $57,854,095 ($424,551) (0.7%) Employer Normal Cost $253,709 $237,390 ($16,319) (6.4%) Employee Normal Cost $199,958 $203,725 $3,767 1.9% PYE 2016 Contribution $2,983,776 $2,914,643 ($69,133) (2.3%) • Nyhart was able to match key measurements within a reasonable range, and did not identify any pension plan provisions which were not captured or were valued inappropriately. • For the conversion, Nyhart reviewed data, plan provisions, & assumptions summarized by the prior actuary in the 7/1/2014 valuation report. 4

Valuation Results General Employees Recommended Contribution 4,000 Thousands 3,000 $188 $172 2,000 $2,542 $2,420 1,000 0 $254 $232 7/1/2014 7/1/2016 ER Normal Cost Amortization Interest Valuation Date 7/1/2014 7/1/2016 Accrued Liability $58,278,646 $58,851,782 Actuarial Value of 32,825,853 36,791,391 Assets Unfunded Liability 25,452,793 22,060,391 Funded Percentage 56.3% 62.5% Recommended $2,983,776 $2,824,098 Contribution 5

GASB 67, 68 Accounting Results – General Employees Measurement Date 6/30/2015 6/30/2016 Total pension liability (TPL) 58,673,000 58,807,821 Plan fiduciary net position (35,290,922) (35,698,537) Net pension liability 23,382,078 23,109,284 Ratio of plan fiduciary net position to TPL 60.15% 60.70% • The net pension liability decreased from 2015 to 2016. • $1,435,000 expected decrease • $267,000 decrease due to demographic gains • $1,429,000 increase due to asset underperformance (i.e. return of 2.4% vs. expectation of 6.50%) ACTUARY’S Under GASB 67 and 68, the Net Pension Liability is equal to the unfunded liability at the measurement date. In determining the unfunded liability, the market value of assets is COMMENT used. 6

GASB 67, 68 Accounting Results – General Employees Measurement Date 6/30/2015 6/30/2016 Service Cost $458,969 $401,218 Interest on TPL 3,861,154 3,718,982 Projected earnings on investments (2,406,707) (2,279,528) Employee contributions (209,446) (202,340) Administrative expense 18,792 16,040 Recognition of deferred outflows/(inflows)* $716,377 935,467 Pension Expense $2,439,139 $2,589,839 The expense was $219,000 higher than anticipated. The increase was largely due to the $1.4 million loss on asset performance, which ACTUARY’S caused a $286,000 increase in expense (as the loss is amortized over 5 COMMENT years). This loss was offset by demographic gains which lowered expense by $67,000. *TPL refers to Total Pension Liability ACTUARY’S ** The $530,00 charge includes charges due to differences between expected and actual COMMENT * The experience recognition of deferred projected in measurement outflows/(inflows) and actual of charges includes earnings changes the TPL, due on pension of assumptions, to differences plan investments differences and expected between experience in measurement of the TPL, changes of assumptions, and differences between projected and actual between and actual earnings on pension plan investments 7

Transition to Nyhart Police Measurements as of 7/1/2014 Prior Actuary Nyhart $ Difference % Difference Actuarial Accrued Liability $20,736,450 $20,747,874 $11,424 0.1% PYE 2016 Contribution $1,176,422 $1,178,011 $1,589 0.1% • Nyhart was able to match key measurements within a reasonable range, and did not identify any pension plan provisions which were not captured or were valued inappropriately. • For the conversion, Nyhart reviewed the data, plan provisions, & assumptions summarized by the prior actuary in the 7/1/2014 valuation report. 8

Valuation Results Police Recommended Contribution 1,500 Thousands $72 $72 1,000 500 $1,105 $1,105 0 7/1/2014 7/1/2016 Amortization Interest Valuation Date 7/1/2014 7/1/2016 Accrued Liability $20,736,450 $19,387,871 Actuarial Value of 12,279,347 12,224,685 Assets Unfunded Liability 8,457,103 7,163,186 Funded Percentage 59.2% 63.1% Recommended $1,176,422 $1,176,462 Contribution 9

GASB 67, 68 Accounting Results – Police Measurement Date 6/30/2015 6/30/2016 Total pension liability (TPL) 20,471,000 19,387,871 Plan fiduciary net position (12,384,845) (12,224,685) Net pension liability 8,086,155 7,163,186 Ratio of plan fiduciary net position to TPL 60.50% 63.05% • The net pension liability decreased from 2015 to 2016. • $598,000 expected decrease • $836,000 decrease due to demographic gains • $511,000 increase due to asset underperformance (i.e. return of 2.3% vs. expectation of 6.50%) ACTUARY’S Under GASB 67 and 68, the Net Pension Liability is equal to the unfunded liability at the measurement date. In determining the unfunded liability, the market value of assets is COMMENT used. 10

GASB 67, 68 Accounting Results – Police Measurement Date 6/30/2015 6/30/2016 Service Cost $0 $0 Interest on TPL 1,311,335 1,280,958 Projected earnings on investments (853,442) (790,732) Employee contributions 0 0 Administrative expense 5,794 4,831 Recognition of deferred outflows/(inflows)* $1,332,366 (619,831) Pension Expense/(Income) $1,796,053 ($124,774) The expense was $734,000 lower than anticipated. The decrease was largely due to the $836,000 demographic gains which were ACTUARY’S immediately recognized. The gain was offset by a $511,000 asset loss COMMENT which will be recognized over 5 years. The asset loss increased expense by $102,000. *TPL refers to Total Pension Liability ACTUARY’S ** The $530,00 charge includes charges due to differences between expected and actual COMMENT * The experience recognition of deferred projected in measurement outflows/(inflows) and actual of charges includes earnings changes the TPL, due on pension of assumptions, to differences plan investments differences and expected between experience in measurement of the TPL, changes of assumptions, and differences between projected and actual between and actual earnings on pension plan investments 11

1 Mortality Update Looking ahead 2 Review of Assumptions 3 Long-term Projections and Planning 12