SPECIAL CITY COUNCIL - BUDGET REVIEW AND EXHIBIT 1

SPECIAL COUNCIL MEETING BUDGET REVIEW The Special City Council Meeting was held by video conference on June 1, 2020 at 6:04 p.m. with Council President Hare presiding. Council members present via video or telephone were Mr. Anderson, Mr. Sudler, Mr. Neil, Mr. Slavin, Mr. Cole, Mr. Polce (arrived at 6:14 p.m.) and Mr. Lindell. Mr. Taylor was absent. Staff members present via video or telephone were Mrs. Mitchell and Mrs. McDowell. Mayor Christiansen was also present. ADOPTION OF AGENDA Mr. Hare requested to remove item #4 - Stormwater Utility Recommendation, to be discussed at a later date. Mr. Sudler moved for approval of the agenda as amended, seconded by Mr. Lindell and unanimously carried. Mr. Hare stated that Mr. Taylor was unable to attend, but that Mr. Taylor had no problems with the budget as long as there were no tax increases, which he was not in favor of. INTRODUCTION AND PRESENTATION OF FISCAL YEAR 2021 RECOMMENDED BUDGET AND HIGHLIGHTS OF OVERALL BUDGET Mr. Matthew Harline, Assistant City Manager, reviewed the document titled “2020-2021 Draft Annual Operating Budget,” (Exhibit #1). Mrs. Donna Mitchell, City Manager, noted that splitting the Water/Wastewater fund into two separate funds also split the employees into two separate funds and, in doing so, when the actuary calculated the Other Post-Employment Benefits (OPEB) retirement's liability, a greater difference in the percentage of payroll for the OPEB expense went to the Wastewater fund than to the Water fund. MAJOR FUND HIGHLIGHTS - GENERAL FUND Mr. Matthew Harline, Assistant City Manager, reviewed pages 21-31 of the “2020-2021 Draft Annual Operating Budget,” pages 190-199 of the budget book. Regarding iPlan tables, Mr. Sudler asked if it would be contractors that would be submitting these plan tables for review legally. Responding Mr. Harline clarified that iPlan is a light table that is basically a computer screen that you can write on. Responding to Mr. Sudler, Mr. Harline stated that it would be contractors who need equipment. He noted that they would submit plans, and they would be able to mark up and share from department to department easier. Mr. Harline stated that it would eliminate the use of paper and the cumbersomeness of having a set of plans that have been marked up.

SPECIAL COUNCIL MEETING OF JUNE 1, 2020 PAGE 2 Responding to Mr. Sudler's questions regarding Diversity and Inclusion, Mr. Hare stated that Mrs. Kim Hawkins, Human Resources Director, sent an email outlining his concerns in-depth since it has been put on hold due to the current circumstances. Responding to Mr. Sudler's questions, Mr. Harline provided the following information: • Looking at the current years’ General Fund revenues, they are seeing the original approved amount for several of the funds, like Kent County book reimbursement. They budgeted at $275,000 and it is coming in at $238,700. He noted that the decrease is unrelated to the coronavirus and that they have been seeing decreasing funds each year. • One of the largest decreases was in permits and other fees, which was budgeted at $1.72 million. Applications for building permits have probably been affected somewhat by the Coronavirus. They are anticipating those revenues to be close to $1.12 million. • The tiered rate structure recommended by the consultant, NexGen, provides a disincentive for wasting water by giving lower usage customers a lower rate than larger consumers to encourage water conservation. • The base rates try to match the actual fixed costs of providing some of the basic services. The actual fixed costs for water rates are steady and the variable rates are a smaller part of the resource. • Segal Consulting is conducting a Compensation and Classification Study at the department head level to address personnel and the retention rate. Mr. Hare noted that Mrs. Hawkins' report has quite a few recommendations as to how to ascertain what the department should be doing. MAJOR FUND HIGHLIGHTS - WATER FUND Mr. Matthew Harline, Assistant City Manager, reviewed pages 63-71 of the “2020-2021 Draft Annual Operating Budget,” pages 293-311 of the budget book. MAJOR FUND HIGHLIGHTS - WASTEWATER FUND Mr. Matthew Harline, Assistant City Manager, reviewed pages 73-81 of the “2020-2021 Draft Annual Operating Budget,” pages 313-329 of the budget book. Mrs. Donna Mitchell, City Manager, referring to page 77 of the “2020-2021 Draft Annual Operating Budget,” noted that Staff planned on either a bond issue or a loan through the State Revolving Fund, since is it only a rate of 2%, to complete the Inflow/Infiltration Removal/System Improvements, which is a major project in 2023 and 2024. Mrs. Mitchell stated that $800,000 was allocated in 2021 and $419,000 in 2022 for Ms. Sharon Duca, Public Works Director, to do smoke testing to determine where the lines are leaking. She noted that when smoke testing was done years ago, it was done in segments instead of citywide.

SPECIAL COUNCIL MEETING OF JUNE 1, 2020 PAGE 3 Mrs. Mitchell advised that $4,270,000 was budgeted in both 2023 and 2024 to complete the Inflow/Infiltration Removal/System Improvements project, at which time the I&I money will be applied toward debt service rather than water. Regarding treatment fees, Mrs. Mitchell stated that they have had to increase the budget the last few years because of the wet weather. She advised that they were not able to cover the county sewer bill because the rain water was going into the line. Mrs. Mitchell, referring to page 347 of the budget book, noted that the 2020 project date exceeds “Exceeds/(Remains) to Meet Requirement” in row 35 at negative $693,300 due to the increase in the treatment charge. MAJOR FUND HIGHLIGHTS - ELECTRIC REVENUE FUND Mr. Matthew Harline, Assistant City Manager, reviewed pages 83-100 of the “2020-2021 Draft Annual Operating Budget,” pages 331-363 of the budget book. Responding to Mr. Anderson’s questions, Mr. Harline provided the following information: • They are hoping to have the LED lighting project implemented in three years. This project allows for the design in this year and next year and then the installation of the lights and the seven-pin technology to allow ad-ons, such as detecting sounds. Those ad-ons are not in this budget, but they can be added in 2022, 2023 or, depending upon Council priorities, they could begin installing some of them in 2021, but this budget does not include the ad-ons. • They are anticipating full police staffing. When they were going through the budget process, they had people in the Academy to fill the remaining spots. Mrs. Mitchell noted that there are six cadets in the budget. • Regarding grants for organizations that do Dover Days and the African American Festival, there is going to be a direct $15,800 for Dover Days, which is now its own 501c3. They are anticipating supporting Dover Day with a fee for service instead of a donation. • The funds for the Fourth of July celebration and the African American Festival are programmed in the Parks and Recreation Department at $5,000.00 each. There is no increase or decrease from the previous year. Responding to Mr. Anderson regarding street priorities, Mrs. Mitchell stated that she sent an email showing how 0.007 compared with the commercial and industrial rates that she presented in January. She noted that all of the large customers faired pretty well. Responding to Mr. Anderson, Mr. Harline stated that they are still counting on the grading being done in partnership with Innovation Readiness Training (IRT). He noted that it has been approved and it will appear in the next federal fiscal year, which would start October 1st, at which time they would do the planning. Mr. Harline noted that they would do the actual grading in the summer of 2022.

SPECIAL COUNCIL MEETING OF JUNE 1, 2020 PAGE 4 Responding to Mr. Anderson regarding the $360,000 that is budgeted, Mrs. Mitchell stated that they have budgeted for one project. They had an estimated cost of $319,000 in this budget and they were going to use that money to help with that project. She stated that they will not know the cost of each project until they get the engineering done on the Master Plan Projects. Mrs. Mitchell advised that they were going to place any balance of that money or all of that money in the Parkland Reserve and as they get the engineering and estimates done, they will bring those projects back to Council. Mr. Slavin asked Mr. Lindell, as Chair of Legislative, Finance, and Administrative Committee, if he would consider having a standing update each quarter on the budget, revenues, and expenses. Mr. Slavin moved to adopt the budget as presented. The motion was seconded by Mr. Cole. Mr. Neil expressed concerns regarding the lodging tax and property taxes. He noted that he requested they have a separate fund for Dover Days. Mr. Neil stated that it was important that tourism had a fee and he suggested $5,000 because they are marketing and advertising to make people aware. Mr. Neil proposed a general discussion on the implementation of the fees. He noted that they have to have the infrastructure for these fees to maintain the pumps and pipes. Mr. Neil asked if they could delay this issue. Responding to Mr. Neil regarding bonding to support a structure for wastewater and water, Mrs. Mitchell stated that many of those projects are already with bonding. She noted that the interest rate is 2% and that the interest and bond payment is built into the budget and the forecast model. Mrs. Mitchell stated that the rate and fees are covering those debt service payments to bond those projects. Mr. Neil asked if it would hurt them if they were to delay the fee part of the implementation. He asked if they can give a break to the City residents who are going to have to pay that, because it is an increase that they are going to have to pay each month. Responding to Mr. Neil, Mrs. Mitchell stated it is in the total bill, it is not an increase. She stated it is actually a decrease because of the PCA credit, the only one that will actually see an increase is the residential customer, which is $2 and some change. Mrs. Mitchell noted that they would actually see a slight increase, but it is nowhere near what it could be if they were not doing the PCA credit. She stated that she did a calculation of $104,200 in water utility lost revenue and $149,900 in wastewater lost revenue if they deferred the rate increases for two months until September 1st. Mrs. Mitchell stated that the budget does include debt service for projects so it would erode at that income, but that they could manage with it. Mr. Harline noted that they have the forms prepared for the lodging tax and they should be ready in a week. Mr. Anderson asked what the feedback was for their cash customers, not changing the due date, but waving latencies in interest for people who need a couple of extra months, who need until September to pay their property taxes. Responding, Mr. Hare stated that is something that is going to be on the Council agenda. He noted that he has received a lot of calls from business and hotel owners, and it is going to be proposed that they delay and that they do not have any penalties. Mr. Hare stated

SPECIAL COUNCIL MEETING OF JUNE 1, 2020 PAGE 5 instead of July 1st property taxes being due, they are going to extend it to September 30th to give everybody a chance to get the revenues. Mr. Hare noted that a lot of the businesses he has spoken to are very comfortable with that. He noted that they are going to apply that to everybody. Mr. Slavin moved to adopt the budget as presented. The motion was seconded by Mr. Cole and unanimously carried. Mr. Slavin moved for adjournment, seconded by Mr. Cole and unanimously carried. Meeting adjourned at 8:19 p.m. TRACI A. McDOWELL CITY CLERK All ordinances, resolutions, motions, and orders adopted by City Council during their Special Meeting of June 1, 2020, are hereby approved. ROBIN R. CHRISTIANSEN MAYOR /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Council-Minutes\2020\06-01-2020 SPECIAL CITY COUNCIL - BUDGET REVIEW.wpd Exhibits Exhibit #1 - Document titled “2020-2021 Draft Annual Operating Budget”

EXHIBIT #1 Special Council Meeting - Budget Review of 06/01/2020 2020-2021 DRAFT ANNUAL OPERATING BUDGET With 2021 – 2025 Capital Investment Program 1

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City of Dover Fiscal Year 2021 Recommended Budget Budget Highlights & Discussion Points June 1, 2020

The Vision The City of Dover is a place where people want to live! Through the team effort of its elected officials, employees, and citizens, Dover is a clean and safe community, with a future of balanced growth and opportunity where all citizens are heard, enjoy a high quality of life, and diversity is valued. 4

The Vision …Dover is a clean and safe community, …enjoy a high quality of life… This budget document reflects a spending plan for FY21, that maintains the gains for critical service levels from last year and starts a path towards enhanced maintenance of our infrastructure to support the City’s taxpayers and citizens beyond FY21. • This budget maintains staffing added last year for maintenance of basic public works such as ditch maintenance, streets, stormwater culverts, catch basins, vegetation/tree maintenance, building inspections and code enforcement. • This budget anticipates holding the gains in personnel from last year, but due to stagnant revenues, no additional full-time personnel are recommended. • This budget continues with long range plans to address our aging facilities, park improvements, and to upgrade HVAC systems in City facilities. • The budget does not include a self-funding Stormwater Utility. The City will still have to address stormwater infrastructure maintenance and operational requirements as required by Federal and State regulations, but any additional fees will require discussion during FY21 for implementation in late FY21 or in FY22. 5

