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LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE AGENDA DECEMBER 9, 2013 - 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. AGENDA ADDITIONS/DELETIONS 1. Request of Elizabeth W. Murphey School - Grant For Judo Mats (Tabled by Committee on November 25, 2013 So That More Information Could Be Obtained Regarding Where the Money May Come From) 2. Proposed Ordinance #2013-18 - Budget Amendments for Fiscal Year 2013/14 (Staff Recommends Adoption of Proposed Ordinance #2013-18) 3. Draft Comprehensive Annual Financial Report (CAFR) (Committee Action Not Required) 4. Adjournment by 7:00 p.m. /tm S:\AGENDAS-MINUTES-PACKETS\Committee-Agendas\2013\12-09-2013 LF&A.wpd THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

ACTION FORM PROCEEDING: Legislative, Finance & Administration Committee DEPARTMENT OF ORIGIN: Finance DATE SUBMITTED: 11/26/13 PREPARED BY: Donna Mitchell, Controller/Treasurer SUBJECT: FYI 4 Budget Ordinance - First Amendment REFERENCE: N/A APPROVALS: Committee & Council EXHIBITS: Draft Budget Ordinances & Revised Capital Investment Plan EXPENDITURE REQUIRED: As attached AMOUNT BUDGETED: As attached TIMETABLE: RECOMMENDED ACTION: Approval of draft budget ordinance to be forwarded to City Council for first reading on January 13, 2014. The attached budget ordinance incorporates the following changes into the FY14 Budget. • Amends the Beginning Budget Balances for all Funds. • Transfers the favorability in the General Fund Beginning Budget Balance to the Civilian Pension Fund in accordance with policy. • Amends the Electric Budget for an unfavorable Beginning Budget Balance by reducing the transfer to the Electric capital project fund. The capital project fund had a favorable budget balance and was able to accommodate the reduction in the transfer. • Amends the Water/Wastewater transfer to the capital project fund for savings in Engineering wages in accordance with recent Council actions for project design work. • Capital project funds are amended to reflect the audited Beginning Balances and corresponding adjustments for those uncompleted projects with multi-year construction periods. A separate revised Capital Investment Plan is attached for review. • Grant Funds are changed to reflect programming changes in the Grants based on information received after the budget was approved. All changes are notated in red font.

City of Dover Fiscal Year 2013/2014 Budget First Amendment Capital Investment Plan Amendments Fiscal Year 2014 Original Revised Prior Prior Year Current Revised CIP CIP Fiscal Year(s) Budget Year CIP Budget Budget Expenses Balance Budget Budget N/A Fire -Apparatus Loans $ 238,500 $ 238,500 $ $ $ 238,500 $ 238,500 N/A Grounds - Vehicles/Equipment $ 50,100 $ 50,100 $ $ $ so, 100 $ 50, 100 LB0901 Library $ 20,800,300 $ 20,800,300 $ 20,388,800 s 411,500 $ $ 20,800,300 Adjusted FY14 Budget $ 411,500 N/A Air Conditioning - JW Pitts Center $ 65,000 $ 65,000 $ s $ 65,000 $ 65,000 PR1402 Schutte Park Land Improvements 30,000 30,000 30,000 30,000 Parks & Recreation $ 9s,ooo ==s=~9s..,,o_o_o $ s $ 9s,ooo ..,S==9=5==,o=o=o N/A Code Enforcement -Vehicles (2) $ 30,000 $ 30,000 s $ $ 30,000 $ 30,000 N/A Vehicles & Equipment $ 257,300 $ 233,500 s $ $ 233,500 s 233,500 MR1301 Downtown Security Cameras 102,400 48,200 54,200 102,400 PD1302 Police Department Parking Lot 51,800 25,300 26,500 51,800 Police Department $ 257,300 $ 387, 700 s 48,200 $ 79,500 $ 260,000 $ 387,700 Adjsuted FY14 Budget $ 339,500 ST1403 American Avenue $ - $ 18,900 s $ 18,900 $ - $ 18,900 ST1403 Maryland Ave 13,700 13,700 13,700 ST1403 Pear Street 292,400 292,400 292,400 ST1403 Pennsylvania Ave 182,100 3,000 179,100 182,100 ST1403 Pennsylvania Ave Ext 71,600 71,600 71,600 ST1403 Rodney Road 79,100 79,100 79,100 ST1403 West Street 17,900 17,900 17,900 ST1403 Rodney Road Alley 16,400 16,400 16,400 ST1405 American Avenue Ext 30,700 8,800 21,900 30,700 ST1405 Bayard Avenue 10,600 10,600 10,600 ST1405 Greenhill Road 81,100 81,100 81,100 ST1405 Madison Ave 26,500 2,200 24,300 26,500 ST1405 Mary Street 41,900 41,900 41,900 ST1405 West Street 66,000 66,000 66,000 ST1405 S. Hancock Avenue 5,400 5,400 5,400 ST1405 Town Pointe Curb Ramps 3,000 3,000 3,000 ST1404 Village of Westover VI 264,800 264,800 264,800 ST1402 FY14 Sidewalk Program 70,000 70,000 70,000 70,000 N/A Vehicles 181,500 181,500 181,500 181,500 Street Division $ 251,500 $ 1,473,600 $ 14,000 $ 943,300 $ 516,300 $ 1,473,600 Adjusted FY14 Budget $ 1,459,600 ST1304 Garrison Farm Streets & Stormwater $ 2,000,000 $ 2,000,000 $ 63,900 $ 1,936,100 $ $ 2,000,000 Adjusted FY14 Budget $ 1,936,100 N/A Sanitation - Vehicles (2) $ 402,100 s 402,100 $ $ $ 402, 100 $ 402, 100 N/A Information Technology- Server $ 7,000 $ 7,000 $ $ $ 7,000 $ 7,000 N/A Facilities Mangement -Vehicle $ 17,800 $ 17,800 $ $ $ 17,800 $ 17,800 lOF 3

City of Dover Fiscal Year 2013/2014 Budget First Amendment Capital Investment Plan Amendments Fiscal Year 2014 Original Revised Prior Prior Year Current Revised CIP CIP Fiscal Year(s) Budget Year CIP Budget Budget Expenses Balance Budget Budget N/A Electronic Gate & Security Camera s 55,ooo =s==5=5..,,,o=o=o s s s 55,000 s. .__5_5... ,o_o_o Procurement & Inventory N/A Mayor - Vehicle s s 23,800 s s s 23,800 s 23,800 ---- Total General Capital Project Fund $ 24,204,600 $ 25,580,900 $ 20,514,900 $ 3,370,400 $ 1,695,600 $ 25,580,900 Adjusted FY14 Budget $ 5,066,000 ST1401 American Avenue s s 6~800 s - s 62,800 s s 62,800 CT1201 North Street Roundabout 500,000 572,200 572,200 572,200 CT1369 Bayard Avenue 130,000 289,400 289,400 289,400 CT1317 Wesley College Phase I 148,600 148,600 39,300 109,300 148,600 CT14xx Buttner Pl, Susan Pl, & Lakeview Dr 43,200 43,200 43,200 CT14xx Unidentified project request 500,000 500,000 500,000 500,000 Total Community Transportation Fund $ 1,278,600 $ 1,616,200 $ 39,300 $ 1,033,700 $ 543,200 $ 1,616,200 Adjusted FY14 Budget $ 1,576,900 WD0804 1.0 MG Storage Tank - Denney's Road s 4,196,600 s 2,556,000 s 82,500 s 2,083,500 s 390,000 s 2,556,000 WD0805 Piney Point Well 398,800 1,096,200 516,200 580,000 1,096,200 WQ0907 Rt. 13 Water Main Upgrade 1,023,700 2,326,000 2,173,200 152,800 2,326,000 WD1201 Pay As You Go Water Station 30,200 30,200 30,200 30,200 WD1302 Garrison Farm Storage Tank 2,000,000 4,235,000 212,600 1,787,400 2,235,000 4,235,000 WD1304 Future Columbia Well Design 55,000 34,800 34,800 34,800 WD1308 Emergency Generators 80,000 60,000 60,000 60,000 TBD West Dover Connector - Water Design 11,000 11,000 11,000 TBD Denneys Rd. - Water Alignment Design 33,200 33,200 33,200 FY14 Wellhead Redevelopment 75,000 75,000 75,000 75,000 FY14 Vehicles 143,600 26,800 26,800 26,800 Water Division $ 8,002,900 $ 10.484,200 $ 2,984,500 $ 4. 728 700 $ 2 771 000 $ 10 484 200 Adjusted FY14 Budget s 7,499,700 WW1010 Tar Ditch Interceptor Upgrade s 518,200 s 518,200 s 31,900 s 486,300 s s 518,200 WW1204 Baltray Pump Station Replacement 125,000 125,000 20,900 104,100 125,000 WW1205 Dover Brook Gardens Pump Station 65,000 65,000 12,200 52,800 65,000 WW1206 Brandywine Pump Station Replcmnt 402,000 402,000 33,900 368, 100 402,000 WW1207 McKee Run Pump Station lmprvmnts 55,000 55,000 7,700 47,300 55,000 WW1301 Hazlettville Road Interceptor 770,000 770,000 30,000 30,000 WW1302 Lakeview Drive Pump Station Rplcmnt 502,000 502,000 52,000 52,000 WW1303 Westover Pump Station 768,800 768,800 65,000 65,000 WW1304 Garrison Farm Wastewater Projects 2,000,000 3,224,200 108,200 1,891,800 1,224,200 3,224,200 1113xx lnflow/lnfiltratrion - FY13 unidentified 1,000,000 758,900 867,000 (108,100) 758,900 111309 Dover Downs Pump Station Upgrade 16,000 16,000 16,000 111310 Puncheon Run Pump Station Upgrade 21,000 21,000 21,000 111401 Kent Avenue I & I Repair 75,000 75,000 75,000 West Dover Connector - WW Design 33,100 33,100 33,100 FY14 Vehicles 237,200 26,800 26,800 26,800 Wastewater Division $ 6 443 200 $ 7 361 000 $ 214 800 $ 4.001.400 $ l,251.000 $ 5 467,200 Adjusted FY14 Budget s 5,252,400 N/A Water Constuctuion - Vehicle s 90,000 s..._ _9=o..,,,o=o_o s s s 90,000 ..__ _ S 9_o... ,o_o_o Total Water/Wastewater I & E Fund $ 14,536,100 $ 17,935,200 $ 3,199,300 $ 8,730,100 $ 4,112,000 $ 16,041,400 Adjusted FY14 Budget $ 12,842,100 20F 3

City of Dover Fiscal Year 2013/2014 Budget First Amendment Capital Investment Plan Amendments Fiscal Year 2014 Original Revised Prior Prior Year Current Revised CIP CIP Fiscal Year(s) Budget Year CIP Budget Budget Expenses Balance Budget Budget EG1212 MR Unit 3 Turbine Inspection $ 1,021,000 $ 1,653,500 $ 503,700 $ $ 1,149,800 $ 1,653,500 EG1214 Industrial Wastewater Discharge System 212,000· 282,300 274,300 8,000 282,300 EG1312 Unit 3 Generator Repairs (Originally in EG1212) 236,000 250,900 246,700 4,200 250,900 EG1402 Unit 3 Cooling Tower Repairs 42,000 42,000 42,000 42,000 EG1404 McKee Run #3 Aux System Component 116,000 116,000 116,000 116,000 EG1405 Vansant #11 Component Replacement 32,000 32,000 32,000 32,000 EG1406 McKee Run Energy Pipe Replacement 80,000 80,000 80,000 80,000 EG1407 Metering System Upgrades 25,000 25,000 25,000 25,000 EG1408 McKee/Vansant Safety & Compliance 86,000 86,000 86,000 86,000 EG1409 McKee Run NaturalGas Valves 65,000 65,000 65,000 65,000 EG1410 McKee/Vansant Crane Repair 125,000 125,000 125,000 125,000 EG1413 McKee/Vansant Preserve Structure 42,000 42,000 42,000 42,000 EG1415 McKee Run Units 1 & 2 Component Replmnts 105,000 105,000 105,000 105,000 EG1416 Vansant Capacity Increase 250,000 250,000 250,000 250,000 Electric Generation $ 2,497,000 $ 3,154, 700 $ 1,024,700 $ 12,200 $ 2,117,800 $ 3,154,700 Adjusted FY14 Budget $ 2,130,000 EE1414 New Developments $ 600,000 $ 189,400 $ $ $ 189,400 $ 189,400 EE1410 Air Mobility Command 13,500 13,500 13,500 EE1411 Bergold Lane (DAFB) 29,000 29,000 29,000 EE1412 Capital City Trail 26,500 26,500 26,500 EE1418 The Grande 28,000 28,000 28,000 EE1419 Home 2 Suites Hotel 37,000 37,000 37,000 EE1422 Shorewash Car Wash 13,400 13,400 13,400 EE1423 7-Eleven New Service 5,800 5,800 5,800 EE1426 Eden Hill Entrance 52,400 52,400 52,400 EE1428 Tidewater General Green 34,000 34,000 34,000 EE1429 Clearview Meadows 88,000 88,000 88,000 EE1430 Calpine Equipment Move 83,000 83,000 83,000 EE1415 Meter Changeout Program 150,000 150,000 150,000 150,000 N/A Vehicles & Equipment 350,000 350,000 44,600 350,000 394,600 Transmission & Distribution $ 1,100,000 $ 1,100,000 $ $ 44,600 $ 1,100,000 $ 1,144,600 Adjusted FY14 Budget $ 1,144,600 EE1308 Horsepond Rd Substation $ 761,800 $ 761,800 $ 30,900 $ 139,100 $ 591,800 $ 761,800 EE1312 General Scott Switchgear 1,150,000 1,150,000 50,000 800,000 850,000 EE1314 Capitol Park Overhead to Underground 308,000 568,200 320,200 248,000 568,200 EE1330 Morris Estates Overhead to Underground {Ph 1) 275,000 275,000 242,400 32,600 275,000 EE1401 Air Condition Replacement Monitors 12,000 12,000 12,000 12,000 EE1402 Substation Battery Replacement 24,500 24,500 24,500 24,500 EE1403 Distribution Upgrades 400,000 152,000 152,000 152,000 EE1404 Lighting Improvements 50,000 50,000 50,000 50,000 EE1405 Distribution Feeder Replacement Program 277,500 190,200 190,200 190,200 EE1406 Distrribution Capacitors & Controls 60,000 60,000 60,000 60,000 EE1407 Transmission Line Maintenance Program 75,000 75,000 75,000 75,000 EE1408 Substation Switch Replacement 80,000 80,000 80,000 80,000 EE1417 Bayside Drive (Persimmon Tree/White Oak Rd) 42,300 42,300 42,300 EE1424 McRun Substation Repairs - Emergency 45,000 45,000 45,000 N/A Vehicles & Equipment 35,000 35,000 35,000 35,000 Engineering Division $ 3,508,800 $ 3,521,000 $ 593,500 $ 221, 700 $ 2,405,800 $ 3,221,000 Adjusted FY14 Budget $ 2,627,500 Total Electric I & E Fund $ 7,105,800 $ 7,775,700 $ 1,618,200 $ 278,500 $ 5,623,600 $ 7,520,300 Adjusted FY14 Budget $ 5,902,100 3 OF 3

CITY OF DOVER ORDINANCE# 2013-18 2013-2014 BUDGET ORDINANCES - FIRST AMENDMENT 1 GENERAL FUND 2 REVENUES AND BUDGET FOR 2013-2014 3 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 4 The amount hereinafter named aggregating Forty Million, Five Hundred One Thousand, Five 5 Hundred dollars ($40,501,500) or so much thereof as may be necessary are hereby appropriated 6 from current revenues and ther funds for the use by several departments of the Municipal 7 Government for the Fiscal Year beginning July 1, 2013 and ending June 30, 2014: 8 ORIGINAL REVISED 9 2013/14 2013/14 10 BUDGET BUDGET 11 BEGINNING BALANCE $ 3,455,200 $ 4,219,800 12 REVENUES 13 FINES AND POLICE REVENUE 666,000 666,000 14 INVESTMENT INCOME 75,000 75,000 15 LIBRARY REVENUES 66,600 66,600 16 KENT COUNTY BOOK REIMBURSEMENT 400,000 400,000 17 BUSINESS LICENSES 1,460,000 1,460,000 18 PERMITS AND OTHER LICENSES 1,167,500 1,167,500 19 MISCELLANEOUS CHARGES 63,300 63,300 20 POLICE EXTRA DUTY 650,000 650,000 21 PROPERTY TAXES 11,120,000 11,120,000 22 BID REVENUE 49,500 49,500 23 RECREATION REVENUE 133,000 133,000 24 FRANCHISE FEE 606,200 606,200 25 TRASH FEES 2,676,500 2,676,500 26 RENT REVENUE - GARRISON FARM 118,500 118,500 27 COURT OF CHANCERY FEES 863,200 863,200 28 REVENUES SUBTOTAL 20,115,300 20,115,300 29 INTERFUND SERVICE RECEIPTS 30 INTRAFUND SERVICE RECEIPTS WATER/WASTEWATER 1,134,900 1,134,900 31 INTRAFUND SERVICE RECEIPTS ELECTRIC 3,319,400 3,319,400 32 INTERFUND SERVICE RECEIPTS SUBTOTAL 4,454,300 4,454,300 33 GRANTS 34 POLICE RELATED 110,000 110,000 35 POLICE PENSION GRANT 500,000 . 500,000 36 GREEN ENERGY GRANT 98,500 98,500 37 MISCELLANEOUS GRANTS 25,000 25,000 38 GRANTS SUBTOTAL 733,500 733,500 39 TRANSFERS FROM 40 TRANSFER TAX 1,315,500 1,315,500 41 MUNICIPAL STREET AID 527,400 531,100 42 CIVIL TRAFFIC PENALTIES 600,000 600,000 43 WATER/WASTEWATER 500,000 500,000 44 ELECTRIC 8,000,000 8,000,000 45 OTHER RESERVES 32,000 32,000 46 TRANSFERS FROM SUBTOTAL 10,974,900 10,978,600 47 TOTAL REVENUES 36,278,000 36,281,700 48 TOTALS $ 39,733,200 $ 40,501,500

