CCW PACKET - Revised 04-24-2017

COUNCIL COMMITTEE OF THE WHOLE AGENDA APRIL 25, 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. SAFETY ADVISORY AND TRANSPORTATION COMMITTEE AGENDA ADDITIONS/DELETIONS 1. PRESENTATION - LIGHTS ON, CRIME OUT - RESTORING CENTRAL DOVER (CHANDA JACKSON, NCALL COMMUNITY ENGAGEMENT SPECIALIST) 2. PROPOSED ORDINANCE #2017-06 - AMENDING CHAPTER 70 - OFFENSES AND MISCELLANEOUS PROVISIONS, SECTION 70-2 - WEAPONS GENERALLY (SPONSORS: COLE AND HUTCHISON) 3. ADJOURNMENT OF SAFETY ADVISORY AND TRANSPORTATION COMMITTEE MEETING UTILITY COMMITTEE AGENDA ADDITIONS/DELETIONS 1. PRESENTATIONS A. LOW INCOME RESIDENTIAL UTILITY PROGRAMS UNDER CONSIDERATION OR APPROVED BY THE DELAWARE ENERGY EFFICIENCY ADVISORY COUNCIL (EEAC) (CHARLES T. KISTLER) B. PRESENTATION - MUNICIPAL WIFI (ROB NICHOLSON, DELMARVA VOIP) 2. ANNUAL ENGINEERING CONSULTANT'S REPORT ON THE OPERATION AND MAINTENANCE OF THE ELECTRIC SYSTEM - FISCAL YEAR 2016 (STAFF RECOMMENDS ACCEPTANCE OF THE REPORT) 3. ADJOURNMENT OF UTILITY COMMITTEE MEETING

APRIL 25, 2017 COUNCIL COMMITTEE OF THE WHOLE Page 2 LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE AGENDA ADDITIONS/DELETIONS 1. SEED FUNDING REQUEST FROM BIG RIVER FILM CO., LLC FOR A SHORT FILM TO CELEBRATE THE 300TH YEAR OF DOVER 2. EVALUATION OF PROPOSALS – FISCAL YEAR 2017-2021 AUDIT SERVICES (STAFF RECOMMENDS THE APPROVAL OF CLIFTONLARSENALLEN LLP FOR THE AUDIT SERVICES CONTRACT NOT TO EXCEED THE FIXED PRICES PROVIDED IN THE PROPOSAL DATED MARCH 24, 2017) 3. DOWNTOWN DOVER BUSINESS IMPROVEMENT DISTRICT (BID) BUDGET AND ASSESSMENT (TAX) RATES FOR FISCAL YEAR 2017-2018 (STAFF RECOMMENDS APPROVAL OF THE PROPOSED BUDGET AND ASSESSMENT (TAX) RATES FOR FISCAL YEAR 2017-18, AS PRESENTED) 4. 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\04-25-2017 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.

Lights On Crime Off Campaign April 25, 2017 1

GOALS  PRIMARY:  To provide an element of safety and security around the front entrance of the home  Encourage residents to call the police when they suspect illegal activity  SECONDARY:  Provide information for the City of Dover Community Energy Center Services located at the Williams State Service Center  Give residents the option of trading in an old incandescent light bulb for a new LED light bulb 2

 Provide an energy efficient source of light  Engage residents by signing a pledge under a branded unified campaign to reduce crime PROGRAM  Make illegal activity unattractive in OBJECTIVES Downtown Dover  Work hand in hand with the Dover Police Department and Central Delaware Habitat for Humanity 3

TARGET AREA Pilot program encompasses 200 homes within the Restoring Central Dover area 4

LIGHTS ON CRIME OFF CAMPAIGN Partner-driven Action A STRONG COMMUNITY Delaware Dover Police Sustainable Community Department Central Energy Engagement Work Housing Delaware Group Work Group Habitat for Safety Humanity Work Group Collaboration Community Partners Working Together on Community Challenges 5

Restoring Central Dover has/will WE NEED YOUR HELP  Provided the leg work for the donation of the light bulbs  Provide man hours (go door to door) in high crime areas Opportunities to Help  Provide funding to distend the lighting program to the back of the house  Expand lighting to the alleys

Potential Future Steps Expand program lighting measures to include: • Modifications based off of feedback from pilot program as needed such as using adapters for automatic lighting at night • Expand to include more homes • Expand lighting in more alleys 7

Item Costs Program LED Light Bulbs $3-$5 each (In kind from Delaware Sustainable Costs Energy) Estimates Restoring Central Dover Staff and Volunteers Over 200 hours Solar Motion Sensor Flood $23.99 each Light* Improve Alley Lighting** $240 each *Estimate does not include labor ** Estimate based upon converting existing lighting to LED, Costs projected to be recouped within 5 years. 8

CONTACT US 363 SAULSBURY ROAD, DOVER, DE 19904 302-678-9400 WWW.NCALL.ORG WGRIMES@ NCALL.ORG; CJACKSON@NCALL.ORG FACEBOOK.COM/CENTRALDOVER 9

CITY OF DOVER PROPOSED ORDINANCE #2017-06 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL 2 MET: 3 That Chapter 70 - Offenses and Miscellaneous Provisions, Section 70-2 - Weapons Generally, Paragraph 4 (d) - Prohibited, (2) - Furnishing to Certain Persons, of the Dover Code be amended by inserting the bold, 5 blue text, as follows: 6 Sec. 70-2. - Weapons generally. 7 (a) Definitions. The following words, terms and phrases, when used in this section, shall have the 8 meanings ascribed to them in this section, except where the context clearly indicates a different 9 meaning: 10 Municipal building shall mean any building where the city meets in its official capacity, including 11 non-city owned or leased buildings during the time in which the city is meeting in or occupying the 12 building, or any building containing the offices of city elected officials and of city employees 13 actively engaged in performing governmental business. Parking facilities are excluded. 14 Weapon shall mean any firearm from which a shot, projectile or other object may be discharged, or 15 any air gun, BB gun, or any instrument, toy or weapon commonly known as a "peashooter," 16 "slingshot" or "beany," or any bow made for the purpose of throwing or projecting missiles of any 17 kind, or any knife, brass or metal knuckles, or any club loaded with lead or other weight, or any 18 blackjack or billyclub. 19 (b) Unlawful discharge. It shall be unlawful for any person to discharge any firearm within the city, 20 except lawfully in self-defense, in defense of property, in defense of others or as permitted in 21 paragraph (c). 22 (c) Lawful discharge. 23 (1) Law enforcement officers. The discharge of weapons by any law enforcement officer while on 24 duty, or as necessary in the lawful discharge of his or her duties, is permitted. 25 (2) Galleries and ranges. The discharge of weapons at licensed shooting galleries or ranges when 26 the instrument can be fired, discharged or operated in a manner that shall not endanger persons 27 or property, and also in a manner that shall prevent the projectile from traversing any grounds 28 or space outside the limits of the gallery or range is permitted. 29 (d) Prohibited. 30 (1) Business display. It shall be unlawful for any pawnbroker, secondhand dealer or other person 31 who engages in business in the city to display, or to place on exhibition in any show window 32 or other window facing upon any street, any pistol, revolver or other firearm with a barrel of 33 less than 12 inches in length, or any switchblade knife, or any brass or metal knuckles, or any 34 club loaded with lead or other weight, or any blackjack or billyclub.

Proposed Ordinance #2017-06 - Chapter 70 - Offenses and Miscellaneous Provisions Page 2 35 (2) Furnishing to certain persons. It shall be unlawful for any person to purchase from, or sell, 36 loan or furnish any weapon to any person under the influence of any alcoholic beverage or any 37 illegal narcotic drug, stimulant or depressant, any person in a condition of agitation and 38 excitability or a minor under the age of 18 years. Nothing in this ordinance shall be 39 construed to prohibit the furnishing of weapons pursuant to an authorized course of 40 school instruction, or for the purpose of engaging in any school-authorized sporting or 41 recreational activity. 42 (3) Possession of firearms, ammunition, components of firearms, or explosives in municipal 43 buildings. Except as set forth in section (c) below, possession of firearms, ammunition, 44 components of firearms, or explosives is prohibited in all municipal buildings. 45 a. Required signs. In all municipal buildings, a conspicuous sign shall be posted at each 46 entrance stating that the possession of firearms, ammunition, components of firearms, or 47 explosives are prohibited. Such sign may also state that persons in violation may be 48 denied entrance to the building or be ordered to leave the building. 49 b. Immediate departure. Any person who immediately foregoes entry or immediately exits 50 any municipal building or police station due to the possession of a firearm, ammunition, 51 components of firearms, or explosives shall not be guilty of violating this section. 52 c. Exceptions. The following shall constitute valid exceptions to this section: 53 1. Possession of firearms, components of firearms, and ammunition or explosives by 54 law enforcement officers; 55 2. Law enforcement agencies receiving shipments or delivery of firearms, components 56 of firearms, ammunition, or explosives; 57 3. Law enforcement agencies conducting firearm or ammunition safety and training 58 programs, donation, amnesty, or any other similar programs in police stations or 59 municipal buildings; 60 4. Compliance by persons subject to protection from abuse court orders; 61 5. Carrying firearms and ammunition by persons who hold a valid license pursuant 62 to either § 1441 or § 1441A of Title 11 of the Delaware Code so long as the firearm 63 remains concealed except for inadvertent display or for self defense or defense of 64 others; 65 6. Carrying firearms and ammunition by officers or employees of the United States 66 duly authorized to carry a concealed firearm; or 67 7. Carrying firearms and ammunition by agents, messengers and other employees of 68 common carriers, banks, or business firms, whose duties require them to protect 69 moneys, valuables and other property and are engaged in the lawful execution of 70 such duties.

Proposed Ordinance #2017-06 - Chapter 70 - Offenses and Miscellaneous Provisions Page 3 71 (e) Penalties. 72 (1) Fines. Except as otherwise provided, any violation of this section shall be subject to a fine as 73 provided for in Appendix F-Fees and Fines. 74 (2) Forfeiture. Every person convicted of a violation of this section, section 70-3, or any state law 75 relating to weapons shall forfeit the weapon to the city. Upon a finding of guilt, it shall then 76 be the duty of the court, after the expiration of a reasonable time, to declare by written order 77 that the chief of police shall either dispose of the weapon or retain the weapon for official 78 police department use. 79 (f) Severability. The provisions of this ordinance shall be severable. If any provisions of this ordinance 80 are found by any court of competent jurisdiction to be unconstitutional or void, the remaining 81 provisions of this ordinance shall remain valid, unless the court finds that the valid provisions of this 82 ordinance are so essentially and inseparably connected with, and so dependent upon, the 83 unconstitutional or void provision that it cannot be presumed that city council would have enacted 84 the remaining valid provisions without the unconstitutional or void provision; or unless the court 85 finds that the remaining valid provisions, standing alone, are incomplete and incapable of being 86 executed in accordance with city council's intent. 87 (Code 1968, §§ 20-29, 20-33-20-36; Code 1981, § 14-5; Ord. No. 2015-15, 10-26-2015 ) 88 ADOPTED: * 89 S:\ORDINANCES\2017\DRAFT\ORDINANCE #2017-06 CH 70 - OFFENSES AND MISCELLANEOUS PROVISIONS - WEAPONS GENERALLY\ORDINANCE #2017-06 - CH 70 - OFFENSES AND MISC 90 PROVISIONS - 70-2 - WEAPONS GEN (MARKSMANSHIP COURSES).wpd 91 SYNOPSIS 92 The amendment would enable furnishing weapons for an authorized course of school 93 instruction, or for the purpose of engaging in any school-authorized sporting or recreational 94 activity. 95 (SPONSORS: COLE AND HUTCHISON) 96 Actions History (Most recent first) 97 04/25/2017 - Introduction - Council Committee of the Whole/Safety Advisory and Transportation Committee

Board of Education Superintendent of Schools Sean P. M. Christiansen, President Daniel C. Shelton, Ed. D. Voice: (302) 857-4200 John C. Martin Jr., Vice-President Fax: (302) 672-1715 Matthew J. Lindell Email: dan.shelton@capital.k12.de.us Ralph L. Taylor, Jr. Dr. Chanda Jackson-Short 198 Commerce Way Dover, DE 19904 April 24, 2017 City of Dover Safety Advisory and Transportation Committee Dear Committee Members: I apologize that I am unable to attend the meeting tonight because of a prior commitment to attend the Secretary of Education Scholars Dinner honoring three of our Dover High School students. This is a very special event for the students and their families. However, to advocate for the Dover High School AFJROTC program and students, I would like to submit this letter in support of City of Dover Proposed Ordinance #2017-06: That Chapter 70 – Offenses and Miscellaneous Provisions, Section 70-2 – Weapons Generally, Paragraph (d) – Prohibited, (2) – Furnishing to Certain Persons, of the Dover code be amended by inserting the bold, blue text, as follows: “Nothing in this ordinance shall be construed to prohibit the furnishing of weapons pursuant to an authorized course of school instruction, or for the purpose of engaging in any school-authorized sporting or recreational activity.” This amendment will allow the students enrolled in the Dover High School AFJROTC program to be able to compete in the marksmanship competition program, through which scholarships can be earned. This program is not new to Delaware, many of our neighboring districts already are part of this National program. In addition, we have met with members of the Dover PD leadership to discuss how the program would be operated and they were satisfied with the process and procedures that will be in place. Enclosed with this letter is a power point presentation developed by John K. Murphy, Major, USAF (Ret.) Senior Aerospace Science Instructor at Dover High School. This goes into far greater detail than this letter. In closing, I ask for your support of City of Dover Proposed Ordinance #2017-06. With highest personal regards, Very truly yours, Dan Shelton, Ed. D. Superintendent of Schools The Capital School District is an equal opportunity employer and does not discriminate on the basis of race, color, creed, religion, gender (including pregnancy, childbirth and related medical conditions), national origin, citizenship or ancestry, age, disability, marital status, veteran status, genetic information, sexual orientation, or gender identity, against victims of domestic violence, sexual offenses, or stalking, or upon any other categories protected by federal, state, or local law. Inquiries regarding nondiscrimination policies should be directed to the Title IX, District 504 and ADA Coordinators: Capital School District, 198 Commerce Way, Dover DE 19904. Phone (302) 672-1500

Dover High School AFJROTC Marksmanship Program Discussion 16 Mar 2017, 1630

Marksmanship Overview  Introduction  Civilian Marksmanship Program  Scholarships  Support from AFJROTC (AFOATS)  Safety  Examples of local JROTC facilities  Way Forward  Questions

Delaware JROTC’s with Marksmanship Programs HIGH SCHOOL BRANCH APPOQUINIMINK HS Army CAPE HENLOPEN HS Army CHRISTIANA HS Navy DELAWARE MILITARY ACADEMY Navy Dover High School Air Force FIRST STATE MILITARY ACADEMY Marine Corps INDIAN RIVER HS Marine Corps MOUNT PLEASANT HS Army SEAFORD HS Navy SMYRNA HS Air Force SUSSEX CENTRAL SENIOR HS Army SUSSEX TECHNICAL HS Army WOODBRIDGE HS Marine Corps

http:I / th ecm p.org I air j rotc- air- rifle-nation a 1- cham pi onsh ip/ P . ,. C ~· Dover High School HOME I AJR GUN I JROTC MATCHES MORE INFO 2017 JROTC AIR RIFLE Postal Results Regional Results National JROTC Cham pionsh ip Info: YOU~ 2017 National JROTC Program CONS All Service Qualifications Team and Individual R-egistration Team/Individual Declination NATIONAL CHAMPIONSHIP Congratulatlions to all JROTC unit teams and indiv idual cadets that qualified fo r the 2017 J ROTC Nalional Champions hips. This competition is the final I~ o f the JROTC Postal series, where the top qualifying teams and indiv iduals from eac h JROTC Service, will compete in a shoulder to shoulder compelition. This competition is scheduled for 23-25 March in Annison, Alabama. The LJ. S. Army Cadet Command, TECOM, the Naval Service Training Command, AFOATS and Air Pistol, a the Civilian Marksmans hip Program (CMP) joinUy conduct this competition. The 20 16-2018 11th Edition o f the National Standard Three Position Ai r Rifle Rules governs. Rule books may be downloaded from the CMP web site at http://thecmp.org/air/national-standard-three-position-air- rifle-rules/ If you have questions regarding the JROTC Postal Championships, please email postals@thecmp.org or call (419) 635-2141, ext. 730. the 80 firing

~ Civilian Marksmanship P Edition of lhe National Standard Three Position Ai r Rifle Rules governs. Rulebooks may be downloaded from lhe CMP web site at http://thecmp.org/air/national-standard-three-posltion-air- rifle-rulesf If you have questions regarding the JROTC Postal Championships, please ema il posta!s@lhecmp.org or call {419) 635-2141, ext. 730. the 80 firing points lh' SERVICE CHAMPIONSHIPS AL Housing Links Las Vegas, NV (USMC Service Championship, Army & Air Force 9-11 February 2017 CMP Event Photos Regional) Uve Target Views class of target air rifle 9-1 1 February 2017 Anniston, AL (Army & A ir Force) 16-18 February Camp Perry, OH (A rmy & Air Force) 2017 16- 18 February Anniston, AL (Navy Service Championship) 2017 NATIONAL JROTC CHAMPIONSHIP 23-25 March 2017 Anniston, AL (all 4 services) marksmanship ability \).S.ARAf)' throughout the nation The CMP also supports JROTC by providing training and curriculum to JROTC Instructors (see the JMIC Instructor Courses under · rraining"). The CMP also offers scholarships. Find out more informalion by visiting the CM P Scholarship web page. to selected high sc ho team or club that is p; 1t a ' ~ 0" CJ 1 ~~ - - - --

Scholarships

Scholarships  College-Based Scholarships  If you plan on rifling in college, your prospective institution could have funds and endowments set up by alumni who participated in the sport before you ever set foot on that campus or in honor of relatives and important figures to your school. Some of the top schools for college rifle include West Virginia, Murray State, Kentucky, and TCU. Since they are top-tier programs and some of the best in the nation, the greater your skill, the more scholarship money you may earn. Like other sports, the amount of each annual award may vary based on performance. Make sure you do your research, and talk to your financial aid office and athletic departments about local and college-based awards you could be eligible for.  All Military Academies offer scholarships for marksmanship

Sussex Tech Range Range, Targets and spent pellets

For ease of replacing the This is what the target cardboard the targets are looks like when it is let hinged at the bottom. down so as to change The latch keeps the target out the cardboard. This is what our in place until the cardboard Notice the chain holding targets needs to be replaced. it from falling to the floor look like from a and causing possible injury. distance. The metal backing make them very heavy.

Here’s what’s behind Notice the slot where When the pellets Here’s a close-up look the cardboard. It’s the cardboard is slid penetrate the target at a flattened pellet. 12 gauge steel, or into place. and cardboard, they thicker, so as not to don’t ricochet, they deform when hit by flatten and fall to the a pellet. bottom of the inside of the target.