The Vision …Dover is a clean and safe community, …enjoy a high quality of life… This budget document reflects a spending plan for FY21, …to support the City’s taxpayers and citizens beyond FY21. • This budget reflects an increased focus on new and upgraded technology for better customer service and greater efficiency. • This budget implements rate increases in water and wastewater (a.k.a. sewer) for needed improvements to infrastructure as well as establishing a prudent reserve in the wastewater fund over time. • This budget offsets the increase in water and wastewater fees with an increase in the PCA credit for electric rates. • This budget reflects the uncertainty of the General Fund revenues by: • Reducing the transfer to the Capital fund from $3.26 million FY20 to a recommendation of $2.08 million in FY21; • Cutting GF CIP from $6.57 million in FY21 requested CIP to $4.87 million recommended; • Budgeting only 2% raises for Non-bargaining employees; 0% increase in Health Care. 6

The Vision …Dover is a clean and safe community, …enjoy a high quality of life… This budget document reflects a spending plan for FY21, …to support the City’s taxpayers and citizens beyond FY21. • This budget reflects an increased focus on new and upgraded technology for better customer service and greater efficiency. • This budget implements rate increases in water and wastewater (a.k.a. sewer) for needed improvements to infrastructure as well as establishing a prudent reserve in the wastewater fund over time. • This budget offsets the increase in water and wastewater fees with an increase in the PCA credit for electric rates. • This budget reflects the uncertainty of the General Fund revenues by: • Reducing the transfer to the Capital fund from $3.26 million FY20 to a recommendation of $2.08 million in FY21; • Cutting GF CIP from $6.57 million in FY21 requested CIP to $4.87 million recommended; • Budgeting only 2% raises for Non-bargaining employees; 0% increase in Health Care. 7

Mission – Planning for the Future ➢ Create economic opportunities – three prongs ❖ New Businesses ❖ Preserve and Expand Existing Business ❖ Citizens of Dover and local communities with quality jobs ➢ City buildings and infrastructure ❖ Address space needs and energy efficiencies ❖ Address code compliance for City structures ❖ Look to the future needs and opportunities ➢ Quality of Life and Collaboration with Partners ❖ Restore Central Dover – lighting, cleanup, events ❖ Safe streets and neighborhoods ❖ Park amenities for families ❖ Increased funds for demolition of dangerous buildings ➢ Utilities ❖ Continue to address water quality ❖ Address aging water & wastewater infrastructure ❖ Develop a stormwater strategy ❖ Establish partnerships in new generation technologies and renewables 8

Executive Summary • General Fund ✓ Property Tax – No rate increase (reassessment → decreased rate) ✓ No new full-time positions; kept additions from prior year ✓ Major Improvements in Dover Park (FY21 – FY22) and Schutte Park (FY22) ✓ Development of a Stormwater Utility for consideration in Winter 2021 • Water Utility – separate Fund since FY20 ✓ Cost of service and rate increases start in FY21 ✓ Proposed to meet future revenue requirements for operations and capital maintenance ✓ Allows for needed improvements and to preserve prudent reserves ✓ Lowest volume users will see a decrease in their bill ✓ Completion and full operation of the Water Treatment Facility • Wastewater Utility – separate Fund since FY20 ✓ Cost of service and rate increases start in FY21 ✓ Proposed to meet future revenue requirements for operations and capital maintenance ✓ Allows for needed improvements and to preserve prudent reserves • Electric Fund ✓ Decommissioning of McKee 3 during FY21 – FY 23 ✓ Secure Solar energy PPAs for 25 years. ✓ Increase in PCA Credit (to $.00700/kwh) ✓ Offset Water and Wastewater rate increases for most customers ✓ Increased credit the sent back to customers from FY20 PCA ($.00382/kwh) 9

Policy Compliance • Revenue Policy • #6 – The City will project current revenues on a conservative basis so the actual revenues will consistently meet or exceed budgeted revenues. Revenues greater or less than the original budget will flow through to the audited Ending Budget Balance. • Expenditure Policy • #3 –The City will adopt a balanced budget, by fund, for all funds maintained by the City, in which total anticipated revenues must equal or exceed the budgeted expenditures, less capital transfers, for each fund. The Beginning Budget Balance will not be considered a revenue source. • Budget Balance Policy – General Fund • #1 – The City will strive to maintain a minimum Budget Balance, of at least 8% and no greater than 12% of the current year operating revenues for the General Fund, excluding the carry forward balance. (8.33% = 1 month, 12% = 45 days) • Budget Balance Policy – Water Fund • #1 – The City will strive to maintain a minimum Budget Balance, of at least 8% and no greater than 17% of the current year operating revenues for the Water Fund, excluding the carry forward balance. (17% = 2 months) • Budget Balance Policy – Wastewater Fund • #1 – The City will strive to maintain a minimum Budget Balance, of at least 8% and no greater than 17% of the current year operating revenues for the Wastewater Fund, excluding the carry forward balance. (17% = 2 months) • Budget Balance Policy – Electric Fund • #1 – The City will strive to maintain a minimum Budget Balance, of at least 12% of the current year operating revenues for the Electric Fund, excluding the carry forward balance. 10

Policy Compliance as Recommended Water and General Water Wastewater Wastewater Electric Fund Utility Utility Fund Fund * Revenues 44,944,700 $7,323,600 $10,284,300 $17,607,900 $85,086,900 Expenses (46,416,200) (7,082,100) (8,968,800) (16,050,900) (79,420,400) Surplus/(Deficit) ($1,471,500) $241,500 $1,315,500 $1,557,000 $5,666,500 Ending Budget Balance 4,341,600 $1,460,400 $1,363,400 $2,823,800 $10,650,700 % of Revenue 9.7% 19.9% 13.3% 16.0% 12.5% Beginning Budget Balance 5,813,100 $1,218,900 $47,900 $1,266,800 $10,230,300 Less PCA Credit (5,246,100) Adjusted Beginning Budget Balance $4,984,200 Capital Improvement Transfers $2,078,100 $1,300,000 $1,200,000 $2,500,000 $5,000,000 Revenue Policy #6 x ✓ ✓ ✓ ✓ Budget Balance Policy #1 ✓ x ✓ ✓ ✓ Expenditure Policy #3 x ✓ ✓ ✓ ✓ * The Electric Fund Revenue does not include the distribution of prior fiscal year earnings, The FY21 Beginning Budget Balance is reduced $5.2 million to rebate prior year revenues through a Power Cost Adjustment (PCA) credit; 11

City of Dover Recap of Budget Review - Major Funds Fiscal Year 2020/21 2019/20 2020/21 2020/21 APPROVED REQUESTED RECOMMENDED Operating Budgets Expenditures less Capital Transfers General Fund $43,601,200 $45,694,700 $44,338,100 Water Fund 5,679,600 5,831,600 5,782,100 Wastewater Fund 8,674,300 7,939,300 7,768,800 Electric Revenue Fund 77,899,400 74,723,700 73,420,400 Total Operating Budgets $135,854,500 $134,189,300 $131,309,400 Capital Budgets General Fund $4,904,000 $6,572,100 $4,867,800 Water Fund 1,520,100 1,387,400 1,225,900 Wastewater Fund 2,302,600 1,518,000 1,099,000 Electric Revenue Fund 7,058,645 6,355,900 6,355,900 Total Capital Budgets Budgets $15,785,345 $15,833,400 $13,548,600 Grand Total Major Funds $151,639,845 $150,022,700 $144,858,000 12

Actual Actual Actual Actual Actual Actual Actual Actual Proposed GENERAL FUND 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Property Tax Rate Approved $0.3378 $0.3378 $0.3378 $0.4050 $0.4050 $0.4050 $0.4050 $0.4400 $0.4050 Proposed Property Tax Rate Increase $0.0551 $0.0350 ($0.0350) Trash Fees (in City) $17.00 $17.00 $17.00 $17.00 $17.00 $21.00 $21.00 $21.00 $21.00 Trash Fees (outside City) $42.75 $42.75 $42.75 $42.75 $42.75 $54.00 $0.00 $0.00 $0.00 Transfer from Electric Utility $8 million $8 million $10 million $10 million $10 million $10 million $10 million $10 million $10 million % of Electric Fund Revenues 8.3% 9.6% 12.5% 12.2% 12.3% 12.2% 12.2% 11.8% 11.8% % of General Fund Revenues 22.3% 22.5% 25.7% 23.9% 23.7% 23.4% 23.4% 22.0% 21.4% Transfer from Water/Wastewater Utility $500,000 $500,000 $500,000 $850,000 $875,000 $900,000 $1,000,000 $1,000,000 $1,000,000 % of Water/Wastewater Fund Revenues 3.7% 3.6% 3.4% 5.7% 5.7% 5.8% 5.8% 6.3% 5.7% % of General Fund Revenues 1.4% 1.1% 1.3% 2.0% 2.1% 2.1% 2.1% 2.2% 2.1% WATER/WASTEWATER FUND Water per 1,000 gal (Tier 1) $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $2.49 Water per 1,000 gal (Tier 2) $3.11 Water per 1,000 gal (Outside City Tier 1) $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $3.74 Water per 1,000 gal (Outside City Tier 2) $4.67 Water Customer Charge $1.25 $1.25 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $5.00 Wastewater per 1,000 gal. Charge $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.84 Wastewater per 1,000 gal (Outside City) $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $4.25 Wastewater Customer Charge $1.25 $1.25 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $5.00 Kent County Sewer Treatment Fee - Rate set by County $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.58 $2.58 Kent County Sewer Adjustment (I & I flows) $1.05 $1.05 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.61 ELECTRIC FUND Residential Rates $0.1316 $0.1204 $0.1204 $0.1203 $0.1203 $0.1203 $0.1206 $0.1206 $0.1209 Increase % -3.5% -8.5% 0.0% -0.1% 0.0% 0.0% 0.2% 0.0% 0.2% Power Cost Adjustment ($0.00252) ($0.00855) ($0.00382) ($0.00382) ($0.00700) Electric Fund Customer Charge $5.00 $5.00 $5.00 $7.50 $7.50 $7.50 $8.46 $8.46 $9.42 Reconnect Fees $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 Return Check Fees $25 $25 $25 $40 $40 $40 $40 $40 $40 13

Major Operating Funds Personnel • No staff (FTE) increases are recommended. • Pay increases and progression steps in accordance with collective bargaining agreements; Non-Bargaining increases of 2% preserved. • State Health Plan calls for no increase • Retirement payouts • Some known retirements (City Manager, IT Director, etc.) are budgeted • Others will be absorbed by attrition and new hires put on hold until such time the budget will cover the position. Exceptions will be reviewed by the City Manager, Controller/Treasurer and Department Head. • Negotiations with AFSCME and IBEW still pending. • Possible to review at mid-year for key positions (additional street sweeper, police officers, addition planning and inspection staff.) 14

Personnel Request REQUESTED STRATEGIC POSITIONS DEPARTMENT FTE POSITION SALARY/BENEFITS CITY CLERK 1.0 ASST TO DIR OF COUNCIL AFFAIRS & CON SERV $ 63,100.00 PLANNING 1.0 SECRETARY II $ 54,700.00 PLANNING 1.0 PLANNER I $ 59,100.00 LIBRARY 1.0 LIBRARIAN I $ 64,000.00 FACILITIES MAINT. 1.0 CRAFTSPERSON I $ 59,900.00 FACILITIES MAINT. 1.0 CRAFTSPERSON I $ 59,900.00 STORMWATER 1.0 SW MOTOR EQUIPMENT OPERATOR II STEP 1 $ 58,100.00 STORMWATER 1.0 STORMWATER PROGRAM MANAGER $ 81,800.00 GOUNDS 0.5 LABORER - PART TIME $ 12,100.00 POLICE CIVILIAN 1.0 SEU ADMIN ASSISTANT $ 53,400.00 POLICE 1.0 (1) PD OFFICERS $ 89,700.00 POLICE 1.0 (2) PD OFFICERS $ 89,700.00 POLICE 1.0 (3) PD OFFICERS $ 89,700.00 POLICE 1.0 (4) PD OFFICERS $ 89,700.00 POLICE 1.0 (5) PD OFFICERS $ 89,700.00 Count = 14 14.5 $ 1,014,600.00 15