49 2013-2014 BUDGET ORDINANCES - CONTINUED so GENERAL FUND - EXPENDITURES AND BUDGET BALANCE FOR 2013-2014 Sl ORIGINAL REVISED S2 2013/14 2013/14 S3 DEPARTMENT EXPENSES BUDGET BUDGET S4 CITY CLERK $ 334,400 $ 334,400 SS COUNCIL 107,800 107,800 S6 TAX ASSESSOR 198,300 198,300 S7 FIRE 692,100 692,100 S8 GROUNDS MAINTENANCE 948,SOO 948,SOO S9 LIBRARY 1,330,400 1,330,400 60 RECREATION 708,200 708,200 61 LIFE SAFETY 468,200 468,200 62 CODE INFORCEMENT 377,100 377,100 63 PLANNING 444,800 444,800 64 INSPECTIONS S40,300 S40,300 6S ECONOMIC DEVELOPMENT 21S,200 21S,200 66 POLICE 13,S71,800 13,S71,800 67 POLICE EXTRA DUTY 760,000 760,000 68 STREETS 603,700 603,700 69 SANITATION 2,1S3,800 2,1S3,800 70 CITY MANAGER 4S7,300 4S7,300 71 INFORMATION TECHNOLOGY 660,SOO 660,SOO 72 FINANCE 906,SOO 906,SOO 73 PUBLIC SERVICES -ADMINISTRATION 42S,800 42S,800 74 FACILITIES MANAGEMENT 632,600 632,600 7S CENTRAL SERVICES Sl7,600 S17,600 76 FLEET MAINTENANCE 720,700 720,700 77 CUSTOMER SERVICES 1,109,400 1,109,400 78 HUMAN RESOURCES 334,300 334,300 79 MAYOR 83,300 83,300 80 DEPARTMENT SUBTOTALS 29,302,600 29,302,600 81 OTHER EXPENSES 82 DEBT SERVICE SS7,300 SS7,300 83 CONTRIBUTION TO DDP 162,400 162,400 84 MISCELLANEOUS GRANT RELATED EXPENSES 2S,OOO 2S,OOO 8S INSURANCE 6S8,900 6S8,900 86 RETIREES HEALTH CARE 1,636,SOO 1,636,SOO 87 OTHER EMPLOYMENT EXPENSES 400,000 400,000 88 PENSION UNFUNDED LIABILITY l,1S9,100 1,923,700 89 POLICE PENSION FUND - STATE GRANT S00,000 S00,000 90 POLICE PENSION FUND - UNFUNDED LIABILITY 307,400 307,400 91 UNCOLLECTIBLES - TRASH AND OTHER 10,000 10,000 92 STREET LIGHTS 836,000 836,000 93 OTHER EXPENSE SUBTOTAL 6,2S2,600 7,017,200 94 TRANSFERS 9S TRANSFER TO CAPITAL FUND - PROJECTS 1,278,300 1,278,300 96 TRANSFERS SUBTOTAL 1,278,300 1,278,300 97 TOTAL EXPENDITURES 36,833,SOO 37,S98,100 98 CURRENT YEAR BALANCE 2,899,700 2,903,400 99 TOTALS s 39,733,200 s 40,501,500 100 The City Manager is hereby authorized, without further approval of the City Council, to make 101 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 102 department with the exception of any transfers prohibited by City Procedure #F306. 103 ADOPTED :

104 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 105 GENERAL FUND CONTINGENCY 106 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 107 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 108 The amount hereinafter named aggregating Seven Hundred Forty Six Thousand, Five Hundred 109 dollars ($746,500) or so much thereof as may be necessary are hereby appropriated from current 110 revenues and other funds for the use by several departments of the Municipal Government for the 111 fiscal year beginning July 1, 2013 and ending June 30, 2014: 112 CASH RECEIPTS 113 ORIGINAL REVISED 114 2013/14 2013/14 115 BUDGET BUDGET 116 BEGINNING BALANCE $ 732,100 $ 734,000 117 INTEREST EARNED 12,500 12,500 118 TOTALS $ 744,600 $ 746,500 119 EXPENSE SUMMARY 120 ORIGINAL REVISED 121 2013/14 2013/14 122 BUDGET BUDGET 123 TRANSFER TO OPERATING ACCOUNT 124 s 21,000 $ 21,000 125 CARRY FORWARD TO NEXT YEAR $ 723,600 $ 725,500 126 TOTALS $ 744,600 $ 746,500 127 The City Manager is hereby authorized, without further approval of the City Council, to make 128 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 129 department with the exception of any transfers prohibited by City Procedure #F306. 130 ADOPTED:

131 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 132 GOVERNMENTAL CAPITAL PROJECTS FUND 133 REVENUES AND BUDGET FOR 2013-2014 134 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 135 The amount hereinafter named aggregating Five Million, One Hundred Fifty Six Thousand, Eight Hundred dollars 136 ($5,156,800) or so much thereof as may be necessary are hereby appropriated from current revenues and other 137 funds for the use by several departments of the Municipal Government for the fiscal year beginning July 2,2013 138 and ending June 30, 2014 : 139 REVENUES 140 ORIGINAL REVISED 141 2013/14 2013/14 142 BUDGET BUDGET 143 BEGINNING BALANCE 144 BEGINNING BALANCE - LIBRARY PROJECT s 241,200 $ 2,801,800 $ (74,700) $ 256,500 145 REVENUES 146 STATE GRANTS - OTHER 15,000 15,000 147 CONTRACTOR'S CONTRIBUTIONS 264,800 148 TRANSFER FROM COMMUNITY TRANSPORTATION 54,200 149 TRANSFER FROM GENERAL FUND FOR PROJECTS 1,278,300 1,278,300 150 TRANSFER FROM MUNICIPAL STREET AID - CAPITAL 251,200 151 TRANSFER FROM PARKLAND RESERVE 95,000 80,000 152 SUBTOTAL PROJECT RECEIPTS 1,388,300 1,943,500 153 STATE GRANTS - LIBRARY 150,000 154 LIBRARY CAPITAL PLEDGES 5,000 155 SUBTOTAL LIBRARY PROJECT RECEIPTS 155,000 156 TOTAL REVENUES 1,388,300 2,098,500 157 TOTAL BEGINNING BALANCE AND REVENUES $ 1,554,800 $ 5,156,800 158 EXPENSE SUMMARY 159 ORIGINAL REVISED 160 2013/14 2013/14 161 DEPARTMENT EXPENSES BUDGET BUDGET 162 FIRE 163 GROUNDS MAINTENANCE s 238,500 s 238,500 50,100 50,100 164 LIBRARY 411,500 165 RECREATION 95,000 95,000 166 CODE ENFORCEMENT 30,000 30,000 167 POLICE 257,300 339,500 168 STREETS 251,500 1,459,600 169 STREETS - GARRISON FARM INFRASTRUCTURE 1,936,100 170 SANITATION 402,100 402,100 171 INFORMATION TECHNOLOGY 7,000 7,000 172 FACILITIES MANAGEMENT 17,800 17,800 173 PROCUREMENT & INVENTORY 55,000 55,000 174 MAYOR 23,800 175 DEPARTMENT SUBTOTAL 1,404,300 5,066,000 176 CURRENT YEAR BALANCE 150,500 90,800 177 TOTALS $ 1,554,800 $ 5,156,800 178 The City Manager is hereby authorized, without further approval of the City Council, to make 179 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 180 department with the exception of any transfers prohibited by City Procedure #F306. 181 ADOPTED :

182 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 183 GENERAL CAPITAL ASSET RESERVE 184 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 185 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 186 The amount hereinafter named aggregating Five Hundred Fifteen Thousand, Threes Hundred dollars 187 ($515,300) or so much thereof as may be necessary are hereby appropriated from current revenues 188 and other funds for the use by several departments of the Municipal Government for the fiscal year 189 beginning July 1, 2013 and ending June 30, 2014: 190 CASH RECEIPTS 191 REVISED REVISED 192 2013/14 2013/14 193 BUDGET BUDGET 194 BEGINNING BALANCE $ 504,000 s 507,300 195 RECEIPTS 196 INTEREST EARNINGS 8,000 8,000 197 TOTAL RECEIPTS 8,000 8,000 198 TOTALS $ 512,000 $ 515,300 199 EXPENSE SUMMARY 200 REVISED REVISED 201 2013/14 2013/14 202 BUDGET BUDGET 203 CARRY FORWARD TO NEXT YEAR $ 512,000 $ 515,300 204 TOTALS $ 512,000 $ 515,300 205 The City Manager is hereby authorized, without further approval of the City Council, to make 206 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 207 department with the exception of any transfers prohibited by City Procedure #F306. 208 ADOPTED :

209 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 210 PARKLAND/RECREATION RESERVE 211 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 212 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 213 The amount hereinafter named aggregating Two Hundred Five Thousand, Four Hundred dollars 214 ($205,400) or so much thereof as may be necessary are hereby appropriated from current revenues 215 and other funds for the use by several departments of the Municipal Government for the fiscal 216 year beginning July 1, 2013 and ending June 30, 2014: 217 OPERATING REVENUES 218 ORIGINAL REVISED 219 2013/14 2013/14 220 BUDGET BUDGET 221 PRIOR YEAR BALANCE s 202,500 s 202,900 222 INTEREST INCOME 2,500 2,500 223 TOTALS $ 205,000 $ 205,400 224 OPERATING EXPENSES 225 ORIGINAL REVISED 226 2013/14 2013/14 227 BUDGET BUDGET 228 TRANSFER TO CAPITAL PROJECTS FUND s 95,000 s 80,000 229 CURRENT YEAR BALANCE 110,000 125,400 230 TOTALS s 205,000 s 205,400 231 The City Manager is hereby authorized, without further approval of the City Council, to make 232 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 233 department with the exception of any transfers prohibited by City Procedure #F306. 234 ADOPTED:

235 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 236 WATER/WASTEWATER FUND 237 REVENUES AND BUDGET FOR 2013-2014 238 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 239 The amount hereinafter named aggregating Fourteen Million, Nine Hundred Fifty Four Thousand, 240 dollars ($14,954,000) or so much thereof as may be necessary are hereby appropriated from 241 current revenues and other funds for the use by several departments of the Municipal Government for 242 the fiscal year beginning July 1, 2013 and ending June 30, 2014: 243 ORIGINAL REVISED 244 2013/14 2013/14 245 BUDGET BUDGET 246 BEGINNING BALANCE - WATER $ 770,800 s 732,700 247 BEGINNING BALANCE - WASTEWATER 412,600 441,400 248 BEGINNING BALANCE - KCSA 141,600 (17,300) 249 TOTAL BEGINNING BALANCES 1,325,000 1,156,800 250 BASE REVENUE 251 WATER FEES 4,730,700 4,730,700 252 WASTEWATER FEES 3,642,700 3,642,700 253 WASTEWATER ADJUSTMENT FEES 2,980,300 2,980,300 254 GROUNDWATER INFLOW ADJUSTMENT 1,324,600 1,324,600 255 WATER TANK SPACE LEASING 333,800 333,800 256 SEWER IMPACT FEES 323,000 323,000 257 WATER IMPACT FEES 357,000 357,000 258 INTEREST - WATER 9,100 9,100 259 INTEREST- WASTEWATER 14,000 14,000 260 MISCELLANEOUS SERVICE FEE 82,000 82,000 261 TOTAL REVENUES 13,797,200 13,797,200 262 TOTAL BEGINNING BALANCES AND REVENUES $ 15,122,200 $ 14,954,000

263 2013-2014 BUDGET ORDINANCES - CONTINUED 264 WATER/WASTEWATER FUND - EXPENDITURES AND BUDGET BALANCE FOR 2013-2014 265 ORIGINAL REVISED 266 2013/14 2013/14 267 DIRECT EXPENSES BUDGET BUDGET 268 ENGINEERING & INSPECTION $ 664,400 $ 631,200 269 WATER CONSTRUCTION 351,400 351,400 270 WATER DEPARTMENT 433,900 433,900 271 WATER TREATMENT PLANT 1,501,800 1,501,800 272 WASTEWATER DEPARTMENT 945,100 945,100 273 DIRECT EXPENDITURE SUBTOTAL 3,896,600 3,863,400 274 OTHER EXPENSES 275 DEBT SERVICE - WATER 403,800 403,800 276 DEBT SERVICE - WASTEWATER 615,700 615,700 277 RETIREES HEALTH CARE 200,000 200,000 278 OTHER EMPLOYMENT EXPENSES 25,000 25,000 279 PENSION UNFUNDED LIABILITY 339,400 339,400 280 KENT COUNTY TREATMENT CHARGE 3,524,800 3,524,800 281 INTRAFUND SERVICE FEES 1,233,400 1,233,400 282 OTHER EXPENSES SUBTOTAL 6,342,100 6,342,100 283 TRANSFER TO 284 GENERAL FUND FROM WATER 250,000 250,000 285 GENERAL FUND FROM WASTEWATER 250,000 250,000 286 WATER IMP AND EXT 1,200,000 1,233,200 287 WASTEWATER IMP AND EXT 1,330,000 1,330,000 288 TRANSFER TO SUBTOTAL 3,030,000 3,063,200 289 TOTALEXPENSES 13,268,700 13,268,700 290 CURRENT YEAR BALANCES 291 CURRENT YEAR BALANCE WATER 1,056,400 1,018,300 292 CURRENT YEAR BALANCE WASTEWATER 797,100 825,900 293 CURRENT YEAR BALANCE KCSA (158,900) 294 CURRENT YEAR BALANCE SUBTOTALS 1,853,500 1,685,300 295 TOTAL CURRENT YEAR BALANCES AND EXPENSES $ 15,122,200 $ 14,954,000 296 The City Manager is hereby authorized, without further approval of the City Council, to make 297 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 298 department with the exception of any transfers prohibited by City Procedure #F306. 299 ADOPTED:

300 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 301 WATER/WASTEWATER CONTINGENCY RESERVE 302 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 303 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 304 The amount hereinafter named aggregating Two Hundred Ninety Seven Thousand, Four Hundred dollars 305 ($297,400) or so much thereof as may be necessary are hereby appropriated from current revenues 306 and other funds for the use by several departments of the Municipal Government for the fiscal year 307 beginning July 1, 2013 and ending June 30, 2014: 308 CASH RECEIPTS 309 ORIGINAL REVISED 310 2013/14 2013/14 311 BUDGET BUDGET 312 BEGINNING BALANCE - WATER s 103,800 s 104,100 313 BEGINNING BALANCE - WASTEWATER $ 188,300 $ 188,300 314 TOTAL BEGINNING BALANCES $ 292,100 $ 292,400 315 RECEIPTS 316 INTEREST EARNINGS 5,000 5,000 317 TOTAL RECEIPTS 5,000 5,000 318 TOTALS $ 297,100 $ 297,400 319 EXPENSE SUMMARY 320 ORIGINAL REVISED 321 2013/14 2013/14 322 EXPENSES BUDGET BUDGET 323 TRANSFER TO OPERATING FUND/RESERVES 324 TOTALEXPENSES 325 CURRENT YEAR BALANCE - WATER 105,600 106,600 326 CURRENT YEAR BALANCE - WASTEWATER 191,500 190,800 327 CURRENT YEAR BALANCE SUBTOTALS 297,100 297,400 328 TOTAL EXPENSES AND CURRENT YEAR BALANCES $ 297,100 $ 297,400 329 The City Manager is hereby authorized, without further approval of the City Council, to make 330 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 331 department with the exception of any transfers prohibited by City Procedure #F306. 332 ADOPTED :

333 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 334 WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND 335 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 336 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 337 The amount hereinafter named aggregating Fifteen Million, Four Hundred Fifty Four Thousand, Nine Hundred 338 dollars ($15,454,900) or so much thereof as may be necessary are hereby appropriated from current revenues 339 and other funds for the use by several departments of the Municipal Government for the fiscal year beginning 340 July 1, 2013 and ending June 30, 2014: 341 CASH RECEIPTS 342 ORIGINAL REVISED 343 2013/14 2013/14 344 BUDGET BUDGET 345 PRIOR YEAR BALANCE -WATER $ 1,620,000 s 4,473,800 346 PRIOR YEAR BALANCE-WASTEWATER 660,900 2,807,000 347 TOTAL BEGINNING BALANCES 2,280,900 7,280,800 348 RECEIPTS 349 BOND PROCEEDS - WATER - 2013 ISSUE 3,000,000 350 BOND PROCEEDS - WASTEWATER - 2013 ISSUE 1,067,900 351 BOND PROCEEDS-WASTEWATER - 2011 ISSUE (DRLP) 62,000 352 ARBITRAGE REBATE - IRS REFUND 66,000 353 TRANS FROM OPERATING FUND FOR WATER 1,200,000 1,233,200 354 TRANS FROM OPERATING FUND FOR WASTEWATER 1,330,000 1,330,000 355 TRANSFER FROM WATER IMPACT FEE RESERVE 390,000 390,000 356 TRANSFER FROM WASTEWATER IMPACT FEE RESERVE 1,000,000 357 INTEREST INCOME 25,000 25,000 358 TOTAL RECEIPTS 2,945,000 8,174,100 359 TOTALS $ 5,225,900 $ 15,454,900 360 EXPENSE SUMMARY 361 ORIGINAL REVISED 362 2013/14 2013/14 363 EXPENSES BUDGET BUDGET 364 WATER $ 1,476,800 $ 7,499,700 365 WASTEWATER 1,251,000 5,252,400 366 WATER CONSTRUCTION 90,000 90,000 367 TOTALEXPENSES 2,817,800 12,842,100 368 CURRENT YEAR BALANCE -WATER 1,655,700 1,552,800 369 CURRENT YEAR BALANCE - WASTEWATER 752,400 1,060,000 370 CURRENT YEAR BALANCE SUBTOTALS 2,408,100 2,612,800 371 TOTALS $ 5,225,900 $ 15,454,900 372 The City Manager is hereby authorized, without further approval of the City Council, to make 373 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 374 department with the exception of any transfers prohibited by City Procedure #F306. 375 ADOPTED:

376 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 377 WATER/WASTEWATER CAPITAL ASSET RESERVE 378 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 379 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 380 The amount hereinafter named aggregating One Million, Twenty Six Thousand, Nine Hundred dollars 381 ($1,026,900) or so much thereof as may be necessary are hereby appropriated from current 382 revenues and other funds for the use by several departments of the Municipal Government for 383 the fiscal year beginning July 1, 2013 and ending June 30, 2014: 384 CASH RECEIPTS 385 ORIGINAL REVISED 386 2013/14 2013/14 387 BUDGET BUDGET 388 BEGINNING BALANCE - WATER $ 504,400 $ 505,400 389 BEGINNING BALANCE - WASTEWATER 503,700 504,300 390 TOTAL BEGINNING BALANCES 1,008,100 1,009,700 391 RECEIPTS 392 INTEREST EARNINGS - WATER 8,600 8,600 393 INTEREST EARNINGS - WASTEWATER 8,600 8,600 394 TRANSFER FROM WATER 395 TRANSFER FROM WASTEWATER 396 TOTAL RECEIPTS 17,200 17,200 397 TOTALS $ 1,025,300 $ 1,026,900 398 EXPENSE SUMMARY 399 ORIGINAL REVISED 400 2013/14 2013/14 401 BUDGET BUDGET 402 CURRENT YEAR BALANCE - WATER $ 513,000 $ 514,000 403 CURRENT YEAR BALANCE - WASTEWATER 512,300 512,900 404 CURRENT YEAR BALANCE SUBTOTALS 1,025,300 1,026,900 405 TOTALS $ 1,025,300 $ 1,026,900 406 The City Manager is hereby authorized, without further approval of the City Council, to make 407 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 408 department with the exception of any transfers prohibited by City Procedure #F306. 409 ADOPTED:

410 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 411 ELECTRIC REVENUE FUND 412 REVENUES AND BUDGET FOR 2013-2014 413 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 414 The amount hereinafter named aggregating Eighty Nine Million, Six Hundred Six Thousand, Five 415 Hundred dollars ($89,606,500) or so much thereof as may be necessary are hereby appropriated from 416 current revenues and other funds for the use by several departments of the Municipal Government for 417 the fiscal year beginning July 1, 2013 and ending June 30, 2014: 418 ORIGINAL REVISED 419 2013/14 2013/14 420 BUDGET BUDGET 421 BEGINNING BALANCE $ 7,152,400 s 6,620,900 422 BASE REVENUE 423 DIRECT SALES TO CUSTOMER 76,286,700 76,286,700 424 UTILITY TAX 1,492,200 1,492,200 425 MISCELLANEOUS REVENUE 602,000 602,000 426 RENT REVENUE 251,000 251,000 427 GREEN ENERGY 135,800 135,800 428 INTEREST EARNINGS 119,400 119,400 429 TRANSFER FROM RATE STABILIZATION 4,000,000 4,000,000 430 INTRAFUND SERVICE RECEIPTS WATER/WASTEWATER 98,500 98,500 431 TOTAL REVENUES 82,985,600 82,985,600 432 TOTALS $ 90,138,000 $ 89,606,500

433 2013-2014 BUDGET ORDINANCES - CONTINUED 434 ELECTRIC REVENUE FUND - EXPENDITURES & BUDGET BALANCE FOR 2013-2014 435 ORIGINAL REVISED 436 2013/14 2013/14 437 EXPENSES BUDGET BUDGET 438 POWER SUPPLY $ 23,832,000 $ 23,832,000 439 SOLAR ENERGY 1,565,800 1,565,800 440 SOLAR RENEWAL ENERGY CREDITS 300,000 300,000 441 POWER SUPPLY MANAGEMENT 996,000 996,000 442 PJM CHARGES - ENERGY 12,812,900 12,812,900 443 PJM CHARGES - TRANSMISSION & FEES 4,740,000 4,740,000 444 CAPACITY CHARGES 15,787,200 15,787,200 445 SUB-TOTAL POWER SUPPLY 60,033,900 60,033,900 446 PLANT OPERATIONS 6,015,800 6,015,800 447 PJM SPOT MARKET ENERGY (230,500) (230,500) 448 PJM CREDITS (397,000) {397,000) 449 CAPACITY CREDITS (15,079,800) (15,079,800) 450 GENERATION SUBTOTAL (9,691,500) (9,691,500) 451 POWER SUPPLY & GENERATION SUBTOTAL 50,342,400 50,342,400 452 DIRECT EXPENDITURES 453 TRANSMISSION/DISTRIBUTION 3,302,500 3,302,500 454 ELECTRICAL ENGINEERING 1,192,200 1,192,200 455 ADMINISTRATION 597,000 597,000 456 METER READING 220,300 220,300 457 SYSTEMS OPERATIONS 543,600 543,600 458 DIRECT EXPENDITURE SUBTOTALS 5,855,600 5,855,600 459 OTHER EXPENSES: 460 UTILITY TAX 1,492,200 1,492,200 461 ALLOW FOR UNCOLLECTIBLES 200,000 200,000 462 CONTRACTUAL SERVICES - RFP'S 100,000 100,000 463 RETIREES HEALTH CARE 513,300 513,300 464 OTHER EMPLOYMENT EXPENSES 150,000 150,000 465 TRANSFER TO PENSION UNFUNDED LIABILITY 1,314,200 1,314,200 466 OPEB UNFUNDED LIABILITY 975,700 975,700 467 GREEN ENERGY PAYMENT TO DEMEC 135,800 135,800 468 INTRAFUND SERVICE FEES 3,319,400 3,319,400 469 INTEREST ON DEPOSITS 27,000 27,000 470 DEBT SERVICE 3,301,900 3,301,900 471 OTHER EXPENSES SUBTOTAL 11,529,500 11,529,500 472 TRANSFER TO 473 IMPROVEMENT & EXTENSION 5,448,600 4,918,600 474 GENERAL FUND 8,000,000 8,000,000 475 TRANSFER TO SUBTOTAL 13,448,600 12,918,600 476 TOTALEXPENSES 81,176,100 80,646,100 477 CURRENT YEAR BALANCE 8,961,900 8,960,400 478 TOTALS s 90,138,000 s 89,606,500 479 The City Manager is hereby authorized, without further approval of the City Council, to make 480 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 481 department with the exception of any transfers prohibited by City Procedure #F306. 482 ADOPTED:

483 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 484 ELECTRIC UTILITY CONTINGENCY RESERVE 485 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 486 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 487 The amount hereinafter named aggregating Eight Hundred Twenty Six Thousand, Four Hundred dollars 488 ($826,400) or so much thereof as may be necessary are hereby appropriated from current revenues 489 and other funds for the use by several departments of the Municipal Government for the fiscal year 490 beginning July 1, 2013 and ending June 30, 2014: 491 CASH RECEIPTS 492 ORIGINAL REVISED 493 2013/14 2013/14 494 BUDGET BUDGET 495 BEGINNING BALANCE $ 814,300 $ 814,200 496 RECEIPTS 497 INTEREST EARNINGS 12,200 12,200 498 TOTAL RECEIPTS 12,200 12,200 499 TOTALS $ 826,500 $ 826,400 500 EXPENSE SUMMARY 501 ORIGINAL REVISED 502 2013/14 2013/14 503 EXPENSES BUDGET BUDGET 504 TRANSFER TO INSURANCE STABILIZATION RESERVE 505 TOTALEXPENSES 506 CURRENT YEAR BALANCE 826,500 826,400 507 TOTALS $ 826,500 $ 826,400 508 The City Manager is hereby authorized, without further approval of the City Council, to make 509 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 510 department with the exception of any transfers prohibited by City Procedure #F306. 511 ADOPTED:

512 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 513 ELECTRIC UTILITY INSURANCE STABLIZATION RESERVE 514 SOURCES AND USE OF FUNDS FOR 2013-2014 515 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 516 The amount hereinafter named aggregating Seven Hundred Forty Three Thousand, Nine Hundred dollars 517 ($743,900) or so much thereof as may be necessary are hereby appropriated from current revenues 518 and other funds for the use by several departments of the Municipal Government for the fiscal year 519 beginning July 1, 2013 and ending June 30, 2014: 520 CASH RECEIPTS 521 ORIGINAL REVISED 522 2013/14 2013/14 523 BUDGET BUDGET 524 BEGINNING BALANCE $ 728,000 s 733,000 525 INTEREST EARNINGS 10,900 10,900 526 TOTALS $ 738,900 $ 743,900 527 EXPENSE SUMMARY 528 ORIGINAL REVISED 529 2013/14 2013/14 530 BUDGET BUDGET 531 TRANSFER TO ELECTRIC IMPROVEMENT & EXTENSION 532 CURRENT YEAR BALANCE 738,900 743,900 533 TOTALS $ 738,900 $ 743,900 534 The City Manager is hereby authorized, without further approval of the City Council, to make 535 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 536 department with the exception of any transfers prohibited by City Procedure #F306 . 537 ADOPTED:

538 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 539 ELECTRIC UTILITY RATE STABLIZATION RESERVE 540 SOURCES AND USE OF FUNDS FOR 2013-2014 541 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 542 The amount hereinafter named aggregating Seventeen Million, Six Hundred Forty Two Thousand, Five 543 Hundred dollars ($17,642,500) or so much thereof as may be necessary are hereby appropriated from 544 current revenues and other funds for the use by several departments of the Municipal Government for 545 the fiscal year beginning July 1, 2013 and ending June 30, 2014: 546 CASH RECEIPTS 547 ORIGINAL REVISED 548 2013/14 2013/14 549 BUDGET BUDGET 550 BEGINNING BALANCE $ 17,383,600 s 17,382,100 551 INTEREST EARNINGS 260,400 260,400 552 TOTALS $ 17,644,000 $ 17,642,500 553 EXPENSE SUMMARY 554 ORIGINAL REVISED 555 2013/14 2013/14 556 BUDGET BUDGET 557 TRANSFER TO ELECTRIC FUND $ 4,000,000 $ 4,000,000 558 CURRENT YEAR BALANCE 13,644,000 13,642,500 559 TOTALS $ 17,644,000 $ 17,642,500 560 The City Manager is hereby authorized, without further approval of the City Council, to make 561 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 562 department with the exception of any transfers prohibited by City Procedure #F306. 563 ADOPTED:

564 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 565 ELECTRIC UTILITY IMPROVEMENT AND EXTENSION FUND 566 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 567 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 568 The amount hereinafter named aggregating Nine Million, Three Hundred Sixty Four Thousand dollars 569 ($9,364,000) or so much thereof as may be necessary are hereby appropriated from current 570 revenues and other funds for the use by several departments of the Municipal Government for the 571 fiscal year beginning July 1, 2013 and ending June 30, 2014: 572 CASH RECEIPTS 573 ORIGINAL REVISED 574 2013/14 2013/14 575 BUDGET BUDGET 576 BEGINNING BALANCE $ 3,091,000 $ 3,980,200 577 RECEIPTS 578 TRANSFER FROM ELECTRIC 5,448,600 4,918,600 579 GENERAL SERVICE BILLING 440,000 440,000 580 INTEREST EARNINGS 25,200 25,200 581 TOTAL RECEIPTS 5,913,800 5,383,800 582 TOTALS $ 9,004,800 $ 9,364,000 583 EXPENSE SUMMARY 584 ORIGINAL REVISED 585 2013/14 2013/14 586 EXPENSES BUDGET BUDGET 587 ELECTRIC GENERATION $ 2,117,800 s 2,130,000 588 TRANSMISSION AND DISTRIBUTION 1,100,000 1,144,600 589 ELECTRICAL ENGINEERING 2,405,800 2,627,500 590 TOTALEXPENSES 5,623,600 5,902,100 591 CURRENT YEAR BALANCE 3,381,200 3,461,900 592 TOTALS $ 9,004,800 $ 9,364,000 593 The City Manager is hereby authorized, without further approval of the City Council, to make 594 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 595 department with the exception of any transfers prohibited by City Procedure #F306. 596 ADOPTED:

597 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 598 ELECTRIC UTILITY DEPRECIATION RESERVE 599 SOURCES AND USE OF FUNDS FOR 2013-2014 600 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 601 The amount hereinafter named aggregating Ten Million, Three Thousand, One Hundred dollars 602 ($10,003,100) or so much thereof as may be necessary are hereby appropriated from current 603 revenues and other funds for the use by several departments of the Municipal Government for the 604 fiscal year beginning July 1, 2013 and ending June 30, 2014: 605 CASH RECEIPTS 606 ORIGINAL REVISED 607 2013/14 2013/14 608 BUDGET BUDGET 609 BEGINNING BALANCE $ 9,888,200 s 9,855,700 610 INTEREST EARNINGS 147,400 147,400 611 TOTALS $ 10,035,600 $ 10,003,100 612 EXPENSE SUMMARY 613 ORIGINAL REVISED 614 2013/14 2013/14 615 BUDGET BUDGET 616 CURRENT YEAR BALANCE 10,035,600 10,003,100 617 TOTALS $ 10,035,600 $ 10,003,100 618 The City Manager is hereby authorized, without further approval of the City Council, to make 619 interdepartmental transfers of up to five percent ofthe amount hereinafter appropriated to any 620 department with the exception of any transfers prohibited by City Procedure #F306. 621 ADOPTED:

622 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 623 ELECTRIC UTILITY FUTURE CAPACITY RESERVE 624 SOURCES AND USE OF FUNDS FOR 2013-2014 625 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 626 The amount hereinafter named aggregating Ten Million, One Hundred Forty Five Thousand, Eight Hundred 627 dollars ($10,145,800) or so much thereof as may be necessary are hereby appropriated from current 628 revenues and other funds for the use by several departments of the Municipal Government for the 629 fiscal year beginning July 1, 2013 and ending June 30, 2014: 630 CASH RECEIPTS 631 ORIGINAL REVISED 632 2013/14 2013/14 633 BUDGET BUDGET 634 BEGINNING BALANCE $ 9,989,900 s 10,004,200 635 INTEREST EARNINGS 141,600 141,600 636 TOTALS $ 10,131,500 $ 10,145,800 637 EXPENSE SUMMARY 638 ORIGINAL REVISED 639 2013/14 2013/14 640 BUDGET BUDGET 641 CURRENT YEAR BALANCE 10,131,500 10,145,800 642 TOTALS $ 10,131,500 $ 10,145,800 643 The City Manager is hereby authorized, without further approval of the City Council, to make 644 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 645 department with the exception of any transfers prohibited by City Procedure #F306. 646 ADOPTED:

647 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 648 MUNICIPAL STREET AID FUND 649 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 650 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 651 The amount hereinafter named aggregating Seven Hundred Eighty Two Thousand, Four Hundred 652 dollars ($782,400) or so much thereof as may be necessary are hereby appropriated from current 653 revenues and other funds for the use by several departments of the Municipal Government for the 654 fiscal year beginning July 1, 2013 and ending June 30, 2014: 655 CASH RECEIPTS 656 ORIGINAL REVISED 657 2013/14 2013/14 658 BUDGET BUDGET 659 BEGINNING BALANCE s 100 s 251,500 660 STATE GRANT - OPERATIONS 527,400 530,900 661 STATE GRANT- CAPITAL 662 TOTALS $ 527,500 $ 782,400 663 BUDGET SUMMARY 664 ORIGINAL REVISED 665 2013/14 2013/14 666 BUDGET BUDGET 667 TRANSFER TO GENERAL FUND - OPERATIONS s 527,400 s 531,100 668 TRANSFER TO GENERAL FUND - CAPITAL 251,200 669 CURRENT YEAR BALANCE 100 100 670 TOTALS $ 527,500 $ 782,400 671 The City Manager is hereby authorized, without further approval of the City Council, to make 672 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 673 department with the exception of any transfers prohibited by City Procedure #F306. 674 ADOPTED :

675 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 676 COMMUNITY TRANSPORTATION IMPROVEMENT FUND 677 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 678 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 679 The amount hereinafter named aggregating One Million, Five Hundred Seventy Seven Thousand, Four 680 Hundred dollars ($1,577,400) or so much thereof as may be necessary are hereby appropriated from 681 current revenues and other funds for the use by several departments of the Municipal Government 682 for the fiscal year beginning July 1, 2013 and ending June 30, 2014: 683 OPERATING REVENUES 684 ORIGINAL REVISED 685 2013/14 2013/14 686 BUDGET BUDGET 687 PRIOR YEAR BALANCE s 165,300 s 189,300 688 GRANTS REVENUE - DELDOT 500,000 1,387,600 689 INTEREST INCOME 500 500 690 TOTAL REVENUES 500,500 1,388,100 691 TOTALS $ 665,800 $ 1,577,400 692 OPERATING EXPENSES 693 ORIGINAL REVISED 694 2013/14 2013/14 695 BUDGET BUDGET 696 PROGRAM EXPENSES - DELDOT 697 TRANSFER TO GENERAL CAPITAL PROJECT FUND s 500,000 s 1,522,700 54,200 698 TOTAL EXPENDITURES 500,000 1,576,900 699 CURRENT YEAR BALANCE 165,800 500 700 TOTALS $ 665,800 $ 1,577,400 701 The City Manager is hereby authorized, without further approval ofthe City Council, to make 702 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 703 department with the exception of any transfers prohibited by City Procedure #F306. 704 ADOPTED :

705 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 706 WORKERS COMPENSATION FUND 707 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 708 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 709 The amount hereinafter named aggregating One Million, Seven Hundred Sixty Nine Thousand, One 710 Hundred dollars ($1,769,100) or so much thereof as may be necessary are hereby appropriated from 711 current revenues and other funds for the use by several departments of the Municipal Government 712 for the fiscal year beginning July 2, 2013 and ending June 30, 2014 : 713 OPERATING REVENUES 714 ORIGINAL REVISED 715 2013/14 2013/14 716 BUDGET BUDGET 717 PRIOR YEAR BALANCE s 1,200,600 s 1,267,800 718 INTEREST INCOME 10,600 10,600 719 PREMIUM FROM CITY 490,700 490,700 720 TOTALS $ 1,701,900 $ 1,769,100 721 OPERATING EXPENSES 722 ORIGINAL REVISED 723 2013/14 2013/14 . 724 BUDGET BUDGET 725 PROGRAM EXPENSES/SUPPLIES - CLAIMS s 450,000 s 450,000 726 INSURANCE 76,500 76,500 727 BANK FEES 600 600 728 STATE OF DEL - SELF INSURANCE TAX 37,000 37,000 729 CONTRACTUAL SERVICES 57,000 57,000 730 TOTALEXPENSES 621,100 621,100 731 CURRENT VEAR BALANCE 1,080,800 1,148,000 732 TOTALS $ 1,701,900 $ 1,769,100 733 The City Manager is hereby authorized, without further approval of the City Council, to make 734 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 735 department with the exception of any transfers prohibited by City Procedure #F306. 736 ADOPTED :

737 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 738 LIBRARY GRANT FUND 739 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 740 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 741 The amount hereinafter named aggregating Three Hundred Four Thousand, Four Hundred dollars 742 ($304,400) or so much thereof as may be necessary are hereby appropriated from current revenues 743 and other funds for the use by several departments of the Municipal Government for the fiscal year 744 beginning July 1, 2013 and ending June 30, 2014: 745 OPERATING REVENUES 746 ORIGINAL REVISED 747 2013/14 2013/14 748 BUDGET BUDGET 749 BEGINNING BALANCE s s 27,800 750 STATE GRANT 270,100 274,100 751 FEDERAL GRANT 2,500 752 TOTALS $ 270,100 $ 304,400 753 OPERATING EXPENSES 754 ORIGINAL REVISED 755 2013/14 2013/14 756 BUDGET BUDGET 757 PROGRAM EXPENSES/SUPPLIES s 28,000 s 28,000 758 OFFICE SUPPLIES 24,000 24,000 759 PRINTING/DUPLICATING 8,900 8,900 760 POSTAGE 100 100 761 BOOKS 124,900 124,900 762 FURNITURE 2,000 2,000 763 AUDIO VISUAL SUPPLIES 74,000 74,000 764 TRAINING/CONF/FOOD/TRAV 3,500 3,500 765 OFFICE EQUIPMENT/REPAIRS & MAINT 2,000 2,000 766 COMPUTER HARDWARE 2,700 2,700 767 SUBTOTALEXPENSES 270,100 270,100 768 CURRENT YEAR BALANCE 34,300 769 TOTALS $ 270,100 $ 304,400 770 The City Manager is hereby authorized, without further approval of the City Council, to make 771 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 772 department with the exception of any transfers prohibited by City Procedure #F306. 773 ADOPTED:

774 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 775 POLICE GRANT FUNDS 776 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 777 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 778 The amount hereinafter named aggregating Four Hundred Eighty Eight Thousand, Six Hundred dollars 779 ($488,600) or so much thereof as may be necessary are hereby appropriated from current revenues 780 and other funds for the use by several departments of the Municipal Government for the fiscal year 781 beginning July 1, 2013 and ending June 30, 2014: 782 OPERATING REVENUES 783 ORIGINAL REVISED 784 2013/14 2013/14 785 BUDGET BUDGET 786 BEGINNING BALANCE $ 215,000 $ 100 787 GRANTS RECEIVED 413,000 488,500 788 TOTALS $ 628,000 $ 488,600 789 OPERATING EXPENSES 790 ORIGINAL REVISED 791 2013/14 2013/14 792 BUDGET BUDGET 793 PROGRAM EXPENSES/SUPPLIES $ 191,000 $ 224,700 794 COMPUTER HARDWARE 60,000 60,000 795 TELEPHONE/FAX 15,000 15,000 796 TRAINING/CONF/FOOD/TRAV 36,000 36,000 797 CONSULTING/AUDIT FEES 1,000 1,000 798 TRANSFER TO GENERAL FUND 110,000 151,800 799 SUBTOTALEXPENSES 413,000 488,500 800 CURRENT YEAR BALANCE 215,000 100 801 TOTALS $ 628,000 $ 488,600 802 The City Manager is hereby authorized, without further approval of the City Council, to make 803 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 804 department with the exception of any transfers prohibited by City Procedure #F306. 805 ADOPTED :

806 2013-2014 BUDGET ORDINANCE-FIRST AMENDMENT - CONTINUED 807 CDBG FUND 808 CASH RECEIPTS/REVENUES AND BUDGET FOR 2013-2014 809 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 810 The amount hereinafter named aggregating Two Hundred Forty Nine Thousand, Six Hundred dollars 811 ($249,600) or so much thereof as may be necessary are hereby appropriated from current revenues 812 and other funds for the use by several departments of the Municipal Government for the fiscal year 813 beginning July 1, 2013 and ending June 30, 2014: 814 OPERATING REVENUES 815 ORIGINAL REVISED 816 2013/14 2013/14 817 BUDGET BUDGET 818 BEGINNING BALANCE - CDBG $ - $ 2,000 819 BEGINNING BALANCE - NSP $ $ 2,800 820 GRANTS RECEIVED 223,600 244,800 821 TOTALS $ 223,600 $ 249,600 822 OPERATING EXPENSES 823 ORIGINAL REVISED 824 2013/14 2013/14 825 BUDGET BUDGET 826 CURRENT YEAR CLOSING COST/DOWN PAYMENT PROG $ 40,000 $ 40,000 827 CURRENT YEAR DOVER INTERFAITH MINISTRY 27,500 27,500 828 CURRENT YEAR MHDC EMERGENCY HOME REPAIR 40,000 40,000 829 CURRENT YEAR ELIZABETH W MURPHEY SCHOOL 32,700 39,700 830 CURRENT YEAR NCALL RESEARCH INC 6,000 8,900 831 CURRENT YEAR MILFORD HOUSING H/O REHAB 32,700 39,700 832 CURRENT YEAR SALARIES 44,700 49,000 833 SUBTOTALEXPENSES 223,600 244,800 834 CURRENT YEAR BALANCE 4,800 835 TOTALS s 223,600 s 249,600 836 The City Manager is hereby authorized, without further approval of the City Council, to make 837 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 838 department with the exception of any transfers prohibited by City Procedure #F306. 839 ADOPTED:

For the Fiscal Year Ended June 30, 2013 AF T DR Prepared by the Finance Department Donna S. Mitchell, Controller/Treasurer

Acknowledgements The City of Dover’s Comprehensive Annual Financial Report was prepared by the Finance Department. Tracey Lisiecki, Financial Reporting & Accounting Manager AF Margaret Teal, CPA Assistant Finance Director Linda Gomes Administrative Assistant T Jeffrey Dill Accountant II Karlett Walker Accountant II Sharon Daniel DR Account Clerk II Katie Heffington Payroll Specialist Special appreciation to: Special appreciation is extended to Mr. Scott Koenig, City Manager and all personnel throughout the City for their continued support of the Finance Department.

INTRODUCTORY SECTION AF T THIS SECTION CONTAINS THE FOLLOWING: LETTER OF TRANSMITTAL DR CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING LIST OF ELECTED OFFICIALS LIST OF APPOINTED OFFICIALS LIST OF COMMISSIONS ORGANIZATIONAL CHART

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 2 December 9, 2013 The Honorable Mayor, Honorable Council President, Members of the City Council and Citizens of the City of Dover Dover, Delaware 19901 Ladies and Gentlemen: AF I am pleased to submit the Comprehensive Annual Financial Report of the City of Dover for the fiscal year ended June 30, 2013. This report is published to comply with the provisions of Article IV, Section 46 of the City Charter. It is also intended to provide financial data to the tax and ratepayers, bondholders, trustees, banks, federal and state agencies and the financial community at large. T Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The financial statements in this report have been audited by SB & Company, LLC, an D independent firm of certified public accountants as required by Section 46 of the City Charter. SB & Company, LLC has provided an unqualified opinion on the City of Dover financial statements for the year ended June 30, 2013. The independent public accountant’s report is R located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Our MD&A can be found immediately following the report of our independent auditors. THE REPORTING ENTITY AND ITS SERVICES The City of Dover was incorporated in 1829 under a Charter granted by the General Assembly. Dover is the Capital of the State of Delaware and is located in the central part of the state. It is home to the State Governor’s office, legislative offices, and is the County seat for Kent County. The City currently occupies a land area of 23 square miles and serves a population of approximately 36,492.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 2 Dover’s governing body is composed of a Mayor and nine Council Members, with one Council Member elected by Council to serve as Council President. Two members of City Council are elected from each of the four districts; the ninth Council member of Council and the Mayor are elected at-large. On February 6, 2012, the City’s Charter was amended to extend the term lengths of the Mayor and Council from two years to four years. Beginning with the municipal election scheduled for May 2013, elected officials will serve four-year staggered terms. The Council is responsible for all matters of policy and is the authority for levying taxes, securing revenues, authorizing expenditures of City funds and incurring City debts. The City of Dover operates under a Council – Manager form of government. The City provides a full range of services as mandated by the Charter or adopted by the City Council. They include police protection, street and sanitation maintenance, recreation, library, community development, economic development, public improvements, planning and zoning, AF safety inspections, electric power generation and distribution, water and wastewater services, legislative services and general administration. Within the City is a volunteer fire company that is autonomous. Under established criteria, the operations of the Robbins Hose Fire Company are not a part of this report. However, the City provides financing for dispatching personnel costs, most of the building and equipment T maintenance, supplies and contractual services. The City also provides funding to Robbins Hose for payments on several pieces of firefighting apparatus. These payments are grouped under the Fire Department and are included in the General Fund. The Fire Chief is elected by the volunteer members of the Fire Company. The City Council traditionally adopts the election and the City Council officially appoints the Fire Chief for a one- year term. Therefore, the position of Fire Chief is included in the City organization chart. The Capital School District does not meet the established criteria for inclusion in the reporting D entity and, accordingly, is excluded from this report. The City Council shall, on or before the second Monday of June in each year, adopt a budget for the succeeding fiscal year. This annual budget serves as the foundation for the City of R Dover’s financial planning and control. The budget is prepared by fund and department. With approval of the City Manager and Controller/Treasurer, Department Heads may transfer resources within or between departments, with the exception of capital project budgets. Transfers between funds and transfers of capital project budgets, however, need special approval from the City Council. ECONOMIC CONDITION AND FUTURE GROWTH The City of Dover is distinguished as the dominant center of employment, commerce, educational opportunity, and cultural activity in central Delaware. Development activity in the Capital City continued to be slow during Fiscal Year 2013, consistent with the economic trends seen nationwide and recent prior years; however there seems to be an increase in construction and economic activity. Residential growth continues to occur at a slow pace, and major institutions and government agencies continue to expand to meet the demands of a growing regional population and

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 3 economy. Commercial corridor areas of U.S. Routes 13 and 113 and DE Route 8 have continued to be the center of commerce in Dover, and in the past year progress has been made in expanding commercial services in this area. Efforts to revitalize the traditional urban core of downtown Dover have continued, and the State has funded capital improvements to improve this area with a plaza, streetscape, and parking lot project. Total value of construction was estimated at $51.7 million during the first eleven months of Fiscal Year 2013. This is a slight decrease from the $65 million in construction value during Fiscal Year 2012; however, it is noted that the value of the new Dover High School contributed to the large construction value of the prior year. The City of Dover issued 3,350 business licenses in the first 11 months of Fiscal Year 2013, an increase over the prior year. Building permits issued during this period totaled 979 which was a decline from the previous year. The City of Dover Planning Office processed 29 new development applications (site plans, AF subdivisions and conditional uses) and two rezoning applications during the reporting period, which is a slight decrease from the prior fiscal year. The City also processed two annexation requests during Fiscal Year 2013, which represent the first annexation activity since 2009. Growth and development trends during Fiscal Year 2013 are further discussed and summarized below: POPULATION GROWTH T The 2010 U.S. Decennial Census, which was conducted in April 2010, found that 36,047 people reside in Dover. The Delaware Population Consortium estimates, the City of Dover’s population as of July 1, 2012 was 36,492. This change represents a 1.2% population increase over the decennial Census. RESIDENTIAL DEVELOPMENT A total of 33 new residential housing starts were recorded during the first eleven months of D Fiscal Year 2013, which represents a slight decrease from the 56 during the prior fiscal year. Construction activity resumed in Clearview Meadows and Patriot Village, and steady build-out continued in Emerald Point and Lexington Glen. However, a number of abandoned and incomplete subdivisions continued to be the focus of staff during Fiscal Year 2013. The City R began action to call the letters of credit for the Village of Westover Phase VI and the Village of Cannon Mill to complete the infrastructure in these subdivisions. The Village of Cannon Mill remains unresolved. Additionally, construction activity ceased in the Eden Hill Residential District, and the undeveloped portion of the subdivision is in foreclosure. This is expected to be a focus of staff as the new fiscal year begins. The apartment market was strong in Fiscal Year 2013, as the Blue Hen Apartments have seen full occupancy. DoveView, which had sat vacant and incomplete for three years, was purchased and renamed The Grande. The first two buildings of the Grande, a 55 and over community, opened in late 2012, and the City issued a building permit for the third and final building in May 2013. DOWNTOWN DOVER REDEVELOPMENT Efforts to revitalize Downtown Dover remained strong, with the completion of capital projects along North Street between State Street and Governors Avenue with $3 million in funds allocated by the State of Delaware. The community plaza, consolidated parking lot, and

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 4 streetscape project are now open to the public. Plans are underway to convert the site of a former dangerous building at the southeast corner of North Street and Governors Avenue to a pocket park. Renovations continued and are nearly complete on the building at 22-24 West Loockerman Street. These renovations include improvement of the facades on both Loockerman Street and North Street, and tenant fit-out for the location of EZ Pass offices in the building. The spirit of downtown remained strong, with First Friday festivities, and a number of other special events, celebrations and parades held throughout the year. The Bayard Plaza opened in early 2013 at the southwest corner of Loockerman Street and Governors Avenue. Bayard Plaza includes 48 apartments and the Bayard Pharmacy on the first floor. INSTITUTIONAL DEVELOPMENT AF Institutional development has continued during fiscal year 2013. The historic Kent County Courthouse renovation project was completed. The new Dover Public Library opened on September 20, 2012. The Wesley College Streetscape project was completed, and Wesley College also acquired the Frear Federal Building and is preparing for renovations to the building so that the college’s nursing program can be housed there. Significant progress was made on the construction of the Dover High School, which is expected to open in fall 2014. T Delaware State University and Delaware Technical and Community College also continued with renovations on their campuses. RETAIL/COMMERCIAL DEVELOPMENT The retail sector remained slow during Fiscal Year 2013, as is consistent with the national economic slowdown and the trend of recent years. Redevelopment of the former Superfresh store in Greentree Shopping Center is well underway, and Redeners Supermarket is expected to open in August 2013. The long-awaited Grotto Pizza opened in Dover in May 2013 following an extensive renovation of the former Atlantic Bookstore site and building. Plans are D still underway to redevelop the former Wal-Mart site, but not progress has been made to date. Construction of a Dick’s Sporting Goods at the Dover Mall is underway, with plans to open in fall 2013. While commercial growth has been slow, these improvements seem to indicate that the commercial sector is rebounding. R INDUSTRIAL DEVELOPMENT The Dover economy derives considerable benefits from a variety of large industrial and manufacturing companies including Kraft Foods, Procter and Gamble, Energizer/Playtex Family Products, and Berry Van Lines, as well as numerous small- to mid-sized industrial entities. Planning continued on development of the Garrison Oak Technical Park, including progress on the development of the Garrison Energy Center, a 618 MW dual cycle gas power plant. OFFICE DEVELOPMENT Dover’s dominance as the place for business office locations downstate has continued; however, the market appears to be saturated with office space at this point in time. The recently completed State Street Commons remains vacant; however, the Silver Bullit, which had been abandoned, is now complete and occupied.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 5 INFRASTRUCTURE The City has several large water and sewer projects underway to upgrade pump stations, distribution and transmission mains. These projects will improve water quality and reduce the inflow/infiltration in our sewer system. The City continues to upgrade the electric transmission and distribution system with systematic upgrades to substations and the transfer of overhead distribution lines to underground lines in the electric territory subdivisions. The City and the State has several transportation projects underway. The Garrison Tract infrastructure build out consisting of water, wastewater, storm water, and streets got underway in Fiscal Year 2013 and is expected to be completed in early 2015. Summary Dover continues to be affected by the nation’s economic downturn; however, key construction projects continue to move forward. The large institutional presence of Bayhealth, the State, AF and the colleges and universities helps to strengthen the City’s economy. The development of the Garrison Tract with the Dover Sun Park and the completion of the Calpine project will also serve to increase the City’s economy. Dover remains a center for commerce, services and residential communities. As the economy rebounds, Dover is well positioned to support continued growth. T LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES The City completed the construction of the 42,000 square foot regional library in September 2012 as planned. The City is now underway with the infrastructure build out of the Garrison Oak Technology Park “GOTP” which will service as a technology and industrial park. The design of the GOTP subdivision includes fifteen parcels of which two are occupied and one is under contract. The Dover Sun Park has occupied one of the parcels since 2010 and the Calpine 305 megawatt electric generating station is currently under construction. D The City Council continues its focus on replacing or upgrading old infrastructure in order to improve the quality and reliability of our utility systems. In fiscal year 2013, $3.1 million of water and wastewater capital improvements were completed. This included the completion of R the Route 13 water main two-pump station replacements and several sewer mains relined as planned in our inflow infiltration removal program. The electric utility completed capital improvements of $3.3 million in fiscal year 2013. The major initiatives completed by our Transmission and Distribution crews were the completion of the Frazier substation, system upgrades to capacitors, lighting, and upgrades to 69kv switches. The infrastructure and lighting for the new Dover High School and several new services were also completed. The City’s plant operator, North American Energy Services, completed the replacement of the industrial water wastewater system at the McKee Run generating plant. The Unit 3 Generator repairs were completed as well as stack repairs and the air heater expansion joint. Also completed was Units 1 & 2 stack repairs. The Unit 3 turbine inspection began in fiscal year 2012 and will continue through fiscal year 2014 at a projected total cost of $1.6 million. The City maintains a five-year Capital Investment Plan which serves as its planning and budgeting tool to program upgrades and replacements to its equipment, facilities, and

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 6 infrastructure. As part of this process, operating expenses are identified and funding sources are determined. Managers are required to rank capital expenditures by criticality based on the impacts on customer service and revenue losses. The fiscal year 2013/2014 Capital Investment Plan includes $2.0 million for vehicles and equipment and $23.4 million of infrastructure and utility improvement projects. The Capital Investment Plan is presented to City Council each year during the budget workshops and the final plan is approved by City Council along with the annual budget. FINANCIAL POLICIES AND FINANCIAL PLANNING Unreserved, undesignated fund balances in the General Fund (11.8%) fall within the policy guidelines of a minimum of 8% and maximum of 12% of revenues as approved by City Council AF in the City of Dover Financial policies. The water, wastewater, and electric utilities have the same policy requirement for their budget balances. If the balances fall below 8%, the City Manager is required to submit budgets to bring the balances up to minimum within three years. The current budget balances as of June 30, 2013 for the utilities are water (14.3%), wastewater (5.4%). The water and wastewater utilities are accounted for in the same fund and have a combined budget balance of 8.6%. The electric utility ended the year with a budget T balance less than the 8.0% at 7.3%. This was attributed to higher than projected transmission cost from the regional transmission provider (PJM) that serves Dover’s utility. The fiscal year 2014 budget will be adjusted to address the shortfall. The City policies also require non-recurring revenues to be set aside for capital improvements as designated by City Council (reserve accounts) and a 2% contingency reserve in the General Fund, Water/Wastewater Fund and 1% contingency in the Electric Revenue Fund to address unforeseeable natural disasters and insurance losses. All major funds meet the contingency reserve requirement. D The water and wastewater utilities impose impact fees, which are reserved by ordinance, on new developments or facilities to assist with financing future expansion projects. The electric utility maintains depreciation and future capacity reserves to assist with asset replacements R and system expansions. Financial policies require the electric utility to maintain a minimum of $10.0 million in each of these reserves, with replenishment over seven years when used to finance projects. The City’s Financial Policies also include an Electric Rate Stabilization Reserve account. The purpose of this reserve is to enable the City to absorb month-to-month power supply cost increases while adjusting budgets and implementing potential rate increases. If the cost of power supply decreases, the reserve can also be used to provide a power cost adjustment decrease to maintain competitive rates. The goal is to maintain a reserve balance equivalent to 10% of the power supply cost. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Dover, Delaware for its comprehensive annual financial report (CAFR) for the fiscal year ended