Seaford High School Range and equipment

Seaford NJROTC Range

Rifle Storage (Drill Rifles)

Air Rifle Storage Double locked room and locked cabinets

Down Range • Target placement for three position firing • Prone • Kneeling • Standing • Note light on ceiling

Firing Line – mat and equipment • Mat • Rifle • Eye protection • Stand with scope • Rifle case

Recharging the system • Compressed air tank • Rifle

Rifle • Gauge

Rifle Compress Air Gauge

Targets

Rifle Case

Rifle Case

Requirements Marksmanship Requirements

Range Safety  All individuals using firing range facilities will receive training on rules, safety precautions, and commands for the firing range. This training is to be documented in the cadet’s training record and maintained for the period the cadet is enrolled.  The SASI or ASI will be designated as the Range Officer, regardless of rank or employment position, and is the senior authority in control of the range during live firing operations.  The down range perimeter of the range shall contain any pellet that misses a trap or a backstop.  Doors shall be locked and marked with a warning to prevent down range entry to the range.  Pellet traps/backstops shall be designed to stop all pellets and prevent their return to the firing line.   HQ AFJROTC strongly recommends using non-lead pellets. The safe and proper handling of all used pellets is to be done in accordance with local school district procedures for the storage and disposal of hazardous waste. SASI’s are to maintain documentation of the methods used.

Shooter Safety rules Competitive shooting has one of the best safety records of any organized sport. This is because each shooter is expected to know and practice the safety rules and because range safety is strictly enforced. The following safety rules are strictly enforced on all properly managed ranges: Treat every air rifle as if it were loaded. Follow all commands given by the range safety officer. Be aware of where the muzzle is pointed at all times. Keep the muzzle of the air rifle pointed in a safe direction; this is usually up toward the ceiling or downrange toward the target. Have muzzle awareness at all times. Only point the air rifle at targets at which you intend to fire.

Shooter Safety (Continued) Load/Unload the air rifle only when on the firing line and only when authorized by the Range Officer. Be sure that the bolt is closed when actually firing a shot. Keep your finger off the trigger until you’re ready to fire in your firing position. Never handle a rifle at the firing line when someone is down range. When given the command “cease fire,” or “stop,” immediately open the bolt of your rifle and place the rifle on your shooting mat so that the open bolt is visible. Inform the Range Officer in the event a rifle is loaded after the command “cease fire,” or “stop”.

Shooter Safety (Continued) No one may go down range until authorized by the Range Officer. Prior to going down range, all rifles must be unloaded and the bolts open. Insert a clear barrel indicator (CBI) when the air rifle is not in use and when directed by the Range Officer. Eye protection is required. Hearing protection is recommended. Think about what you’re doing and be careful. Think and practice safety at all times. Wash hands after handling pellets. Never horseplay in or near the range. Treat the air rifles as weapons that are capable of causing serious bodily harm.

Range Specifications In addition to ensuring that a safe marksmanship environment is established and maintained, SASI’s must establish the following minimum standards: The distance from the firing line is 10 meters (33 feet.) Target heights (measured from the center of the sighting targets); prone 19.7in. +4 in., standing 55 in. +2 in., kneeling 31.5 in. +4 in. Course of Fire and Time Limits. The course of fire will be according to the National Standard Three-Position rules shown below. National Standard Three-Position, Individual Event (3x10) 10 shots in each position: prone, standing, and kneeling (in that order Air rifle targets for 10 meters Preparation period of 10 minutes

Our Way Forward  City and District Approval  Establishing a Range at DHS  Securing Equipment Donations – Seaford (FSMA)  Securing Funding NRA – Grants Dec and Apr Deadlines

QUESTIONS/CONCERNS

City of Dover Briefing April 25, 2017 Agenda: 1. Help Initiative, Inc. 2. Energy Efficiency Advisory Council (EEAC) 3. Utility Program Plans - Residential 4. City of Dover Energy Efficiency (EE) Program 5. Delaware State University Proposed Renewables 6. Workforce Development Collaboration 7. Energy Efficiency Universe

HELP Initiative, Inc. • Capability Overview • Established and Delaware incorporated 501(c)(3) Organization • Identify, remediate and protect the health & safety of low income clients • Use healthy home best practices to maintain affordable utility services and quality of life standards • Assist vulnerable clients with troubled payment history to conserve energy and reduce residential utility bills by using proven usage reduction techniques • Analyze billing and transaction data with the support of subject matter experts to estimate the impact of service delivery on energy usage, energy cost and bill payment. • Provide a clear educational understanding of the reasons for high energy usage and how behavioral traits contribute to energy usage and energy bills. • Provide Training, Education and Work Force development strategies and tactics for implementation planning and scheduling for low income communities of promise in Delaware.

Energy Efficiency Advisory Council • In July of 2014, Delaware General Assembly passed key legislation that enables all of Delaware’s electric and gas utilities to provide cost-effective energy efficiency programs to their customers in collaboration with the Sustainable Energy Utility (SEU). • Legislation created a 13-member Energy Efficiency Advisory Council (EEAC) tasked with assisting the state’s electric and natural gas utilities with the development and deployment of energy efficiency programs and financing mechanisms. • EEAC Low Income Working Group responsible for establishing a Guidance Document that will determine the process for obligating Exelon settlement funds specifically earmarked in DPL territory for Low Income communities with a two (2) track approach  Track #1 – traditional Energy Efficiency Request for Proposal (i.e. Quick Home Energy Checkup/QHEC)  Track #2 – community foundation approach for managing/growing funds and issuing smaller grants to community members (i.e. Reflective Roof / White Roofs, Interior Storm Windows, Seed Entrepreneurial ventures with an energy saving focus) • EEAC EE Program Launch based on Public Service Commission (PSC) Approval – 4Q2017

Utility Program Plans - Residential • Delmarva Power Energy Efficiency (EE) Program Plan (Approved for Submission to PSC) over 3 year period  Consumer Products Program – Residential Lighting, Energy Star Refrigerator Recycle Program ($9.346M / 60K participants)  Behavior Based Program – OPower behavior model of motivation by comparison and high usage alerts ($6.342M /540K par.)  Prepaid Metering Program / Pay as you Go Program using Advanced Metering Infrastructure (AMI) technology to pay in advance with alerts (PSC Pending)  Power Assist Program – profile client usage and target kWh levels coupled with vulnerability (PSC Pending) • Delaware Electric Cooperative EE Program Plan (Active pending EEAC Vote) over 2 year period  Geothermal Heat Pump Grants ($215K / 72 participants)  Heat Pump Water Heater Grants ($12K / 40 Units)  Residential LED’s ($60K / 5880 participants) • Chesapeake EE Program Plan (Active pending EEAC Vote) over 3 year period  School Energy Pledge, Awareness for Communities about Energy Program  Appliance Grant, Energy Conservation Grant, Multifamily Housing Program • DEMEC EE Program Plan (Approved and Accepted Plan by EEAC) over 4 year period  LED Streetlight Conversion Project w/Total Costs $ 784,122  See Attachment (DEMEC Energy Efficiency Plan Submittal)

City of Dover EE Programs • “Lights On - Crime Off” – Collaborative NCALL / Dover PD / SEU / DelState Campaign:  Funded Target (Study) Area – NCALL Restoring Central Dover Proof of Concept – Residential Home(s) installed on New Street & Queen Street  LED Light Sensor Technology & Solar Motion Flood Light provided by SEU  Implementation Strategy – 1 home, 1 block, 1 community, 1 Lights On - Dover Strong Campaign • Evaluation & Impact Criteria - Dover Police Crime Data for Central Dover Study Area  CY2017 Hot Spot Mapping  CY2017 Crime Reporting Outcomes for Central Dover Study Area • Energy Efficiency (EE) Pathway for Delaware State University college student participation as part of the Exelon Settlement funds  Install LED Light Sensor bulb technology  Install Solar Motion Flood Light  Provide EE & Health and Safety Education  Reinforce Community Campaign for “Lights On Dover Strong”

DelState Proposed Renewable Programs Co-mingle public and commercial information in a single space

DelState Proposed Renewable Programs Bus stop sign that is digital then layer on transit data, municipal announcements and even some paid advertising

DelState Proposed Renewable Programs NYC's Smart Bench Pilot to Give Detailed Sense of Usage Trends in Highbridge Park.

Workforce Development Collaboration Workforce Development – Career Pathway Program(s) • Collaboration toward the formation of a statewide Workforce Development Advisory Group  Delmarva Power – settlement funds for workforce development ($1.5M over 4 years to DSU & DelTech)  Delaware Tech – High School Pathway into the Energy Efficiency Workforce ($720K over 4 years)  Delaware State University – Renewable energy education center including Certificate Programs and Credentialing Services in Renewable Energy ($720K over 4 years)  Energy Coordinating Agency (ECA) LEED Certified Gold Green Jobs Training Center and Administrator for Community Energy Centers funded by SEU  DNREC - Grantee for Weatherization Assistance Program (WAP) and chairs EEAC  Interfaith Community Housing – Rehab homes as part of the Neighborhood Stabilization Program (NSP) in New Castle County for affordable homeownership • Pathway that leverages funds to build careers using foundational programs like Energy Efficiency “Lights On” and Renewable “Smart Signs” & “Smart Bench Technologies.

Public Health LIHEAP LIHEAP DEAP DeLead SCAP / EcoKits /WAP/RRHACE DEMEC City of Dover Community Job Creating City of Dover Energy Center Services Programs – Customer Service WAP, EEAC, CEC Department Spoke City of Spoke H.E.L.P. SEU DelTech & Jobs Dover Community Energy Initiative DelState Workforce Hub Centers, Pre-WAP, Assisted HP, Faith Training Development Efficiency Exelon Settlement Spoke Partners ($) DNREC Houses of Social Weatherization “Communities Housing Worship City of Dover Services (WAP), Energy of Promise” Williams State Efficiency (SB- Faith Efficiency / Building Leaders Find Service Center 150) Homeless Inspections Job Applicants Workforce Development City of Dover - Community Energy Center Services Energy Efficiency Universe

Points of Contact Charles T. Kistler HELP Initiative, Inc ckistler@helpinitiativede.org 302-236-7773 Harold Stafford HELP Initiative, Inc hstaff@Comcast.net 302-359-7289

Energy Efficiency Projects: 2016, 2017, 2018, 2019

Delaware Municipal Electric Corporation – Energy Efficiency Projects 2016, 2017, 2018, 2019 SUBMITTED TO: DELAWARE ENERGY EFFICIENCY ADVISORY COUNCIL March 8, 2017 1.0 Introduction This report details energy efficiency improvement activities completed in 2016 and continuing through to 2019. In keeping with the Energy Efficiency Advisory Council (“EEAC”) vote to allow 2016 measures to count towards 2017 goals, DEMEC submits this form of a plan to conform to the EEAC process. Many of these measures have been completed with more planned for the upcoming years. The Delaware Municipal Electric Corporation, Inc. (“DEMEC”) requests Council approval. 2.0 Program Overview The DEMEC cities and towns including, New Castle, Newark, Middletown, Smyrna, Clayton, Dover, Milford, Seaford, and Lewes, worked together on a large scale LED streetlight installation project. On behalf of all member communities, DEMEC developed specifications and issued a request for proposes (“RFP”) from vendors that could furnish LED lighting fixtures. The RFP was designed specially to allow any or all communities to participate in the program at any level desired, permitting all cities and towns to benefit from a scaled purchase, but without the obligation to commit to any one vendor, any number of fixtures or installation services. In other words, DEMEC members received very attractive pricing with a la carte menu options. 2.1 Target Market The Targeted market was DEMEC cities and towns. 2.2 Market Analysis and Trends LED streetlights are more energy efficient and longer-lasting than other common street lighting technologies. Retrofitting saves cities and towns money both on their electric bills and in operations and maintenance. LEDs offer a number of other advantages as well, including improved visibility, reduced light pollution, and additional more advanced options such as dimming, remote control, and Wi-Fi capability. LED technology is well-established technology

for this application. The costs for this technology have continued to decline making investment a realistic next step. DEMEC will continue to monitor LED costs and use any available incentives as necessary to install more LED Streetlights. 2.3 Eligible Measures/Service and Customer Incentives The eligible measures are LED Streetlights. Some replacements have been made with more planned. DEMEC cities and towns intend to make use of their respective Green Energy Funds for this purpose and plan to provide 100% incentives as available. 2.4 Marketing DEMEC has publicized the results of these efforts to its DEMEC board members and when requested has drafted press releases for municipal use. DEMEC continues to invite additional LED Streetlight replacement requests from its members as incentives and interest continues. Going forward DEMEC can build on its 2016 success by:  Continuing to use the original design specifications, as appropriate, for new LED retrofits  Maintaining a relationship with the original vendor to easily obtain product  Encouraging DEMEC cities and towns to plan for efficiency in Green Energy Fund budgets  Considering reusing the financing template with the Sustainable Energy Utility  Continuing to include municipal improvements as part of the DEMEC Energy Efficiency Program customer pool 2.5 Evaluation, Measurement and Verification The EM&V plan, proposed by Vermont Energy Investment Corporation (VEIC) to DEMEC, provides services described below for the DEMEC LED Streetlight Conversion Project. Due to the size of the project, and the fact that this will be the first assessment of a DEMEC energy efficiency project, the EM&V plan specifies that a custom methodology will be utilized for EM&V, rather than using a deemed savings methodology. The Evaluation plan includes:  Description of the project including impetus for undertaking the project and project goals  Assessment of pre-installation conditions, including lighting technology, controls, wattages, burn time, usage, quality of fixtures and maintenance costs  Evaluation of street lighting proposal, including review of equipment, controls, and installation specifications, along with cost and savings estimates  Evaluation of equipment, as installed, including visual inspection of representative fixtures, and interviews with relevant personnel and installation personnel.  Evaluation of new fixture performance including light quality  Evaluation of project economics using DE state-wide avoided costs, to determine the cost effectiveness of the project using the TRC test

VEIC will also conduct the following activities:  Initialize a VEIC screening tool with approved DE state-wide avoided costs to be used in conjunction with VEIC energy efficiency measure analysis tools.  Travel to Delaware to inspect equipment and to interview relevant project personnel.  Present findings of the Evaluation in a written report that will include results for cost- effectiveness using Delaware state-wide avoided costs.  Provide numeric inputs and outputs of the analysis in a format to be specified by the EEAC or its contractor.  Participate in one meeting (by phone conference) to present findings to DE EEAC, if requested by DEMEC. The cost for these services, as proposed, is approximately $15,000 2.6 Savings, Costs, and Cost-effectiveness Program Years 2016 2017 2018 2019 Total MWH Savings 1,339 103 66 75 1,583 KW Peak reduction - - - - - Implementation Cost $ 15,000 $ 4,500 estimated $ 19,500 Incentive Costs $ 651,472 $ 47,880 $ 30,552 $ 34,718 $ 764,622 Total Costs $ 666,472 $ 47,880 $ 30,552 $ 34,718 $ 784,122 TRC ratio 1.9 1.9 1.9 1.9

NYC's Smart Bench Pilot to Give Detailed Sense of Usage Trends in Highbridge Park The initiative is part of the city’s broader effort to generate data-driven decision-making in its parks department, a move reflected in large and small municipalities nationwide. by Adam Stone / August 5, 2016 1 A Soofa bench in Cambridge, Mass. (Soofa) When New York City authorities reopened Highbridge Park in June 2015 after nearly 40 years, the $61.8 million restoration proved an immediate hit. With its expansive views of the Harlem River, the stone and steel pedestrian bridge linking Manhattan and the Bronx drew crowds of tourists. But would locals use the park? There was no easy way to be sure. When it comes to facilities use in public parks, data has traditionally been hard to come by. 1

“There are different groups that have collected user data in the past, but it has literally been people with clickers and clipboards. These are one-off efforts, very isolated in time,” said NYC Parks Department Director of Data Analytics Jackie Lu. “We want to collect this data in a more granular way and also in a more continuous, ongoing way.” To that end, the city has signed on as a beta user of Soofa, whose “smart” park benches will be installed in the park to help give planners a detailed sense of usage trends. Founded as an outgrowth of the MIT Media Lab in 2014, Cambridge, Mass.-based Soofa’s main offering is a solar-powered phone charger embedded in a park bench. It’s a straightforward technology that is meant to serve as a civic amenity. In its latest iteration, the company takes the smart bench one step further. The Highbridge Park beta — along with test runs in Boston; Oak Park, Ill.; Sunny Isles Beach, Fla.; and elsewhere — will integrate a sensor into the benches that can take track visitor volume in the park. Specifically, an embedded Wi-Fi scanner will search a 75-meter radius for Wi-Fi-enabled mobile devices, anonymously sensing every enabled device that comes into range. Soofa will be able to collect data on how many devices enter the park and how long they tend to stay. This in turn should give park managers a glimpse into overall usage patterns. With five solar-powered benches deployed at strategic points along the park, Lu said, it might be possible to gain an understanding not just of how many people come and go, but also their trajectory. "There is the potential to understand how people are moving through the park,” she said. “If you see the same devices walk by multiple benches, then you start to understand flow through the park.” The Soofa initiative is part of the city’s broader effort to generate data-driven decision-making in its parks department, a move reflected in large and small municipalities nationwide. The Park District of Oak Park, Ill., for instance, operates 18 parks serving 52,000 residents, providing nearly 3,000 recreation programs and special events annually. Tracking data on those programs is relatively easy: Planners know how many people register for a given course; they can count heads at an event. Tracking park usage is more problematic, however. “For any park and recreation department, the No. 1 way people use your services is through your parks, but that is also one of the hardest things to get a handle on in terms of how they are being used," said Bobbi Nance, the park district’s senior manager for strategy and innovation. "There are no entrances or exits. They are public and open." Park usage data could be helpful in a number of ways. Metrics might help planners to schedule trash collection, or schedule maintenance based on anticipated use levels. “It might tell us how 2

often we need to renew things, how quickly certain parks or certain features might be wearing down,” Nance said. Data could help justify capital improvements and also guide investments. “They can help us tell a much fuller story of everything that we are providing to the community, not just what is going on inside our physical buildings,” she said. To that end, Oak Park is installing four of Soofa’s “core” devices: That’s a stripped down version of the technology, a stand-alone unit that offers the charging and monitoring capabilities, without the cost of the bench. The units are positioned to reflect diverse activities, in areas where no staff are regularly stationed, including athletic fields and a sculpture walk. Nance said the city is investing $14,000 in the project. The city recently completed a decade of parks renewal and didn’t need any bench upgrades, so the ability to get into the beta in a relatively limited way was a big inducement. “That certainly made it much easier than it might have been, if we had had to do something in a much bigger way right from the start,” Nance said. That ease of entry is not coincidental. Soofa executives espouse a vision they say is attuned to evolving smart-city needs: To deliver smart enhancements that are relatively inexpensive and that show a rapid return on investment. In past years, cities have looked at smart city initiatives on a grand scale, with vendors promising intricate landscapes of interconnected devices. Lately the ambitions have become more modest. Civic planners are looking for small-scale projects that can deliver in the short term. They want “pilot-scale projects that not only directly benefit the public, but whose success can be measured in weeks and months versus years and decades,” said Soofa Co- founder and CEO Sandra Richter. Soofa says its $4,900 benches can meet that mark. RELATED Boston Pilots Smart, Solar-Powered BenchesMeet the Co-Inventor of the City Bench of the Future “Cities don’t want to go out and do big things. Government is risk-averse. They are looking for something to show that they are innovating but they are looking to do it in these small, tangible ways,” said Soofa Director of Partnerships Edward Krafcik. By implementing technology to drive decisions, “this can show residents that the city is committed to looking ahead, and not just waiting for something to happen,” Krafcik said. At the same time, the phone-charging capability delivers a level of instant gratification that may help make the expense palatable. “Whenever cities are spending taxpayer dollars, residents want a practical return, and residents see charging phones as an amazing benefit.” 3