Personnel Budget Summary Budget Requested Recommended Fiscal Year Fiscal Year Fiscal Year % 2019/2020 2020/2021 2020/2021 Change By Fund General Fund $ 30,585,700 $ 32,598,900 * $ 31,290,900 2.31% Water Utility Fund 2,113,000 2,096,600 2,096,600 -0.78% Wastewater Utility Fund 891,900 958,400 958,400 7.46% Electric Utility Fund 5,210,900 5,498,700 5,498,700 5.52% Grant Funds 93,500 91,000 91,000 -2.67% $ 38,895,000 $ 41,152,600 $ 39,844,600 2.68% By Fund Increase over FY20 General Fund $ 2,013,200 $ 705,200 Water Utility Fund $ (16,400) $ (16,400) Wastewater Utility Fund $ 66,500 $ 66,500 Electric Utility Fund $ 287,800 $ 287,800 $ (2,500) $ (2,500) $ 2,351,100 $ 1,043,100 * The Stormwater Division is included in the General Fund Recommended Budget 16

Major Fund Highlights Fiscal Year 2020 – 2021 Budget Hearing June 1 -3, 2020 17

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GENERAL FUND BUDGET REVIEW Fiscal Year 2020-2021 Operating Department & Division Summaries • June 2020 – Budget Review Hearing 19

• General Fund Public Safety, General & Community Services Police * Fire * Life Safety * Code Enforcement Planning * Public Inspections * Library * Recreation Streets * Stormwater * Sanitation * Tax Assessor Support Services for all City Operations Mayor * City Council * City Clerk * City Manager Finance * Customer Service * Human Resources Information Technology * Procurement & Inventory Public Works Administration * Grounds Facilities Management * Fleet Maintenance 20

General Fund Revenues - Summary • Projected revenues are flat as compared to the FY20 Original Budget • ($84,200) or -0.2% • Major increases affecting revenues • Net Property Tax increase related to new construction $289,100 • Property Tax rollback (reassessment correction) of $.035, $1,227,600 • Interfund Service Receipts $309,200 • Police Extra Duty $89,000 (Corresponding increase in expense, includes both fees and grants) • Other Grants $80,000 • Major decreases affecting revenues • Permits and Inspections $278,000 • Interfund Service Receipts $101,000 • Transfer Tax $91,500 (-6.0%) • Civic Traffic Penalties $87,900 (-16.5%) • Kent County Book Reimbursement $30,000 (- $55,000 since FY19) 21

General Fund Revenues - Summary GRANTS 3.4% COURT OF CHANCERY FEES POLICE FINES & FEES 3.2% LICENSES & PERMITS 3 .6% FRANCH ISE FEES 6.5% 1.4% LIBRARY & RECREATION TRANSFER TAXES FEES 3.2% 1.1% 0.6% INTERFUND SERVICE FEES 12.5% PROPERTY TAXES 33.1% UTILITY TRANSFERS 24.5% 22

General Fund Revenues – Property Taxes CITY OF DOVER PROPERTY ASSESSMENT PROJECTION 2020 BASE YEAR TAXABLE ASSESSED VALUE AS OF MARCH 18 2020 $ 3,581,763,900 Abatement Incentives (36,184,200) Filed Tax Exemption Requests (scheduled for Annual Appeals) (1,317,000) Supplemental Billing (April) (ALREADY INCLUDED IN TAXABLE VALUE) Estimate Only 128,800 Annual Appeals (increased because of reval appeals) Estimate Only (15,000,000) Senior Citizen/Disability Exemption (approx 425 approved; revenue loss $88,257) Estimate Only (22,000,000) TOTAL ASSESSED VALUE $ 3,507,391,500 CITY OF DOVER PROJECTED PROPERTY TAX RECEIPTS ACCRUAL METHOD OF ACCOUNTING 7/01/20 - 6/30/21 I Using a tax of $0.405 per $100 of assessment, the estimated gross 7/01/20 billing will be $ 14,204,900 Penalties 50,000 Estimated Quarterly Billing 80,200 PROJECTED PROPERTY TAX RECEIPT SUBTOTAL $ 14,335,100.00 Pay In Lieu of Taxes Luther Towers; State of Delaware; Milford Housing; DE State Housing Auth; 550,700 Dover Housing Authority; Whatcoat Village; Liberty Court PROJECTED PROPERTY TAX RECEIPTS FOR FY 2020 $ 14,885,800 $0.01 of tax rate equates$to: 350,739.15 $ 350,700 23

General Fund Revenues – Other • Transfer Tax $91,500 (-6.0%). • DEFAC Projection for 35 decrease in FY21 • City assumption is 6% decrease based on economic downturn • Municipal Street Aid Budgeted at $750,000 • Below FY20 revised $796,000 and FY19 actual $806,285 • Above FY20 budgeted --- and FY19 budgeted $665,300 • Subject to State appropriation • MOA with State for $1,000,000 for Parks is pending • Only $310,000 recognized as revenue 24

General Fund Trendline Revenues & Expenditures – 100 General Fund $60 $50 -- - -- - - -- - -- -- - - ,,,, V'l $40 ~ - - - - - --- z 0 ::::::i $30 - ...I ~ V). $20 $10 $0 2014A 2015A 2016A 2017A 2018A 2019A 2020B 2021B 2022F 2023F 2024F 2025F 2026F I- I-REVENUES $37.2 $40.1 $42.7 $42.5 $44.2 $43.7 $45.1 $44.9 $43.9 $44.4 $44.8 $45.3 $45.7 I- - 2-EXPENOITURES $37.2 $39.7 $42.1 $41.9 $42.0 $44.5 $46.9 $46.3 $49.9 $49.2 $50.3 $51.4 $49.6 25

GF Fund Balance Trend GENERAL FUND FAVORABLITY ACTUAL V. BUDGET FY19 - FY 21 2018/19 2019/20 2020/21 2020/21 ACTUAL APPROVED REQUESTED RECOMMENDED Beginning Balance Adopted 5,882,000 5,548,900 5,813,100 5,813,100 Beginning Balance Actual 8,239,400 7,365,500 5,813,100 5,813,100 Favorability / (Unfavorability) 2,357,400 1,816,600 Adopted Revenues 43,979,500 45,028,900 45,271,700 44,944,700 Actual/Estimated Revenues 43,637,600 43,981,400 Favorability / (Unfavorability) (341,900) (1,047,500) I Adopted Expenditures 45,818,700 46,862,800 49,651,000 46,416,200 Actual/Estimated Expenditures 44,511,500 45,533,800 Favorability / (Unfavorability) 1,307,200 1,329,000 Ending Balance Adopted 4,042,800 3,560,500 1,433,800 4,341,600 Ending Balance Actual 7,365,500 5,813,100 3.17% 9.66% Favorability / Percentage of Fund Balance Remaining (Unfavorability) 3,322,700 2,252,600 compared to 8% GF Capital Transfer Budget 3,013,800 3,261,600 2,078,100 2,078,100 26

General Fund Expenditures - Summary • Overall Expenditures are flat as compared to the FY20 Original Budget ($280,200) or -0.6% • Major increases affecting expenditures • Increased cost for Retiree Health Care – $150,000 • Police Operations – $552,000 • Only a 3.2% overall increase • Requested $1.3 million operating increase (include +6 FTE) • Grounds increases largely offset by transfers – $345,000 • from Parks 3.0 FTE – $186,800 • from Streets for mowing – $132,300 • Major decreases affecting expenditures • Reduced transfer to CIP – $1,183,500 • Assessor’s Office – reassessment completed in FY20 – $154,700 • Fleet Maintenance – $116,800 • 1 FTE moved to Procurement • Reduced cost for tools and supplies 27

General Fund Expenditures - Summary DEBT SERVICE TRANSFER TO 1.0% CAPITAL PROJECTS OTHER CITY STREET LIGHTS 0.4% 4.5% ADMINISTRATION 1.8% INSURANCE 5.3% RETIREE PENSION 1.7% LIBRARY & CONTRIBUTIONS RECREATION 2.0% 5.8% RETIREE MEDICAL PLANNING & CONTRIBUTIONS INSPECTIONS 4.4% 5.4% PUBLIC WORKS 17.4% FINANCIAL ADMINISTRATION 8.8% POLICE & FIRE 41.5% Several General Fund Departments service all City operations. The General Fund bills the utility funds service 28

General Fund Expenditures – Summary By Expenditure Category RETIREE PENSION STREET LIGHTS CONTRIBUTIONS 1.9% DEBT SERVICE RETIREE 2.1% INSURANCE 1.1% MEDICAL 1.8% CONTRIBUTIONS 4.7% CAPITAL 4.8% ADMINISTRATIVE OTHER EXPENSES 0.7% 9.2% MATERIALS & SUPPLIES 3.9% PERSONNEL SERVICES 69.9% 29

General Fund Expenditures 51000 - Salaries & Wages – 100 General Fund $25 8% 7% $20 6% LU 5% z~ II) 2 $15 ct 0 4% :I: u :::i ...I ....ct 3% :::i ~ $10 z -v)- z 2% ct '#. 1% $5 - $- 01-SAIARIESANDWAGES 11111111111111 2014A $16 2015A $17 2016A $17 2017A $18 2018A $17 2019A $18 2020B $20 2021B $20 2022F $21 2023F $21 2024F $22 2025F $23 2026F $23 0% -1% - - % CHG 0% 4% 5% 1% 0% 5% 7% 4% 3% 2% 2% 2% 3% • New positions in FY18 and FY19 to address strategic priorities. • Model assumes no additional positions. • All $1.01 million in FTE requests were in current GF (2 Stormwater FTEs) 30

FY 2021 DRAFT ANNUAL OPERATING BUDGET PROJECTED COST PER CAPITA BY FUNCTION Fiscal Year 2020-2021 OTHER TRANSFER TO CAPITAL PROJECTS I $4.63 $54.99 • INSURANCE $21.17 DEBT SERVICE $12.23 STREET LIGHTS $21.57 RETIREE PENSION CONTRIBUTIONS $24.74 RETIREE MEDICAL CONTRIBUTIONS • $54.13 I PUBLIC WORKS • $214.41 I I FINANCIAL ADMINISTRATION • $108.76 I I POLICE & FIRE I $509.62 PLANNING & INSPECTIONS • $66.07 I LIBRARY & RECREATION • $71.29 I CITY ADMINISTRATION • $65.74 $0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 Total per capita based on population estimate of 37,790 = 31

Mayor 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 108,300 $ 104,600 $ 104,600 -3% MATERIALS & SUPPLIES 2,500 1,100 1,100 -56% ADMINISTRATIVE EXPENDITURES 116,100 Mayor 116,000 116,000 0% OPERATING EXPENDITURES $ 226,900 $ 221,700 $ 221,700 -2% Highlights: • Personnel Costs are projected to remain relatively flat after the inclusion of an administrative assistant in FY20. • Materials & Supplies decreased $1,400. Last year’s amount was increased to outfit the new Administrative Assistant. • Overall costs decreased 2% 32

City Council 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 91,000 $ 91,000 $ 91,000 0% MATERIALS & SUPPLIES 3,900 2,200 2,200 -44% ADMINISTRATIVE EXPENDITURES Mayor 62,800 63,400 63,400 1% OPERATING EXPENDITURES $ 157,700 $ 156,600 $ 156,600 -1% Highlights: • Materials & Supplies decreased $1,700. • $600 was added to Community Relations Expenses for increased cost of awards and recognition expenses. • Overall costs decreased 1% 33

City Manager 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 689,800 $ 801,400 $ 801,400 16% MATERIALS & SUPPLIES 7,500 7,500 7,500 0% ADMINISTRATIVE EXPENDITURES 310,600 254,400 254,400 -18% Mayor OPERATING EXPENDITURES $ 1,007,900 $ 1,063,300 $ 1,063,300 5% Highlights: • Personnel Costs increased $109,400 primarily due to the expenses to bring a new City Manager on board while Mrs. Mitchell’s leave balance is paid out (8-month overlap). • Administrative expenses are down $75,000 because the Compensation, Classification and Benefits Study (Segal-Waters) was a one-time cost in FY20. • Overall expenditures are up 5% budget to budget (BTB), but this is a one-time increase 34