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 7 June 30, 2012. This was the twenty-eighth (28) consecutive year that the City of Dover has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report. The report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The Finance Department extends our thanks to you for your continued interest and support in planning and conducting the financial operations of the City in a responsible and progressive AF manner. I also express my appreciation to the many City employees for their assistance and cooperation during the year in preparation of this report. My appreciation is extended to Mrs. Ann Marie Townshend, City Planner for her assistance with the preparation of the local economy section and Ms. Traci McDowell, City Clerk and their staff for their continued support of the Finance Department. Special appreciation is extended to the employees of the Finance Department, whose pride and dedicated service continues to make this report and each year a T success. Respectfully submitted, Donna S. Mitchell, CPA Controller/Treasurer DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 8 AF T DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 9 Mayor Carlton Carey AF T DR City Council Members 1st row: Council President & Councilman At large Timothy A. Slavin, First District: Beverly C. Williams and James L. Hutchison, Sr. 2nd row: Second District: William F. Hare and Adam M. Perza, Third District: David L. Bonar and Sean Lynn. 3rd row: Fourth District: David L. Anderson and Wallace R. Dixon

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 10 CITY OF DOVER, DELAWARE List of Elected Officials June 30, 2013 Length of Term Services Expires Mayor Carleton E. Carey, Sr. 6 Years May 2015 AF City Council At-Large Timothy A. Slavin First District 1 Year May 2017 T Beverly C. Williams 11 Years May 2015 James L. Hutchison, Sr. 2 Years May 2017 Second District William F. Hare 2 Years May 2017 Adam M. Perza 1 Year May 2015 Third District David L. Bonar* 3 Years May 2015 D Sean M. Lynn Fourth District RWallace R. Dixon David L. Anderson * Council President 2 Years 6 Months 2 Years May 2017 May 2015 May 2017

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 11 CITY OF DOVER, DELAWARE List of Appointed Officials June 30, 2013 Length of Length of Time in Time with Position the City City Clerk/Assistant Treasurer – Traci A. McDowell 8 Years 27 Years AF City Manager/Civil Defense Director – Scott D. Koenig City Solicitor – Nicholas H. Rodriquez 2 Years 45 Years 23 Years 45 Years T Deputy City Solicitor – William W. Pepper 24 Years 24 Years Council President – David L. Bonar 3 Years 3 Years Assessor – Cheryl A. Russell 4 Years 21 Years City Building Inspector - Ann Marie Townshend 1 Year 7 Years D City Planner – Ann Marie Townshend Controller/Treasurer – Donna S. Mitchell R Fire Chief – Patrick W. West Fire Marshal – David J. Truax Police Chief – James E. Hosfelt 1 Year 13 Years 6 Months 17 Years 3 Years 7 Years 13 Years 6 Months 22 Years 24 Years

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 12 CITY OF DOVER, DELAWARE List of Commissions & Committees As of June 30, 2013 Board of Adjustment Legislative, Finance & Administration Planning Commission Kishor C. Sheth, Chairman Sean M. Lynn, Chairman Col. Robert D. Welsh, Chairman Arthur G. Ericson, Vice Chairman William F. Hare, Councilman Fred Tolbert, Vice Chairman William Hufnal Timothy A. Slavin, Councilman Michael J. Ambruso, Sr. James N. Keller Michael G. Rushe John H. Baldwin, Sr. Richard Senato Daniel Shevock Edgar C. Cregar, Jr. Dean Holden Construction Code Board of Appeals OPEB Board Thomas Holt Adam M. Perza, Chairman Donna S. Mitchell, Chair Dr. Bobby Jones Sean M Lynn, Councilman William F. Hare, Councilman Kathleen Still Scott D. Koenig, City Manager Beverly C. Williams, Councilwoman AF Scott D. Koenig, City Manager Property Maintenance Code Election Board Kimberly Hawkins, Human Resources Director Board of Appeals William T. Garfinkel, Chairman Scott D. Koenig, City Manager Anita L. McDowell Boyer Parks, Recreation & Community Enhancement Heather D. Ennis Lillie M. Johnson Wallace R. Dixon, Chairman Charles Martin Goldie Legates Adam M. Perza, Councilman Cherrita Matthews James L. Hutchison, Councilman Safety Advisory & Transportation Traci McDowell M. Milford Caldwell, Jr. James L. Hutchison, Chairman Ann Baker Horsey Adam M. Perza, Councilman T Historic District Wallace R. Dixon, Councilman Richard Scrafford, Chairman Pension – Civilian John J. Davis Charles A. Salkin, Vice Chairman David L. Bonar, Chairman Thomas J. Keller, Jr. George M. Fisher, IV Sean M. Lynn, Councilman Joseph McDaniel Scott D. Koenig, City Manager Utility C. Terry Jackson Donna S. Mitchell, Controller/Treasurer David L. Bonar, Chairman Lester Blakeman Adam M. Perza, Councilman Human Relations Commission Kenneth Clendaniel Beverly C. Williams, Councilwoman Roy Sudler, Jr., Chair Frances P. Hettinger Lester L. Blakeman Justina Brewington Richard Snaman Linda D. Hackett Pension – Police Richard Senato Timothy Mullaney, Chairman Youth Advisory Committee Dr. Phyllis Edamatsu David L. Bonar, Councilman Kristen Dietz, Co President Dawn Allen-Pyne Sean M. Lynn, Councilman Dennis Hallock, II, Co-President Anlee Baccio-Walker Scott D. Koenig, City Manager Kenneth Anderson D Ellen O. Wasfi Faye White R James Hosfelt, Chief of Police Martin Stallings Jay Unterkofler Chidinma Emenike Karly Jones Sonya Modi Valerie Provotorova Rachel Voak

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 13 City of Dover Organization Chart Fiscal Year 2013 AF T DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section - Transmittal Letter page 14 The City of Dover, Delaware 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. AF T DR

FINANCIAL SECTION AF T THIS SECTION CONTAINS THE FOLLOWING: PART - A REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS PART - B DR MANAGEMENT’S DISCUSSION AND ANALYSIS PART - C BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Fund Financial Statements Notes to Financial Statements PART - D REQUIRED SUPPLEMENTARY INFORMATION PART - E SUPPLEMENTARY INFORMATION Combining Fund Statements Budgetary Schedules

AFFINANCIAL SECTION T PART - A REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS DR

AFFINANCIAL SECTION T PART - B MANAGEMENT’S DISCUSSION AND ANALYSIS DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B The City of Dover Management’s Discussion and Analysis For the Year Ended June 30, 2013 The City of Dover management offers readers of the City of Dover financial statements this narrative overview and analysis of the financial activities of the City of Dover for the fiscal year ended June 30, 2013. Readers are encouraged to consider the information included in Management’s Discussion and Analysis along with additional information that we have presented in our letter of transmittal, which can be found on pages 2-6 of this report. Financial Highlights AF Total assets of the City exceeded its liabilities by $219.8 million (net position). Of this amount, $34.7 million was reported as “unrestricted net position” which represents the amount available to meet the City’s ongoing obligations to citizens and creditors. The general government reported a deficit of $4.8 million and the business type activities, Water/Wastewater and Electric funds, reported $39.5 million of positive unrestricted net position. The governmental activities have been negatively impacted by the net obligation for T other post-employment benefits. The difference between the unrestricted amounts and the total net position is $185.1 million, $35.4 million is restricted primarily for debt and capital construction purposes and $149.7 million is invested in capital assets net of related debt. • • The governmental activities remained consistent at $49.6 million invested in capital assets, an increase in restricted net assets of $.2 million, as well as an increase of $2.0 million in unrestricted net position resulting in a positive net change of $2.2 million. The business-type activities experienced a $1.8 million increase in investments in DR capital assets. An increase in restricted net position of $0.9 million as well as an increase in unrestricted net assets of $5.5 million, resulting in a positive change in net position of $8.2 million. The electric utility experienced significant savings in power supply cost over the past two years. As a result $5.0 million was transferred to the rate stabilization reserve awaiting the completion of a cost of service study and proposed new electric rates. Overview of the Financial Statements This Comprehensive Annual Financial Report (CAFR) consists primarily of three required parts - management’s discussion and analysis (this section), the basic financial statements and required supplementary information. The CAFR also includes optional supplementary information that provides summary information and detail, and a statistical section. The basic financial statements are of two kinds that present different views of the City: • The first two statements are government-wide financial statements (pages 37-38) that provide both long-term and short-term information about the City’s overall financial status.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B • The remaining statements (pages 39-47) are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. - The governmental fund statements (pages 39-42) tell how general government services, like community services, planning, public safety, and public works, were financed in the short term as well as what remains for future spending. - Proprietary fund statements (pages 43-45) offer short and long-term f inancial information about the activities the government operates like businesses, which for the City of Dover are the Electric Revenue and Water/Wastewater Funds. - The Fiduciary fund statements (pages 46-47) provide information about the financial AF relationships in which the City acts solely as a trustee or agent for the benefit of others, to whom the resources belong. The City is the trustee, or fiduciary, for its Employee Pension plans and Other Postemployment Benefits plan and acts in an agency capacity for the Dover Downtown Partnership, Fourth of July Celebration Committee, and the Dover Library Foundation, none of which are considered to be component units of the City. All of the City’s Fiduciary activities are reported in T separate Statements of Fiduciary Net Assets and Changes in Fiduciary Net Assets. We exclude these activities from the City’s other financial statements because the City may not use these assets to finance its operations. The City is responsible for insuring that the assets reported in these funds are used for their intended purposes. The financial statements also include notes (pages 51-89) that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information (pages 94-97) that further explains and supports the information in the financial statements. Other supplementary D information includes details on non-major funds and other information that can be found on pages 103 through 118. The following page summarizes the major features of the City’s financial statements, R including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and content of each of the statements:

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B Major Features of City’s Government-wide and Fund Financial Statements Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Scope Entire City The activities of the Activities the City Instances in which government City that are not operates similar to the City is the (except fiduciary proprietary or private businesses, trustee or agent for funds) fiduciary, such as such as electric, someone else’s public safety and water and wastewater resources public works funds Required • Statement of • Balance sheet • Statement of net • Statement of financial net assets • Statement of assets fiduciary net AF statements • Statement of revenues, • Statement of assets activities expenditures, revenues, • Statement of and changes in expenses and changes in fund balances changes in net fiduciary net assets assets • Statement of cash flows Accounting basis and measurement focus Type of asset/liability information Accrual T accounting and economic resources focus All assets and liabilities, both financial and Modified accrual accounting and current financial resources focus Only assets expected to be used up and liabilities that come Accrual accounting and economic resources focus All assets and liabilities, both financial and capital, Accrual accounting and economic resources focus All assets and liabilities, both short-term and D capital, and short- due during the year and short-term and long-term term and long-term or soon thereafter; no long-term capital assets included R Type of inflow/outflow information All revenues and expenses during the year, regardless of when cash is received or paid Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter All revenues and expenses during the year, regardless of when cash is received or paid All revenues and expenses during the year, regardless of when cash is received or paid Government-wide Statements The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the City of Dover’s assets, liabilities, and deferred inflows/outflows of resources with the difference reported as net position. Net position is one way to measure

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B the City’s financial health or position. Over time, increases or decreases in the City’s net assets are indicators of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the City, one needs to consider additional non-financial factors such as changes in the City’s property tax base and the condition of the City’s physical assets and infrastructure. The government-wide financial statements of the City are divided into two categories: • Governmental activities—Most of the City’s basic services are included here, such as general government, public safety, planning and code enforcement, public works, library and recreation, community and economic development, central services and financial administration. Property taxes, business licenses, permits, sanitation fees, fines, utility transfers and state and federal grants finance most of these activities. • AF Business-type activities—The City charges fees to customers to help it cover the costs of certain services it provides. The City’s electric, water, and wastewater services are included here. Fund Financial Statements T The fund financial statements provide more detailed information about the City’s most significant funds—not the City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law and by covenants. The City Council may also establish other funds to control and manage money for particular purposes. The City has three kinds of funds: • Governmental Funds - Most of the City’s basic services are included in governmental DR funds, which focus on (1) how cash, and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps one determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Since this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information on a separate page, which explains the relationship (or differences) between them. - Governmental Fund Balance classifications are reported to the extent to which they are constrained as promulgated by Governmental Accounting Standards Board Statement No. 54. - The City’s general fund is the only governmental fund considered to be a major fund under the requirements of Governmental Accounting Standards Board Statement No. 34. • Proprietary Funds - Services for which the City charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long and short-term financial information.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B − The City’s enterprise funds (one type of proprietary fund) are the same as its business-type activities, but provide more detail and additional information, such as cash flows. − The City’s two enterprise funds are both considered major funds under the requirements of GASB Statement No. 34. • Fiduciary Funds – The City is responsible for assets that because of a trust arrangement can be used only for the trust beneficiaries. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the City’s fiduciary activities are reported in a separate statement of fiduciary net assets and a statement of changes in fiduciary net assets. We exclude these activities from the City’s government-wide financial statements because the City cannot use AF these assets to finance its operation. Financial Analysis of the City as a Whole The City produces government-wide financial statements using the full accrual basis of accounting and economic resource management focus. As year-to-year financial information T is accumulated on a consistent basis, changes in net assets may be observed and used to discuss the changing financial position of the City as a whole. The Net Position, of the City of Dover, as of June 30, 2012 and 2013 are as follows (presented in millions of dollars): DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B Governmental Business-Type Activities Activities Total 2012 2013 2012 2013 2012 2013 Assets Non-Capital Assets $ 11.8 $ 14.1 $ 79.7 $ 86.7 $ 91.5 $ 100.8 Capital Assets 51.7 54.1 135.7 135.7 187.4 189.8 Total Assets 63.5 68.2 215.4 222.4 278.9 290.6 Liabilities Current Liabilities 4.6 3.0 9.2 9.8 13.8 12.8 Non-Current Liabilities 15.5 19.7 40.1 38.3 55.6 58.0 Total Liabilities 20.1 22.7 49.3 48.1 69.4 70.8 Net Position AF Invested in Capital Assets, Net of Related Debt 49.6 49.6 98.3 100.1 147.9 149.7 Restricted Net Assets 0.5 0.7 33.8 34.7 34.3 35.4 Unrestricted Net Assets (6.8) (4.8) 34.0 39.5 27.2 34.7 Total Net Position $ 43.3 $ 45.5 $ 166.1 $ 174.3 $ 209.4 $ 219.8 T The Changes in Net Position, for the City of Dover, as of June 30, 2012 and 2013 are as follows (presented in millions of dollars): DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B Governmental Business-Type Activities Activities Total 2012 2013 2012 2013 2012 2013 Revenues: Program Revenues Charges for Services $ 11.3 $ 10.0 $ - $ - $ 11.3 $ 10.0 Water/Wastewater Charges for Services - - 13.8 13.4 13.8 13.4 Electric Charges for Services - - 93.5 90.7 93.5 90.7 Operating Grants and Contributions 2.6 2.9 - - 2.6 2.9 Capital Grants and Contributions 6.3 2.1 0.5 - 6.8 2.1 General Revenues Property Taxes 11.1 11.1 - - 11.1 11.1 Transfer Taxes 1.4 1.1 - - 1.4 1.1 Earnings on Investments-Other 0.1 - 0.6 0.1 0.7 0.1 Total Revenues 32.8 27.2 108.4 104.2 141.2 131.4 Expenses General Government Public Safety Public Works AF Library and Recreation Community and Economic Development 2.0 17.6 8.6 2.4 0.8 2.3 18.0 6.7 2.3 1.1 - - - - - - - - - - 2.0 17.6 8.6 2.4 0.8 2.3 18.0 6.7 2.3 1.1 T Central Services 1.3 1.2 - - 1.3 1.2 Financial Administration 3.0 3.0 - - 3.0 3.0 Other Post-Employment Benefits 6.5 5.1 - - 6.5 5.1 Interest Charges 0.1 0.1 - - 0.1 0.1 Plus (less) Indirect Expense Allocation (4.0) (4.2) 4.0 4.2 - - Water/Wastewater - - 10.2 9.9 10.2 9.9 Electric - - 74.5 71.4 74.5 71.4 Total Expenses 38.3 35.6 88.7 85.5 127.0 121.1 Change in Net Position before Transfers (5.5) (8.4) 19.7 18.7 14.2 10.3 Transfers 8.3 10.5 (8.3) (10.5) - - Change in Net Position 2.8 2.1 11.4 8.2 14.2 10.3 D Net Position, Beginning of Year Net Position Governmental Activities R $ 40.5 43.3 $ 43.4 45.5 154.7 166.1 $ 166.1 $ 174.3 Governmental net position increased by $2.2 million. Net revenues o f $ 2 7 . 2 m i l l i o n were less than the prior year by $5.6 million. The General Governmental Charges for services line item decreased by $1.3 million from the prior year mainly due to a decrease in donations for the library which accounts for a decrease of $1.8 million. This decrease was offset by increases in police extra duty fees, court of chancery fees and sanitation fees totaling $.9 million. Other sources of decreased revenues 195.2 $ 209.4 209.5 $ 219.8 from the previous fiscal year are attributed to police fines, recreation income and licenses and permits received totaling $.3 million. Expenses of $35.6 million reflect an overall decrease of $2.7 million from the prior year. Post-employment benefits and pension benefit costs decreased by $1.4 million. Other decreases were to library and recreation, and central services. The increases to expense were in general government, public safety, community and economic development.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B Transfers to the Governmental Funds from the Proprietary Funds increased $2.2 million of which $2.0 million was contributed towards infrastructure improvements at the Garrison Oak Technical Park. These improvements are required for the construction of the Calpine 305 megawatt electric generating facility. The chart that follows allocates revenues to program costs as applicable. It shows that some City functions are in part self-supporting. Expenses & Program Revenues Governmental Activities 20.0 18.0 Revenues Millions 16.0 Expenses 14.0 12.0 10.0 8.0 6.0 4.0 AF T 2.0 - D The following chart shows the sources of funding for program costs for the last fiscal year. As can be seen, a substantial portion of funding for governmental operations is provided by R property taxes, charges for services and transfers from the utilities.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B Revenues by Source - Governmental Activities Utility Transfer In Charges for 28% Services 26% Operating Grants AF Transfer Taxes and Contributions 3% 8% Capital Grants and Property Taxes Contributions 29% 6% T Business-Type Activities As noted earlier, the business-type activities saw a positive change in net position of $8.2 million. Both utilities experienced a decrease in revenues which resulted in a combined net decrease of $4.2 million. The utilities expenses when combined also decreased in total by $3.2 million. The water/wastewater utility had a positive change in net position of $2.0 million. The utility D experienced a decrease in operating income of $0.4 million from the previous year. The decrease in operating income was primarily due to a decrease in water, sewer and impact fees, offset by increases in ground water adjustment fees and water tank space rent. The R utility experienced a decrease in personnel and operating expenses of $0.3 million. Non- operating expenses netted an increase as a result of a decrease in the fair value of the investments and decreased capital contributions. The electric utility realized a positive change in net position of $6.2 million. The utility experienced a decrease in operating revenues of $2.8 million from the previous year as a result of a reduction in electric rates resulting from reduced power supply cost. Operating expenses decreased as well in total by $3.2 million due to lower power supply cost and a $.5 million decrease in operating expenses. The decreases were offset by an increase in post-retirement benefits expense totaling $.6 million. Non-operating revenues and expenses reflect a negative result of $1.3 million. Interest earned on both operating and reserve funds $ .7 million were offset by the interest and fiscal charges of $1.4 million and decrease in fair value of investments of $.6 million. Transfers to the General Fund increased to $10.0 million from $7.9 million in the preceding year including a $2.0 million contribution towards infrastructure improvements at the Garrison Oak Technical Park.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B Revenues and Expenses Business Type Activities Electric Revenue Water/Wastwater 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 Millions AF Total Operating Expenses & Transfers Financial Analysis of the City’s Funds Governmental Funds Operating Revenue T As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Government funds focus on expendable resources and near term inflows and outflows of those resources. As such, fund balance is generally a good indicator of net resources available for spending at the end of the fiscal year, subject to any stated restrictions on its use. D The combined fund balances of the City’s governmental funds at June 30, 2013, were $8.9 million. This represented an increase of $3.5 million during the year. Approximately 38% of the combined fund balances, $3.4 million, constitutes unassigned fund balance, which is R available to meet the City’s current and future needs. The remainder of fund balance is non-spendable, restricted, committed or assigned to indicate that it is not available for operational spending because it is constrained by legally enforceable contracts, other governmental agreements and legislation, City Council resolution or it is not convertible to cash within a reasonable period of time. Further detail of fund balances is presented in the Notes to the Basic Financial Statements in Note 7. The General Fund is the primary operating fund of the City, accounting for such activities as general government, public safety, public works, library and recreation, community and economic development, central services and financial administration. The General Fund balance at June 30, 2013, was $8.2 million, which represents an increase of $3.3 million from the previous fiscal year. Both revenue and expenditures decreased due to completion of the new Library. The decrease in revenue was offset slightly by increases in revenues from Court of Chancery fees, property taxes and Sanitation fees and rebates. Library Services, which included expenditures for the library capital project in the prior year, decreased by $8.0 million. Other expenditure decreases were in public works, recreational services, streets and sanitation services, garage and stores and street light expense.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B Expenditure increases were in general government, public safety and law enforcement, financial administration, insurance, retiree health car and employee pension. Proprietary Funds The City’s proprietary funds provide the same type of information found in the government- wide Financial Statements, but in more detail. As of June 30, 2013, the Water/Wastewater Fund has a net position of $50.7 million, of which $9.2 million is unrestricted. The fund’s net position increased $2.0 million during the year as explained on page 29. At June 30, 2013, the Electric Fund has a net position of $123.9 million, of which $30.3 million is unrestricted. This fund experienced an increase in net position of $6.2 million during the year as explained on page 29. AF General Fund Budgetary Highlights During this fiscal year, the City Council amended the budget two times. These budget amendments or supplemental appropriation ordinances were primarily for the following purposes: T 1. To amend the grant budgets, reserve accounts for the actual results of the prior fiscal year and to re-appropriate budget balances for ongoing capital projects. 2. To amend all carried forward budget balances for the major operating funds from the prior fiscal year, as well as program revenues and expenses based on the analyses provided by a mid-year review. The General Fund financials in the Governmental Funds Balance Sheet (page 39) and D Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds (page 41) include both the General Fund operating activities and the Governmental Capital Project Fund activities. R The General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget & Actual is included in Part D-Required Supplementary Information (page 94-95). The Governmental Capital Projects Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances-Budget to Actual is included in Part E- Supplementary Information (Page 96). The Combining Statements – Combining General Fund Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund is included in Part E- Supplementary Information (page XX-XX) The Final General Fund Budget incorporated the following changes to the Original Budget. The Budget Balance carried forward from the prior fiscal year was higher by $1.1 million than was projected. Receipts had a net decrease of approximately $.1 million. The most significant increases were attributed to police extra duty fees, property taxes, Garrison Farm