The bench system also meets the demand for provable outcomes, another hallmark of the modern smart city mentality. “Today everything is evidence based," Krafcik said. "Cities want data they can analyze and that they can tie to an outcome, to prove very quickly whether this is a successful or an unsuccessful intervention." Ideally, the benches could even become a driver of revenue. In one Cambridge, Mass., neighborhood, for instance, planners have used the sensors to count the pace of business at food trucks. The trucks pay rent to the city, which now is using the data to optimize how much rent it charges. “So it all ties back to actual revenue earnings potential for the city,” Krafcik said. How else might the smart park bench data be used? In New York City, it’s an open question so far. “As an agency, we are just starting to learn how to leverage and look at our data,” Lu said. Gathering the information will be a first step. “Understanding what we can do with it — that is really going to be the next step. If we can get this specific data at this specific site, how can we use it to inform operational decisions, resource allocation decisions? That is what we are looking to learn.” Adam Stone Contributing Writer RELATED Digital Signs Could Become the Next Tool for Smart CitiesBoston Pilots Smart, Solar-Powered BenchesMeet the Co-Inventor of the City Bench of the Future 4

Digital Signs Could Become the Next Tool for Smart Cities The Soofa Sign is getting tested in local government and could co-mingle public and commercial information in a single space. by Adam Stone / January 18, 2017 Image courtesy of Soofa Smart city initiatives often emphasize a mix-and-match approach to technology: lamp posts that also measure air quality, for example. Slated to pilot in half a dozen cities in the coming months, the Soofa Sign offers an example of such synergies. Take a bus stop sign and make it digital. Now layer on transit data, municipal announcements and even some paid advertising. When combined, these items may add up to more than the sum of their parts. 1

RELATED NYC's Smart Bench Pilot to Give Detailed Sense of Usage Trends in Highbridge Park. What Is a Smart City? “There are other ways to deliver these different kinds of information, but this is an interesting new format that we want to explore,” said Tom Evans, executive director of the Cambridge (Mass.) Redevelopment Authority, which is piloting the technology. Founded as an outgrowth of the MIT Media Lab in 2014, Cambridge, Mass.-based Soofa Technologies said it has deals to launch additional pilots in New York City, Los Angeles, Norfolk, Va., and Austin, Texas, in 2017. The company made inroads in the civic tech space last year with the introduction of a solar- powered park bench that serves as both a charging station for personal devices and a Wi-Fi- enabled sensor to collect data on usage levels in parks and civic spaces. Boston, Oak Park, Ill., and Sunny Isles Beach, Fla., have piloted the bench, the company reported. Its latest offering aims to combine a range of uses on a digital signage platform. The tall, freestanding sign could co-mingle public and commercial information in a single space for the benefit of citizens. “Right now bus stop advertising mostly goes to big national brands, because those ads are expensive to produce,” Soofa CEO and Co-Founder Sandra Richter said. “By going digital it becomes possible to change that content easily, so you can begin to use it in different ways. It becomes a platform that can combine civic uses with for-profits and even private citizens.” The Cambridge Redevelopment Authority placed its sign at the busy Kendall Square subway stop, which services MIT and a thriving tech-startup community. The tech firms post want ads on the sign, while the redevelopment authority uses it to post subway schedules and promote its own events. “In summer there is a farmer’s market, there are evening events in the neighborhood that we will advertise," Evans said. "Right now, we are using it to announce public meetings, as a means of government transparency and outreach. We are on the Web and Twitter and social media, but this gives us an added way of doing that kind of outreach.” On the tech side, the sign’s software employs applets to perform predefined functions, for instance using APIs to interface with the mayor’s tweets or the bus schedule. An applet might also grab data from an event calendar or pull from a communitywide emergency alert system. While the integration of messaging has gone smoothly in Cambridge, the agency has faced some challenges in adapting its message to the new, electronic format. “From a government perspective, we tend to publish notices with basic time-and-place data. In this format that comes off a little bland," said Evans. "You need a photograph, maybe an aerial of the neighborhood or images of people collaborating at work. We want to utilize the screen element, rather than just putting text up there.” 2

On the plus side, because digital signage is untested territory, Evans has some wiggle room in how he presents news to the community. “There is no prescribed format for this type of outreach, so we have some flexibility on how we work with it,” he said. Soofa said it is aiming to craft a risk-free financial proposal for cities willing to experiment with the medium. If a municipality will take on the sign, the company will foot the bill and reimburse itself over time from ad revenues. Richter said a sign may generate $20,000 to $40,000 in annual revenues depending on where and how it is used. She wouldn’t disclose how much the company will be paid in this model. “It’s going to be a big investment and big risk for us, but we believe in the model and the cities we are talking with believe in the model,” she said. With conventional signage, “we have these huge communications surfaces all over the city and they are not filled with very relevant content. At the same time, we have civic leaders struggling to find ways to connect with the public,” Richter said. “We need democratized communication channels.” Adam Stone Contributing Writer 3

o View this email in your browser Soofa Sign early adopter application has passed, but you don't have to miss out Last Friday cities big and small across the U.S. formally applied to be early adopters of the Soofa Sign to show their commitment to creating inclusive and sustainable neighborhoods. Didn't sign up to be a first round early adopter? Not to worry, today we are opening a waitlist for anyone interested in getting in on the second batch of Soofa Signs shipping in late 2017. To get on the second round waitlist, simply sign up here. Digital Signs Could Become the Next Tool for Smart Cities (GovTech Magazine) "Slated to pilot in half a dozen cities in the coming months, the Soofa Sign co-mingles public and commercial information in one place. Take a bus stop sign and make it digital. Now layer on transit data, municipal announcements and even some paid advertising. When combined, these items may add up to more than the sum of their parts." Read the full story at Gov Tech >>

More Than A Sign; A Digital Communication Platform For Cities Share what makes your neighborhood sustainable, inclusive, and lovable. Learn how the Soofa Sign is customizable for any location and how it is geared toward improving the pedestrian experience in your community. View the Soofa Sign brochure here >> Soofa Featured On MIT's Home Page We are very excited to announce that Soofa was featured on the MIT homepage this week. MIT News wrote a spotlight article profiling our history from the early days at the Media Lab to the launch of the Soofa Sign and everything in between. Read the full article >> We'll Be Speaking At AI And The City In NYC Sandra Richter, Soofa cofounder and CEO, will be speaking at AI And The City at The Hub at Grand Central Tech in New York City on February 9th. Learn more about the event and sign up here >> Smart Parks Case Study Coming In February In February we will release our first Smart Park case study with the Park District of Oak Park, IL. We'd love to hear from you what you'd like to learn about our research and development projects. Please share your opinion, take our 2 minute survey here >> What We're Reading

What's Really Warming The World? (Bloomberg) Electricity production generates the largest share of greenhouse gas emissions, further calling for the need for more solar and sustainable energy production. The article includes amazing data visualizations comparing different factors that warm the Earth. Why Parks Are Essential Infrastructure (Governing Magazine). Great piece from the City Parks Alliance about the return on investment parks provide and why they can't be overlooked. We talk about the same in our Smart Parks whitepaper. ICYMI Our 2016 Year In Review Check out some of our highlights from 2016 and plans for this year, read our year in review blog post >> Copyright © 2017 Changing Environments Inc., All rights reserved. Want to change how you receive these emails? You can update your preferences or unsubscribe from this list

City of Dover Muni-Wifi

We are a technology company that provides a complete suite of services ranging from structured cabling, network design, VoIP and IP surveillance camera systems. Locally owned and operated. Offices in Lewes, Dover, Hatfield PA, Monrovia CA, Dallas TX State of Delaware approved vendor

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Concept

Revenue sources & efficiencies Municipal WiFi means a new source of revenue based on an expansion of the existing utility infrastructure (electricity, cable TV, gas or telephone), or street light and utility pole leasing. Revenue sources & efficiencies: 1. Public transportation 2. Hot Parks 3. Networked parking meters 4. Food Truck and pop up retailer secure POS 5. Daily or monthly users 6. Digital Tourism 7. Splash Page advertising 8. Marketing to visitors beyond events

Level of Effort Building out $100,000 - $150,000 ● Discovery & Planning ● Engineering & Design ● Controller & Network Configuration ● Ten (10) wireless access points ● Splash page design ● Admin Training Monthly recurring $1,500 - $2,000 ● Data service ● Support ● Licensing ● Monitoring

Thank you Thank you! Rob Nicholson Director of Business Development OFFICE: 302-645-7770 | Ext.802

Engineering Consultant’s Report on the Operation and Maintenance of the Electric System Fiscal Year 2016 City of Dover, Delaware Project No. 97522 4/24/2017

Engineering Consultant’s Report prepared for City of Dover, Delaware Dover, Delaware Project No. 97522 4/24/2017 prepared by Burns & McDonnell Engineering Company, Inc. Kansas City, Missouri COPYRIGHT © 2017 BURNS & McDONNELL ENGINEERING COMPANY, INC.

April 24, 2017 Ms. Donna S. Mitchell, CPA Controller/Treasurer City of Dover 5 East Reed Street Weyandt Hall, Suite 300 Dover, Delaware 19901 Re: Engineering Consultant’s Report Project No. 97522 Dear Ms. Mitchell: In compliance with the requirements of Section 705 and Section 504 of the City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 (Resolution), Burns & McDonnell presents this Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System for the fiscal year ended 2016. This report summarizes our review and assessment of the City of Dover’s (City) Electric System, its existing retail electric rates, its insurance coverage in effect, and its reserve funds. Financial, statistical, and operating data used in preparing the report were initially reported in the City’s annual financial statements and accounting records. Additional information was furnished by City and Electric Division staff. In the preparation of this Engineering Consultant’s Report, Burns & McDonnell completed assessments of the electric generating stations and the transmission and distribution system of the City’s Electric Division. Assessments involved interviews, observations, and review of fiscal year 2016 expenditures and fiscal year 2016 budgets. In addition, an analysis of the balances of the Improvement and Extension Fund as well as other funds supporting the Electric Division was performed. Burns & McDonnell also reviewed the adequacy of revenues provided by current retail rates in relation to the requirements of the Resolution. Finally, a high-level assessment of the City’s insurance coverage related to the Electric Division was completed. Based on these reviews and assessments, it is the opinion of Burns & McDonnell that the Electric System is being operated and maintained, including replacements and upgrades as appropriate, in a manner that is consistent with current electric utility practices. In addition, the current retail rates have provided sufficient revenues to satisfy the debt service coverage requirement in the Resolution. Further, it is the opinion of Burns & McDonnell that the balances in the various reserve funds maintained by the City for the Electric Division are sufficient for their intended purposes. We appreciate the cooperation and assistance provided by the City and the Electric Division staff in the preparation of this report. We will be happy to discuss the report with you at your convenience. Sincerely, Burns & McDonnell Ted J. Kelly Principal & Senior Project Manager TJK/sg 9400 Ward Parkway \ Kansas City, MO 64114 O 816-333-9400 \ F 816-333-3690 \ burnsmcd.com

FY 2016 Engineering Consultant’s Report Table of Contents TABLE OF CONTENTS Page No. 1.0 EXECUTIVE SUMMARY ................................................................................... 1-1 1.1 Introduction .......................................................................................................... 1-1 1.2 Electric System Overview and Assessment ......................................................... 1-1 1.2.1 General Plant ......................................................................................... 1-2 1.2.2 Production Plant .................................................................................... 1-2 1.2.3 Transmission and Distribution Plant..................................................... 1-3 1.3 Financial Overview and Assessment ................................................................... 1-3 1.4 Conclusions .......................................................................................................... 1-5 2.0 INTRODUCTION ............................................................................................... 2-1 2.1 Purpose of Report ................................................................................................ 2-1 2.2 Organization......................................................................................................... 2-2 3.0 ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT .................................. 3-1 3.1 Electric System Overview.................................................................................... 3-1 3.1.1 Production Plant .................................................................................... 3-2 3.1.2 Transmission and Distribution Plant..................................................... 3-2 3.1.3 General Plant ......................................................................................... 3-2 3.2 Production Plant Assessment ............................................................................... 3-3 3.2.1 Production Plant Operations ................................................................. 3-3 3.2.2 McKee Run Condition Assessment ...................................................... 3-9 3.2.3 VanSant Condition Assessment .......................................................... 3-12 3.2.4 Production Plant Conclusion............................................................... 3-13 3.3 Transmission and Distribution Plant Assessment .............................................. 3-14 3.3.1 Transmission and Distribution Plant Operations ................................ 3-14 3.3.2 Transmission and Distribution Plant Condition Assessment .............. 3-18 3.3.3 Transmission and Distribution Plant Conclusion ............................... 3-19 4.0 FINANCIAL OVERVIEW AND ASSESSMENT................................................. 4-1 4.1 Required Revenue ................................................................................................ 4-1 4.2 Electric Rates ....................................................................................................... 4-1 4.3 Operating Results ................................................................................................. 4-2 4.3.1 Adequacy of Electric Rates ................................................................... 4-6 4.4 Status of Revenue Bonds ..................................................................................... 4-7 4.5 Insurance .............................................................................................................. 4-8 4.6 Operating and Reserve Accounts ....................................................................... 4-11 4.6.1 Electric Revenue Fund ........................................................................ 4-11 4.6.2 Electric Improvement and Extension Fund......................................... 4-12 5.0 CONCLUSIONS ................................................................................................ 5-1 City of Dover, Delaware TOC-1 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Table of Contents APPENDIX A LIST OF TABLES Page No. Table 3-1: Year-End Plant in Service ...................................................................................... 3-1 Table 3-2: FY 2015 Generating Plant Operating Statistics ..................................................... 3-4 Table 3-3: Fiscal Year 2016 On-going/Planned Capital Expenditures.................................... 3-8 Table 4-1: Annual Sales and Customer Accounts ................................................................... 4-3 Table 4-2: Annual Revenues and Sales Ratios ........................................................................ 4-4 Table 4-3: Revenue Margins and Unaccounted for Energy .................................................... 4-5 Table 4-4: Comparative Statement of Revenues, Expense, ..................................................... 4-6 Table 4-5: Debt Service Coverage ........................................................................................... 4-7 Table 4-6: Debt Service Schedule of Electric Revenue Bonds................................................ 4-8 Table 4-7: Schedule of Insurance Coverage in Effect ............................................................. 4-9 Table 4-8: Reserve Account Activity and Balances .............................................................. 4-14 City of Dover, Delaware TOC-2 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Table of Contents LIST OF FIGURES Page No. Figure 2-1: Organization ........................................................................................................... 2-3 Figure 2-2: Administration Section ........................................................................................... 2-3 Figure 2-3: Electric Engineering Section .................................................................................. 2-3 Figure 2-4: Electric Transmission & Distribution Section ....................................................... 2-4 City of Dover, Delaware TOC-3 Burns & McDonnell

FY 2016 Engineering Consultant’s Report List of Abbreviations LIST OF ABBREVIATIONS Abbreviation Term/Phrase/Name Burns & McDonnell Burns & McDonnell Engineering Company, Inc. City City of Dover, Delaware DCS distributed control system EDQP Employee Development and Qualification Program EIA U.S. Energy Information Administration FY Fiscal Year GWh gigawatt-hour I&E Fund Electric Improvement & Extension Fund kV kilovolt kW kilowatt kWh kilowatt-hour LAN local area network McKee Run McKee Run Generating Station MW megawatt MWh megawatt-hour NAES North American Energy Services Corporation NERC North American Electric Reliability Corporation NRG NRG Energy Center Ohm standard unit of electrical resistance PJM Pennsylvania New Jersey Maryland Interconnection Report 2014 Engineering Consultant’s Report on the Operation and Maintenance of the Electric System Resolution Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 City of Dover, Delaware i Burns & McDonnell

FY 2016 Engineering Consultant’s Report List of Abbreviations VanSant VanSant Generating Station TEA The Energy Authority, Inc. City of Dover, Delaware ii Burns & McDonnell

FY 2016 Engineering Consultant’s Report Statement of Limitations STATEMENT OF LIMITATIONS In preparation of the Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System for the fiscal year ended 2016 (the Report), Burns & McDonnell relied upon information provided by the City of Dover, Delaware (the City). The information included various analyses, computer-generated information and reports, audited financial reports, and other financial and statistical information, as well as other documents such as operating budgets and current retail electric rate schedules. While Burns & McDonnell has no reason to believe that the information provided, and upon which Burns & McDonnell has relied, is inaccurate or incomplete in any material respect, Burns & McDonnell has not independently verified such information and cannot guarantee its accuracy or completeness. In addition, Burns & McDonnell has used the information provided to make certain assumptions with respect to conditions that may exist in the future. While Burns & McDonnell believes the assumptions made are reasonable for the purposes of the Report, it makes no representation that the conditions assumed will occur. City of Dover, Delaware iii Burns & McDonnell