City Clerk 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 383,100 $ 451,100 $ 451,100 18% MATERIALS & SUPPLIES 11,700 8,800 8,600 -26% ADMINISTRATIVE EXPENDITURES 37,800 38,700 48,700 29% Mayor TOTAL EXPENDITURES $ 432,600 $ 498,600 $ 508,400 18% Highlights: • Personnel Costs increased $68,000 in case expenses are needed to bring on a new City Clerk concurrent with Ms. McDowell; and her leave balance will be paid out. • Administrative Expenses has increased by $10,000, primarily for the election on April 20, 2021. • Overall expenditures are up 18% budget to budget (BTB), but this is a one-time increase. 35

Customer Service 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 1,009,800 $ 1,048,600 $ 1,048,600 4% MATERIALS & SUPPLIES 33,300 38,300 35,500 7% ADMINISTRATIVE EXPENDITURES 24,400 24,500 21,500 -12% Mayor OPERATING EXPENDITURES $ 1,067,500 $ 1,111,400 $ 1,105,600 4% Highlights: • No major changes. • Materials & Supplies increased $2,200 for computer replacement on schedule. • No Capital Outlay in FY2020-21. 36

Finance 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 736,100 $ 748,400 $ 748,400 2% MATERIALS & SUPPLIES 5,900 5,900 5,900 0% ADMINISTRATIVE EXPENDITURES 193,800 Mayor 238,400 238,400 23% OPERATING EXPENDITURES $ 935,800 $ 992,700 $ 992,700 6% Highlights: • Personnel Costs are up 2% for raises. • Administrative Expenses has increased $44,600 (23%) primarily in Contractual Services to budget for increased maintenance costs for MUNIS and payroll software. • Total increase for the department BTB is 6%. 37

Fire 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 401,100 $ 407,300 $ 407,300 2% MATERIALS & SUPPLIES 1,600 1,600 1,600 0% ADMINISTRATIVE EXPENDITURES 361,000 361,000 361,000 0% OPERATING EXPENDITURES 763,700 769,900 769,900 1% Mayor CAPITAL OUTLAY 281,100 173,300 173,300 -38% TOTAL EXPENDITURES $ 1,044,800 $ 943,200 $ 943,200 -10% Highlights: • Payments for Engine 5 will begin when the unit is delivered in fall of 2020. There are no additional truck purchases budgeted for FY21. • Operating expenditures are budgeted for only a 1% increase. 38

Human Resources 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 437,300 $ 424,000 $ 424,000 -3% MATERIALS & SUPPLIES 46,200 35,400 32,000 -31% ADMINISTRATIVE EXPENDITURES 39,800 53,700 68,200 71% Mayor OPERATING EXPENDITURES $ 523,300 $ 513,100 $ 524,200 0.2% 0% Highlights: • Personnel Costs are essentially level. One additional FTE was added in FY20 • Materials & Supplies decreased $14,200 (31%). Computer and equipment were purchased in FY20 for new FTE. • Administrative Expenses reflect a $28,400 increase overall; including $20,000 in Contractual Services to add Pay-for- Performance study; $7,100 increase in the Training budget. 39

Information Technologies 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 452,800 $ 586,300 $ 586,300 29% MATERIALS & SUPPLIES 96,900 106,500 71,500 -26% ADMINISTRATIVE EXPENDITURES 197,300 255,100 247,900 26% OPERATING EXPENSES 747,000 947,900 905,700 21% CAPITAL OUTLAY 45,600 61,600 61,600 35% Mayor TOTAL EXPENDITURES $ 792,600 $ 1,009,500 $ 967,300 22% Highlights: • Personnel Costs increased $140,600 (31%) primarily due to the expenses to bring a new IT Director on board while Andy Siegel’s leave balance is paid out (6-month overlap). • Materials & Supplies decreased $25,400 (26%) due to the distribution of costs for the GIS system over several funds. • Administrative Expensditures have increased $50,600 (26%) to cover additional costs in Contractual Services – cybersecurity enhancements and HTE software maintenance increases. 40

Library 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 1,483,400 $ 1,310,600 $ 1,310,600 -12% MATERIALS & SUPPLIES 83,700 83,400 83,400 0% ADMINISTRATIVE EXPENDITURES 212,700 314,200 314,200 48% OPERATING EXPENDITURES Mayor 1,708,200 1,779,800 1,708,200 -4% CAPITAL OUTLAY - - - 0% TOTAL EXPENDITURES $ 1,779,800 $ 1,708,200 $ 1,708,200 -4% Highlights: • Personnel Costs decreased 10% assuming 6 months under contract with LS&S and 6 months a new Director and Assistant Director • Administrative Expenses has increased $119,500 in Contractual Services to budget for 6 months under contract with LS&S and for the Security Service. 41

Recreation 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 854,900 $ 664,700 $ 664,700 -22% MATERIALS & SUPPLIES 72,600 77,300 77,300 6% ADMINISTRATIVE EXPENDITURES 229,100 231,900 231,900 1% OPERATING EXPENDITURES 1,156,600 973,900 973,900 -16% Mayor CAPITAL OUTLAY 476,000 595,000 395,000 -17% TOTAL EXPENDITURES $ 1,632,600 $ 1,568,900 $ 1,368,900 -16% Highlights: • Personnel Costs decreased $190,200 (22%) when the parks maintenance crew was moved to the Grounds Department. • Materials & Supplies 6% increase due to additional need for Furniture and Small Tools ($4,500 increase over FY20). • Capital Outlay reflects the construction of a splash pad and building in Dover Park, pending State funding. 42

Parks & Recreation - Projects • Working on MOA with the State • Contract for Design Awarded to WRA • Dover Park Master Plan • Splash Pad • Park Building • Can-Do (accessible) Playground • Schutte Park Master Plan • Skate Park • Dog Park • Grounds Division added to Parks & Recreation in FY21 43

Grounds 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 1,021,600 $ 1,216,700 $ 1,216,700 19% MATERIALS & SUPPLIES 58,600 60,700 60,700 4% ADMINISTRATIVE EXPENDITURES 189,300 328,100 328,100 73% OPERATING EXPENDITURES 1,269,500 1,605,500 1,605,500 26% Mayor CAPITAL OUTLAY 128,400 151,000 - -100% TOTAL EXPENDITURES $ 1,397,900 $ 1,756,500 $ 1,605,500 15% Highlights: • The bulk of the >$200K (19%) increase is due to the moving of 3 Grounds people from Parks & Rec to Grounds. Otherwise the change would be closer to a 4.5% increase. • The increase in Administrative Expenses is due to the outsourcing of Garrison Oak Park maintenance and mowing contracts (GOTP maintenance previously budgeted in Streets division). 44

Police 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 16,735,500 $ 17,524,700 $ 17,424,300 4% MATERIALS & SUPPLIES 395,100 426,300 352,000 -11% ADMINISTRATIVE EXPENDITURES 718,400 804,400 710,300 -1% OPERATING EXPENDITURES Mayor 18,755,400 17,849,000 18,486,600 4% CAPITAL OUTLAY 753,900 1,735,900 912,400 21% TOTAL EXPENDITURES $ 18,602,900 $ 20,491,300 $ 19,399,000 4% Highlights: • Personnel increase of 4% based on FOP contract. • Capital Outlay consists of first floor retiling, cooling tower & pump replacement, computer wiring upgrade, and communications center workspace. • Two replacement vehicles included; current fleet of patrol vehicles deemed road-worthy by Fleet department, with no replacements needed in FY21. 45

Tax Assessor 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 209,500 $ 215,400 $ 215,400 3% MATERIALS & SUPPLIES 12,600 4,400 4,400 -65% ADMINISTRATIVE EXPENDITURES Mayor 26,100 176,100 26,100 -85% OPERATING EXPENDITURES $ 398,200 $ 245,900 $ 245,900 -38% Highlights: • Materials & Supplies and Administrative Expenditures are down as a result of the completion of the re-assessment in FY20. 46

Procurement & Inventory 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 388,200 $ 422,700 $ 422,700 9% MATERIALS & SUPPLIES 16,900 13,500 12,900 -24% ADMINISTRATIVE EXPENDITURES 279,300 287,800 280,300 0% OPERATING EXPENDITURES Mayor 684,400 724,000 715,900 5% CAPITAL OUTLAY 390,000 25,000 25,000 -94% TOTAL EXPENDITURES $ 1,074,400 $ 749,000 $ 740,900 -31% Highlights: • Personnel Costs have increased due to the inclusion of an Administrative Assistant transferred from Fleet Maintenance. • Capital Outlay includes the replacement of all Warehouse windows. 47

Facilities Maintenance 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 460,300 $ 450,400 $ 450,400 -2% MATERIALS & SUPPLIES 25,800 17,600 28,600 11% ADMINISTRATIVE EXPENDITURES 169,600 176,800 176,800 4% OPERATING EXPENDITURES Mayor 655,700 644,800 655,800 0% CAPITAL OUTLAY 784,000 885,700 700,000 -11% TOTAL EXPENDITURES $ 1,439,700 $ 1,530,500 $ 1,355,800 -6% Highlights: • Personnel is down 2% - this includes the loss of a custodial position through attrition and the adding of a Craftsperson III who will also be responsible for HVAC maintenance duties (previously contracted out). • Capital Outlay includes the carried forward project to replace City Hall HVAC components, including duct work, air handlers, chillers, heat pumps, furnace/boiler, and etc. 48

Fleet Maintenance 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 596,600 $ 496,900 $ 496,900 -17% MATERIALS & SUPPLIES 441,600 433,200 419,200 -5% ADMINISTRATIVE EXPENDITURES Mayor 13,000 15,500 14,500 12% OPERATING EXPENDITURES $ 1,051,200 $ 945,600 $ 930,600 -11% Highlights: • Personnel Costs will be reduced in FY21 with the moving of the Administrative Assistant position back to Procurement & Inventory. • Materials & Supplies should flatten out in FY21. This will be the third year of the department maintain all PD vehicles, in- house. • Slight increase in Administrative Expenditures to cover increased training. 49

Planning 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 534,400 $ 532,200 $ 532,200 0% MATERIALS & SUPPLIES 26,300 35,500 35,500 35% ADMINISTRATIVE EXPENDITURES 9,700 10,100 90,100 829% OPERATING EXPENDITURES Mayor 570,400 577,800 657,800 15% CAPITAL OUTLAY - 20,400 20,400 100% TOTAL EXPENDITURES $ 570,400 $ 598,200 $ 678,200 19% Highlights: • Personnel Costs will remain primarily flat due to reduction in OPEB rates. • Materials & Supplies will increased to cover the inclusion of new computers and software (iPlan touch screen tables) • Increased Administrative Expenses will cover the scanning of back logged documentation into Docuware. • Capital outlay will cover 33% of the cost of 3 iPlan tables, related software and etc. 50

Inspections 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 616,300 $ 563,700 $ 563,700 -9% MATERIALS & SUPPLIES 7,600 3,800 3,200 -58% ADMINISTRATIVE EXPENDITURES 20,800 23,700 22,100 6% OPERATING EXPENSES Mayor 644,700 591,200 589,000 -9% CAPITAL OUTLAY 18,600 18,600 18,600 0% TOTAL EXPENDITURES $ 663,300 $ 609,800 $ 607,600 -8% Highlights: • Personnel Costs decrease with the transfer of an FY20 Strategic Position from Inspections to Life Safety. • Materials & Supplies reduction is part of moved position Office Furniture and Computer Equipment will be transferred to Life Safety as well. • Capital Outlay will include the replacement of one vehicle 51

Code Enforcement 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 493,400 $ 530,400 $ 530,400 7% MATERIALS & SUPPLIES 27,200 27,200 26,000 -4% ADMINISTRATIVE EXPENDITURES 159,600 259,300 258,600 62% OPERATING EXPENDITURES Mayor 680,200 816,900 815,000 20% CAPITAL OUTLAY 37,200 - - -100% TOTAL EXPENDITURES $ 717,400 $ 816,900 $ 815,000 14% Highlights: • Personnel Costs will increase in FY21 due to the promotion of an inspector from Inspector I to Inspector II. • Administrative Expenses increase primarily due to the increasing of demolition Expenses for FY21 (up $100K, over last year). 52