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B rent and Court of Chancery fees. The most significant reductions of revenue were in intrafund service fees, and civil traffic penalties. Expenditures were revised to reflect an aggregate increase of $0.3 million. Increases In transfers to the Police and Employee Pension funds accounted for most of the increased budget expense with slight increases in code enforcement, police and streets operations budgets. The increases were offset by decreases in fire, library, recreation, sanitation, customer services, vehicle maintenance and facilities management. The net result of these changes was a $0.6 million increase in the revised budget balance over the Original Budget Balance (on a non-GAAP basis). Actual revenues and other financing sources exceeded the final budgeted amounts in the General Fund for the current fiscal year. The more significant positive variances were AF in permits and other licenses, police extra duty fees and court of chancery fees and were offset by fines and police revenue, transfer tax, trash fees, miscellaneous grants and civil traffic penalties netting $0.2 million over budgeted revenues. Expenditures were approximately $0.5 million under budget as a result of several operating departments experiencing personnel savings. The General Fund budget balance carry forward was $0.8 million higher than budgeted as a result of the above variances. T Capital Asset and Debt Administration At the end of the current fiscal year, the City’s governmental and proprietary funds had invested $54.1 million and $135.7 million, respectively, in a variety of capital assets and infrastructure, as reflected in the following schedule, which represents a net increase of $2.4 million for governmental activities and the proprietary funds remained the same in total since the end of last fiscal year (presented in millions of dollars). Additional detailed data for all capital assets of the City is presented in the Notes to the Basic Financial Statements in D Note 4. R Depreciable Assets, Net Buildings Equipment Vehicles General Infrastructure Utility, Plant, Buildings, and Infrastructure $ Governmental Activities 2012 7.0 1.7 1.5 20.6 - $ 2013 26.3 2.2 1.1 19.6 - $ Business-Type Activities 2012 - - - - 130.5 $ 2013 - - - - 131.7 $ 2012 130.5 Total 7.0 1.7 1.5 20.6 $ 2013 26.3 2.2 1.1 19.6 131.7 Other 0.2 0.8 - - 0.2 0.8 Non-depreciable Assets Land 3.9 4.0 1.6 1.6 5.5 5.6 Construction in Progress 16.8 0.1 3.6 2.4 20.4 2.5 $ 51.7 $ 54.1 $ 135.7 $ 135.7 $ 187.4 $ 189.8

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B A summary of debt outstanding at June 30, 2012 and 2013 is as follows which represents an increase of $4.1 million for the governmental funds and a decrease of $1.8 million for the proprietary funds, since the end of last year (presented in millions of dollars): Governmental Business-Type Activities Activities Total 2012 2013 2012 2013 2012 2013 Non-current liabilities Liability for Compensated Absences $ 2.3 $ 2.1 $ 0.8 $ 0.8 $ 3.1 $ 2.9 Bonds (Net of Discount/Issuance Cost) 2.1 4.5 38.9 37.0 41.0 41.5 OPEB Obligation 11.2 13.1 0.4 0.5 11.6 13.6 $ 15.6 $ 19.7 $ 40.1 $ 38.3 $ 55.7 $ 58.0 Additional detailed data for all debt of the City is presented in the Notes to the Basic AF Financial Statements in Note 5. The City Charter limits the amount of general obligation debt the City can issue in any one year to .25% of the taxable assessed value of real property within the City. The aggregate of amounts borrowed for which the full faith and credit of the City is pledged cannot exceed 5% of assessed value of real property within the City boundaries. The City has used 2.9% of T its debt limit. Economic Factors and Next Year’s Budgets and Rates In Fiscal 2013 the City started to see a slight uptick in residential housing and commercial development. The City developed the fiscal year 2014 budget in accordance with the City’s financial policies ensuring all budgets are balanced and reserve requirements were adhered to. The following changes over fiscal year 2013 were incorporated into the fiscal year 2014 budget. • All vacant positions from 2013 were reviewed. Only those considered critical were DR budgeted to be filled, resulting in a reduction of three full-time and two part-time • Negotiations with the collective bargaining units to include a 15% across the board cost sharing on all health care plans • A 3% raise was included for non-bargaining employees • Benefit rate changes were included for health care, pension, OPEB and worker’s compensation resulting in an overall budget increase of $445,000 • No discretionary increases in operating expenses • Funded the capital investment plan with a commitment to providing dollars for necessary infrastructure an utility improvements The General Fund revenues are projected to increase by 1.6% and expenditures increasing by 3.5%. The net increase was made up by revising the fiscal year 2013 budget balance due to salary savings through attrition and debt service savings. All current rates and fees will be maintained in fiscal year 2014. The capital investment plan for fiscal year 2014 will be financed with a $1.3 million transfer from the General Fund and $80,000 from capital reserves and grants. The Water/Wastewater Fund overall revenues decreased 1.4% and expenses decreased 5.3%. The revenue decrease is related to customer usage as property owners are being

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Management's Discussion & Analysis - Part B more conservation and weather has been milder. Expense reductions are a result of the usage reductions and capital projects that have reduced the County treatment fees. Transfers to the capital project fund were reduced in accordance with the plans for water projects. Water rates and wastewater rates will remain the same as the prior fiscal year. The City continues to maintain competitive water and wastewater rates within the State of Delaware. The capital investment plan for fiscal year 2014 will be financed with $2.5 million of operating income and $390,000 from impact fee reserves. Once again in fiscal year 2013, the City contracted with Burns & McDonnell to update the Electric Cost of Service study so as to incorporate into the budget lower rates due to the decline in power supply cost. The Electric Fund overall revenues decreased 11.3% and expenses decreased by 10.8% to coincide with cost of service decreases. The Electric Fund will also be utilizing a $4.0 million transfer from the rate stabilization reserve in order to AF maintain the required budget balance. The City anticipates a negative growth rate attributed to demand response programs being implemented by large customers and conservation measures on the part of other commercial and residential customers. Capital projects are budgeted to be financed with a $5.5 million transfer from operating income. The City continues to closely monitor the local economy and its impact on growth and T revenues. Revenue enhancements, rate increases, and potential cost reductions will continue to be reviewed in order to maintain the City’s financial policies. Contacting the City’s Financial Management This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Ms. Donna Mitchell, Controller/Treasurer at 302- D 736-7018 (TTY/TDD Operator 1-800-855-1155). R

FINANCIAL SECTION AF PART - C S T BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS D S S R FUND FINANCIAL STATEMENTS NOTES TO FINANCIAL STATEMENTS

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Net Position June 30, 2013 Governmental Business-Type Activities Activities Total Assets: Cash and Cash Equivalents $ 2,207,381 $ 4,743,549 $ 6,950,930 Investments 7,916,257 25,859,966 33,776,223 Receivables, Net 1,477,009 8,393,521 9,870,530 AF Internal Balances 207,510 (207,510) - Due from Other Governments 143,363 - 143,363 Inventory, at Cost 147,650 3,923,489 4,071,139 Prepaid Items 69,463 51,279 120,742 Restricted Cash and Cash Equivalents 1,619,543 8,146,564 9,766,107 Restricted Investments 18,252 27,902,862 27,921,114 T Net Pension Asset 297,885 6,722,506 7,020,391 Net OPEB Asset - 1,169,269 1,169,269 Land and Construction in Progress 4,076,042 4,049,402 8,125,444 Capital Assets, Net of Depreciation 49,979,976 131,683,597 181,663,573 Total Assets 68,160,331 222,438,494 290,598,825 Liabilities: Accounts Payable and Accrued Liabilities 1,613,267 6,941,229 8,554,496 Unearned Revenue 1,210,549 232,427 1,442,976 D Customer Deposits Other Non-Current Liabilities R Due within One Year Due in more than One Year Due in more than One Year - OPEB Total Liabilities Net Position: Net investment in capital assets Restricted for: - 156,984 1,444,753 5,115,314 13,112,314 22,653,181 49,577,021 2,022,159 677,104 3,108,830 34,727,258 449,016 48,158,023 100,079,972 2,022,159 834,088 4,553,583 39,842,572 13,561,330 70,811,204 149,656,993 Capital Projects 85,867 34,665,736 34,751,603 Public Safety 216,344 - 216,344 Other Purposes 441,065 - 441,065 Unrestricted (4,813,147) 39,534,763 34,721,616 Total Net Position $ 45,507,150 $ 174,280,471 $ 219,787,621 The notes to financial statements are an integral part of this statement.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Activities For the Year Ended June 30, 2013 Net (Expense) Revenue and Changes in Net Program Revenues Position Indirect Operating Capital Grants Expenses Charges for Grants and and Governmental Business Type AF Expenses Allocation Services Contributions Contributions Activities Activities Total Functions/Programs Governmental Activities General Government $ 2,287,391 $ (813,346) $ 2,463,437 $ 50,000 $ - $ 1,039,392 $ - $ 1,039,392 Public Safety 17,989,463 - 4,240,847 1,256,113 - (12,492,503) - (12,492,503) Public Works 6,716,039 (616,555) 2,624,877 663,953 161,698 (2,648,956) - (2,648,956) Library and Recreation 2,313,048 - 656,001 276,863 1,945,746 565,562 - 565,562 Community and Economic Development 1,116,804 (176,838) - 667,767 - (272,199) - (272,199) Central Services 1,184,169 (729,353) - - - (454,816) - (454,816) T Financial Administration 3,029,048 (1,906,218) - - - (1,122,830) - (1,122,830) Other Post Employment Benefits 5,119,778 - - - - (5,119,778) (5,119,778) Interest Charges 114,785 - - - - (114,785) - (114,785) Total Governmental Activities 39,870,525 (4,242,310) 9,985,162 2,914,696 2,107,444 (20,620,913) - (20,620,913) Business Type Activities - Water/Wastewater 9,858,866 1,046,492 13,387,706 - - - 2,482,348 2,482,348 Electric 71,399,767 3,195,818 90,685,693 - - - 16,090,108 16,090,108 Total Business Type Activities 81,258,633 4,242,310 104,073,399 - - Total Primary Government $ 121,129,158 $ - $ 114,058,561 $ 2,914,696 $ 2,107,444 $ (20,620,913) $ 18,572,456 $ (2,048,457) General Revenues Taxes Property Taxes 11,126,395 - 11,126,395 D Transfer Taxes Earnings on Investments Total General Revenues Transfers R Total General Revenues and Transfers Changes in Net Position Net Position Beginning Net Position Ending The notes to financial statements are an integral part of this statement. $ 1,107,686 36,793 12,270,874 10,491,718 22,762,592 2,141,679 43,365,471 45,507,150 $ - 112,402 112,402 (10,491,718) (10,379,316) 8,193,140 166,087,331 174,280,471 $ 1,107,686 149,195 12,383,276 - 12,383,276 10,334,819 209,452,802 219,787,621

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Governmental Fund Balance Sheet June 30, 2013 Total Total General Nonmajor Governmental Fund Funds Funds Assets: Cash and Cash Equivalents $ 1,824,267 $ - $ 1,824,267 Restricted Cash and Cash Equivalents 858,086 761,457 1,619,543 Investments 6,564,730 - 6,564,730 Restricted Investments 18,252 - 18,252 Receivables, net Accounts 1,208,735 1,304 1,210,039 Taxes 262,970 - 262,970 AF Due from Other Funds 452,808 56,110 508,918 Due from Other Governments - 143,363 143,363 Prepaid Items 58,213 - 58,213 Inventory, at Cost 147,650 - 147,650 Total Assets $ 11,395,711 $ 962,234 $ 12,357,945 Liabilities: T Accounts Payable $ 1,028,037 $ 103,181 $ 1,131,218 Unearned Revenue 1,210,549 - 1,210,549 Due to Other Funds 216,385 85,023 301,408 Other 156,984 - 156,984 Total Liabilities 2,611,955 188,204 2,800,159 Deferred Inflows of Resources: Unavailable revenue 577,437 60,236 637,673 Total Deferred Inflows of Resources 577,437 60,236 637,673 Fund Balances: D Non-Spendable Restricted Committed R Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows and Fund Balances The notes to financial statements are an integral part of this statement. $ 227,457 131,237 936,899 3,519,012 3,391,714 8,206,319 11,395,711 $ - 590,445 - 123,349 - 713,794 962,234 $ 227,457 721,682 936,899 3,642,361 3,391,714 8,920,113 12,357,945