1.0 – EXECUTIVE SUMMARY

FY 2016 Engineering Consultant’s Report Executive Summary 1.0 EXECUTIVE SUMMARY 1.1 Introduction The Fiscal Year 2016 Engineering Consultant’s Report on the Operation and Maintenance of the Electric System (Report) has been prepared in compliance with the requirements of the City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 (Resolution). Burns & McDonnell was retained as the Engineering Consultant by the City of Dover, Delaware (City) to complete an inspection of the Electric System and prepare a report on findings. The Resolution requires that the Engineering Consultant complete the following: “The City covenants that it will cause the Engineering Consultants employed under the provisions of Section 705 of this Resolution . . . to make an inspection of the Electric System at least once each fiscal year and . . . to submit to the City Manager a report setting forth (a) their findings whether the properties of the Electric System have been maintained in good repair, working order and condition and whether they have been operated efficiently and economically and (b) their recommendation as to (i) the proper maintenance, repair and condition of the Electric System during the ensuing fiscal year and an estimate of the appropriations which should be made for such purposes, (ii) the insurance to be carried under the provisions of Article VII of this Resolution, (iii) the amount that should be deposited during the ensuing fiscal year to the credit of the Improvement and Extension Fund for the purposes set forth in Section 510 of this Article, (iv) the extensions, improvements, renewals and replacements which should be made during the ensuing fiscal year, and (v) any necessary or advisable revisions of the electric rates.” This is the twelfth annual Engineering Consultant’s Report prepared for the City by Burns & McDonnell. 1.2 Electric System Overview and Assessment The Electric Division served a monthly average of 24,207 accounts in fiscal year (FY) 2016, approximately 20,065 of which were residential customers. Five of the Electric Division customers take service from the 69-kV transmission system. These customers include the Dover Air Force Base, Kraft, Proctor & Gamble, White Oak Solar and NRG Energy Center (NRG). NRG is an exempt wholesale City of Dover, Delaware 1-1 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Executive Summary generator that sells power that must be transmitted through the City’s transmission system to third party purchasers. When the NRG plant is not operational, the Electric Division provides power for the plant site. 1.2.1 General Plant General plant facilities consist primarily of Electric Division administrative and operations facilities and pollution control related equipment on McKee Run Generating Station (McKee Run) and VanSant Generating Station (VanSant). Other types of general plant include office furniture and equipment, transportation and power-operated equipment, and communication equipment. Effective July 1, 2011, the City entered into an Energy Management Agreement with The Energy Authority, Inc. (TEA) to assist the City with its energy procurement, energy sale, purchase of fuels, establishment and management of risk policies, and the development and management of hedging protocols and related energy procurement challenges. Headquartered in Jacksonville, Florida, TEA is a non-profit energy manager owned by seven public utility systems operating across the nation. 1.2.2 Production Plant The City owns two generating plants, the McKee Run and VanSant generating stations. McKee Run consists of three steam turbine generating units with a total combined capacity of 136 megawatts (MW). VanSant is a 39 MW simple-cycle combustion turbine unit. NAES Corporation operates the generating plants. The agreement between the City and NAES Corporation has been in effect since July 1, 2006. The various systems and components of the generating plants reviewed by the Engineering Consultant are listed below: Major Equipment • Steam turbines/generators • Boilers and auxiliaries • Station cooling water systems • Fuel handling systems • Water treatment systems • Station electrical systems • Station control systems • General facilities City of Dover, Delaware 1-2 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Executive Summary Management and Organization • Safety • Training • Staffing Based on statements and information provided by the City, as well as the observations and reviews performed, it is the Engineering Consultant’s opinion that the City’s power generation facilities are being operated and maintained consistent with generally accepted electric utility practice in the United States. In general, the performance, operation, maintenance, staff, planning, and training aspects for the McKee Run and VanSant were found to be above average. Specifically, the generation facilities have demonstrated a high level of availability despite the dispatching of the units primarily for peak demand. 1.2.3 Transmission and Distribution Plant The transmission and distribution network includes 44 miles of overhead transmission lines, 0.12 miles of underground transmission lines, 179.8 miles of overhead distribution lines and 287.18 miles of underground distribution lines. Five Electric Division customers take service from the 69-kV transmission system. The following list includes areas of the transmission and distribution system that were considered and reviewed. • System reliability • Power quality • Operations and maintenance • Design standards and specifications • Transmission and distribution improvements It is the Engineering Consultant’s opinion that the design, construction, operation, and maintenance of the City’s electric transmission and distribution system and the associated facilities are consistent with current generally accepted electric utility standards. In recent years, the City has made appropriate upgrades and improvements which the Engineering Consultant has observed while conducting the reviews and assessments to complete the annual reports. 1.3 Financial Overview and Assessment The level of revenues required from the retail electric rates for the Electric Division were determined through the analysis of the financial results and net income or net margins for FY 2016. The Resolution requires that the Electric Division maintain a debt service coverage ratio of 1.25. City of Dover, Delaware 1-3 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Executive Summary Customers of the Electric Division of the City were charged for the electric service they received based on the City’s rate schedules and contracts that were in place in FY 2016. A comprehensive cost-of-service and rate design study was completed in 2006 and subsequent rate analyses were completed in 2007, 2008, 2012, 2013, and 2015 to examine revenue requirements and revenue generation. Specifically, the 2006 rate study was conducted to address increased costs associated with a new power supply contract that became effective on July 1, 2006. The rate study recommended combining several rate classes and implementing rate increases on July 1, 2006. The 2006 rate study also recommended an additional increase be implemented on January 1, 2007 to cover increased costs associated with operating the generating station. The 2007 and 2008 rate analyses re-examined Electric Division revenues and expenses and recognized additional revisions to power supply costs. Because of these analyses, additional rate increases were implemented on July 1, 2007, July 1, 2008, and July 2012. The July 2013 rate adjustments established the rate schedules utilized by the Electric Division today. Total energy sales decreased from 723 GWh in FY 2015 to 713 GWh in FY 2016, a decrease of 1.34 percent. Total revenue from sales to electric customers in FY 2016 was $79.1 million, representing an increase of $0.82 million from FY 2015. In FY 2016, the average revenue per kWh for residential customers was 12.49 cents and the system-wide average price was 11.07 cents per kWh. The Electric Division’s largest cost in providing electric service to its customers is the wholesale cost of power purchased from the Pennsylvania New Jersey Maryland Interconnection (PJM) marketplace through its energy manager, TEA. From FY 2015 to FY 2016, the cost of power decreased from $50.0 million to $42.6 million. Net income was a positive $3.0 million in FY 2015 and increased to a net income of $7.2 million in FY 2016. General Administration expenses increased between FY 2015 and FY 2016, however, the net income increase in FY 2016 was due to a decrease in power supply costs and a decrease in retiree health care, while all other expenses stayed relatively constant. Following is an excerpt from Section 502(c) of the Resolution. “(c) The total amount of the Revenues of the Electric System during the preceding fiscal year shall have been not less than the total of the following: The Current Expenses of the Electric System during the current fiscal years shown by the Annual Budget . . . for such fiscal year, and City of Dover, Delaware 1-4 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Executive Summary One hundred twenty-five percent (125%) of the maximum amount of the Principal and Interest Requirements for any fiscal year thereafter on account of all bonds then Outstanding under the provisions of this Resolution.” The Resolution requires that annual revenues of the Electric Division be no less than the total current expenses plus 125 percent of the greatest remaining annual debt service. The Electric Division achieved debt service coverage ratios for FY 2014, FY 2015, and FY 2016 of 3.51, 4.98, and 4.80, respectively. Therefore, the revenues generated by the current electric rates have been sufficient to meet the applicable covenant of the Resolution. The City maintains a comprehensive insurance program to cover varying types of liabilities, as well as significant losses related to various Electric Division properties. It is the opinion of Burns & McDonnell as Engineering Consultant, and not as insurance counselor, the insurance in full force and affect appears to satisfy the requirements of Section 706 of the Resolution. The City established the Electric Revenue Fund and the Electric Improvement & Extension (I&E) Fund to make money available for specific purposes when they are needed. The following is a list of these funds’ respective cash accounts: Electric Revenue Fund • Insurance Reserve Account • Contingency Reserve Account • Electric Rate Stabilization Reserve Account • Interest and Sinking Account Electric Improvement and Extension Fund • Depreciation Reserve Account • Future Capacity Reserve Account The Engineering Consultant reviewed activity information on the accounts listed above and found that the balances in those accounts as of June 30, 2016, were consistent with the required or target balances. 1.4 Conclusions Based on the reviews and assessments completed, it is the opinion of Burns & McDonnell that: City of Dover, Delaware 1-5 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Executive Summary 1. The City’s power generation facilities are being operated and maintained consistent with accepted electric utility practice in the United States. 2. The design, construction, operation, and maintenance of the City's electric transmission and distribution system and associated facilities are consistent with generally accepted electric utility standards. The system has been upgraded to improve operation, reliability, and service quality to customers. 3. The Electric Division capital projects included in the City’s Capital Investment Plan and the FY 2017 Operating Budget are necessary and should provide improved reliability and power quality for the Electric System. 4. The balances as of June 30, 2016, for the various reserve funds maintained by the City for the Electric Division appear to be sufficient for their defined purposes. 5. The insurance coverage in full force and affect as maintained by the City related to the various assets of the Electric Division appears to satisfy the requirements of Section 706 of the Resolution. 6. The electric revenues generated by the City’s current retail rates are more than sufficient to fulfill the debt service coverage requirement defined in Section 502(c) of the Resolution. City of Dover, Delaware 1-6 Burns & McDonnell

2.0 – INTRODUCTION

FY 2016 Engineering Consultant’s Report Introduction 2.0 INTRODUCTION The City of Dover, Delaware (City) operates a municipally-owned electric utility system that served 24,240 customers, excluding lighting, within the City and surrounding areas at the end of fiscal year (FY) 2016. The 68 square-mile service area of the electric utility is in central Delaware; with the City, itself located approximately 70 miles south of Philadelphia, Pennsylvania. 2.1 Purpose of Report This FY 2016 Annual Engineering Consultant’s Report (Report) has been prepared in compliance with the requirements adopted December 23, 1985 of the City of Dover Electric Bond Resolution (Resolution). Burns & McDonnell was retained by the City as the Engineering Consultant defined in Section 705 of the Resolution, as follows. “The City covenants that it will, for the purpose of performing and carrying out the duties imposed on the Engineering Consultants under the provisions of this Resolution, employ an independent engineer or engineering firm or corporation having a nationwide and favorable repute for skill and experience in such work.” The required scope of the Report is described in Section 504 of the Resolution, as follows. “The City covenants that it will cause the Engineering Consultants employed under the provisions of Section 705 of this Resolution . . . to make an inspection of the Electric System at least once each fiscal year and . . . to submit to the City Manager a report setting forth (a) their findings whether the properties of the Electric System have been maintained in good repair, working order and condition and whether they have been operated efficiently and economically and (b) their recommendation as to (vi) the proper maintenance, repair and condition of the Electric System during the ensuing fiscal year and an estimate of the appropriations which should be made for such purposes, (vii) the insurance to be carried under the provisions of Article VII of this Resolution, (viii) the amount that should be deposited during the ensuing fiscal year to the credit of the Improvement and Extension Fund for the purposes set forth in Section 510 of this Article, (ix) the extensions, improvements, renewals and replacements which should be made during the ensuing fiscal year, and City of Dover, Delaware 2-1 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Introduction (x) any necessary or advisable revisions of the electric rates.” 2.2 Organization The Electric Utility Director is responsible for the overall management of the Electric Utility Division. Mr. Harry Maloney is the current Electric Utility Director for the Electric Division. The Electric Director oversees the day-to-day operations of the Electric Division and manages the Division’s staff. The Director also provides oversight of the production plant budget, monitors the contracts of the energy coordinator and the power generation operator/manager, and is responsible for North American Energy Services Corporation (NAES Corporation) contracts and oversight. The Electric Division is organized into four separate operating sections. Descriptions of the current Electric Division sections are provided below. Administration Section – Administration provides the overall management of the Electric Division’s Engineering and Transmission & Distribution Sections. This section performs all planning and budgeting, monitors all construction projects, administers all power supply and generating station operations agreements, and coordinates with customer service and public relations for the Electric Division. Electric Engineering Section – Electric Engineering provides design, specifications, construction management, and project inspection for all capital investment projects of the Electric Division. This section also develops and maintains maps, plans, and specifications, as well as engineering standards for construction and maintenance of the Electric System. The group formerly known as the System Operations Section has been reorganized as part of the Electric Engineering Section. This group is responsible for the operation of a 24/7 system operations control center and is comprised of the System Operators Crew Leader and the Operators. Transmission & Distribution Section – Transmission & Distribution constructs, operates, and maintains the overhead and underground electric systems and fiber optic communication facilities. This section installs and maintains all electric metering, as well as street and security lighting. This section also investigates and resolves customers’ power supply problems and oversees the work of tree trimming contractors. Figures 2-1 through 2-3 provide organizational charts illustrating the staffing hierarchies of the various sections in the Electric Division. The number of individuals in each position is indicated as appropriate. Electric Division staff totaled 38 at the time this report was issued. City of Dover, Delaware 2-2 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Introduction Figure 2-1: Organization City Manager Electric Director (1) Administration System Electric Electric T&D (2) Operations (5) Engineering (8) (22) Figure 2-2: Administration Section Administration Administrative Assistant (1) Account Clerk II (1) Figure 2-3: Electric Engineering Section Engineering Services & System Operations Supervisor System Ops. Substation Engineering Electrical Electric Crew Leader Tech Crew Crew Leader Engineer (1) Draftsman (1) (0) Leader (1) (1) Engineering Substation SCADA Tech Fieldworker Tech (2) (1) (1) City of Dover, Delaware 2-3 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Introduction Figure 2-4: Electric Transmission & Distribution Section Electric Transmission & Distribution Line Crew Superintendent (1) T&D Lineman Crew Electric Meter Groundworker Engineering Leader 1st Tech Crew (2) Coordinator (1) Class (3) Leader (1) Lineman 1st Lineman 2nd Linemand 3rd Electric Meter Class (8) Class (2) Class (3) Tech (1) The subsequent sections of the Report provide a discussion of the required reviews and inspections conducted pursuant to Section 504 of the Resolution. Section 3.0 describes the assessment of the Electric System and its condition. Section 4.0 presents the financial results for the Electric Division, including an analysis of the adequacy of revenues provided by the electric rates. Section 5.0 summarizes the conclusions of Burns & McDonnell regarding the operation and maintenance of the Dover Electric System. City of Dover, Delaware 2-4 Burns & McDonnell