Life Safety 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 229,700 $ 277,700 $ 277,700 21% MATERIALS & SUPPLIES 14,100 10,000 8,900 -37% ADMINISTRATIVE EXPENDITURES 137,700 152,400 146,100 6% OPERATING EXPENDITURES Mayor 440,100 381,500 432,700 13% CAPITAL OUTLAY 48,900 - - -100% TOTAL EXPENDITURES $ 430,400 $ 440,100 $ 432,700 1% Highlights: • Personnel Costs will increase due to the inclusion of an FY20 Strategic Position transferred from Inspections. • Materials & Supplies will be slightly down from FY20. • Administrative Expenses increase tied to new employee training and expenses not budgeted in FY20; portable radio & Knox Box (incl. software). 53

Public Works Admin 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 767,200 $ 670,300 $ 670,300 -13% MATERIALS & SUPPLIES 21,000 64,900 10,400 -50% ADMINISTRATIVE EXPENDITURES Mayor 14,100 10,500 6,100 -57% OPERATING EXPENDITURES $ 802,300 $ 745,700 $ 686,800 -14% Highlights: • Personnel Costs decreased with the loss of the Operations Manager (position vacated with move of employee to Parks & Recreation Director) . Position will not be backfilled. Also, two, long-time, Admin. Assistants retired in FY20. MEO I (floater) added to Sanitation staff. • Materials & Administrative Expenses have been moved to Parks & Recreation along with new director. 54

Sanitation 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 739,000 $ 813,400 $ 813,400 10% MATERIALS & SUPPLIES 43,400 45,800 45,800 6% ADMINISTRATIVE EXPENDITURES 1,650,000 1,647,600 1,647,600 0% Mayor OPERATING EXPENSES 2,432,400 2,506,800 2,506,800 3% CAPITAL OUTLAY 287,200 507,400 475,200 65% TOTAL EXPENDITURES $ 2,719,600 $ 3,014,200 $ 2,982,000 10% Highlights: • Personnel Costs increase with the inclusion of an MEO I and the filling of the, vacant, Field Supervisor II position. • Slight increase to Materials & Supplies to cover new (small) tools and new/replace- ment trash cans (supplies). 55

Public Works: Sanitation Table 2a Projected Net Margins - Sanitation 5-4-20 - FY20 Revised & FY21 Proposed Revised Projection Projection Projection Projection Projection 2020 2021 2022 2023 2024 2025 Net Income - Sanitation Trash Fees $ 3,076,600 $ 3,038,400 $ 3,173,500 $ 3,308,700 $ 3,431,500 $ 3,431,500 Miscellaneous Income - 75,000 75,000 75,000 75,000 75,000 Transfer from General Fund - - - - - - Total Revenue 3,076,600 3,113,400 3,248,500 3,383,700 3,506,500 3,506,500 Operating Expenses 2,432,400 2,518,700 2,632,600 2,755,300 2,832,400 2,901,400 Debt Service Payments - - - - - - Operating Transfers - Out 287,200 475,200 482,300 531,000 519,500 527,300 Total Operating Expenses 2,719,600 2,993,900 3,114,900 3,286,300 3,351,900 3,428,700 Net Cash $ 357,000 $ 119,500 $ 133,600 $ 97,400 $ 154,600 $ 77,800 • No rate increase planned in FY21 • Operating Revenues exceed Expenditures with overhead allocation removed with slight increases in FY22 and FY23 56

Streets 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 545,100 $ 547,600 $ 547,600 0% MATERIALS & SUPPLIES 71,600 122,100 118,900 66% ADMINISTRATIVE EXPENDITURES 193,900 33,200 33,200 -83% OPERATING EXPENDITURES 810,600 702,900 699,700 -14% Mayor CAPITAL OUTLAY 1,266,500 936,000 936,000 -26% TOTAL EXPENDITURES $ 2,077,100 $ 1,638,900 $ 1,635,700 -21% Highlights: • Materials & Supplies, up, due to the need for DelDOT mandated replacement cones, flags, & signage ($4K). Also, herbicide chemical expense, transferred from Grounds ($38K) • Administrative Expenses decrease due to the transferring of GOTP maintenance contract ($125K) and Wood Chip Disposal ($11K) to Grounds. • $441K decrease in Capital Outlay due to the transfer of related projects to Stormwater Division. Now, strictly Street & Alley program. 57

Stormwater 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 402,800 $ 420,200 $ 420,200 4% MATERIALS & SUPPLIES 148,100 72,300 70,200 -53% ADMINISTRATIVE EXPENDITURES 308,100 295,700 295,500 -4% Mayor OPERATING EXPENDITURES 859,000 788,200 785,900 -9% CAPITAL OUTLAY 365,000 1,372,200 1,110,700 204% TOTAL EXPENDITURES $ 1,224,000 $ 2,160,400 $ 1,896,600 55% Highlights: • Increase in Personnel Costs primarily due to inclusion of employee in FY20 who waived benefit coverage; all vacant positions in FY21 are estimated at employee + child(ren)rate. Otherwise 2% increase in Salaries. • Materials & Supplies decrease primarily due to the transferring of ditch maintenance to Grounds. • Second year with stand alone Capital Improvement Program for Stormwater. 58

Public Works Engineering 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 160,200 $ 161,100 $ 161,100 1% MATERIALS & SUPPLIES 11,400 11,400 13,100 15% ADMINISTRATIVE EXPENDITURES 197,200 23,500 22,700 -88% OPERATING EXPENDITURES 368,800 196,000 196,900 -47% Mayor CAPITAL OUTLAY - 39,600 39,600 100% TOTAL EXPENDITURES $ 368,800 $ 235,600 $ 236,500 -36% Highlights: • Materials & Supplies increase based largely on new GIS software. • Administrative Expenses back to normal expense level – last year included the Silver Lake Emergency Repair Plan ($175K) • Capital Outlay includes replacement vehicle as well as a portion of the iPlan software expense. 59

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Other Funds • Lodging Tax is budgeted conservatively • Projection is for $220,000 based on 2016 reported revenues • Assumes 50% decrease due to economic downturn • The $110,000 is NOT shown as CIP funding source in FY21 • Library Funding from the State • Anticipate 5% decrease from State (12,900) v. actual FY20 • No Fund Balance budgeted but available if needed (~$8,000) • Police Grants are budgeted to increase $150,000 (24%) 61

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WATER FUND BUDGET REVIEW Fiscal Year 2020-2021 Operating Department & Division Summaries • June 2020 – Budget Review Hearing 63

Water Fund Operations • Accomplishments in FY20 • Bulk Water Station purchased and installed, awaiting the software integration. • Wellhead Redevelopment Inspection of 6 deep wells and associated repairs. • Columbia Avenue Water Main Replacement. • Initial Assessment of Elevated Water Storage Tanks. • Accomplishments planned in FY21 • Finalization of Geospatial location of Water Meters in GIS. • Water Main Replacement – West Street W. Alley and Ross Street. • Completion of Water Treatment Plant Improvements. • Wellhead Redevelopment of four (4) deep wells. • Fully staff the Division, currently having two (2) vacancies. • Water Master Plan Update. • Begin Elevated Water Storage Tank Maintenance Contract. • Finalize Allocation Permit with DNREC. • Continue to work with Tyler / Munis for Integration. 64

Water Fund Budget • Revenue increase over FY20 Original Budget $779,600 (11.9%) • Due to rate increase • Expense essentially flat v. FY20 Original Budget $48,000 (+0.7%) • Budget Balance increase of $559,500 (65.7%) • Major increases/(decreases) affecting revenues • Water Service fees $700,900 (12.7%) due to rate increase • Misc. & Interest increase $68,800 (208%) ( based on trends • Major increases/(decreases) affecting expenses • Overall decrease in Personnel Costs $16,400 (-0.8%) with Director being funded 50% in Wastewater too in FY21, offsets raises. • Increase of 63,700 (56.3%) in Retiree Healthcare and $58,000 (20.4%) pension expenses due to splitting out Water and Wastewater funds • Increase in Contractual Services for the Water Master Plan Update • Capital Project Appropriation reduction ($200,000) 65

Planning for the future - Water • Implementation of cost of service rates and modeling • Presented to City Council in January 2020 • Implemented in this Budget • Based on a long-range financial plan • Customer Service/Technology enhancements • Advance Metering Infrastructure (AMI) • Roll out of new billing system with Tyler Munis • Continue water quality improvements with flushing program and water main replacements • Capacity improvements • Evaluating future well installation • Denney’s Road Water Tower 66

Water Capital Investment Plan Actual Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year CAPITAL PROJECTS 2019 2020 2021 2022 2023 2024 2025 Vehicles & Equipment (Split W/WW 50%) $ - $ - $ - $ - $ - $ - $ - Water, Water Construction & Water Treatment 'II Vehicles & Equipment - Water $ 160,744 $ 70,300 $ 20,400 $ 455,800 $ 185,100 $ 40,000 $ 208,000 Meter Reading - Radio Read Meters (Split W/WW 50%) 28,784 17,200 - 418,700 418,700 418,700 - N. State Street Water Main Replacement 155,380 - - - - - - Denney's Road (Water Tower?) - Design - - - 85,000 1,539,900 1,539,900 - Bulk Water Station - William Street 4,289 38,100 - - - - - Projects with Locations to be Determined Future Well Installation - - - 707,700 707,700 - - Wellhead Redevelopment 90,000 75,000 140,000 75,000 75,000 75,000 75,000 Water Quality Improvements 162,197 900,800 980,500 1,050,000 980,000 1,264,800 1,250,000 Emergency Repairs - line breaks 54,770 85,000 85,000 85,000 85,000 85,000 85,000 Treatment Plant Improvements 4,157,995 3,311,200 - - - - - Total Water $ 4,814,159 $ 4,497,600 $ 1,225,900 $ 2,877,200 $ 3,991,400 $ 3,423,400 $ 1,618,000 Actual Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Projection FUNDING SOURCES 2019 2020 2021 2022 2023 2024 2025 I & E Fund Budget Balance - Water $ 5,672,600 $ 5,349,000 $ 3,794,200 $ 3,917,500 $ 2,592,300 $ 1,790,000 $ 1,467,100 Transfer from Operating Fund - Water 1,800,000 1,500,000 1,300,000 1,500,000 1,600,000 1,500,000 1,700,000 'II 'II 'II Transfer from Impact Fee Reserve - Water 40,400' 30,900 39,200 42,000 39,200 50,600 - State Loan Fund - Water 2,598,099 1,401,900 - - 1,539,900 1,539,900 - Interest Income - Water 52,024 10,000 10,000 10,000 10,000 10,000 10,000 Total Funding Sources - Water $ 4,490,523 $ 2,942,800 $ 1,349,200 $ 1,552,000 $ 3,189,100 $ 3,100,500 $ 1,710,000 Total Sources of Funds (incl. Budget Balances) $ 12,628,109 $ 12,078,000 $ 6,627,100 $ 7,397,400 $ 12,403,800 $ 11,008,200 $ 5,214,100 Water - Ending Budget Balance $ 5,348,964 $ 3,794,200 $ 3,917,500 $ 2,592,300 $ 1,790,000 $ 1,467,100 $ 1,559,100 67