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2013 Amounts reported for governmental activities in the statement of net position (page 37) are different because: Total fund balances for governmental funds (Page 39) $ 8,920,113 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 54,056,018 Other assets are not available to pay for current period expenditures and, AF therefore, are reported as unavailable revenue in the funds. The net pension asset resulting from contributions in excess of the annual required contribution (police and employee) is not a current financial resource, and, therefore, is not reported in the governmental funds. Police Pension Plan $ 106,065 637,673 T General Pension Plan An internal service fund (page 44) is used by the City to charge the cost of the workers' compensation fund. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities--both current and long-term-- 191,820 297,885 1,267,842 D are reported in the statement of net position. Compensated absences represent amounts accrued for sick leave for those employees who are vested and accrued vacation for all employees. R The net OPEB obligation resulting from contributions less than the annual required contribution (general) is not a use of current financial resources, and therefore, is not reported in the governmental funds. Current- General Obligation Bonds Compensated Absences $ (430,000) (1,014,753) (1,444,753) Long-Term- General Obligation Bonds, net of discount $ (4,048,997) Compensated Absences (1,066,317) Net OPEB Obligation (13,112,314) (18,227,628) (19,672,381) Total net position of governmental activities $ 45,507,150 The notes to financial statements are an integral part of this statement.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds For the Year Ended June 30, 2013 Total Total General Nonmajor Governmental Fund Funds Funds Revenues Fines $ 612,193 $ 299,811 $ 912,004 Library Revenue- General 64,584 - 64,584 Library Revenue County Reimbursement 406,481 - 406,481 Licenses and Permits 2,548,913 - 2,548,913 Sanitation Fees and Rebates 2,624,877 - 2,624,877 Recreation - 40,446 40,446 AF Miscellaneous Services 2,470,200 - 2,470,200 Property Taxes 11,225,834 - 11,225,834 Transfer Taxes - 1,107,686 1,107,686 Grants Received 2,719,977 2,399,112 5,119,089 Court of Chancery Fees 917,700 - 917,700 Investment Income 43,799 1,399 45,198 Total Revenues 23,634,558 3,848,454 27,483,012 Expenditures Current: General Government Library Services Public Safety and Law Enforcement Public Works Recreational Services Streets and Sanitation Services Financial Administration Garage and Stores T 1,107,122 5,240,504 17,688,100 1,565,442 651,341 2,990,430 909,877 431,542 - 273,713 360,542 192,963 - - - - 1,107,122 5,514,217 18,048,642 1,758,405 651,341 2,990,430 909,877 431,542 DInsurance Retiree Health Care Employee Pension Community and Economic Development R Street Lights Debt Service: Principal Retirement Interest and Fiscal Charges Bond Issuance Costs Total Expenditures Excess (deficiency) of Revenues over Expenditures Other financing Sources (Uses) Proceeds from Sale of Bonds 241,395 1,620,600 1,693,500 223,110 878,760 296,003 73,071 1,029 35,611,826 (11,977,268) 2,648,500 - - - 716,856 - - - - 1,544,074 2,304,380 - 241,395 1,620,600 1,693,500 939,966 878,760 296,003 73,071 1,029 37,155,900 (9,672,888) 2,648,500 Transfers in 12,666,208 - 12,666,208 Transfers out - (2,174,490) (2,174,490) Total other Financing Sources (Uses) 15,314,708 (2,174,490) 13,140,218 Net Change in Fund Balances 3,337,440 129,890 3,467,330 Fund Balances at Beginning of Year 4,868,879 583,904 5,452,783 Fund Balances at End of Year $ 8,206,319 $ 713,794 $ 8,920,113 The notes to financial statements are an integral part of this statement.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2013 Amounts reported for governmental activities in the statement of activities (page 39) are different because: Net change in fund balances--total governmental funds (Page 41) $ 3,467,330 Governmental fund reports capital outlays as expenditures. However, in the statement of activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capitalization of net capital asset expenditures including CIP $ 4,872,122 Loss on assets transferred in and not fully depreciated (19,139) AF Current Year depreciation and amortization (2,524,904) 2,328,079 Governmental funds report the repayment of principal of general long-term debt as an expenditure but the repayment reduces the liability in the statement of net position. 296,003 Changes in other assets are not available to pay for current period expenditures and therefore are not reported as revenues in the funds. (196,430) The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to T governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long- term debt and related items. Amortization of 2003 Bond Issuance costs $ (40,685) 2012 Library Construction Loan Proceeds (2,648,500) (2,689,185) Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for the transactions that are not normally paid with expendable available financial Dresources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, assets are not recognized in governmental funds unless they represent current financial resources but are R recognized in the statement of activities as they accrue. The following differences, therefore, occur between the statement of activities and the governmental funds. Decrease in compensated absences Decrease in net pension asset - Police Plan Increase in net pension asset - General Pension Plan Increase in net OPEB obligation - General Fund An internal service fund is used by the City to charge the costs of workers' compensation insurance to individual funds. The change in net position of the internal service fund is transferred to the $ 199,054 (92,285) 127,094 (1,932,772) (1,698,909) governmental funds and amounts attributable to internal charges are then allocated to functional expenditures. Net revenue is allocated back to respective functions and business type activities, as appropriate. 634,791 Change in net position of governmental activities (Page 38) $ 2,141,679 The notes to financial statements are an integral part of this statement.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Net Position - Proprietary Funds June 30, 2013 Governmental Business-type Activities Activities Water/ Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Assets Current Assets: Cash and Cash Equivalents $ 1,801,914 $ 2,941,635 $ 4,743,549 $ 383,114 Investments 7,858,347 18,001,619 25,859,966 1,351,527 Receivables, Net 918,428 7,475,093 8,393,521 4,000 Due from Other Funds-Charges 50,989 131,005 181,994 - AF Inventory 81,271 3,842,218 3,923,489 - Prepaid Items - 51,279 51,279 11,250 Total Current Assets 10,710,949 32,442,849 43,153,798 1,749,891 Non-Current Assets: Restricted Assets Cash 1,383,690 6,762,874 8,146,564 - Investments 3,890,328 24,012,534 27,902,862 - Net Pension Asset 479,537 6,242,969 6,722,506 - T Net OPEB Asset - 1,169,269 1,169,269 - Land and Construction in Progress 1,252,427 2,796,975 4,049,402 - Capital Assets, Net of Depreciation 45,537,043 86,146,554 131,683,597 - Total Non-Current Assets 52,543,025 127,131,175 179,674,200 - Total Assets 63,253,974 159,574,024 222,827,998 1,749,891 Liabilities Current Liabilities: Accounts Payable and Accrued Expenses 1,137,186 5,804,043 6,941,229 482,049 Due to Other Funds - Charges 116,852 272,652 389,504 - Deferred Revenue - 232,427 232,427 - D Accrued Interest Payable 74,327 602,777 677,104 - Customer Deposits - 2,022,159 2,022,159 - Revenue Bonds Payable 706,083 2,150,000 2,856,083 - Liability for Compensated Absences 76,444 176,303 252,747 - R Total Current Liabilities 2,110,892 11,260,361 13,371,253 482,049 Non-Current Liabilities: Net OPEB Obligation 449,016 - 449,016 - Revenue Bonds Payable 10,220,634 23,960,000 34,180,634 - Liability for Compensated Absences 95,211 451,413 546,624 - Total Non-Current Liabilities 10,764,861 24,411,413 35,176,274 - Total Liabilities 12,875,753 35,671,774 48,547,527 482,049 Net Position Invested in Capital Assets, Net of Related Debt 37,246,443 62,833,529 100,079,972 - Restricted for Capital Construction 3,890,328 30,775,408 34,665,736 - Unrestricted 9,241,450 30,293,313 39,534,763 1,267,842 Total Net Position $ 50,378,221 $ 123,902,250 $ 174,280,471 $ 1,267,842 The notes to financial statements are an integral part of this statement.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds For the Year Ended June 30, 2013 Governmental Business-type Activities Activities Water/ Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Operating Revenues Charges for Services $ 11,043,071 $ 88,331,196 $ 99,374,267 $ - Miscellaneous Services/Income 2,344,635 2,354,497 4,699,132 1,214,013 Total Operating Revenues 13,387,706 90,685,693 104,073,399 1,214,013 Operating Expenses Water/Wastewater Services 7,174,128 - 7,174,128 - AF General Administrative 1,175,225 4,470,795 5,646,020 433,214 Power Supply - 55,681,251 55,681,251 - Transmission/Distribution - 3,267,698 3,267,698 - Engineering - 1,107,231 1,107,231 - Metering - 219,010 219,010 - Systems Operations - 544,405 544,405 - Utility Tax - 1,443,853 1,443,853 - Depreciation 1,705,809 4,621,501 6,327,310 - T Contractual Services - - - 33,700 Taxes - - - 29,114 Retirees Pension 231,385 1,115,765 1,347,150 - Retirees Health Care 261,019 696,500 957,519 - Self Insurance-Workers' Compensation - - - 74,789 Total Operating Expenses 10,547,566 73,168,009 83,715,575 570,817 Operating Income 2,840,140 17,517,684 20,357,824 643,196 Non-Operating Revenues (Expenses) Interest Earned: Operating Funds 114,833 190,469 305,302 - Reserve Funds 87,675 506,771 594,446 12,459 DR Net Decrease in Fair Value of Investments Interest and Fiscal Charges Gain on Sale of Assets Total Non-Operating Revenue (expenses) Income before Contributions and Transfers Transfers In Transfers Out Total transfers Change in Net Position Total Net Position--Beginning Total Net Position--Ending The notes to financial statements are an integral part of this statement. $ (172,357) (369,131) 11,339 (327,641) 2,512,499 - (500,000) (500,000) 2,012,499 48,365,722 50,378,221 (614,989) (1,432,779) 5,203 (1,345,325) 16,172,359 8,282 (10,000,000) (9,991,718) 6,180,641 117,721,609 $ 123,902,250 $ (787,346) (1,801,910) 16,542 (1,672,966) 18,684,858 8,282 (10,500,000) (10,491,718) 8,193,140 166,087,331 174,280,471 $ (20,864) - - (8,405) 634,791 - - - 634,791 633,051 1,267,842

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2013 Governmental Business-type Activities Activities Water Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Cash Flows from Operating Activities Receipts from Customers $ 13,273,867 $ 89,805,855 $ 103,079,722 $ - Payments to Suppliers (including Purchased Power) (5,704,873) (61,388,679) (67,093,552) (137,603) Payments to Employees (1,735,265) (4,235,494) (5,970,759) - Payments of Personnel Related Costs (755,970) (1,614,454) (2,370,424) 1,152,388 Internal Activity--Payments from (to) Other Funds (16,544) - (16,544) 14,459 Other Receipts (Payments) including Claims Paid (281,241) (7,634,455) (7,915,696) (363,919) Net Cash Provided by Operating Activities 4,779,974 14,932,773 19,712,747 665,325 AF Cash Flows from Noncapital Financing Activities Transfers Out (500,000) (10,000,000) (10,500,000) - Transfers in - 8,282 8,282 - Net Cash Used for Noncapital Financing Activities (500,000) (9,991,718) (10,491,718) - Cash Flows from Capital and Related Financing Activities Acquisition and Construction of Capital Assets (2,983,446) (3,301,960) (6,285,406) - Proceeds from Capital Debt 637,239 - 637,239 - T Bond Issuance Costs (6,597) (1,050) (7,647) - Principal Paid on Revenue Bond Maturities (687,229) (2,110,000) (2,797,229) - Interest Paid on Capital Debt (251,180) (1,233,804) (1,484,984) - Net Cash Used for Capital and Related Financing Activities (3,291,213) (6,646,814) (9,938,027) - Cash Flows from Investing Activities Interest on Investments 114,833 190,469 305,302 - Redemption of IInvestment Securities 1,500,000 2,000,000 3,500,000 (741,502) Purchase of Investment Securities (2,509,828) (4,815,151) (7,324,979) (8,308) Interest on Restricted Cash 87,675 506,771 594,446 - Net Cash Used for Investing Activities (807,320) (2,117,911) (2,925,231) (749,810) D Net Increase/(Decrease) in Cash and Cash Equivalents 181,441 (3,823,670) (3,642,229) (84,485) Balances--Beginning of the Year 3,004,163 13,528,179 16,532,342 467,599 Balances--End of the Year $ 3,185,604 $ 9,704,509 $ 12,890,113 $ 383,114 R Reconciliation of Operating Income to Net Cash Provided by (Used for) Operating Activities: Operating Income Adjustments to Reconcile Operating Income to Net Cash provided by (Used for) Operating Activities: Depreciation Expense Changes in Assets and Liabilities (Increase)/Decrease in Receivables (Increase)/Decrease in Due from Other Funds (Increase)/Decrease in Inventory (Increase)/Decrease in Prepaid Items Increase/(Decrease) in Accounts Payable and Accrued Expenses Increase/(Decrease) in Deferred Revenue Increase/(Decrease) in Due to Other Funds Increase/(Decrease) in Customer Deposits Increase/(Decrease) in Liability for Compensated Absences Increase/(Decrease) in NPO/NPA for Pension $ 2,840,140 1,705,809 (62,922) (50,917) (13,482) 477 (278,415) 622,489 - (11,544) - (12,680) $ 17,517,684 4,621,501 (837,711) (106,415) 21,316 (36,297) (45,452) 15,090 (53,440) (87,446) 117,728 (35,350) $ 20,357,824 6,327,310 (900,633) (157,332) 7,834 (35,820) (323,867) 637,579 (53,440) (98,990) 117,728 (48,030) $ 643,196 15,564 - - - 6,565 - - - - - - Increase/(Decrease) in NPO/NPA for OPEB 41,019 (6,158,435) (6,117,416) - Net Cash Provided by Operating Activities $ 4,779,974 $ 14,932,773 $ 19,712,747 $ 665,325 Non-Cash Investing, Capital and Financing Activities: Change in Fair Value of Investments $ (172,357) $ (614,989) $ (787,346) $ (20,864) Deferred charges expensed $ (111,354) $ (224,975) $ (336,329) $ - The notes to financial statements are an integral part of this statement.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Net Position Fiduciary Funds June 30, 2013 Pension OPEB Trust Trust Agency Funds Fund Funds Assets Cash and Cash Equivalents $ 7,855,270 $ 486,852 $ 265,431 Investments at Fair Value - Mutual Funds 33,442,789 13,141,621 - Receivables Prepaid Items Total Assets Liabilities Accounts Payable AF - - 41,298,059 - - - 13,628,473 1,250 50,771 45 316,247 83,155 T Due to Agencies - - 233,092 Total Liabilities - 1,250 $ 316,247 Net Position Net Position Held in Trust for Retirement Benefits $ 41,298,059 $ 13,627,223 The notes to financial statements are an integral part of this statement. DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section - Part C City of Dover Statement of Changes in Net Position Fiduciary Funds For the Year Ended June 30, 2013 Pension OPEB Trust Trust Funds Fund Additions: Net Investment Income $ 2,543,986 $ 728,829 City's Contribution-Payroll Based 310,963 1,403,935 AF City's Contribution-Lump Sum 9,972,500 2,537,100 Employee Contribution 233,097 - State Insurance Premium Tax Proceeds 577,765 - Other 1,942 78,743 Total Additions 13,640,253 4,748,607 Deductions: Benefit Payments General Administration T Refund of Pension Contribution Total Deductions Change in Net Position Net Position - Beginning 4,970,885 26,809 80,813 5,078,507 8,561,746 32,736,313 2,027,056 7,500 - 2,034,556 2,714,051 10,913,172 D Net Position - Ending The notes to financial statements are an integral part of this statement. R $ 41,298,059 $ 13,627,223

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 55 NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2013 1. FINANCIAL REPORTING ENTITY A. The City The City of Dover was incorporated in 1829 and is a municipal corporation governed by an elected mayor and a nine-member council. The accompanying financial statements present the financial position and operating results for fiscal year ended June 30, 2013. B. Reporting Entity AF In evaluating how to define the reporting entity, for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit was made by applying the criteria set forth in Accounting Principles Generally Accepted in the United States of America (GAAP). The criterion used is that set forth by Statement of Governmental Accounting Standards number 14, which T defines the reporting entity as the primary government and those component units for which the primary government is financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board and either (a) the ability to impose will by the primary government, or (b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Based upon this criterion, the following is a brief review of each potential component unit addressed in defining the government’s reporting entity. Included within the reporting entity: DR The City provides many services as follows - police protection, street maintenance, sanitation, recreation, library, community development, public improvements, planning, safety inspections, electric generation and distribution, water and wastewater services, legislative services and general administration, including employee benefits. These functions are part of the City’s daily operations and therefore are not legally separate component units. Not included within the reporting entity: The City has joined the State of Delaware Police Pension Plan for uniformed police officers employed by the City after September 1, 1982. The plan is completely managed by the State of Delaware and, therefore, is not included in the financial statements. The Robbins Hose Volunteer Fire Company and the Capital School District are not included within the financial reporting entity because they do not meet the criteria for inclusion set forth by GAAP. 2. SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. A summary of the more significant policies follows:

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 56 A. Basis of Presentation Government-wide Statements: The statement of net position and the statement of activities include the financial activities of the overall government, except for fiduciary activities. Individual funds are not displayed but the statements distinguish governmental activities, generally funded by taxes and other City revenue, from business-type activities (BTAs), generally funded in whole or in part with fees charged to external users. Eliminations have been made for the doubling-up effect of certain internal activities. The government-wide statement of activities presents a comparison between direct program expenses and program revenues for each function of the City’s governmental activities and for each of the City’s identifiable business-type activities. Direct expenses are those that are specifically associated with a program, function or activity. Program AF revenues include (a) charges paid by the recipients or beneficiaries of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. The City allocates the costs of certain governmental services to the costs of business-type T activities (indirect expense allocation). These costs include allocated amounts of city management, centralized budgetary formulation and oversight, accounting, financial reporting, payroll, procurement contracting and oversight, investing and cash management, personnel services, etc. The allocations are charged to the BTAs based on the use of these services. As a matter of policy, the costs of certain governmental functions are not allocated to the business-type activities such as public safety, library and recreation and community services. Fund Financial Statements: The accounts of the City are organized on the basis of funds, D each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon R the purposes for which they are to be spent and the means by which spending activities are controlled. The fund financial statements provide information about the City’s funds, including fiduciary funds. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as non-major funds. The City reports the following major governmental fund: General Fund The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The City reports the following major proprietary funds:

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 57 Water/Wastewater Fund This fund accounts for transactions related to water and wastewater services, including the payment of fees to Kent County for the treatment of sewage. The City also holds lease agreements with cell phone companies for equipment placed on City water towers. Electric Revenue Fund This fund incorporates all transactions related to the generation, transmission and distribution of electricity. The City has contracted with both The Energy Authority and North American Energy Services to manage the City’s power supply and generation assets. The City reports the following non-major funds: Internal Service Fund AF The City has created one internal service fund to account for the activities related to self- insured Workers’ Compensation. Receipts are provided from contributions by the City’s three major funds. Expenses are related to payment of claims, premiums, and administration costs. Actuarial analyses are completed every three years to insure sufficient reserves for claims for the Workers’ Compensation Fund. T Special Revenue Funds The City has ten Special Revenue Funds to account for proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Fiduciary Funds Fiduciary funds consist of trust and agency funds and are used to report assets held by the City in a trustee or agency capacity for other purposes. These funds are, therefore, not available to support City programs. D The City is the trustee for the City’s two pension plans, the Police Pension Fund and the Employee Pension Fund, as well as, the Other Post Employment Benefit Trust. The activity of these plans is accounted for in the Basic Financial Statements. R Agency funds are used to account for assets held by the City as an agent for individuals, private organizations or other governments. The City has three agency funds. The City acts as the receiving and paying agent for the Downtown Dover Partnership, Fourth of July Celebration Committee, and Dover Library Foundation. B. Basis of Accounting and Measurement Focus Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All Governmental Funds are accounted for using the modified accrual basis of accounting and the current financial resources measurement focus. Their revenues are recognized when they become measurable and available as net current assets.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 58 Revenues that are susceptible to accrual include property taxes, grants and billable service charges. All other revenues are accounted for when they are received. Property taxes are recognized in the fiscal period for which they are levied provided they are “available”- i.e., they are collected in the current period or are expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty-days after year-end, except for trash collection, which has a thirty- day collection period. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. The exception to this general rule is principal and interest on general long-term debt which is recognized when due. Also, claims and AF judgments and compensated absences are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. The government-wide financial statements as well as all proprietary and fiduciary trust T funds are accounted for using the accrual basis of accounting and the economic resources measurement focus. Agency funds have no measurement focus. A reconciliation of the governmental fund financial statements prepared on the modified accrual basis of accounting to the government-wide financial statements prepared on the accrual basis of accounting is also provided. The types of transactions included in program revenues in the government-wide statement of activities include charges for services, operating grants and capital grants. D Operating income reported in the proprietary fund financial statements includes revenue and expenses related to the continuing operations of the fund. Principal operating revenue for proprietary funds is charges to customers for sales and services. R Principal operating expenses are the costs of providing goods and services, which include purchased power, administrative expenses and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. As permitted by GASB Statement No. 20, with regards to its Enterprise funds the City has elected to apply all applicable GASB pronouncements and all FASB Statements and interpretations, Accounting Principles Board (APB) Opinions and Accounting Research Bulletins (ARB) issued on or before November 30, 1989, unless they conflict with or contradict GASB pronouncements. C. Capital Assets and Long-Term Liabilities Capital assets used in Governmental Fund type operations (general capital assets) are accounted for in the government-wide financial statements rather than in the funds. Public domain ("infrastructure") general capital assets consisting of certain improvements other