3.0 – ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment 3.0 ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT 3.1 Electric System Overview The Electric System owned by the City primarily consists of a production plant, transmission plant, distribution plant, general plant facilities, and construction work in progress. Table 3-1 displays the year- end balances of the various plant components for FY 2014 through FY 2016. Table 3-3 itemizes the specific capital investment plan projects and anticipated expenditures included in the FY 2017 budget. Table 3-1: Year-End Plant in Service FY 2014 FY 2015 FY 2016 Capital assets, not being depreciated Land $ 1,458,066 $ 1,458,066 $ 1,458,066 Construction in progress 1,690,462 2,364,099 2,265,262 Total capital assets, non-depreciable $ 3,148,528 $ 3,822,165 $ 3,723,328 Capital assets, being depreciated Buildings $ 17,666,269 $ 17,675,949 $ 17,881,414 Production 65,913,284 66,561,061 66,252,450 Transmission 35,084,087 35,899,287 36,684,541 Distribution 62,388,947 63,392,975 65,068,946 Administration 1,743,754 1,743,754 1,783,987 Vehicles 645,747 607,949 649,439 Total capital assets, being depreciated $ 183,442,088 $ 185,880,975 $ 188,320,777 Less accumulated depreciation for: Buildings $ (12,172,080) $ (12,576,076) $ (13,030,240) Production (44,002,794) (45,423,777) (46,936,655) Transmission (12,776,190) (14,045,341) (15,095,269) Distribution (28,382,673) (29,742,291) (31,134,017) Administration (1,427,205) (1,536,190) (1,647,784) Vehicles (517,428) (482,121) (522,830) Total accumulated depreciation $ (99,278,370) $ (103,805,796) $ (108,366,795) Total capital assets, being depreciated, net 84,163,718 82,075,179 79,953,982 Total capital assets, net $ 87,312,246 $ 85,897,344 $ 83,677,310 In FY 2016, the Electric System experienced an increase in the annual system peak demand and a decrease in annual energy sales from the previous year. The Electric System experienced its peak at 5 p.m. on July 20, 2015 of 158.5 MW; an increase of 0.5 MW from the previous year. For the year, 713 GWh of energy were sold; a decrease of 1.34 percent from the preceding year. The Electric Division projects energy sales in FY 2017 to total 722 GWh, showing constant energy sales from 2016. The Electric Division expects annual energy sales to grow moderately from FY 2017 through FY 2020. City of Dover, Delaware 3-1 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment 3.1.1 Production Plant The City owns two plants, the McKee Run and VanSant generating stations. McKee Run consists of three steam turbine generating units with a total combined capacity of 136 megawatts (MW). VanSant is a 39- MW simple-cycle combustion turbine unit. Generating units 1 and 2 from McKee Run station are currently scheduled to be retired in June 2017. NAES Corporation operates the generating plants. The organizational structure of NAES has changed based on the city’s request and general operating requirements. The agreement between the City and NAES Corporation has been in effect since July 1, 2006. The Engineering Consultant’s observations regarding the generating stations and units are described later in this section of the Report. Effective July 1, 2011, the City entered into an Energy Management Agreement with The Energy Authority, Inc. (TEA) to manage the sales associated with the production plants; the Electric Division’s first contract with TEA. TEA also assists the City with its energy procurement, energy sales, purchase of fuels, establishment and management of risk policies, the development and management of hedging protocols and related energy procurement challenges. 3.1.2 Transmission and Distribution Plant The service area includes 179.8 miles of overhead lines, 287.18 miles of underground lines. Five Electric Division customers take service from the 69-kV transmission system. These customers include the Dover Air Force Base, Kraft, Proctor & Gamble, and NRG Energy Center (NRG). NRG is an exempt wholesale generator that sells power that must be transmitted through the City’s transmission system to third party purchasers. When the NRG plant is not operating, the Electric Division provides power for the plant site. The Electric Division has two contracts for providing transmission service through the Electric System. The Electric Division provides transmission service to NRG for the output of its 16 MW electric generator. The Electric Division also has a point-to-point contract for the output of an NRG Combustion Turbine which ties directly to the Kent Substation and is not part of the Dover transmission system. 3.1.3 General Plant The general plant category consists primarily of Electric Division administrative and operations facilities, and pollution control-related equipment at McKee Run and VanSant. The agreement with NAES Corporation stipulates NAES Corporation manage the operation and maintenance of the facilities while the City funds all replacements and upgrades required for maintaining the capability of the two generating stations. The City is also responsible for the costs of compliance with new regulations promulgated. Other types of items included in the general plant category include office furniture and equipment, computer- City of Dover, Delaware 3-2 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment related equipment, transportation and power-operated equipment, and communication equipment. Burns & McDonnell did not specifically assess the items in the general plant category for this Report. 3.2 Production Plant Assessment Burns & McDonnell made observations and conducted assessments of the Electric System assets in support of the development of this annual Engineering Consultant’s Report. On March 10, 2017, Mr. Ted Kelly of Burns & McDonnell met with representatives of NAES Corporation to discuss the condition of the McKee Run and VanSant generating stations. Mr. Stacy Johnson, the Plant Manager, coordinated the visit. Mr. Kelly also met with Mr. Jacob Aucoin, the Plant Engineer during the visit. The findings of Burns & McDonnell from the assessment of the City’s production plant assets are documented herein. 3.2.1 Production Plant Operations McKee Run consists of three units. Units 1 and 2 were originally coal-fired units, which began operations in 1961 and 1962, respectively. In 1972, these units were converted to burn No. 6 fuel oil. Units 1 and 2 each have rated capacities of 17 MW. Unit 3 began operations in 1975 and was designed to fire No. 6 fuel oil and natural gas. Unit 3 has a rated capacity of 102 MW. In FY 2008, the City began work to convert all three units at McKee Run to burn No. 2 fuel oil to reduce pollution from the plant. The necessary upgrades and new equipment were installed allowing each of the units to burn both natural gas and No. 2 fuel oil. VanSant consists of a simple cycle combustion turbine with a rated capacity of 39 MW. This unit commenced operation in 1991. An inlet fogging system was installed in the spring of 2015 and capacity testing performed in June 2015 proved a 4 MW increase in unit capacity. VanSant remains unmanned, except when it is dispatched into service. On the occasions when the unit is dispatched, personnel from McKee Run travel to VanSant to startup and operate the unit until the unit dispatch is released by PJM. There is an action item to restore remote start capability to allow the unit start time to be reduced to 15 minutes, currently the transmission operator is asked to allow 1 hour for starting time because the VanSant site is not manned. A remote start capability for this unit would improve the dispatch starting time and increase unit run hours for quicker response to area transmission needs. 3.2.1.1 Management and Organization Station management is well organized and knowledgeable. Personnel take a logical approach to the operation and maintenance of the generation facilities. Mr. Don Mordus served as the Plant Manager through February 13, 2017. Mr. Stacy Johnson is now serving as the plant manager. The management/leadership team consists of eight positions including Mr. Johnson’s position. The City of Dover, Delaware 3-3 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment Administrative Manager, Plant Engineer, Compliance Coordinator, and Materials Coordinator, all report directly to Mr. Johnson. The Plant Engineer oversees and assists with plant operations and engineering compliance. He works closely with the Maintenance Supervisor and three Operations Supervisors to ensure all plant parameters are observed and equipment can be operated per the OEM operating procedures. He provides engineering review for plant modifications and the management of change program. When fully staffed, each operations team consists of an operations supervisor and three operators working 12-hour rotating shifts. The maintenance team consists of a supervisor and five employees per shift, working eight-hour shifts. The operations and maintenance hourly personnel are all union employees. The relationship between the union and management was reported to be excellent. McKee Run is currently at a staff level of 26 employees. 3.2.1.2 Major Equipment Operations and Maintenance In general, the generation facilities appear to have been properly operated and maintained, and in good condition as evidenced by the high availability of the units. The generation facilities are dispatched sparingly and operate primarily as peaking units. As such, the individual units incur a low annual capacity factor. Table 3-2 summarizes the major FY 2016 operating statistics. Table 3-2: FY 2015 Generating Plant Operating Statistics Rated Net Net Heat Capacity - Production - Net Capacity Rate Number of Unit MW kWh Factor Btu/kWh Starts VanSant 39 1,180,449 0.35% 20.742 12 McKee Run Unit 1 17 69,226 0.05% 12.018 1 Unit 2 17 53,897 0.04% 22.328 2 Unit 3 102 33,359,090 3.73% 11.462 37 Total 175 34,662,662 2.26% 12.250 52 Forced Outage Operating Service Availability Unit Hours Hours Factor Factor VanSant 111 33.5 0.38% 2.78% McKee Run Unit 1 - 7.2 0.08% 0.63% Unit 2 - 10.2 0.12% 0.73% Unit 3 6 317.4 3.62% 13.24% Total 116.8 368.3 4.20% 8.46% City of Dover, Delaware 3-4 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment The large amount of time that units are not operating allows for maintenance and repair of the units. Thus, the FY 2016 overall equivalent availability factor for the generation facilities averaged 55.95 percent. Low net capacity factors are offset by PJM capacity credits. In FY 2016, $10.5 million of PJM capacity credits helped cover the entirety of purchased capacity costs. PJM capacity credits are expected to continue to offset significant portions of system capacity costs in FY 2017 and beyond. 3.2.1.3 O&M Management System Maintenance activities are organized, planned, and managed using MP2tm by CMMS Data Group, a computer-based management system. All three major categories of maintenance activities (corrective, preventative, and predictive) are electronically managed by MP2tm. The city is getting better use of the system and is improving on their outstanding work orders, reducing from approximately 400 to close to 100. For corrective maintenance activities, any station operator or mechanic can enter a work order into the system at any terminal on the Station local area network (LAN). A supervisor reviews the request, turns it into a work order, and assigns a priority per a predetermined categorization. The work order is planned, parts are ordered, and then the work order is assigned to an operator or maintenance technician for completion once the material has been received. This system is also used to manage and track preventative maintenance activities that follow a schedule. Changing filters, and turning on and off heat tracing are examples of preventative maintenance. Predictive maintenance activities practiced include oil analyses, vibration testing, and infrared surveys. Portable vibration testing equipment is used at the Stations to improve the frequency of and capabilities to trouble- shoot rotating equipment. This technology allows personnel to identify problems and take corrective actions before equipment failure can occur. In FY 2016, the City started or planned several general upkeep items at the plants as well as initiated several larger items. Starting in FY2016, the plant will be winterized to keep the temperature above 40 degrees Fahrenheit to shorten the time to reach full capacity. The power plant is also working to reinstate the remote start capability of the VanSant unit to allow quicker dispatch time, improve PJM’s dispatch of the combustion turbine and earn better revenue ultimately to comply with market requirements and the PJM Capacity Performance program. 3.2.1.4 Safety “Safety First” is an overall theme and attitude of the Electric Division. Near-miss incidents are documented, reviewed, and corrective follow-up actions are taken as required with an employee-run City of Dover, Delaware 3-5 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment safety committee actively in place. This committee conducts monthly safety meetings, completes safety equipment inspections, and defines and implements tasks to improve safety in all areas. Members of the safety committee complete periodic visual inspections of employee work activities utilizing an observation checklist to detail their findings. Recorded observations are discussed and infractions corrected. Safety is the first topic discussed at all meetings at the generating plant, prior to the start of each meeting a “safety moment” is discussed, before the morning management meeting and at the beginning of each shift turnover. An indoctrination video emphasizing safety is shown to all visitors when entering the Station. Mr. Mike Benkert, Senior Project Manager – Safety, reported an accident in January 2015 when an employee slipped on ice at the VanSant facility. The incident resulted in a broken ankle and 6 months off work for rehabilitation. The ice buildup was on a walkway sloped towards the building allowing a pooling of water and ice formation in cold weather. The walkway was replaced in the summer of 2015 and sloped for proper rain and water run off to preclude a repeat of this incident at the VanSant site. For 2016 there were no lost time accidents so the updated lost time accident rate for the City of Dover generation plant is zero. The Plant Manager has made a strong commitment to improving the safety culture to reduce or eliminate recordable accidents at the sites through a NAES Safe approach and focus of all employees. The last recordable at the plant was on April 16, 2015. 3.2.1.5 Training The required annual OSHA compliance training is completed and documented for each employee. A formal two-day employee orientation program is required for all new employees. This orientation covers a multitude of subjects from employee benefits to a review of the various Station operating manuals. For operator training, the Employee Development and Qualification Program (EDQP) was established prior to 2002. EDQP is a formal program for training operators to progressively advance to positions with additional responsibilities. The training program is a combination of a self-paced and instructor-led learning. In addition to the above programs, cross training of various disciplines also occurs. An example of cross training would be plant operators training with maintenance staff. NAES has replaced the EDQP program with the standard NAES Training Manual, it is made up of qualification levels more applicable to the specific technology operated at the City of Dover utility. NAES has implemented the new training manual qualifications procedure in 2015 an all new employees are being trained per this training program. As current employees complete their existing EDQP qualification level they are shifted in to the NAES TMP Manual program. City of Dover, Delaware 3-6 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment Plant staff receive environmental and safety training online via the GPi Learning website. The training includes tutorials and exams to ensure comprehension of the subject matter. Plant manuals, meetings, and lessons learned offer additional safety training topics. The plant staff also performs safety stand downs based on industry events, lessons learned and best practices that occur in other NAES operated facilities and the industry at large. Plant staff continues to receive appropriate operator certification training for the Pennsylvania New Jersey Maryland Interconnection (PJM) market. This training will continue in the future and is funded by the City to ensure their operators are knowledgeable and conform to the PJM required operator directions when required. The plant also performs, plans, and schedules continuing education training on a regular basis for certified PJM plant operators. Non-certified operators are also encouraged to attend this training to help them prepare for operator certification which is an expectation of all operators by their 18 months’ anniversary at the generation plants. In FY2015, all plant operators without the operating certification from NAES were required to attend training courses to prepare them for completing the PJM certification. The three newest operators are not PJM certified, but are working toward certification. All other operators are PJM certified. 3.2.1.6 Capital Improvements The following table describes 2017 fiscal year on-going and planned Capital Expenditures for the system. The table is organized into three categories, completed, on-going, and planned improvements to the City’s assets: City of Dover, Delaware 3-7 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment Table 3-3: Fiscal Year 2016 On-going/Planned Capital Expenditures Production McKee Run & VanSant Preservation of Structures $ 28,832 McKee Run Building Equipment Replacements 40,018 Unit 3 Software & Compupter Upgrades - CEMS 3,650 Unit 3 - Stack Repairs 2,624 Unit 3 Boiler Systems 69,351 Unit 3 Auxillary System Components 98,331 Unit 3 Turbine Outage - Inspections & Repairs 39,700 VanSant Plenum Replacement 422,659 VanSant Capacity Increase 221,308 VanSant Software & Compupter Upgrades - CEMS 3,650 VanSant Component replacements 13,051 Safety & Compliance Improvements 21,707 Subtotal Electric Generation Division $ 964,881 Transmission & Distribution New Developments - UG Transformers $ 193,332 New Developments - UG Conductors/Devices 477,786 NBR Properties, LLC 11,325 Meter Replacements & System upgrades 60-46 & 40-25 27,065 Vehicles, Trucks, & Equipment 399,941 Subtotal Electric Transmission Division $ 1,109,449 Electric Engineering Townpoint Distribution Upgrades $ 270,641 Oak Grove Trailer Park Distribution Upgrade 1,137 Lakeland Laurel Point - Distribution Upgrade 33,626 Route 8/Taps - Distribution Upgrade 34,778 Townsend Brothers - Distribution Upgrade 6,945 Persimmon Tree Apartments - Distribution Upgrade 16,980 Dover East Estates - Distribution Upgrade 4,531 Lighting Project and Rehabilitation 68,101 Satellite Syncrhonized Substation Clocks 1,200 Horsepond Road Substation Reliability Upgrade 49,450 Transmission Line Maintenance Program 31,881 GOTP Transmission Line Relocation 169,076 Fault Indicators 8,828 Horsepond SS to Cartanza 69kv Rebuild 67,881 Weyant Hall Roof Refurbishment 137,365 Weyant Hall Security Improvements $ 46,181 General Scott Switchgear 792,252 Subtotal Electric Engineering Division $ 1,740,853 Total Planned Capital Investment Projects $ 3,815,183 City of Dover, Delaware 3-8 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment 3.2.2 McKee Run Condition Assessment The following is a summary of the condition assessment of major equipment at McKee Run as presented by the NAES corporation staff. Units 1 and 2 will be decommissioned in 2017; therefore, major maintenance and capital projects have been and will be limited for these units soon. Burns & McDonnell made no internal assessments of equipment during the facility tour. XL Insurance completes inspections of the Electric Division production facilities on an annual basis. After each inspection, the insurance provider issues a report detailing its risk reduction recommendations. Burns & McDonnell has not received the insurance inspection report from XL Insurance based on the inspection conducted on March 9, 2017. 3.2.2.1 Steam Turbines/Generators The steam turbines and generators for VanSant and McKee Run Units 1 and 2 were reported to be in satisfactory condition with no major problems. At the time of Burns & McDonnell inspection, Unit 3 was in routine annual outage. No inspections, planned maintenance or upgrades were completed on Units 1 and 2 during the 2015 outages. During the spring 2014 outage, Unit 3 was dismantled and inspected. Erosion was detected in some places and steps were taken to mitigate. The unit experienced the same vibration issues that were historical on the unit during the startup process after the spring outage. The contractor was dissatisfied with the unit operation and the unit had a rub. The decision was made to go back into the unit and found that the turbine end packing housing was misaligned .050” in the turbine casing and corrected the problem by having the gland box machined for proper alignment and proper gland packing operation without the “rub”. The rotor growth was causing the packing to “rub” and wear. Post work testing of the unit after the gland packing box machining revealed that the vibration issue was resolved. The rotor would grow without rubbing and the vibration issue was resolved. Unit 3 goes through a routine annual outage, and in 2018 will have a valve inspection done on the turbine. Scheduled outages in 2017 will occur on Unit 3 and on VanSant; one being in the spring and one in the fall. 3.2.2.2 Boilers and Auxiliaries Boiler inspections are conducted every year on each of the boilers. The annual inspections typically include the inspection and cleaning of the major boiler components, including the mud and steam drums, the forced draft and induced draft fans, the wind box, condenser water box, condenser tubes, hot well, air preheater components, and safety valves. City of Dover, Delaware 3-9 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment During the spring 2014 outage, piping maintenance and replacements earned the most attention at Unit 1 in addition to typical planned inspections and maintenance on all units. Unit 2 repairs were primarily piping focused as well. Ash and debris was cleared from Unit 3 and a leak was found and repaired. No adverse conditions, controls, or operational concerns were reported during the 2014 fall outage at Units 1 and 2. During that outage the neutralization pit liner was replaced, new insulation and lagging was installed on the high-energy piping, and leaking tubes were replaced all on Unit 3. Additionally, a grating and cover will be added. During February 2015, there was a severe cold weather event which caused problems for the plant equipment, those problems were all corrected, as stated previously, through winterizing the plant and keeping it above 40 degrees during the winter months. In addition, the chemistry issues have been addresses and corrected. There is a higher focus on maintaining boiler water chemistry to mitigate boiler tube failures and improve oiler water chemistry overall. No further issues with this problem have occurred. 