Water Fund Forecast Projected Net Margins - Water 4/17/2020 - FY18 Actual & FY19 Budget Actual Projection Projection Projection Projection Projection Projection Yr 1 - Yr 5 2019 2020 2021 2022 2023 2024 2025 Total Net Income - Water Water Fees $ 5,682,005 $ 5,530,800 $ 6,231,700 $ 6,619,500 $ 6,975,100 $ 7,100,800 $ 7,229,000 $ 34,156,100 Miscellaneous Income - Water 401,878 433,200 487,900 451,900 460,700 469,300 480,400 2,350,200 Impact Fees - Water 753,200 570,000 570,000 570,000 570,000 570,000 570,000 2,850,000 Total Revenue 6,837,083 6,534,000 7,289,600 7,641,400 8,005,800 8,140,100 8,279,400 39,356,300 Operating Expenses - Water (3,215,484) (4,344,000) (4,634,700) (4,630,300) (4,760,700) (4,894,900) (5,033,200) (23,953,800) Operating Transfers - Out (649,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (2,500,000) Total Operating Expenses (3,864,484) (4,844,000) (5,134,700) (5,130,300) (5,260,700) (5,394,900) (5,533,200) (26,453,800) Operating Income 2,972,599 1,690,000 2,154,900 2,511,100 2,745,100 2,745,200 2,746,200 12,902,500 Non-Oper. Rev. - Interest on Operating 95,508 10,000 34,000 34,000 34,000 34,000 34,000 170,000 Non-Oper. Rev. - Interest on Reserves 63,337 19,500 19,400 19,200 19,000 18,900 18,700 95,200 Income Available For Debt Service 3,131,444 1,719,500 2,208,300 2,564,300 2,798,100 2,798,100 2,798,900 13,167,700 Interest for Long-Term Debt (158,170) (222,700) (208,500) (193,900) (178,900) (224,500) (208,200) (1,014,000) Cash From Operations 2,973,274 1,496,800 1,999,800 2,370,400 2,619,200 2,573,600 2,590,700 12,153,700 Depreciation Expense (977,121) (753,600) (801,900) (972,700) (1,129,700) (1,245,700) (1,338,300) (5,488,300) Net Income ($) $ 1,996,153 $ 743,200 $ 1,197,900 $ 1,397,700 $ 1,489,500 $ 1,327,900 $ 1,252,400 $ 6,665,400 Debt Service Coverage Income Avail. for Debt Service $ 3,131,444 $ 1,719,500 $ 2,208,300 $ 2,564,300 $ 2,798,100 $ 2,798,100 $ 2,798,900 $ 13,167,700 Total Debt Service $ 519,022 $ 760,000 $ 762,800 $ 761,800 $ 760,600 $ 950,300 $ 806,900 $ 4,042,400 Debt Service Coverage Ratio 6.03 2.26 2.89 3.37 3.68 2.94 3.47 Transfer to I & E Fund - Water $ 1,800,000 $ 1,649,000 $ 1,300,000 $ 1,500,000 $ 1,600,000 $ 1,500,000 $ 1,700,000 $ 7,600,000 Transfer to Impact Fee Reserve - Water 394,209 - - - - - - - Reinvestment of Reserve Interest 63,337 19,500 19,400 19,200 19,000 18,900 18,700 95,200 Debt Service Principal 366,359 537,300 554,300 567,900 581,700 725,800 598,700 3,028,400 Total Cash Budget Requirements 2,623,905 2,205,800 1,873,700 2,087,100 2,200,700 2,244,700 2,317,400 $ 10,723,600 Net Positive/(Negative Cash) $ 349,369 $ (709,000) $ 126,100 $ 283,300 $ 418,500 $ 328,900 $ 273,300 $ 1,430,100 68

Water Engineering 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 339,900 $ 245,300 $ 245,300 -28% MATERIALS & SUPPLIES 9,300 19,800 29,500 217% ADMINISTRATIVE EXPENDITURES 22,200 123,000 123,000 454% OPERATING EXPENDITURES 371,400 388,100 397,800 7% Mayor CAPITAL OUTLAY - 20,400 20,400 100% TOTAL EXPENDITURES $ 371,400 $ 408,500 $ 418,200 13% Highlights: • Personnel Costs decrease due to the fact that the new Water/Wastewater Director’s salary will now be shared between both Water and Wastewater Engineering. The Manager position was funded solely by Water Engineering in FY20. • Materials & Supplies increased based on shared GIS software purchase. • Administrative Expenditure will increase $100K over last year with the implement of the Water Master Plan this year. 69

Water Maintenance 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 508,200 $ 538,200 $ 538,200 6% MATERIALS & SUPPLIES 88,400 104,900 93,400 6% ADMINISTRATIVE EXPENDITURES 41,800 38,200 38,200 -9% OPERATING EXPENDITURES 638,400 681,300 669,800 5% Mayor CAPITAL OUTLAY 960,400 1,229,200 1,205,500 26% TOTAL EXPENDITURES $ 1,598,800 $ 1,910,500 $ 1,875,300 17% Highlights: • Difference in Personnel Costs over last year largely driven by pension cost. Actuarial report for CAFR separated Water and Wastewater OPEB and pension costs – previously split 50/50. • Capital Outlay includes: Wellhead Redevelopment ($140K), Emergency Water Repairs ($85K), and the ongoing project of, Water Quality Improvements ($980.5K). This year will concentrate on the areas of N. West Street and Ross Street. 70

Water Treatment Plant 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 1,273,400 $ 1,313,100 $ 1,313,100 3% MATERIALS & SUPPLIES 181,700 229,800 239,800 32% ADMINISTRATIVE EXPENDITURES 625,800 668,700 668,700 7% OPERATING EXPENDITURES 2,080,900 2,211,600 2,221,600 7% Mayor CAPITAL OUTLAY 559,700 137,800 - -100% TOTAL EXPENDITURES $ 2,640,600 $ 2,349,400 $ 2,221,600 -16% Highlights: • Materials & Supplies increase driven by the additional need for nearly $50K in added chemicals and $10K back wash tank cover, otherwise expenses on par with FY20. • Administrative Expenses increases are primarily tied to increases in Elevated Storage Tank maintenance and Environmental Health Billing. • Trailer mounted generator, moved out to FY22. 71

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WASTEWATER FUND BUDGET REVIEW Fiscal Year 2020-2021 Operating Department & Division Summaries • June 2020 – Budget Review Hearing 73

Wastewater Fund Operations • Accomplishments in FY20 • Inflow and Infiltration Removal in Rodney Village, Downtown Area, Wesley College Area, Overlook. • Replacement of Camera Truck Equipment. • Finalization of a Feasibility Study for College Road Pump Station Replacement. • Completion of Pump Station Replacement: • Walker Woods PS • Silver Lake PS • Del Tech PS • Accomplishments planned in FY21 • Begin City Wide Inflow and Infiltration Investigation – 2 year project. • Finalize Design of College Road PS Replacement. • Finalize Design of Lepore Road Sanitary Sewer Upgrade. • Finalize Feasibility Study of Turnberry Pump Station Upgrade. • Fully staff the Division, currently having three (3) vacancies. • Meeting House Branch Sanitary Sewer Replacement. • Pump Station #7 Upgrades. • Puncheon Run Grit Removal System Upgrade. • Upgrade SCADA Equipment for Pump Stations. • Continue to work with Tyler / Munis for Integration. 74

Wastewater Fund Budget • Revenue increase over FY20 Original Budget $1,007,500 (10.9%) • Expense decrease over FY20 Original Budget $435,000 or -4.5% • Major increases/(decreases) ) affecting revenues • Wastewater Service Fees $812,800 (22.2%) due to rate increase • Groundwater Inflow Adjustment Revenue increase of $198,500 (10.8%) due to rate increase (7.3%) and growth. • Major increases/(decreases) affecting expenses • Overall increase in Personnel Costs $66,500 (7.5%) with Director being funded 50% in Wastewater too in FY21, offsets raises. • Increase in materials and supplies for purchase of GIS software and iPlan annual maintenance costs • Decrease of 31,600 (27.9%) in Retiree Healthcare due to splitting out Water and Wastewater funds • Decrease of $799,000 (15.7%) in Kent County Sewer Fees, returning to previous levels. • Capital Project Appropriation increase of $300,000 (33.3%) 75

Planning for the future - Wastewater • Implementation of cost of service rates and modeling • Presented to City Council in January 2020 • Implemented in this Budget • Customer Service enhancements • Roll out of new billing system with Tyler Munis • Continue inflow & infiltration improvements with relining program and sewer main replacements • Capacity improvements • Continuation of pump station replacements and upgrades • Technology updates to SCADA equipment and systems 76

Wastewater Capital Investment Plan Actual Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year CAPITAL PROJECTS 2019 2020 2021 2022 2023 2024 2025 Wastewater Vehicles & Equipment - Wastewater $ - $ 43,200 $ 14,000 $ 280,600 $ 448,000 $ 42,000 $ - Sanitary Sewer Video Kit - 166,000 - - - - - Meter Reading - Radio Read Meters (Split W/WW 50%) 28,784 17,200 - 418,700 418,700 418,700 - Tar Ditch Interceptor Upgrade (Meeting House Branch) 3,901 246,100 - - - - - Turnberry Pump Station - - 10,000 67,000 - 600,000 - DelTech Pump Station Replacement 248,049 133,300 - - - - - Lepore Road Sanitary Sewer upgrade - - 50,000 - 317,000 - - Sliver Lake Pump Station Replacement 397,538 147,000 - - - - - Walker Woods Pump Station Replacement 105,025 458,200 - - - - - College Road Pump Station Replacement - 12,000 75,000 - 580,000 - - Heatherfield Pump Station Replacement - - - 12,000 69,000 - 618,000 Cedar Chase Pump Station Replacement - - - - 14,000 71,000 - Laurel Drive Pump Station Replacement - - - - - 16,000 73,000 Kings Cliff Pump Station Replacement - - - - - - 18,000 Puncheon Run Pump Station Upgrade/Repair 47,900 665,100 - - - - - Kurt Drive Pump Station - emergency repair - 217,600 - - - - - US Rt. 113 East PS # 7 Repair - Controller 43,389 280,400 - - - - - SCADA Equipment & Technology Upgrade - 308,000 - - - - - Location/Pump Station to be Determined Inflow/Infiltration Removal/System Improvements 529,158' 750,000 800,000 419,000 4,270,000 4,270,000 - Misc. Sewer System Improvements 154,618 100,000 150,000 155,000 160,000 165,000 170,000 Total Wastewater $ 1,558,362 $ 3,544,100 $ 1,099,000 $ 1,352,300 $ 6,276,700 $ 5,582,700 $ 879,000 Actual Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Projection FUNDING SOURCES 2019 2020 2021 2022 2023 2024 2025 I & E Fund Budget Balance - Wastewater $ 1,148,800 $ 906,600 $ 242,100 $ 384,700 $ 575,600 $ 345,700 $ 535,000 Transfer from Operating Fund - Wastewater 1,100,000 900,000 1,200,000 1,500,000 Transfer from Impact Fee Reserve - Wastewater 20,997 ' 404,900 31,600 ... 33,200 ... 1,500,000 266,800 ... 1,300,000 192,000 1,300,000 192,000 State Loan Fund - Wastewater 112,157' 1,564,700 - - 4,270,000 4,270,000 - Interest Income - Wastewater 83,032 10,000 10,000 10,000 10,000 10,000 10,000 Total Funding Sources - Wastewater $ 1,316,186 $ 2,879,600 $ 1,241,600 $ 1,543,200 $ 6,046,800 $ 5,772,000 $ 1,502,000 Wastewater - Ending Budget Balance $ 906,624 $ 242,100 $ 384,700 $ 575,600 $ 345,700 $ 535,000 $ 1,158,000 Total Funding Sources excludes Budget Balances 77