3.2.2.3 Station Cooling Water Systems The Station has split cooling water systems with one system serving Unit 1 and Unit 2 and a separate system serving Unit 3. Projectile tube cleaning was completed on the Unit 1 and Unit 2 condensers during the spring FY 2011 outage. All the tubes in each unit were cleaned utilizing the scraper blade plug method. Samples were taken from the tube cleanings and retained for inspection. No leaks were detected in the expansion joint or condenser tubes. Each condenser box was cleaned. A significant Unit 3 cooling tower project was completed in CY 2014. This project included the change out of several columns in the tower, work on the hot deck, and balancing of water flow. The cooling water systems are reported to be sufficiently sized and in satisfactory condition. Work is currently being done to reroute where the water is flowing in from to improve existing water mix. This work is projected to be completed by the end of April 2017. 3.2.2.4 Fuel Handling Systems Natural gas is delivered to the Station via a 4-inch pipeline for Unit 1 and Unit 2 and in a 10-inch diameter pipeline for Unit 3. No. 2 fuel oil is delivered to the Station by truck and unloaded into tanks. Forwarding pumps deliver the fuel oil to each of the units. No major fuel projects were reported to be completed in FY 2016 but they will be inspecting and replacing fuel hoses as needed. City of Dover, Delaware 3-10 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment 3.2.2.5 Water Treatment/Steam Purity Quality control parameters for boiler feed-water, internal boiler water, cooling tower water, and steam purity are checked at a minimum of twice per day when systems are operating. Results are recorded and graphically compared to control limits. Adjustments are then made as required. Boiler feed water is treated city water (well water from the City) using a regenerative ion resin demineralizer system, along with deaeration for oxygen control. Boilers 1 and 2 use a coordinated phosphate control for boiler internal purity control and Boiler 3 uses a balanced trisodium phosphate and disodium phosphate within a narrow pH range. A deep-bored water well was installed to provide water in addition to the City supplied water. City water has a high chlorine level which may exceed the Station permitted limits. By combining City water with the well water, the chlorine levels can be maintained at the permitted limits. Water for cooling tower makeup is also obtained from City water. The primary control parameter is silica concentration. Blow down is adjusted as required to maintain control. The City received an industrial waste water permit from Kent County to be able to discharge cooling water to the sewer system. No major water treatment issues were reported at the time of this Report. Steam purity is not continuously monitored. Samples are taken at least twice daily and tested for pH, conductivity, and silica. There have not been any problems with steam purity. Annual inspections of the boiler drums and separation internals have verified that these systems are intact and operating properly. In FY 2016, the station did not experience any internal corrosion related failures, steam path deposits, or excessive condenser fouling. Condor Technologies provides water treatment consulting services and chemicals. A representative visits the Station periodically to review test data and check chemical usage rates. No major issues were reported at the time of this Report. 3.2.2.6 Station Electrical Systems Overall, Station electrical systems and transformers are in satisfactory condition. A condition assessment of the generation facilities’ transformers was conducted in 2014 by TJ/H2b Analytical Services. Oil inspections and analyses were conducted. The inspector recommended that normal operation continue for all the transformers at the plant; however, heating was indicated at two of the transformers. The City has a contract with an environmental consultant to check each substation for oil leaks and to provide instruction on cleaning up in the event of an oil spill. Oil sampling is now completed twice per year on the generator step-up transformers (GSUs). Based on the 2012 XL Insurance annual inspection, there are still no sprinkler protection or blast walls for GSU’s 1-3. In 2012, the city had blast walls installed between Units 1 and 2 auxiliary transformers as City of Dover, Delaware 3-11 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment recommended in the insurance report. This item has since been closed per the insurance company. All plant transformers are examined annually. 3.2.2.7 Station Control Systems Unit 1 and Unit 2 controls are electro-pneumatic. Unit 3 controls are a distributed control system (DCS). In general, the station control systems are in satisfactory condition. The Unit 1 and Unit 2 control systems are outdated but perform satisfactorily. All relays have recently been inspected at both McKee Run and VanSant for North American Electric Reliability Corporation, PJM Interconnection and Mid-Atlantic Area Council compliance. The electro hydraulic control system was modified to become a primary/primary system in 2013. In 2013 additional control wiring was installed to upgrade the Unit 1 and Unit 2 gas control system. No additional controls upgrades or issues to report for FY 2016. 3.2.2.8 General Facilities No major projects or improvements were completed to the General Facilities in FY 2015 other than installing building heaters and routine maintenance and repairs. In FY 2016, the Unit 3 stack was completely relined. A nitrogen generator was added at the plant to keep nitrogen on the boiler at all times. In general, the station facilities appeared clean and well maintained during the site visit. 3.2.3 VanSant Condition Assessment The following is a summary of the condition assessment of major equipment at VanSant as presented by the NAES corporation staff. Burns & McDonnell made no internal assessments of equipment during the facility tour. In general, the unit is operated infrequently, but is well maintained. The VanSant unit has the capability of black starts. The unit does not currently have remote start capability. The Title V permit requires that the station be manned within 15 minutes of starting the unit and when the unit is operating. An operator travels to the site and performs a twice daily walk down of the unit with a checklist of items to review and the walk down results are logged. In FY 2016 sections of the plenum were changed out, stack repairs were completed, and preparations were started for the major outage overhaul. During the outage, the work scope will be validated through the unit inspection. XL Insurance completes inspections of the Electric Division production facilities on an annual basis. After each inspection, the insurance provider issues a report detailing its risk reduction recommendations. The lone recommendation for VanSant following the FY 2012 inspection addressed safety. XL Insurance recommended the installation of gas detection equipment at the plant. A gas detection system has been installed. The gas detectors will activate the fire suppression system and alarm to the central control City of Dover, Delaware 3-12 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment system. No other major repairs or upgrades were made at VanSant in FY 2013. No new recommendations were made in 2015. However, 2015 oil sample analysis of VanSant turbine was rated marginal due to high particle count. During the spring outage in 2016 the unit is scheduled to have the lube oil sump cleaned and inspected by Total Lubrication and inspected which will resolve the high particulate count. Inlet fogging was added in FY 2015 and is enclosed by the shed on site. A capital project was completed on the exhaust stack and the D1 water tank was cleaned in FY 2014. NAES Instrument, Control and Electrical (IC&E) Technicians completed four recommended General Electric Technical Information Letters (TIL) projects for VanSant Unit 11 in the spring 2014 outage as shown below: 1. Annual TIL 1004-2R1 (IGV’s and first stage corrosion/pitting inspection) 2. Annual TIL 1068-2R1 (IGV’s bushing inspection) 3. Annual TIL 1132-2 (IGV thrust washer corrosion inspection) Spring 2014 inspections indicated normal wear on the unit and minor maintenance was completed. During the fall 2014 outage, several minor projects were identified and will be completed at the time of the next major project on the unit. No issues were reported. Every five years, the fuel tanks are inspected for rust and corrosion for leak prevention. The scheduled inspection was completed in June 2015. PM Tasks were developed in the CMMS to perform 5-year inspection next due in 2020 and a 15-year API 653 Ultrasonic shell inspection in 2030. Remote start of the VanSant unit is currently being discussed with the OEM for restoration. The exhaust plenum work will be completed in FY 2016. A weekly diesel start is performed at the site to improve starting reliability of the diesel starting engine. A unit full speed 30-minute no-load test is performed once a month for starting reliability improvements and training purposes, and 26 hours per year has been allocated for the testing of the unit which have little impact on the allowable operating hours (432) under the VanSant Title V diesel engine annual operation 3.2.4 Production Plant Conclusion Based on statements and information provided, as well as the observations and reviews performed, it is the opinion of Burns & McDonnell that the City’s power generation facilities are being operated and maintained consistent with accepted electric utility practice in the United States. In general, the performance, operation, maintenance, staff, planning, and training aspects for the McKee Run and City of Dover, Delaware 3-13 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment VanSant stations were found to be above average. Specifically, the generation facilities have demonstrated a high level of availability despite the dispatching of the units primarily for peak demand. 3.3 Transmission and Distribution Plant Assessment On March 9 and 10, 2017, Mr. Ted Kelly visited the City to collect information and to observe the City transmission and distribution system, as operated and maintained by the Electric Division. Mr. Harry Maloney, the Electric Department Director, and Mr. Paul Waddell, the Engineering Service & System Operations Superintendent, provided information related to the transmission and distribution system. Mr. Maloney also led a tour of the electric transmission and distribution system. Pictures taken of the substations during the inspections are provided in Appendix A. 3.3.1 Transmission and Distribution Plant Operations The Electric Division distributes power to its customers by a network of transmission lines, distribution substations, and distribution lines. The transmission lines are rated at 69 kV and are connected to fifteen distribution substations located throughout the service area. The distribution substations reduce the power from transmission voltages to the primary distribution voltages of 12 kV to facilitate distribution of electric power to customers. 3.3.1.1 Operations and Maintenance The Electric Division has a SCADA system that is monitored continuously for any problems that may arise in the Electric System. The main control room has two system operator desks and a large screen where system operating information is displayed. System operators can monitor the Electric System operation, such as voltage levels, current flows, etc. and make necessary adjustments as problems arise. The systems operators have received some PJM training, but are not required to be certified as Delmarva Power is the controlling agency. Loading on substation transformers used for an emergency, a switching operation, or maintenance is limited to 120 percent of the rated capacity, followed by a twelve-hour cool-down period. The Electric Division has eight line crews and two ground workers to work on the system. Four crews are responsible for overhead lines, four crews are responsible for underground lines, and one crew is responsible for maintenance. The primary responsibilities of the eight line crews are installation of new service connections and construction of new lines. The trouble crew maintains the street lights, repairs underground services and is the first responder to outages. Tree trimming is contracted out and is no longer performed by the Electrical Division; however, performance of the contractor is monitored by the Line Crew Superintendent. City of Dover, Delaware 3-14 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment The Substation/Relay Maintenance Division is responsible for operation and maintenance of the substations and associated equipment. Visual inspections of substations, associated equipment, trip counter checks and battery systems checks are performed regularly. The Substation/Relay Maintenance Division is also responsible for contractor oversight during annual transformer condition assessments including annual oil testing. TJ/H2b Analytical Services completed the annual transformer condition assessments in February 2011. No abnormal gas was indicated and since the oil condition was within acceptable parameters, TJ/H2b recommended the continuation of normal operation. The City has a contract with an environmental consultant to check each substation for oil leaks and to provide instruction on cleaning up in the event of an oil spill. The City contracts with an outside firm to inspect and chemically treat each wood pole in the Electric System every ten years. This is accomplished by awarding a five-year contract to spread out the expenses. Pole treatments were completed in May of 2013. Dover treated and inspected over 760 poles during 2013, of which, only one pole was rejected resulting in a 99.9 percent pass rate. 3.3.1.2 Design Standards and Specifications The Electric Division designs the transmission and distribution circuits and some substation upgrades in conformance with national safety standards. Other substation and transmission design is contracted to Pike Electric, Inc. The underground distribution design utilizes road or alley front access construction. This design means the electrical equipment, such as transformers and underground cable, are installed beside the road instead of behind houses or buildings. The advantage of front access construction is the accessibility for maintenance and repairs to cable and electric equipment. The underground cables are installed in polymerized vinyl chloride pipe for added protection and for easy cable replacement. The Electric Division installs jacketed, concentric cable that is rated at 15 kV, with 133 percent ethylene propylene rubber insulation. The standard overhead distribution design utilizes a flat construction with a single cross-arm and insulators on 45-foot class 2 poles. Typically, all electrical equipment locations have ground rods installed with measured readings of 25 ohms or less. The substation design is generally a low-profile rigid bus design. The circuit breakers are SF6 gas-filled and the relays are microprocessor based with SCADA control and monitoring. City of Dover, Delaware 3-15 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment 3.3.1.3 System Reliability The Electric Division provides for reliability of its distribution system by configuring most its distribution circuits in primary open loop arrangements, improving existing circuits, and installing adequate substation transformer capacity. Normal transformer and line loading are limited to provide sufficient margin to convey firm power requirements during an emergency or a switching operation, or for maintenance. 3.3.1.4 Power Quality The Electric Division does not have any significant power quality problems. The overall power factor for the Electric System is 99.9 percent. Power transformers are equipped with load tap changers that regulate bus voltages at the distribution substations. Distribution transformers are equipped with no-load taps to make voltage adjustments. There are capacitors and voltage regulators on the Electric System that control voltage and vars on the portion of the system furthest away from the current source and generation. The system operators monitor the power factor closely and turn on capacitors or adjust the generation to compensate for low power factors. 3.3.1.5 Safety Mr. Maloney reported to Burns & McDonnell the Electric Division had no lost time in FY 2015 but they did have one small incident of a bruised hand. No other incidents or details were provided for this report. 3.3.1.6 Capital Improvements The following describes completed, on-going, and planned improvements to the City’s transmission and distribution assets: Recently Completed in FY 2016 (FY 2012-FY 2016): • Oak Grove Trailer Park Distribution Upgrade • Lakeland Laurel Point - Distribution Upgrade • Route 8/Taps - Distribution Upgrade • Townsend Brothers - Distribution Upgrade • Persimmon Tree Apartments - Distribution Upgrade • Dover East Estates - Distribution Upgrade • Satellite Syncrhonized Substation Clocks • Horsepond Road URD - Distribution Feeders • GOTP Transmission Line Relocation • Horsepond SS to Cartanza 69kv Rebuild City of Dover, Delaware 3-16 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment • Weyant Hall Roof Refurbishment • Weyant Hall Security Improvements • General Scott Switchgear • NBR Properties, LLC • Unit 3 Software & Computer Upgrades - CEMS • Unit 3 - Stack Repairs • Unit 3 Turbine Outage - Inspections & Repairs • VanSant Plenum Replacement • VanSant Capacity Increase • VanSant Software & Computer Upgrades - CEMS On-Going and Planned (through FY 2021) • Ann Avenue - Underground • Beechwood Avenue - Underground • Farmview - Underground • The Greens - Underground • Townpoint Distribution Upgrades • Distribution System Upgrades - Unidentified • Substation Relay Upgrade • North Street OH to UG (Governors to Queen) • Lighting Project and Rehabilitation • LED Lighting • Ampacity Standardization • SCADA Master Hardware Replacement • Transmission Line Maintenance Program • GOTP Transmission Line Relocation • GOTP Substation • Distribution Capacitors - Overhead • Distribution Capacitors - Underground • Fault Indicators • 69kv Substation Cable Replacement North Street • System Operations Voice Recorder • System Automation City of Dover, Delaware 3-17 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment • Uninterruptible Power Supply (UPS) System Replacement • New Developments - UG Transformers • New Developments - UG Conductors/Devices • PWII/Tar Ditch - Relocation of utility poles & lines • Meter Replacements & System upgrades 60-46 & 40-25 • McKee Run & VanSant Preservation of Structures • McKee Run Building Equipment Replacements • Unit 3 Boiler Systems • Unit 3 Auxiliary System Components • Unit 3 Turbine Repairs - Intercept Valves • Unit 3 Turbine Outage - Generator • Unit 3 Cooling Water Line Replacement/Repairs • Unit 3 Fast Start Upgrade • Units 1, 2 & 3 Hydrogen Purity Analyzers • VanSant Major Overhaul & Inspection • VanSant Component replacements • VanSant Fire Suppression System Upgrade • Hydrogen Generator • Safety & Compliance Improvements • Vehicles, Trucks & Equipment 3.3.2 Transmission and Distribution Plant Condition Assessment The transmission and distribution system assessment included drive-by observations of a sample of the transmission circuits and distribution circuits. Each of the fourteen substations listed below physically observed during the tour. • Cartanza Substation • College Road Substation • Danner Farm Substation • Division Street Substation – Plan to expand in the future • Dover Downs Substation • Frazier Substation • General Scott Substation (North Street) City of Dover, Delaware 3-18 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Electric System Overview and Assessment • Horsepond Substation • Lebanon Substation – New battery set installed • Mayfair Substation • McKee Substation • Mid-City Substation – Three new breakers • St. Joan’s Substation – Fence damaged by a car accident, still needing repair • VanSant Substation In general, the substations appeared to be in acceptable operating conditions. All battery sets in the system substations are less than ten years of age. Mr. Harry Maloney, the Electric Department Director, provided a tour of the substations with Ted Kelly on March 10th, 2017. The General Scott Substation has relatively new breakers, and the 12-kV switchgear and controls were upgraded in FY 2016. Horsepond Substation was recently rebuilt which included a three breaker 69-kV system for the 69-kV bus and the substation logic was reprogrammed. Work started in late February 2013 and was completed in November 2014. At the Cartanza Substation, Delmarva has expanded their side of the substation. In the Lebanon Substation work on the capacitor bank has been completed. Maintenance requirement for battery testing has been completed for NERC requirements. The City has recently completed the process of replacing conductor throughout the entire 69-kV system. In addition, the City has invested heavily in its undergrounding program to increase system reliability. Moving forward, the system will continue to be converted from overhead to underground distribution, but this process has slowed to allow for further evaluation. 3.3.3 Transmission and Distribution Plant Conclusion It is the opinion of Burns & McDonnell that the design, construction, operation and maintenance of the City’s electric transmission and distribution system and the associated facilities are consistent with current generally accepted electric utility standards. In completing Annual Engineering Consultant’s Reports over the past several years, Burns & McDonnell has observed that the City has made appropriate system upgrades and improvements. The City and the Electric Division are proactive in preventative maintenance and expansion of the Electric System before problems arise. City of Dover, Delaware 3-19 Burns & McDonnell

4.0 – FINANCIAL OVERVIEW AND ASSESSMENT

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment 4.0 FINANCIAL OVERVIEW AND ASSESSMENT A review of the financial results of the Electric System for the fiscal year ended June 30, 2016, is provided herein. 4.1 Required Revenue The level of revenues required from the retail electric rates for the Electric Division was determined through the analysis of the financial results and net income or net margins for the most recent fiscal year. The City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 requires that the Electric Division maintain a debt service coverage ratio of 1.25. The following is an excerpt from Section 502(c) of the resolution. “(c) The total amount of the Revenues of the Electric System during the preceding fiscal year shall have been not less than the total of the following: (3) The Current Expenses of the Electric System during the current fiscal years shown by the Annual Budget . . . for such fiscal year, and (4) One hundred twenty-five percent (125%) of the maximum amount of the Principal and Interest Requirements for any fiscal year thereafter on account of all bonds then Outstanding under the provisions of this Resolution. The City further covenants that, from time to time and as often as it shall appear necessary, it will adjust the electric rates as may be necessary or proper so that the revenues of the Electric System in each fiscal year will not be less than the total of the amounts set forth in subdivision (c) of this section.” 4.2 Electric Rates Customers of the Electric Division are charged for the electric service based on rate schedules, tariffs, or contracts that reflect the costs to the Electric Division of providing that service. For purposes of setting electric rates, customers with similar load and service characteristics should be placed in the same rate classification. A comprehensive cost-of-service and rate design study was completed in 2006 and subsequent rate analyses were completed in 2007 and 2008 to examine revenue requirements and revenue generation. Specifically, the 2006 rate study was conducted to address increased costs associated with a new power supply contract that became effective on July 1, 2006. The rate study recommended combining several City of Dover, Delaware 4-1 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment rate classes and implementing rate increases on July 1, 2006. The 2006 rate study also recommended an additional increase be implemented on January 1, 2007 to cover increased costs associated with operating the generating station. The 2007 and 2008 rate analyses re-examined Electric Division revenues and expenses and recognized additional revisions to power supply costs. Because of these analyses, additional rate increases were implemented on July 1, 2007 and July 1, 2008. The City retained Burns & McDonnell to conduct cost-of-service and rate design study in 2012 followed by an update in 2013. The 2012 study examined revenue adequacy, revenue responsibility, and revenue recovery for the Electric Division. It scrutinized customer classes and proposed adjustments for demand rate components and corresponding changes to energy charges. In May 2013, the City retained Burns & McDonnell to incorporate updated power supply cost projections, and other updates, into the model it developed as part of the 2012 Study. An update to the model and rates analysis was completed in early 2015 to reallocate costs and redesign rates to remain regionally competitive. Electric rates are approved by Council on an annual basis. The current rate classes are listed below. • Residential • Small Commercial (1 Phase, 3 Phase, 1 Phase Heating, Church, and Municipal) • Medium Commercial (1 Phase & 3 Phase) • Large Commercial (3 Phase with Reactive Metering) • Primary • Transmission • Outdoor Development Lighting • Private Outdoor Lighting 4.3 Operating Results Table 4-1 presents a summary of the annual energy sales, the average monthly number of customer accounts, and the annual average kilowatt-hour (kWh) energy per customer of the Electric Division for FY 2014 through FY 2016. Annual energy sales were 713 GWh in FY 2016, a decrease of 1.34 percent from FY 2015. Energy sales amounted to 723 GWh in FY 2015, a 0.31 percent decline from FY 2014. City of Dover, Delaware 4-2 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment Table 4-1: Annual Sales and Customer Accounts FY 2014 FY 2015 FY 2016 Energy Sales (kWh) Residential 205,302,701 204,121,492 196,547,288 Commercial 230,178,899 233,016,412 229,661,253 Primary 164,218,197 162,698,678 163,450,257 Transmission 114,470,558 115,164,435 115,555,834 Outdoor Lighting 6,724,400 8,109,618 8,190,700 Total Energy Sales 720,894,755 723,110,635 713,405,332 Average Number of Monthly Customers (accounts) Residential 19,900 20,143 20,065 Commercial 3,412 3,343 3,310 Primary 37 36 37 Transmission 5 5 5 Outdoor Lighting 811 811 823 Total Customers Accounts 24,165 24,338 24,240 Energy Usage Per Customer (kWh/cust./yr.) Residential 10,317 10,134 9,796 Commercial 67,462 69,703 69,384 Primary 4,438,330 4,519,408 4,417,575 Transmission 22,894,112 23,032,887 23,111,167 Outdoor Lighting 8,291 10,000 9,950 Average Usage Per Customer 29,832 29,711 29,431 Table 4-2 presents revenues from sales, revenue per kWh ratios, and average revenue per customer ratios for each revenue classification. Total revenue from sales to electric customers in FY 2016 was $79.1 million, representing an increase of $0.82 million, or 1.05 percent from FY 2015. Total revenue from sales to electric customers includes utility tax revenue and power cost adjustment revenue. In FY 2016, the average rate revenue per kWh for residential customers was 12.59 cents and the total average rate revenue was 11.09 cents per kWh. The 2016 national average retail prices of electricity to ultimate customers, as published by the US Energy Information Administration (EIA), were 12.22 and 10.15 cents per kWh for residential customers and across all sectors, respectively. 1 For a state-wide comparison, the EIA summarized the Delaware 2016 average monthly utility-level retail sales of 1 US Energy Information Administration. Electric Power Monthly, Table 5.6.A. Average Price of Electricity to Ultimate Customers by End-Use Sector. Release Date: March 24, 2017. https://www.eia.gov/electricity/monthly/epm_table_grapher City of Dover, Delaware 4-3 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment electricity and associated revenue per kWh to be 12.83 cents per kWh for residential customers and 10.93 cents per kWh across all sectors. 2 Table 4-2: Annual Revenues and Sales Ratios FY 2014 FY 2015 FY 2016 Revenue Residential $ 25,882,393 $ 25,708,276 $ 25,441,312 Commercial 25,852,554 26,360,222 27,068,886 Primary 15,619,663 15,380,906 15,743,376 Transmission 9,674,084 9,468,043 9,717,546 Outdoor Lighting 1,158,558 1,361,018 1,129,196 Total Revenue $ 78,187,252 $ 78,278,464 $ 79,100,316 Revenue/kWh Residential $ 0.1261 $ 0.1259 $ 0.1294 Commercial 0.1123 0.1131 0.1179 Primary 0.0951 0.0945 0.0963 Transmission 0.0845 0.0822 0.0841 Outdoor Lighting 0.1723 0.1678 0.1379 Total Revenue/kWh $ 0.1085 $ 0.1083 $ 0.1109 Revenue Per Customer Residential $ 1,301 $ 1,276 $ 1,268 Commercial 7,577 7,885 8,178 Primary 422,153 427,247 425,497 Transmission 1,934,817 1,893,609 1,943,509 Outdoor Lighting 1,429 1,678 1,372 Average Revenue Per Customer $ 3,236 $ 3,216 $ 3,263 The Electric Division’s largest cost in providing electric service to its customers in FY 2016 was the wholesale cost of power. The Electric Division purchased power from the PJM Interconnection marketplace through its Energy Manager, TEA. The cost of non-generated power includes energy and demand costs, power supply management expense, PJM charges and credits, generation fuels cost, and capacity charges and credits. The significance of power supply cost to the Electric Division is illustrated in Table 4-3. The top portion of the Table shows net operating revenue as the difference between total revenues generated by the rates and the cost of power supply. 3 The ratios of power supply cost to sales revenues were calculated for FY 2 US Energy Information Administration. Electric Power Monthly, Table 5.6.A. Average Price of Electricity to Ultimate Customers by End-Use Sector. Release Date: March 24, 2017. https://www.eia.gov/electricity/monthly/epm_table_grapher 3 For the purposes of this Report, the phrase “Power Supply” refers to the sum of the costs of power purchased and power generated. This includes plant costs and the cost of fuel. Power Supply also includes any expenses in the CIP City of Dover, Delaware 4-4 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment 2014 through FY 2016. As illustrated, the Electric Division’s power supply cost as a percentage of rate revenue decreased from 63.4 percent in FY 2015 to 53.9 percent in FY 2016. Table 4-3: Revenue Margins and Unaccounted for Energy FY 2014 FY 2015 FY 2016 Net Revenue Margins ($) Sales Revenues $ 78,187,252 $ 78,278,464 $ 79,100,316 Power Supply 57,233,726 49,645,951 42,643,023 Net Revenue Margin $ 20,953,526 $ 28,632,513 $ 36,457,293 Net Revenue Ratio 73.2% 63.4% 53.9% Unaccounted for Energy (kWh) Power Supply 762,254,000 756,897,000 740,872,000 Energy Sales 720,894,755 723,110,635 713,405,332 Unaccounted for Energy (Losses) 41,359,245 33,786,365 27,466,668 Percentage 5.4% 4.5% 3.7% Table 4-3 also illustrates the ratio of the amount of energy purchased and delivered to the electric system to total energy sales. This relationship identifies the level of unaccounted for energy in the Electric System. This unaccounted-for energy may include energy that was unmetered, metered inaccurately, stolen, lost, PJM transmission line losses, local system line/transformer losses, etc. The bottom portion of Table 4-3 presents these comparisons for the Electric Division for FY 2014 through FY 2016. As shown, the percentage ratio of the unaccounted-for energy to the total energy purchased for FY 2016 was 3.7 percent. This is down from 4.5 percent in FY 2015. In previous Annual Engineering Consultant’s Reports, Outdoor Lighting energy was recorded as losses. In this report, Outdoor Lighting customer accounts, energy sales, and revenues were recorded as a separate rate class. The impact this modification has on this Financial Overview and Assessment is most pronounced on the Table 4-3 Unaccounted for Energy analysis, as losses are shown to have increased from corresponding years in previous reports. Table 4-4 presents a re-creation of the Electric Division’s Statement of Revenues, Expenses, and Changes in Unreserved Retained Earnings for the Electric Revenue Fund for FY 2014 through FY 2016. Net income increased in FY 2016 to 7.2 million from $3.0 million in FY 2015. Steady revenues, a decrease in power supply costs of 14.1 percent, a decrease in retiree health care costs of 96.2 percent, and all other expenses staying relatively constant were the main reason for the large swing in net income between 2015 and 2016. Fund that are not capital expenses. The phrase “Purchased Power” refers only to the cost of power purchased from the market and other directly associated costs. City of Dover, Delaware 4-5 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment Table 4-4: Comparative Statement of Revenues, Expense, and Changes in Unreserved Retained Earnings FY 2014 FY 2015 FY 2016 Operating Revenues: Charges for Electric Service $ 78,187,252 $ 78,278,464 $ 79,154,638 Miscellaneous Services/Incomes 1,287,501 1,484,573 1,535,071 Total Operating Revenues $ 79,474,753 $ 79,763,037 $ 80,689,709 Operating Expenses: General Administration $ 2,450,884 $ 2,937,003 $ 5,171,249 Power Supply 57,233,726 49,645,951 42,643,023 Transmission/Distribution 3,806,078 3,508,209 3,309,236 Engineering 1,331,909 1,364,077 993,856 Metering 284,229 346,943 353,956 System Operations 739,406 671,048 579,622 Utility Tax 1,258,957 1,266,872 1,309,701 Depreciation 4,748,120 4,863,653 5,713,104 Retirees Pension 975,700 - - Retiree Health Care 513,300 1,523,100 57,700 Total Operating Expenses $ 73,342,309 $ 66,126,856 $ 60,131,447 Net Operating Income $ 6,132,444 $ 13,636,181 $ 20,558,262 Non-operating Revenues (Expenses) Interest Earned Operating Fund $ 2,112 $ 6,957 $ 156,949 Reserved Funds 216,010 165,827 500,140 Net Increase in Fair Value of Investments 426,399 236,779 192,331 Interest and Fiscal Charges (1,138,739) (1,040,204) (922,704) Gain/(Loss) on Sale of Assets 14,439 39,637 6,201 Total Non-operating Revenues(Expenses) $ (479,779) $ (591,004) $ (67,083) Net Income Before Operating Transfers $ 5,652,665 $ 13,045,177 $ 20,491,179 Operating Transfers - In Operating Transfers - Out (8,000,000) (10,000,000) (13,262,183) Total Net Operating Transfers $ (8,000,000) $ (10,000,000) $ (13,262,183) Net Income $ (2,347,335) $ 3,045,177 $ 7,228,996 4.3.1 Adequacy of Electric Rates The City’s Bond Resolution requires annual revenues of the Electric Division be no less than the total current expenses plus 125 percent of the greatest remaining annual debt service. “Current expenses”, as defined in the Resolution, includes all expenses necessary to maintain and repair the Electric System, all administrative expenses, and engineering, legal or other consultant fees. Transfers to reserve accounts and special purpose funds, and allowances for depreciation are specifically excluded from “current expenses.” City of Dover, Delaware 4-6 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment To determine if the City and the Electric Division have met this requirement, the net income shown in Table 4-4 was adjusted to include the interest on bonds, depreciation expense, and other non-cash income and expenses. Table 4-5 summarizes net income adjustments and the calculation of the revenues available for debt service for FY 2014 though FY 2016. Table 4-5: Debt Service Coverage FY 2013 FY 2014 FY 2015 Net Income $ 6,180,641 $ (2,347,335) $ 2,650,160 Plus Excluded Expenses: Operating Transfers - Out $ 10,000,000 $ 8,000,000 $ 10,000,000 Depreciation 4,621,501 4,748,120 4,863,653 Interest and Fiscal Charges 1,432,779 1,138,739 1,040,204 Gain/(Loss) on Sale of Assets (5,203) (14,439) (39,637) Less Excluded Income: Net Increase in Fair Value of Investments 614,989 (426,399) (236,779) Interest Earned - Reserve Funds (506,771) (216,010) (165,827) Revenues Available for Debt Service $ 22,329,654 $ 10,882,676 $ 18,111,774 Maximum Principal and Interest in Any Year $ 3,401,954 $ 3,344,404 $ 3,344,404 Debt Service Coverage 6.56 3.25 5.42 Minimum Required Debt Service Ratio 1.25 1.25 1.25 As Table 4-5 illustrates, the City and the Electric Division maintained a debt service coverage ratio each year that exceeded the required 125 percent plus current expenses. Therefore, the revenues generated by the current electric rates have been sufficient to meet the applicable covenants of the Resolution. Section 502 of the Resolution requires that the annual debt service used in evaluating the revenues is to be the maximum amount for any fiscal year thereafter. Table 4-6 presents the annual totals of principal and interest amounts due on bonds currently outstanding. The calculation of the debt service coverage ratio in Table 4-5 is based on the total maximum debt service expense in any fiscal year. The FY 2016 calculation was based on the total FY 2016 debt service expense of $1,596,329. 4.4 Status of Revenue Bonds At the end of FY 2015, the City had two series of outstanding electric revenue bonds that were issued pursuant to the Resolution. On July 1, 2008, the City issued $22,200,000 in Electric Revenue Bonds (2008 Bonds). The proceeds from the sale of the 2008 Bonds were used (i) to finance or reimburse the City for improvements to the City’s electric system; (ii) to fund a Debt Service Reserve Fund; and (iii) to pay the costs of issuance of the 2008 Bonds. City of Dover, Delaware 4-7 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment On November 17, 2010, the City issued $8,810,000 of Electric Revenue Refunding Bonds (Series 2010). The proceeds from the sale of the Series 2010 Bonds were used (i) to refund the Series 2004 Bonds, and (ii) to pay the costs of issuance of the Series 2010 Bonds. The non-taxable Series 2010 Bonds received an underlying rating of Aa2 by Moody’s Investors Services and an underlying rating of A+ by Fitch Ratings. Table 4-6 illustrates the debt service schedule for the Series 2008 Bond. The principal and interest and the annual total are shown for the bond series. As of 2016, the outstanding principal balance of the Series 2008 Bonds is $19,315,000. Table 4-6: Debt Service Schedule of Electric Revenue Bonds 2008 Electric Revenue Bonds Total Annual Period Principal Interest Debt Service Debt Service FY 2017 695,000 901,329 1,596,329 1,596,329 FY 2018 730,000 865,704 1,595,704 1,595,704 FY 2019 765,000 831,580 1,596,580 1,596,580 FY 2020 800,000 798,706 1,598,706 1,598,706 FY 2021 840,000 763,856 1,603,856 1,603,856 FY 2022 880,000 726,756 1,606,756 1,606,756 FY 2023 925,000 686,694 1,611,694 1,611,694 FY 2024 970,000 644,056 1,614,056 1,614,056 FY25-34 12,710,000 3,405,972 16,115,972 16,115,972 Total $19,315,000 $ 9,624,653 $28,939,653 $ 28,939,653 4.5 Insurance The City maintains a comprehensive insurance program to insure against varying types of liabilities and significant losses related to various Electric Division properties. Section 706 of the Resolution reads: "The City covenants that it will maintain a practical insurance program, with reasonable terms, conditions, provisions and costs, which the City Manager determines, with the approval of the Engineering Consultants, will afford adequate protection against loss, including loss of Revenues, caused by damage to or destruction of the Electric System or any part thereof and also comprehensive public liability insurance on the Electric System for bodily injury and property damage in such amounts as may be approved by the Engineering Consultants.” Table 4-7 summarizes itemized insurance coverage procured by the City for the period July 1, 2015, through June 30, 2016. Burns & McDonnell has reviewed this list of insurance, and in the opinion of Burns & McDonnell, as Engineering Consultant and not as insurance counselor, the insurance in full force and affect appears to satisfy the requirements of Section 706 of the Resolution. City of Dover, Delaware 4-8 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment Table 4-7: Schedule of Insurance Coverage in Effect July 1, 2015 - Ace American Insurance Company June 30, 2016 Coverage Property Earth Movement -Per Occurrence and in the $20,000,000 Annual Aggregate, except Earth Movement in High Hazard Earth Movement EXCLUDED Zones; Earth Movement in California; EXCLUDED Flood -Per Occurrence and in the Annual 10,000,000 Aggregate; Accounts Receivable; 100,000 Business Interruption; EXCLUDED Contingent Time Element Coverage; EXCLUDED Debris Removal (or 25% of Direct Property Loss, whichever the greater); 2,500,000 Demolition and Increased Cost of Construction; 10,000,000 EDP Media; 1,000,000 Errors and Omissions; 2,000,000 Expediting Expense; 1,000,000 Extra Expense, excluding replacement power or increased cost of generation, 2,000,000 transmission and/or distribution of electricity, water or natural gas; Fire Department Service Charges and Extinguishing Expenses; 500,000 Hazardous Substances -Per Occurrence and in the Annual Aggregate; 500,000 Inland Transit; 2,500,000 Newly Acquired Locations -90 Days reporting; 1,000,000 Personal Property Temporarily Off Premises; 100,000 Course of Construction; EXCLUDED Miscellaneous Unnamed Locations (except perils of Flood, Earth Movement and 500,000 Valuable Papers and Records; 100,000 Deductibles All deductibles listed below are per occurrence except with respect to coverage provided under the Boiler & Machinery which shall be any One Accident. In respect of Damage to Insured Property: $750,000 per Occurrence, except; $100,000 per Occurrence as respects Transit. In respect of Time Element loss (Extra Expense): 45 days per Occurrence, except; 72 hours per Occurrence in respect of Service Interruption. City of Dover, Delaware 4-9 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment July 1, 2015 - XL Insurance June 30, 2016 Coverage Property per Occurrence and in the Annual Aggregate in respect of Flood; $ 10,000,000 per Occurrence and in the Annual Aggregate in respect of Earth Movement, 20,000,000 Excluded. per Occurrence and in the Annual Aggregate applicable in High Hazard Movement zones; per Occurrence and in the Aggregate in respect Hazardous Substance; 500,000 per Occurrence in respect of Business Interruption; EXCLUDED per Occurrence in respect of Accounts Receivable; 100,000 per Occurrence in respect of scheduled, direct Contingent Time Element; EXCLUDED per Occurrence in respect of Incidental Course of Construction; 5,000,000 (or 25.00% of the direct physical loss, whichever greater) per Occurrence in 2,500,000 respect of Debris Removal; per Occurrence in respect of Demolition and Increased Cost of Construction; 10,000,000 per Occurrence in respect of Electronic Data Processing Media; 1,000,000 per Occurrence in respect of Errors and Omissions; 2,000,000 per Occurrence in respect of Expediting Expense; 1,000,000 per Occurrence in respect of Extra Expense excluding replacement power of 2,000,000 increased cost of generation, transmission and/or distribution of electricity, water or natural gas; per Occurrence in respect of Fire Department Service Charges and 500,000 Extinguishing Expenses; per Occurrence in respect of Newly Acquired Locations (ninety (90) days 1,000,000 reporting); per Occurrence in respect of property in Course of Inland Transit; 2,500,000 per Occurrence in respect of Miscellaneous Unnamed Locations, except: 500,000 Excluded. per Occurrence in respect of Flood; Excluded. per Occurrence in respect of Earth Movement; Excluded. per Occurrence in respect of Named Storm; per Occurrence in respect of Valuable Papers and Records; 100,000 per Occurrence in respect of Personal Property Temporarily Off Premise. 100,000 Deductibles / Retentions Application of Deductibles as described in Policy form unless otherwise indicated in Policy Form Revisions Section, if applicable. In respect of Damage to Insured Property: $750,000, Per Occurrence, except; $100,000, per Occurrence as respect Transit; In respect of Time Element loss (Extra Expense): 45 days per Occurrence except; 72 hours Per Occurrence in respect of Service Interruption City of Dover, Delaware 4-10 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment 4.6 Operating and Reserve Accounts The Electric Revenue Fund and the Electric Improvement & Extension (I&E) Fund are the City’s two funds devoted to the Electric Division. The funds are used to manage cash and transactions related to utility operations and capital expenditures, respectively. Each fund includes certain cash accounts established to make money available for specific purposes when they are needed. The accounts maintained within the Revenue and I&E Funds are listed herein. Electric Revenue Fund • Insurance Reserve Account • Contingency Reserve Account • Electric Rate Stabilization Reserve Account • Interest and Sinking Account Electric Improvement & Extension Fund • Depreciation Reserve Account • Future Capacity Reserve Account The following are descriptions of each Fund, their respective accounts and their purposes. 4.6.1 Electric Revenue Fund The Electric Revenue Fund was established in Section 503 of the Resolution. All revenues are to be deposited into the Electric Revenue Fund when received. Current expenses are to be paid and other accounts are to be maintained from the Electric Revenue Fund. Moneys are transferred from the Electric Revenue Fund to the Electric Rate Stabilization Reserve Account, the Interest and Sinking Account, the I&E Fund, the Depreciation Reserve Account, and the Future Capacity Reserve Account. 4.6.1.1 Insurance Reserve Account The Insurance Reserve Account was established by the City to fund insurance deductibles in the event of loss(es) covered by the City’s insurance policies then in effect. The target minimum balance in the Insurance Reserve is $350,000. The reserve balance at the end of FY 2016 was $753,515. To reduce insurance premiums, the City approved raising the minimum reserve balance to $750,000 in 2014. The new minimum balance was in forced in FY 2016; achieved by the accumulation of interest earnings and a $10,000 appropriation. City of Dover, Delaware 4-11 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment 4.6.1.2 Contingency Reserve Account The Contingency Reserve Account was established by the City in FY 2003 to provide for unplanned expenditures that may not be avoidable. The City’s Financial Policies require that a minimum balance be maintained in the Contingency Reserve Account equal to 1.0 percent of the current year revenues for the Electric Revenue Fund. The FY 2016 year-end balance was $836,980 which is equal to 1.05 percent of the FY 2016 revenues for the Electric Revenue Fund. 4.6.1.3 Electric Rate Stabilization Account The Electric Rate Stabilization Reserve Account was established in FY 2005 to offset the costs of the power cost adjustment to the customers of Dover. The account’s target balance is a minimum of 3.0 percent, not to exceed 10.0 percent, of purchased power cost in any given year. Any excess of this amount will be refunded to customers in future years by reducing the rate of the power cost adjustment. The account’s FY 2016 end-of-year balance was $6,874,377, which was 16.1 percent of the FY 2016 purchased power cost. 4.6.1.4 Interest and Sinking Account The Interest and Sinking Account was established in Section 507 of the Resolution. This account consists of two restricted accounts: the Bond Service account and the Reserve Account. The Bond Service Account is funded with equal monthly transfers from the Electric Revenue Fund such that the balance, as of each payment date for interest or for principal and interest, will be equal to the amount of the payment due. The payments of principal and interest due on bonds are made from the Bond Service Account. The Reserve Account is funded by transfers from the Electric Revenue Fund, as necessary, to maintain a balance equal to the maximum combined principal and interest for any future fiscal year through the life of all bonds then outstanding. Moneys in the Reserve Account are used for paying interest on and principal of bonds when the balance in the Bond Service Account is insufficient for making those payments. Excess moneys in the Reserve Account are also used towards paying current interest payments. The total amount in the Restricted Accounts for the 2008 bond as of June 30, 2016, was $3,568,500. 4.6.2 Electric Improvement and Extension Fund The I&E Fund was established in Section 507 of the Resolution. Funds are transferred to the I&E Fund from the Electric Revenue Fund to the extent that the amount of funds available from the Electric Revenue Fund exceeds the total of the amounts required to be added to the Interest and Sinking Account. The I&E Fund also receives additional funding from the Depreciation Reserve Account, the Future Capacity Reserve Account, and from development receipts. Section 510 of the Resolution indicates that, except for certain situations, moneys held in the I&E Fund are to be used only for payment of costs of City of Dover, Delaware 4-12 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment unusual maintenance or repairs, renewals or replacements, obtaining or replacing equipment, constructing extensions, additions, or improvements, and engineering expenses related to the foregoing activities. 4.6.2.1 Depreciation Reserve Account The Depreciation Reserve Account represents moneys that have been set aside for the sole purpose of funding renewals and replacements of the Electric System as components or equipment wear out, deteriorate, or otherwise become unsuitable for the intended purpose. Transfers from the Electric Revenue Fund and investment earnings are the only sources of additional moneys for the Depreciation Reserve Account. Transfers to the I&E Fund are made as necessary to fund capital projects. The target appropriation for the Depreciation Reserve Account each year is the excess of depreciation expense for the year over the amount of principal included in debt service payments made during the year. The reserve balance at the end of FY 2016 was $10,130,667. 4.6.2.2 Future Capacity Reserve Account The Future Capacity Reserve Account was established to set aside and accumulate funds from the Electric Revenue Fund for use in evaluating and pursuing activities related to the Electric Division’s alternatives for power supply resources for future demand for electricity. The target balance for this reserve is $10,000,000. The reserve balance at the end of FY 2016 was $10,283,292. Table 4-8 presents FY 2014 through FY 2016 year-end summaries of the activity within the cash accounts described above. The Insurance Reserve Account, the Contingency Reserve Account, the Electric Rate Stabilization Reserve Account, and the Interest and Sinking Account are accounts within the Electric Revenue Fund. The Depreciation Reserve Account and the Future Capacity Reserve Account are accounts within the I&E Fund. City of Dover, Delaware 4-13 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Financial Overview and Assessment Table 4-8: Reserve Account Activity and Balances Insurance Contingency Electric Rate Bond Depreciation Future Reserve Reserve Stabilization Reserve Reserve Capacity Account Account Account Account Account Account Year Ended June 30, 2014 Balance in Account on July 1 $ 733,043 $ 814,236 $ 17,382,124 $ 3,526,057 $ 9,855,704 $ 10,004,190 Receipts Interest Earned 4,500 4,900 83,700 3,388 59,400 60,200 Appropriations - - - 3,391,860 - - Total Funds Available $ 737,543 $ 819,136 $ 17,465,824 $ 6,921,305 $ 9,915,104 $ 10,064,390 Disbursements Debt Service Payments - - - (3,391,860) - - Transfer to Capital Projects/Ops. - - (7,000,000) - - - Balance in Account on June 30 $ 737,543 $ 819,136 $ 10,465,824 $ 3,529,445 $ 9,915,104 $ 10,064,390 Year Ended June 30, 2015 Balance in Account on July 1 $ 737,458 $ 819,140 $ 10,465,816 $ 3,529,446 $ 9,915,062 $ 10,064,442 Receipts Interest Earned 3,184 3,537 39,538 33,300 42,811 43,457 Appropriations 3,401,952 Total Funds Available $ 740,642 $ 822,677 $ 10,505,354 $ 6,964,698 $ 9,957,873 $ 10,107,899 Disbursements Debt Service Payments (3,401,952) Transfer to Capital Projects/Ops. (3,000,000) Balance in Account on June 30 $ 740,642 $ 822,677 $ 7,505,354 $ 3,562,746 $ 9,957,873 $ 10,107,899 Year Ended June 30, 2016 Balance in Account on July 1 $ 740,642 $ 822,677 $ 7,505,354 $ 3,562,746 $ 9,957,873 $ 10,107,899 Receipts Interest Earned 12,873 14,303 119,022 5,754 172,794 175,393 Appropriations Total Funds Available $ 753,515 $ 836,980 $ 7,624,377 $ 3,568,500 $ 10,130,667 $ 10,283,292 Disbursements Debt Service Payments Transfer to Capital Projects/Ops. (750,000) Balance in Account on June 30 $ 753,515 $ 836,980 $ 6,874,377 $ 3,568,500 $ 10,130,667 $ 10,283,292 City of Dover, Delaware 4-14 Burns & McDonnell