Wastewater Fund Forecast Projected Net Margins - Wastewater 4/17/2020 - FY18 Actual & FY19 Budget Actual Projection Projection Projection Projection Projection Projection Yr 1 - Yr 5 2019 2020 2021 2022 2023 2024 2025 Total Net Income - Wastewater Wastewater Fees $ 3,720,797 $ 3,654,700 $ 4,467,500 $ 4,709,500 $ 4,931,500 $ 4,971,800 $ 5,012,500 $ 24,092,800 Treatment Fees - Kent County 2,902,852 3,267,000 3,275,100 3,313,700 3,350,200 3,368,700 3,387,200 16,694,900 Groundwater Inflow Adjustment 1,858,169 1,841,900 2,040,400 2,172,600 2,293,900 2,315,900 2,338,200 11,161,000 Miscellaneous Income - Wastewater 10,273 23,200 1,300 23,400 23,500 23,500 23,500 95,200 Impact Fees - Wastewater 688,132 480,000 480,000 480,000 480,000 480,000 480,000 2,400,000 Total Revenue 9,180,223 9,266,800 10,264,300 10,699,200 11,079,100 11,159,900 11,241,400 54,443,900 Treatment Expense - Kent County (4,816,650) (5,101,900) (4,302,900) (4,389,000) (4,476,800) (4,566,300) (4,657,600) (22,392,600) Operating Expenses - Wastewater (2,101,834) (2,325,900) (2,406,000) (2,452,900) (2,521,400) (2,592,100) (2,664,700) (12,637,100) Operating Transfers - Out (649,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (2,500,000) Total Operating Expenses (7,567,484) (7,927,800) (7,208,900) (7,341,900) (7,498,200) (7,658,400) (7,822,300) (37,529,700) Operating Income 1,612,739 1,339,000 3,055,400 3,357,300 3,580,900 3,501,500 3,419,100 16,914,200 Non-Oper. Rev. - Interest on Operating 94,952 10,000 20,000 10,000 10,000 10,000 10,000 • 60,000 Non-Oper. Rev. - Interest on Reserves 114,070 44,100 41,500 41,500 41,500 39,900 38,700 203,100 Income Available For Debt Service 1,821,761 1,393,100 3,116,900 3,408,800 3,632,400 3,551,400 3,467,800 17,177,300 Interest for Long-Term Debt (158,611) (161,300) (161,700) (149,900) (137,800) (297,000) (280,500) (1,026,900) Cash From Operations 1,663,150 1,231,800 2,955,200 3,258,900 3,494,600 3,254,400 3,187,300 16,150,400 Depreciation Expense (1,409,071) (1,732,100) (1,825,800) (1,974,700) (2,297,400) (2,533,100) (2,627,800) (11,258,800) Net Income ($) $ 254,079 $ (500,300) $ 1,129,400 $ 1,284,200 $ 1,197,200 $ 721,300 $ 559,500 $ 4,891,600 Debt Service Coverage Income Avail. for Debt Service $ 1,821,761 $ 1,393,100 $ 3,116,900 $ 3,408,800 $ 3,632,400 $ 3,551,400 $ 3,467,800 $ 17,177,300 Total Debt Service $ 609,872 $ 672,500 $ 659,900 $ 659,500 $ 659,000 $ 1,187,700 $ 1,134,300 $ 4,300,400 Debt Service Coverage Ratio 2.99 2.07 4.72 5.17 5.51 2.99 3.06 Transfer to I & E Fund - Wastewater $ 1,100,000 $ 1,049,000 $ 1,200,000 $ 1,500,000 $ 1,500,000 $ 1,300,000 $ 1,300,000 $ 6,800,000 Transfer to Impact Fee Reserve - Wastewater 535,229 - - - - - - - Reinvestment of Reserve Interest 114,070 44,100 41,500 41,500 41,500 39,900 38,700 203,100 Debt Service Principal 458,600 511,200 498,200 509,600 521,200 890,700 853,800 3,273,500 Total Cash Budget Requirements $ 2,207,899 $ 1,604,300 $ 1,739,700 $ 2,051,100 $ 2,062,700 $ 2,230,600 $ 2,192,500 $ 10,276,600 Net Positive/(Negative Cash) $ (544,749) $ (372,500) $ 1,215,500 $ 1,207,800 $ 1,431,900 $ 1,023,800 $ 994,800 $ 5,873,800 78

Rate Increases Every Third Year Residential, 3,000 gallons/mo. (Dover Median) Average, $70 Tidewater Uti lities :$41 Artesian Wate r City of Seaford City of Milfo rd City of Salis bury Tow n of Georgetown City of Newa rk Dover Recommended FY 2021 $13 $26 Dover Current FY2020 $12 $23 M?thdM W1411HM $- $20 S40 $60 $80 $100 $120 $140 $160 Nc\ll'GEN STRATEG•cSANO SOl UTI ONS l lC 9 79

Wastewater Engineering 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 165,000 $ 238,300 $ 238,300 44% MATERIALS & SUPPLIES 6,600 16,000 25,700 289% ADMINISTRATIVE EXPENDITURES 23,500 149,300 24,300 3% OPERATING EXPENDITURES 195,100 403,600 288,300 48% CAPITAL OUTLAY Mayor- 14,000 14,000 100% TOTAL EXPENDITURES $ 195,100 $ 417,600 $ 302,300 55% Highlights: • Personnel Costs will increase as the Water /Wastewater Director’s salary is split between both Water and Wastewater, starting in FY21. Previously the Manager position was expensed out of Water Engineering alone. Actuarial report for CAFR separated Water and Wastewater OPEB and pension costs – previously spilt 50/50. • Materials & Supplies increase based on purchase of shared GIS software. • Capital Outlay includes share of iPlan software and install expense. 80

Wastewater Management 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 736,900 $ 720,100 $ 720,100 -2% MATERIALS & SUPPLIES 109,700 125,400 113,900 4% ADMINISTRATIVE EXPENDITURES 307,300 315,800 310,200 1% OPERATING EXPENDITURES 1,153,900 1,161,300 1,144,200 -1% Mayor CAPITAL OUTLAY 2,302,600 1,504,000 1,085,000 -53% TOTAL EXPENDITURES $ 3,456,500 $ 2,665,300 $ 2,229,200 -36% Highlights: • Overall Personnel Costs decrease driven by a reduction in OPEB and Pension expense. • Capital Outlay includes ($800K) I&I Project (reduced with remainder being completed in FY22). Also includes ($150K) in emergency repairs and ($135K) worth of Pump Station replacements. 81

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ELECTRIC FUND BUDGET REVIEW Fiscal Year 2020-2021 Operating Department & Division Summaries • June 2020 – Budget Review Hearing 83

Electric Fund Budget • Revenue decreased v. FY20 Original Budget- to-Budget (BTB) +$2,381,900 (-2.8%) • Exclusive of revenue reduction for PPA credit ($5.2 million) or -6.2% • Planned rate changes for residential offset by increased PPA Credit ($.0070) • Implementing the cost of service model in FY21 will reduce most business and commercial bills • Overall the utility is in excellent financial condition • Expense decrease from FY20 Original Budget $5,295,000 (6.3%) • Reduction in transfers to reserves of $5 million v. FY20 • Reduced transfer to I&E of $816,000 (12%) 84

Electric Fund Budget • Major increases/(decreases) affecting revenues • Customer sales decrease $2,269,000 due to rate reductions • Major increases/(decreases) affecting expenses • Power Supply ($2,400,100) • Hedges recommended by TEA are beginning to improve the bottom line • Lower costs of generation affected by lower energy prices • Capacity Credits improved ($3,769,700) • PJM Capacity costs at auction have been lower • Wages & Benefits $287,800 • Operating expenses increased $299,600 due to increased tree trimming and increased expense for Administration • Transfers to other accounts as follows • Transfer to Rate Stabilization Reserve $2.0 million • Transfer to Improvement & Extension Reserve of $6.0 million • Transfer to General Fund of $10 million (11.8% of revenues compare to $8M = 9.6% in FY14) 85

Electric Fund Budget – PCA Credit 2019/20 2018/19 ORIGINAL 2019/20 2020/21 2020/21 $ DIFFERENCE ACTUAL APPROVED PROJECTED REQUESTED RECOMMENDED FY21 VS BEGINNING BALANCE 16,024,400 13,548,100 16,550,700 10,230,300 10,230,300 (3,317,800) DISTRIBUTION OF EARNINGS - PCA CREDIT (2,839,650) (2,873,800) (2,873,800) (5,246,100) (5,246,100) (2,372,300) BEGINNING BALANCE - ADJUSTED 13,184,750 10,674,300 13,676,900 4,984,200 4,984,200 (5,690,100) TOTAL REVENUES 83,553,369 84,968,800 84,968,800 85,086,900 85,086,900 118,100 TOTAL BEGINNING BALANCE & REVENUES ~ 96,738,100 ~ 95,643,100 ~ 98,645,700 ~ 90,071,100 . 90,071,100 ~ (5,572,000) TOTAL EXPENSES 80,187,500 84,715,400 88,415,400 79,743,800 79,440,500 (5,274,900) BUDGET BALANCE - WORKING CAPITAL 16,550,700 10,927,700 10,230,300 10,327,300 10,630,600 (297,100) Increased PCA (lower electric bill )is due to… • Implementing the Integrated Resource Plan; • PPAs with lower cost of power than McKee/Van Sant; and • Increased slightly for COVID relief as well 86

Electric Debt Coverage Actual Projected Projected Projected Projected Projected Projected 2019 2020 2021 2022 2023 2024 2025 Debt Service Coverage Income Avail. for Debt Service $ 18,920,387 $ 14,582,800 $ 16,789,800 $ 16,953,000 $ 15,436,000 $ 17,364,500 $ 17,585,600 Total Debt Service $ 1,577,367 $ 1,379,500 $ 1,378,600 $ 1,373,500 $ 1,376,300 $ 1,377,000 $ 1,375,400 Debt Service Coverage Ratio 11.99 10.57 12.18 12.34 11.22 12.61 12.79 Debt Service Coverage Requirement 1.25 2.25 1.25 2.25 3.25 4.25 5.25 Debt Service Coverage Requirement Status Met Met Met Met Met Met Met 87

Electric Fund Operations • Accomplishments in FY20 • Completed RFP for Renewable Energy Purchased Power Agreement (PPA). • Received 81 proposals from 15 different companies • In final stages of developing first of two 25-MW PPAs at competitive price • Completed of the street light audit, began Phase 1 implementation. • Downtown installation • City-wide design • Completed Phase 4 Towne-Point Underground project • Completed McKee Decommissioning Study → Playbook for RFP • Accomplishments planned in FY21 • Provide a more customer centric approach to our business model with outreach and programs geared toward energy efficiency and large customers. • Renewable energy RFP. Recommendation to increase renewable energy resources. • Conversion of Electric GIS information into ACR-GIS (ESRI product) from ARC-FM (not ESRI). • Phase 1 (engineering) of the McKee #3 decommissioning budgeted at $1 million. • Integration of new billing system with Tyler Munis 88

Electric Fund Forecast Revi sed Proj ected Projected Proj ected Projected Projected 2019 2020 2021 2022 2023 2024 Net Income Revenue fro m Current Electric Rates $ 82,607,300 $ 82,686,400 $ 83,231 ,900 $ 83,788,300 $ 82,983,400 $82,983,400 Utility Tax 1,320,700 1,322,000 1,330,800 1,339,700 1,326,400 1,326,400 Miscellaneous Recei pts 1,208,800 1,165,400 1,167,000 1,169,000 1,266,000 1,268,000 Total Operating Revenue 85,136,800 85,173,800 85,729,700 86,297,000 85,575,800 85 ,577,800 Power Supply & Prod uction (48,350, 100) (47,485,900) (47,590,000 ) (53,435,300) (53,554,000 ) (54 ,915,500) Operating Expenses (13,880,000 ) (14,245,800) (14,297,600 ) (14,687,401 ) (15,068,502) (15,476,803) Operating Transfers - Out (10,000,000 ) (10,000,000 ) (10,000,000 ) (10,000,000 ) (10,000,000 ) (10 ,000,000 ) Tot al Operating Expenses (72,230, 100) (71 ,731 ,700 ) (7 1,887,600 ) (78, 122,701 ) (78,622,502) (80 ,392,303) Operatin g Income 12,906,700 13,442,100 13,842,100 8,174,299 6,953,298 5,185,497 Non-Oper. Rev. - Interest on Operat ing 304,800 388,900 374,200 285,000 323,000 373,600 Non-Oper. Rev. - Interest on Reserves 709,400 760,700 824,200 808,500 792,600 776,600 Income Availa ble Fo r De bt Service 13,920,900 14,591 ,700 15,040,500 9,267,799 8,068,899 6,335,699 Interest on Long,Term De bt (819,700 ) (629,500) (593,600 ) (553,500) (511 ,300) (467,000} Cash From Operations 13 101 200 13 962 200 14 446 900 8 714 299 7 557 599 5 868 699 Other Non -Operating Income.Loss , & Transfers Distri buton of Earnings - PCA Credit (2,877,400 ) (2,873,800) (2,890,000 ) (2,906,500) (2,906,500) (2,906,500) De preciation Expense (6,045,300) (6,406,800) (6,801 ,600 ) (7,105, 100) (7,258,200 ) (7,382,587) Net Income $ 4,178,500 $ 4,681 ,600 $ 4,755,300 $ (1,297,301 ) $ (2,607, 101 1 $ (4,420,388) The above forecast has not been adjusted for future generation cost in concert with the decommissioning of Unit 3 as included in power supply and production for Fiscal Year 2022 – Fiscal Year 2024. 89