5.0 – CONCLUSIONS

FY 2016 Engineering Consultant’s Report Conclusions 5.0 CONCLUSIONS In the preparation of this Engineering Consultant’s Report, Burns & McDonnell completed assessments of the electric generating stations and the transmission and distribution system of the City Electric Division. The investigations included interviews, observations, and reviews of FY 2016 expenditures and FY 2017 budgets. In addition, an analysis of the balances of the Improvement and Extension Fund and other funds benefiting the Electric Division was performed. Burns & McDonnell also reviewed the adequacy of the revenues provided by the current retail rates in relation to the requirements of the City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985. A high-level assessment of the City’s insurance coverage related to the Electric Division was also completed. Based on these reviews and assessments, it is Burns & McDonnell’s opinion that: 7. The City’s power generation facilities are being operated and maintained consistent with accepted electric utility practice in the United States. 8. The design, construction, operation, and maintenance of the City's electric transmission and distribution system and associated facilities are consistent with generally accepted electric utility standards. The system has been upgraded to improve operation, reliability, and service quality to customers. 9. The Electric Division capital projects included in the City’s Capital Investment Plan and the FY 2017 Operating Budget are necessary and should provide improved reliability and power quality for the Electric System. 10. The balances as of June 30, 2016, for the various reserve funds maintained by the City for the Electric Division appear to be sufficient for their defined purposes. 11. The insurance coverage in full force and affect as maintained by the City related to the various assets of the Electric Division appears to satisfy the requirements of Section 706 of the Resolution. 12. The electric revenues generated by the City’s current retail rates are more than sufficient to fulfill the debt service coverage requirement defined in Section 502(c) of the Resolution. City of Dover, Delaware 5-1 Burns & McDonnell

FY 2016 Engineering Consultant’s Report Conclusions APPENDIX A City of Dover, Delaware 5-1 Burns & McDonnell

Photo 1 – Cartanza Substation Photo 2 – Cartanza Substation

Photo 3 – Cartanza Substation Photo 4 – Cartanza Substation

Photo 5 – Cartanza Substation Photo 6 – Cartanza Substation

Photo 7 – College Road Substation Photo 8 – College Road Substation

Photo 9 – College Road Substation Photo 10 – College Road Substation

Photo 11 – Danner Farm Substation Photo 12 – Danner Farm Substation

Photo 13 – Danner Farm Substation Photo 14 – Division St. Substation

Photo 15 – Division St. Substation Photo 16 – Dover Downs Substation

Photo 17 – Dover Downs Substation Photo 18 – Dover Downs Substation

Photo 19 – Division St. Substation Photo 20 – Frazier Substation

Photo 21 – Frazier Substation Photo 22 – Frazier Substation

Photo 23 – Frazier Substation Photo 24 – Frazier Substation

Photo 25 – Horsepond Substation Photo 26 – Horsepond Substation

Photo 27 – Horsepond Substation Photo 28 – Horsepond Substation

Photo 29 – Lebanon Substation Photo 30 – Lebanon Substation

Photo 31 – Lebanon Substation Photo 32 – Lebanon Substation

Photo 33 – Mayfair Substation Photo 34 – Mayfair Substation

Photo 35 – Mayfair Substation Photo 36 – Mayfair Substation

Photo 37 – McKee Run Plant Substation Photo 38 – McKee Run Plant Substation

Photo 39 – McKee Run Plant Substation Photo 40 – Mid City Substation

Photo 41 – Mid City Substation Photo 42 – Mid City Substation

Photo 43 – Mid City Substation Photo 44 – Mid City Substation

Photo 45 – North Street Substation Photo 46 – North Street Substation

Photo 47 – North Street Substation Photo 48 – North Street Substation

Photo 49 – North Street Substation Photo 50 – St. Joan’s Substation

Photo 51 – VanSant Substation Photo 52 – VanSant Substation

Photo 53 – VanSant Substation Photo 54 – VanSant Substation

Photo 55 – VanSant Substation Photo 56 – VanSant Substation

Photo 57 – VanSant Substation Photo 58 – VanSant Substation

Photo 59 – VanSant Substation Photo 60 – VanSant Generating Station

Photo 61 – VanSant Generating Station Photo 62 – VanSant Generating Station

Photo 63 – VanSant Generating Station Photo 64 – VanSant Generating Station

Photo 65 – VanSant Fuel Storage

Burns & McDonnell World Headquarters 9400 Ward Parkway Kansas City, MO 64114 O 816-333-9400 F 816-333-3690 www.burnsmcd.com

Big River Film Co. SEED FUNDING REQUEST Prepared by: Big River Film Co., LLC 117 West Reed Street Dover, DE 19904 585-474-7248 nathan@bigriverfilmco.com March 20, 2017

To whom it may concern, Big River Film Co. is an established video production company in Dover, DE that houses a small team of young creatives that are committed to endless adventures and ambitious productions that set us above the rest. Due to its strategic location, we’ve made Dover our home base, and from here we’ve had the opportunity to work all over the globe, including our own backyard right here in Dover. We couldn’t be more excited to be writing to you about our most recent project. Big River Film Co. is seeking $8,000 in seed funding to help launch production of a short film to celebrate the 300th year of Dover. We’ve recently finished production on the downtown Dover branding campaign and are excited to announce this short film as our most ambitious project yet in our efforts to help revitalize and bolster the Dover area. Our goal with this project is threefold: to represent Dover in a fresh and new way, to highlight the rich history of Dover, and to invite the viewer to become a part of the story that is happening in Dover in its 300th year. By achieving these goals, we hope to create a time capsule of life in Dover in its 300th year, while fostering a renewed interest in Dover among a younger generation. Thank you for your consideration. Sincerely,

Big River Film Co. story-driven | video production DE | PHIL | D.C. | NY

Big River Film Co. Dover, Delaware Short Film Production

INTRODUCTION Here at Big River Film Co. we are a small team of creatives that are committed to endless adventures and the ambitious production of films that set us above the rest. We’ve had the opportunity to work around the globe and along the way we’ve learned that telling great stories is at the heart of excellent filmmaking. OUR TEAM NATHAN CRONK DIRECTOR | LEAD PRODUCER Nathan has be en in the field of visual storytelling since 2011. He is a member of the Unite d States Institute of Peace, Global Campus t eam, co-founder at InterMotion Me dia–a D.C. base d production house–and owner of Big River Film Co.. He has amasse d a body of work from around the world, including the jungles of Tanzania, the stre ets of Sierra Le one, peace talks in Eastern Europe and communities all across America. When he’s not pursuing the next big proje ct at Big River you can find him winding through the back roads BRIAN HARVATH PRODUCER | DIRECTOR OF PHOTOGRAPHY Brian’s production care er spans productions from New York City to Los Angeles and features celebrities and brands such as Alicia Keys, HBO, and Vince Camuto. In addition to re cently working on several short films, Brian works as a crew member and maintains a re curring acting role alongside Kevin Spacey and Robin Wright in Netflix’s hit political drama “House of Cards.” pg.1

PROJECT DESCRIPTION In an effort to help revitalize and bolster the Dover area, Big River Film Co is proud to announce our most ambitious project to date: the production of a 5-7 minute short film about Dover, DE in its 300th year. Our goals in the production of this film are threefold: To represent Dover in a fresh and new way To highlight the rich history of Dover while forging a path toward the future. To invite the viewer to become a part of the story that is happening in Dover in its 300th year. By achieving these goals we desire to create a time capsule of life in Dover in its 300th year and foster a renewed interest in Dover among a younger generation. CREATIVE APPROACH The creative approach to this project will be largely focused on the discovery and development of three separate stories to be told simultaneously in the short film. We want to tell the stories of three individuals that exemplify the Dover spirit in unique ways: one person who exemplifies the past, one person who exemplifies the present and one person who exemplifies the future. pg.2

Big River film co. Questions about this proposal? Contact us and we’d be happy to chat! 585.474.7248 | nathan@bigriverfilmco.com | Dover, DE www.bigriverfilmco.com

ACTION FORM PROCEEDING: Council Committee of the Whole AGENDA ITEM NO.: DEPARTMENT OF ORIGIN: Finance Department DATE SUBMITTED: 4/25/17 PREPARED BY: Lori Peddicord, Assistant Controller/Treasurer SUBJECT: Evaluation of Proposals – Fiscal Year 2017-2021 Audit Services REFERENCE: Professional Auditing Services – RFP 17-0029FN REVIEW: Assistant Controller/Treasurer & Acting City Manager EXHIBITS: Cost Comparisons – Exhibit A EXPENDITURE REQUIRED: $294,323 (5 Years) FY17 $49,880 AMOUNT BUDGETED: FY18 $66,000 FUNDING SOURCE (Dept./Page in CIP & Budget): 110-2300-517-30-31 Contractual Services & Grant Funds for A-133 Audit TIMETABLE: N/A RECOMMENDED ACTION: Staff recommends the approval of CliftonLarsenAllen LLP for the audit services contract not to exceed the fixed prices as provided in Exhibit A Proposal dated March 24, 2017. The City of Dover Finance Department solicited proposals to professional accounting firms for the annual audit services on February 14, 2017. On March 24, 2017 the City received six proposals in response to the Request for Proposals. All proposals contained the mandatory elements. CliftonLarsenAllen LLP has 100 U.S. locations with approx. 5,000 staff providing the City one of the country’s largest and most knowledgeable pools of public sector resources. They serve over 2,000 governmental clients nationwide. The proposal submitted by SB & Company included a preference for Minority Business Ownership as certified by the State of Delaware. The proposal for Zelenkofske Axelrod LLC included a local vendor preference. Each of these preference provides for a 3% allowance on the proposed prices. The results of the Finance Department evaluations are as indicated in the Exhibit A attached.

Exhibit A 2017 PROFESSIONAL AUDITING SERVICES EVALUATION Exhibit A RFP 17-0029FN FIRMS Barbacane, Belfint Lyons Thornton & CliftonLarson Zelenkofske Shuman CO Allen Maillie Axelrod LLC SB & Co WEIGHT EVALUATION CRITERIA FACTOR 1. MANDATORY ELEMENTS (mark with x) a. The audit firm is independent and licensed to practice in Delaware. X x x x x x x The firm has no conflict of interest with regard to any other work performed by the b. firm for State or Kent County X x x x x x x The firm's professional personnel have received adequate continuing c. professional education within the preceding two (2) years. X x x x x The firm submits a copy of its last external quality control review report and the d. firm has a record of quality audit work. X x x x x x x The firm adheres to the instructions in this request for proposal on preparing and no comfort e. submitting the proposal. X x letter $ x 2. a. TECHNICAL QUALITY-EXPERTISE AND EXPERIENCE The firm's past experience and performance on comparable government of (1) engagement. 20 15 19 19 19 16 20 The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be (2) available for technical consultant. 20 20 15 20 20 13 20 b. AUDIT APPROACH (1) Adequacy of proposal staffing plan for various segments of the engagement. 10 9 9 9 6 8 10 (2) Adequacy of sampling techniques. 10 10 10 10 10 9 10 (3) Adequacy of analytical procedures. 10 10 10 10 10 9 10 TOTAL 70 64 63 68 65 55 70 3. PRICE 30 9 13 13 8 15 10 GRANT TOTAL 100 73 76 81 72 70 80 Cost Comparisons 2016 Cost 2017 2018 2019 2020 2021 SB & Company Total $62,180 $61,800 $63,670 $65,548 $67,475 $69,410 Total with 3% Preference $59,946 $61,760 $63,582 $65,451 $67,328 Barbacane, Thorton & Co Total $56,000 $57,500 $59,000 $60,500 $62,000 Clifton, Larson & Allen Total $56,380 $57,831 $58,913 $60,055 $61,144 Belfint, Lyons, Shuman Total $56,000 $57,100 $58,300 $59,400 $61,000 Zelenkofske Axelrod LLC Total $53,375 $53,375 $53,375 $53,375 $53,375 Total with 3% Preference $51,774 $51,774 $51,774 $51,774 $51,774 Maillie Total $48,000 $48,550 $49,100 $49,650 $50,200 Total Variance - Lowest vs. Highest w/3% $11,946 $13,210 $14,482 $15,801 $17,128

CITY OF DOVER LEGISLATIVE FINANCE AND ADMINISTRATION COMMITTEE April 25, 2017 BUSINESS IMPROVEMENT DISTRICT - ASSESSMENT (TAX) RATES FOR FISCAL YEAR 2017-2018 Submitted by: Cheryl A. Bundek, AAS INTRODUCTION The Business Improvement District (BID) Ordinance adopted by City Council requires that Council must adopt a BID budget and assessment every year. This report presents the proposed budget and assessment for fiscal year 2017-18. ORDINANCE REQUIREMENT AND BUDGET (A) Appendix D, Article III, Section 9(f) requires that a budget be submitted to City Council for consideration and approval. For your consideration, we have attached the FY 2017-2018 budget showing BID tax revenue and the expenses charged against this revenue (Attachment A). (B) For your consideration, we have also provided the tax calculation worksheet with recommended rates (Attachment B). REQUEST FOR ACTION We request Council to approve the following budget for fiscal year 2017-18 Attachment A, and Assessment (Tax) Rate for 2017-18 - Attachment B. T:\BID Assessment Rates\FY18 BID MEMO TO COUNCIL.doc 1

ATTACHMENT A BUSINESS IMPROVEMENT DISTRICT CASH RECEIPTS BUDGET FOR 2017-18 BID TAX REVENUE AND EXPENSES CHARGED AGAINST THIS REVENUE ADMINISTERED THROUGH CITY OF DOVER BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. The amount hereinafter named aggregating Zero dollars, ($0.00) or so much thereof as may be necessary is hereby appropriated from current revenues and other funds for economic development purposes for the fiscal year beginning July 1, 2017, and ending June 30, 2018: REVENUE PROPOSED Tax Revenue $0.00 EXPENSES Personnel & Administration Expenses $0.00 T:\BID Assessment Rates\FY18 BID MEMO TO COUNCIL.doc 2

ATTACHMENT B CITY OF DOVER LEGISLATIVE FINANCE AND ADMINISTRATION COMMITTEE April 25, 2017 BUSINESS IMPROVEMENT DISTRICT - ASSESSMENT (TAX) RATES FOR FISCAL YEAR 2017-2018 BUSINESS IMPROVEMENT DISTRICT TAX CALCULATION WORKSHEET JULY 1, 2017 TO JUNE 30, 2018 ZONE 1 ZONE 2 ZONE 3 TOTAL Aggregate Assessments $38,004,800 $60,428,800 $35,492,800 $133,926,400 Assessment Tax Rate per $100 - - - --- Revenue Raised $0 $0 $0 $0 % Revenue Raised 0% 0% 0% 0% Number of Parcels 113 104 41 258 Average Assessment $0 $0 $0 $0 NOTE: These figures were estimated per the 2015 reassessed values. The revenue percentages by Zone are per the City of Dover Code Appendix D-Article III, Section 9(e). T:\BID Assessment Rates\FY18 BID MEMO TO COUNCIL.doc 3