Electric Capital Investment Plan ( Part 1) Actual Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year FY1 - FY5 CAPITAL PROJECTS 2019 2020 2021 2022 2023 2024 2025 Total Electric Engineering Projects Cross Arm Cut Out Replacement $ - $ 43,000 $ - $ - $ - $ - $ - $ - Substation Battery Replacement - 27,000 - - - 20,000 - 20,000 Clearview Meadows Tiepoint - 148,000 - - - - - - The Greens - Underground - - - - 184,000 - - 184,000 Derby Estates - Underground - - 140,000 140,000 Division Street Overhead Rebuild - - 85,000 - - - - 85,000 Townpoint Distribution Upgrades 252,127 - 123,000 140,000 - - - 263,000 Kent Trailer Park Overhead - - - 65,000 65,000 Bayside Drive Upgrade 24,869 - - - - - - - Ted Harvey Underground 12,683 - - - - - - - Substation Relay Upgrade 113,362 30,000 30,000 30,000 30,000 30,000 30,000 150,000 Lighting Project and Rehabilitation - LED 448,716 2,300,000 1,025,000 1,200,000 1,200,000 - - 3,425,000 LED Lighting - MLK Parkway 28,840 - - - - - - - Substation Equipment & Fencing (Division St) - - 12,500 - - - - 12,500 SCADA Master Hardware Replacement - - - 165,000 - - - 165,000 Transmission Line Maintenance Program 37,325 50,000 50,000 50,000 50,000 50,000 50,000 250,000 College Road Consolidation - 110,000 110,000 - - - - 110,000 Garrison Oak Substation 16,632 - 750,000 7,000,000 - - - 7,750,000 Distribution Capacitors - Overhead 5,568 25,000 - - - - - - Distribution Capacitors - Underground - 25,000 - - - - - - Fault Indicators - 10,000 - - - - - - ArcFM Migratin to ArcGIS 160,000 Capitol Green - Secondary - - 33,000 - - - - 33,000 System Operations Voice Recorder - - 25,000 - - - - 25,000 Advanced Metering Infrastructure (AMI) - 500,000 - 500,000 1,500,000 1,500,000 1,500,000 5,000,000 System Automation/Radio Upgrades - - 375,000 - - - - 375,000 Livefront Transformer Replacement - - 140,000 - - - - 140,000 Vehicles, Trucks, & Equipment 33,377 - 50,400 • - - - - 50,400 Subtotal Electric Engineering Division $ 973,499 $ 3,268,000 $ 2,968,900 $ 9,150,000 $ 3,104,000 $ 1,600,000 $ 1,580,000 $ 18,242,900 90

Electric Capital Investment Plan ( Part 2) Actual Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year FY1 - FY5 CAPITAL PROJECTS 2019 2020 2021 2022 2023 2024 2025 Total Electric Transmission & Distribution Projects New Developments - UG Transformers $ 144,117 $ 285,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 1,250,000 New Developments - UG Conductors/Devices Meter Replacements & System upgrades 256,796 104,795 513,000 52,000 500,000 100,000 500,000 100,000 500,000 100,000 500,000 100,000 500,000 100,000 . 2,500,000 500,000 Vehicles, Trucks, & Equipment 226,630 405,000 410,000 480,000 - - - 890,000 Subtotal Electric Transmission Division $ 732,338 $ 1,255,000 $ 1,260,000 $ 1,330,000 $ 850,000 $ 850,000 $ 850,000 $ 5,140,000 Electric Generation Projects McKee Run & VanSant Preservation of Structures $ 51,413 $ - $ - $ - $ - $ - $ - $ - Unit 3 Decommissioning - - 1,000,000 9,000,000 4,000,000 - - 14,000,000 Unit 3 Boiler Systems Unit 3 Auxillary System Components 134,091 156,800 266,000 55,000 60,000 - - - - - - - - - . 60,000 - Unit 3 Turbine Outage - Inspections & Repairs Unit 3 Turbine Repairs - Intercept Valves 54,680 487,850 - - - - - - - - - - - - . - - VanSant Major Overhaul & Inspection 82,925 - - - - - - - VanSant Component replacements - 55,000 35,000 - - - - 35,000 VanSant Fire Suppression System Upgrade 25,807 - - - - - - - Safety & Compliance Improvements 75,986 - 172,000 - - - - 172,000 Subtotal Electric Generation Division $ 1,069,552 $ 376,000 $ 1,267,000 $ 9,000,000 $ 4,000,000 $ - $ - $ 14,267,000 Electric Administration Projects Electric Administration Building Improvements $ - $ 318,000 $ 25,000 $ 128,000 $ - $ - $ - $ 153,000 Weyandt Hall Building Improvements - 1,325,200 335,000"I - - - - 335,000 Subtotal Electric Administration Division $ - $ 1,643,200 $ 360,000 $ 128,000 $ - $ - $ - $ 488,000 Electric Metering Division Vehicles, Trucks, & Equipment - 21,800 - - - - - . - Subtotal Electric Administration Division $ - $ 21,800 $ - $ - $ - $ - $ - $ - ERP Consulting and Systems 730,645 842,800 500,000 - - - - 500,000 Total Electric Improvements $ 3,506,034 $ 7,406,800 $ 6,355,900 $ 19,608,000 $ 7,954,000 $ 2,450,000 $ 2,430,000 $ 43,774,700 91

Electric Capital Investment Plan ( Part 3) Actual Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Projected FY1 - FY5 2019 2020 2021 2022 2023 2024 2025 Total Funding Sources ~ Electric I & E Fund Beginning Budget Balance $ 9,123,890 $ 9,362,700 $ 9,869,900 $ 11,132,600 $ 6,163,400 $ 8,768,700 $ 11,919,700 Transfer from Operating Fund 6,400,000 6,816,000 6,000,000 5,000,000 5,000,000 5,000,000 5,000,000 26,000,000 Transfer from Other Funds - ERP 498,000• 548,000 - - - - - • - Electric Depreciation Reserve Account - - 1,000,000 9,000,000 1,000,000 - - 11,000,000 Electric Future Capacity Reserve State Reimbursements & Developer Contributions - 21,515 - - - - - - 4,000,000 - - - - - . 4,000,000 - General Service Billing 429,498 400,000 400,000 400,000 400,000 400,000 400,000 2,000,000 Interest Earnings 190,860 150,000 218,600 238,800 159,300 201,000 251,400 1,069,100 Total Funding Sources 7,539,873 7,914,000 7,618,600 14,638,800 10,559,300 5,601,000 5,651,400 46,331,700 Total Beginning Balance & Funding Sources $ 16,663,763 $ 17,276,700 $ 17,488,500 $ 25,771,400 $ 16,722,700 $ 14,369,700 $ 17,571,100 Electric I & E Fund Ending Budget Balance $ 13,157,729 $ 9,869,900 $ 11,132,600 $ 6,163,400 $ 8,768,700 $ 11,919,700 $ 15,141,100 92

Planning for the Future • Integrated Resource Plan • Energy Generation/Purchase • Unit 3 McKee to go out of service May 31, 2021 • 25 MW Solar Farm ~ June – Dec 2021 • Additional 25 MW to come online in PJM PY22 or PY23 • Future Capacity • Solar PPAs include some capacity • Evaluating options with TEA, customers and system • Enhancements Substations • DAFB Replacement & Consolidation • Garrison Oak Business & Technical Park RFP in FY21 • Improved Operations • Technology • LED street lights • Advance Metering Infrastructure (AMI) • Better partnerships with DAFB and large volume customers 93

Electric Admin 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 209,100 $ 350,500 $ 350,500 68% MATERIALS & SUPPLIES 210,900 210,900 210,900 0% ADMINISTRATIVE EXPENDITURES 195,500 176,000 144,500 -26% OPERATING EXPENDITURES 615,500 737,400 705,900 15% Mayor CAPITAL OUTLAY 1,643,200 360,000 360,000 -78% TOTAL EXPENDITURES $ 2,258,700 $ 1,097,400 $ 1,065,900 -53% Highlights: • Personnel Costs increase based on the inclusion of new Electric Director (at market rate) as well as the reinstatement of an Admin Assistant position. • Administrative Expenses decrease primarily due to the City leaving DEMEC. Saves $40K annually in dues. • Capital Outlay to include: Roof Shingling @ Reed Street ($300K), Chimney replacement ($15K), Generator for Reed Street ($20K), and Admin Facility improvements ($25K). 94

Electric T&D 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 2,735,400 $ 2,877,200 $ 2,877,200 5% MATERIALS & SUPPLIES 425,000 415,000 415,000 -2% ADMINISTRATIVE EXPENDITURES 642,400 703,400 703,400 9% OPERATING EXPENDITURES 3,802,800 3,995,600 3,995,600 5% CAPITAL OUTLAY 1,255,000 1,260,000 1,260,000 0% TOTAL EXPENDITURES $ 5,057,800 $ 5,255,600 $ 5,255,600 4% Highlights: • Personnel Costs increase due primarily to O/T and Pension expense. • Administrative Expenses includes an additional $55,000 for Transmission Line tree trimming (over last year). • Capital Outlay will consist of the normal $850K for ‘New Developments’ with an additional $250K for a replacement Line Truck. 95

Electric Engineering 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 1,053,900 $ 1,054,300 $ 1,054,300 0% MATERIALS & SUPPLIES 65,300 63,900 73,600 13% ADMINISTRATIVE EXPENDITURES 253,700 264,200 264,200 4% OPERATING EXPENDITURES 1,372,900 Mayor 1,382,400 1,392,100 1% CAPITAL OUTLAY 3,293,000 2,968,900 2,968,900 -10% TOTAL EXPENDITURES $ 4,665,900 $ 4,351,300 $ 4,361,000 -7% Highlights: • Salaries (3%) increase offset by lack of request for Educational Assistance this year. • Materials & Supplies increase due to the inclusion of iPlan software expense and portion of new GIS software. • Capital Outlay to include: City Radio Infrastructure upgrade, LED Lighting Conversion, Transmission Line Maintenance, GOTP Substation Replacement, College Rd Consolidation, Division St Overhead Rebuild and O/H to Underground Line Conversion @ Townsend Blvd.. 96

Meter Reading 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 366,700 $ 338,100 $ 338,100 -8% MATERIALS & SUPPLIES 16,000 16,200 15,100 -6% ADMINISTRATIVE EXPENDITURES 19,200 20,200 20,200 5% OPERATING EXPENDITURES 401,900 374,500 373,400 -7% CAPITAL OUTLAY 21,800 - - -100% TOTAL EXPENDITURES $ 423,700 $ 374,500 $ 373,400 -12% Highlights: • Personnel Costs overall decrease due to Supervisor Position turnover. • Administrative Expenses includes training for new supervisor. 97

System Operations 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 853,100 $ 871,100 $ 871,100 2% TOTAL EXPENDITURES $ 853,100 $ 871,100 $ 871,100 2% Highlights: • Personnel Costs 2%. 98

Power Plant Operations 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS $ 2,677,500 $ 3,024,500 $ 2,329,200 -13% MATERIALS & SUPPLIES 210,200 181,700 111,300 -47% ADMINISTRATIVE EXPENDITURES 2,643,000 2,615,600 2,265,600 -14% OPERATING EXPENDITURES 5,530,700 5,821,800 4,706,100 -15% CAPITAL OUTLAY 115,000 1,267,000 1,267,000 1002% Mayor TOTAL EXPENDITURES $ 5,645,700 $ 7,088,800 $ 5,973,100 6% Highlights: • The decrease in Personnel Costs of $348,300 (-13%) is due to the phased in RIF of NAES personnel at the power plant. • Decreases in Materials & Supplies is due to a favorable contract for janitorial services NAES secured, and reduced need for an inventory of supplies. • Administrative Expenses decreased $377,400 (-15%) for reduced travel and training, utilities, contractual services, etc. due to upcoming plant closing • Capital Outlay of $1,000,000 is budgeted for plant decommissioning in FY21. 99

Power Supply 2019-2020 2020-2021 2020-2021 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE 65 SERIES TOTAL $ 1,135,000 $ 734,800 $ 734,800 -35% 95 SERIES TOTAL 40,163,900 40,154,800 40,154,800 0% 98 SERIES TOTAL 956,300 488,400 488,400 -49% OPERATING EXPENDITURES $ 42,255,200 $ Mayor41,378,000 $ 41,378,000 -2% Highlights: • The 65 Series will decrease in FY21 due to the lower charges by TEA and because FY20 included costs for the McKee Decommissioning Study. • Purchased power costs and hedges will remain the same overall in the 95 Series in FY21. • The Series 98 decrease reflects the anticipated reduction in natural gas purchases in FY21. 100