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 59 than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, are capitalized in the government-wide financial statements along with other general capital assets. The capitalization threshold for the City’s assets is $5,000. Personal computers and related hardware valued under $5,000 are manually controlled by the Information Technology Department. All capital assets are valued at historical cost and donated assets are shown at a fair market value as of the date of donation. Depreciation has been provided on general capital assets and is shown in Note 4. Depreciation has been provided over the estimated useful lives using the straight-line method. Estimated useful lives are as follows: Buildings 20 - 50 years Infrastructure 20 - 50 years Vehicles 4 - 7 years AF Equipment, Furniture, Fixtures 5 - 15 years Long-term liabilities expected to be financed from governmental funds and the long-term estimated liabilities for compensated absences are accounted for in the government-wide financial statements, but not in the Governmental Funds. T Depreciation of all exhaustible capital assets used by Proprietary Funds is charged as an expense against their operations. Accumulated depreciation is shown in Note 4 of this section. Depreciation in the proprietary funds has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are presented below: Buildings, Mains, Plant 25 - 90 years Improvements 10 - 20 years Equipment 5 - 15 years Vehicles 4 - 7 years D D. Budget Procedures Legally adopted budgets are prepared for the General Fund, Water/Wastewater Fund, R Electric Revenue Fund, the Internal Service Fund and the following non-major special revenue funds: Municipal Street Aid Fund, Community Development Block Grant Fund (Federal), State Department of Transportation Grants Fund (Community Transportation), Police Grant Funds, and Library Grants Fund. The General Governmental Capital Projects Fund provides for separate budgets to cover the planning and control of capital items for the governmental programs. The financial transactions of this fund are included in the financial statements of the General Fund. The Electric Improvement and Extension Fund and the Water/Wastewater Improvement and Extension Fund are sections of each utility enterprise. These sections are required by bond resolutions. Separate budgets for these funds cover the planning and control of only the capital items of the utilities. The financial transactions of these funds are included in the financial statements of the Electric Revenue Fund and the Water/Wastewater Fund. The City prepares the budget for the General Fund revenues on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. The budget and actual schedule (in the legal budget format (non-GAAP), adopted by the City) for the

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 60 General Fund, the City’s major governmental fund, is presented in the required supplementary information section of this report. Budgets for the Electric Revenue Fund, Water/Wastewater Fund and Internal Service Fund are prepared on an accrual basis. Budgets are prepared under the assumption that the principal redemption of long-term debt must be assumed by Enterprise Fund activity in conformity with the bond ordinance. The Combining General Fund Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund as well as the budget and actual schedules of the other funds are also presented in the supplementary information section of this report because they are “not required.” AF According to the City's procedures, the preceding year's ending net budgetary balances are considered as resources for the following year. The beginning balances become operating items of revenues in the budgets. Estimated ending budgetary balances provide the balancing amount for each budget. In accordance with the City’s financial policies, adopted by City Council, the major operating funds of the City are required to maintain an 8% minimum ending budget balance expressed as a percentage of operating revenues T excluding the beginning budget balance. E. Major Transfers The Electric Revenue Fund and Water/Wastewater Fund annually transfer a budgeted portion of their revenues to the General Fund. In this fiscal year transfers were also made from the Realty Transfer Tax Fund, Municipal Street Aid Fund, Electronic Red Light Safety Program (ERLSP) Fund, State Department of Transportation (D.O.T.) Fund, and Police Grant Fund to the General Fund. The purpose of these transfers is to provide routine D subsidies to the General Fund for operating functions, capital project expenditures and debt service requirements. All transfers between the General Fund and the non-major governmental funds are netted R in the government-wide financial statements. F. Inventories and Prepaid Items Both inventories and prepaid items are accounted for using the consumption method. Inventories are treated as operational expenditures at the time of use rather than at the time of purchase for both the governmental and proprietary funds. Prepaid expenses are reflective of insurance policies and commitments due on July 1 for the following fiscal year. The warehouse inventories, consisting mostly of parts and supplies, are maintained on a perpetual inventory basis. Inventories of all funds are valued at cost and net of reserves, utilizing a weighted moving average method of valuation. The City maintains inventory reserves to charge off any damaged or obsolete items. The Electric Revenue Fund maintains fuel inventory for the generating assets on a perpetual basis and utilizes the weighted moving average method of valuation.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 61 G. Cash and Investments The City's cash and cash equivalents consist of cash on hand, demand deposits and short- term investments with original maturities of three months or less from the date of acquisition. Investments consist of United States Government and its agencies notes and bonds, corporate bonds and common stocks and open-end mutual funds. The fair value of investments is determined by current market value. H. Accounts Receivable Allowances for uncollectible accounts are maintained and uncollectible accounts are charged off against these allowances. The authority to write off accounts is vested with the City Council. Current balances of allowances are as follows: AF General Fund Water/Wastewater Fund Electric Revenue Fund I. Restricted Assets $154,086 108,234 386,346 T Certain assets are restricted because their use is limited by bond covenants, endowments, or other similar third party restrictions. Restricted assets as of June 30, 2013 total $37,687,221 including cash and cash equivalents of $9,766,107 and $27,921,114 in investments. Of this amount, $1,637,795 is attributed to governmental activities and $36,049,426 is attributable to business-type activities. D J. Unbilled Service Receivables The City follows a policy of billing for services in accordance with billing cycle procedures. All known services rendered are billed and incorporated in the books at the end of the fiscal R year. Billing information which is unreported by June 30, 2013, by the operating departments is billed and accounted for in the month the information is received. K. Bond Accounts/Issuance Costs The City has elected to recognize bond discounts and issuance cost in governmental funds, as well as the proprietary funds, as a current period expense in accordance with GASB 65. As of June 30, 2013 the unamortized bond discounts and issuance costs held by the General fund and the Proprietary funds have been expensed L. Deferred inflows of resources In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 62 accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes, demolitions, general billings, grass cutting, police extra-duty, and State grants. M. Fund Balances and Net Position Governmental fund balances are reported based on a hierarchy of constraints on the nature or specific purpose to which the funds can be spent. The classifications of fund balance are as follows: • The Non-spendable fund balance classification includes amounts that cannot be spent either because they are in a non-spendable form or because they are legally AF or contractually required to be maintained intact. • The Restricted fund balance classification includes amounts that can be spent only for specific purposes because of the City Charter, the City Code, state or federal laws, or externally imposed conditions by grantors or creditors. • The Committed fund balance classification includes amounts that can be used only for specific purposes determined by the formal action of a City ordinance which is T approved by City Council majority vote the highest level of decision-making authority. • The Assigned fund balance classification includes amounts authorized and established by City Council. The City’s Financial Policies as adopted by City Council includes the purpose and description of all classes of fund balance. Modifications require City Council approval. The city considers restricted, committed, or assigned amounts to have been spent when a related expenditure is incurred. Proprietary funds report net position in three categories: DR 1) Invested in capital assets net of related debt; 2) Restricted 3) Unrestricted Fund balances and net position are further explained in Note 7. N. Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. DEPOSITS AND INVESTMENTS A. Cash in Bank and Cash Equivalents

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 63 Custodial credit risk – deposits. The bank collateralizes the City of Dover’s deposits over and above those covered by the $250,000 FDIC Insurance limit with specific securities, which are ‘marked to market’ daily against the aggregate balances. The market value of the collateral is at a minimum of or equal to 102% of the amount of applicable deposits. Collateral consists solely of either full faith and credit obligations of the United States Government or fixed rate obligations of agencies or instruments of the United States Government. On June 30, 2013, the carrying amount of unrestricted cash totaled $6,950,930 and the bank cash balances totaled $6,339,903. The carrying amount of restricted cash totaled $9,766,107 and the bank cash balances on restricted accounts totaled $9,795,432. The restricted deposits are held by the City for bond related transactions, special purpose operating and capital grants. Fiduciary fund deposits of $8,607,553 are excluded. B. Investments AF The City Council has adopted an investment policy which is reviewed every two years and updated as needed for best practices. The Pension Boards have their own distinct investment policy over the Pension Trust funds since the objectives differ from those of the T City. The City investments are segregated from the Pension Trust investments for clarity. As of June 30, 2013, the City had the following investments: i. Investments Held by Third Party Custodian Investment Type Fair Value (Years) Government-Wide: Fixed income securities: U.S. Government Treasuries $ 13,679,771 1.59 DR U. S. Government Agencies Municipal Obligations Corporate Bonds Certificate of Deposit Fair Value of fixed income securities Portfolio weighted average maturity Other investments: Money Market Mutual Funds & Certificate of Deposit Equity Stock and Other Total Other Investments Total Government-Wide Investments 21,571,889 5,042,288 17,963,293 3,193,680 $ 61,450,921 223,259 23,157 246,416 $ 61,697,337 2.41 2.55 2.91 1.55 2.34 Interest rate risk: As a means of limiting its exposure to fair value losses arising from rising interest rates the City’s investment policy limits U.S. Government securities to a maximum maturity of 10 years from the date of purchase. For most other securities, the maximum maturity is five years from the date of purchase. Short-term cash flow balances are invested up to one year. The investments are held in the City’s name at a third party custodian.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 64 Credit risk: The City’s investment policy is to apply the prudent-person rule. Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital and, in general, avoid speculative investments. As of June 30, 2013, the City’s fixed income and short-term investments had the following risk characteristics as compared to the Standard’s & Poor’s: Authorized Investments Policy Minimum Rating Category Portfolio Ratings Percent Allocation U.S. Government N/A AA+ 22.20% U.S. Government Agency N/A AA+ 35.10% Certificates of Deposit and Short-Term A-1 Short-Term A-1+ 5.20% Time Deposits Long-Term AA Long-Term AA- Corporate Debt Issued by a US Corporation Commercial Paper A-1 N/A Corporate Notes/Bonds AA AA- to AAA 29.20% Repurchase Agreements Short-Term A-1 N/A AF Registered Investment Companies (money market funds) Municipal Obligations Long-Term AA AAAm AA Concentration of credit risk: The City has sector and issuer limitations on its investment portfolio as follows: AAAm AA to AA+ 8.20% T Authorized Investments U.S. Government U.S. Government Agency Certificates of Deposits and Time Deposits Corporate Debt Commercial Paper Corporate Notes/Bonds Delaware Domicled Institutions Sector and Issuer Restrictions Up to 100% per sector Up to 100% per sector Up to 25% per sector; 5% per issuer Up to 25% per sector; 5% per issuer Up to 50% per sector; 5% per issuer Up to 20% per sector; 5% per issuer D Repurchase Agreements Up to 25% per sector Registered Investment Companies Up to 25% per sector (money market funds) Mortgage-Backed Securities Up to 50% per sector; 5% per issuer R ii. Municipal Obligations Up to 30% per sector; 5% per issuer Investments Held by Trustee for Post Employee Benefits & Pensions

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 65 Investment Type Fair Value (Years) Other Postemployment Benefits (OPEB) and Pension Funds (Trustee held): Corporate Bonds - OPEB Trust $ 4,840,623 1.72 Short-term corporate bond open-end mutual funds 340,395 0.08 Intermediate-term corporate bond open-end mutual funds 5,275,041 1.50 Long-term corporate bond open-end mutual funds 6,216,774 3.70 Fair value of fixed income investments 16,672,833 Portfolio weighted average maturity 1.75 Other investments: Domestic equity open-end mutual funds 18,282,026 AF International equity open-end mutual funds 11,629,551 Fair value of other investments 29,911,577 Total fair value OPEB and pension funds $ 46,584,410 The Pension Trust and OPEB Trust have their investments exclusively in open-end mutual funds, with limits on its investments as follows: T Authorized Investments Pension Plans Domestic Equities: Large Cap Value Large Cap Growth Mid Cap Small Cap Real Estate/REIT Non-US Stock: Target% 10.00% 11.00% 5.00% 5.00% 5.00% Benchmark S&P/Citi 500 Value S&P/Citi 500 Growth S&P/Citi Mid-Cap 400 Value S&P/Citi Small Cap 600 Value FTSE NAREIT Equity REIT D Non-US Equity Non-US Small Cap Emerging Markets: R Emerging Markets Fixed Income Short Term Bonds Inflation Protected Bonds Intermediate Term Bonds Long Term Bonds Cash & Cash Equivalents 10.00% 15.00% 0.05% 2.00% 13.00% 19.00% 4.50% MSCI EAFE MSCI EAFE Small Cap MSCI EM (Emerging Markets) BofA Merrill Lynch 1-3 Yr Corp Barclays US Treasury US TIPS TR Barclays Cap Interm US GOVT/Credit Index Barclays Cap Long GOVT Credit Index CitiGroup 3 Month Tbill Custodial credit risk-investments: For an investment, this is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. To avoid custodial credit risk, it is the City’s policy to have its investments held at a third party custodian in the City’s name.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 66 4. CAPITAL ASSETS A summary of the Capital asset activity for the year ended June 30, 2013 is presented below: Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated Land $ 3,958,887 $ - $ - $ 3,958,887 Construction in progress 16,759,414 4,229,390 20,871,649 117,155 Total capital assets, not being depreciated 20,718,301 4,229,390 20,871,649 4,076,042 Capital assets, being depreciated: Buildings 10,941,377 19,612,149 - 30,553,526 Furniture and fixtures 180,350 653,372 - 833,722 AF Equipment 6,965,654 750,636 - 7,716,290 Vehicles 4,677,659 192,999 212,198 4,658,460 Lights 614,531 - - 614,531 Improvements other than buildings 39,696,715 305,225 - 40,001,940 Books and audio visuals 8,115 - - 8,115 D.R.M.O. police equipment - - - - Total capital assets, being depreciated 63,084,401 21,514,381 212,198 84,386,584 T Less accumulated depreciation for: Buildings (3,916,836) (292,575) - (4,209,411) Furniture and fixtures (169,965) (44,410) - (214,375) Equipment (5,247,449) (379,625) 104,968 (5,522,106) Vehicles (3,176,538) (453,158) 88,091 (3,541,605) Lights (455,182) (9,952) - (465,134) Improvements other than buildings (19,100,657) (1,345,184) - (20,445,841) Books and audio visuals (8,136) - - (8,136) D.R.M.O. police equipment - - - - Total accumulated depreciation (32,074,763) (2,524,904) 193,059 (34,406,608) Total capital assets, being depreciated, net 31,009,638 18,989,477 19,139 49,979,976 DR Governmental activities capital assets, net (continued) $ 51,727,939 $ 23,218,867 $ 20,890,788 $ 54,056,018

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 67 (continued) Beginning Ending Balance Increases Decreases Balance Business-type activities: Electric Revenue Fund Capital assets, not being depreciated Land $ 1,458,066 $ - $ - $ 1,458,066 Construction in progress 789,014 1,253,188 703,293 1,338,909 Total capital assets, not being depreciated 2,247,080 1,253,188 703,293 2,796,975 Capital assets, being depreciated Buildings 17,456,628 162,721 - 17,619,349 Production 64,610,399 445,707 16,057 65,040,049 Transmission 33,106,748 910,689 6,751 34,010,686 Distribution 60,680,365 1,139,933 67,829 61,752,469 Administration 1,634,017 109,737 - 1,743,754 AF Vehicles 640,096 22,118 36,338 625,876 Total capital assets, being depreciated 178,128,253 2,790,905 126,975 180,792,183 Less accumulated depreciation for: Buildings (11,400,308) (395,571) - (11,795,879) Production (41,416,622) (1,281,863) 16,057 (42,682,428) Transmission (10,344,554) (1,195,920) 3,457 (11,537,017) Distribution (25,322,267) (1,574,515) 64,536 (26,832,246) T Administration (1,196,545) (121,987) 2,000 (1,316,532) Vehicles (464,219) (51,646) 34,338 (481,527) Total accumulated depreciation (90,144,515) (4,621,502) 120,388 (94,645,629) Total capital assets, being depreciated, net 87,983,738 (1,830,597) 6,587 86,146,554 Total electric revenue fund capital assets, net 90,230,818 (577,409) 709,880 88,943,529 Water/Wastewater Fund Capital assets, not being depreciated Land 163,240 - - 163,240 D Construction in progress 2,792,579 1,774,185 3,477,577 1,089,187 Total capital assets, not being depreciated 2,955,819 1,774,185 3,477,577 1,252,427 Capital assets, being depreciated R Plant, wells, pumping stations, and storage 15,718,500 451,166 - 16,169,666 Distribution mains, hydrants, and accessories 17,673,573 2,392,065 - 20,065,638 Sewage plant mains, and pumping stations 31,580,569 1,334,502 - 32,915,071 Vehicles and equipment 4,578,855 520,441 78,932 5,020,364 Total capital assets, being depreciated 69,551,497 4,698,174 78,932 74,170,739 Less accumulated depreciation for: Plant, wells, pumping stations, and storage (6,708,797) (332,879) - (7,041,676) Distribution mains, hydrant, and accessories (5,810,392) (372,108) - (6,182,500) Sewage plant mains, and pumping stations (11,164,961) (705,400) - (11,870,361) Vehicles and equipment (3,322,671) (295,420) 78,932 (3,539,159) Total accumulated depreciation (27,006,821) (1,705,807) 78,932 (28,633,696) Total capital assets, being depreciated, net 42,544,676 2,992,367 - 45,537,043 Total water/wastewater fund capital assets, net 45,500,495 4,766,552 3,477,577 46,789,470 Business-type activities capital assets, net $ 135,731,313 $ 4,189,143 $ 4,187,457 $ 135,732,999

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 68 Depreciation expense was charged to functions/ programs of the primary government as follows: Governmental activities: General government $ 11,625 Central services 90,771 Public safety 447,858 Public works 1,644,602 Library and recreation 266,892 Financial administration 63,156 Total depreciation expense - governmental activities $ 2,524,904 5. LONG -TERM OBLIGATIONS AF A. Summary of Bonded Indebtedness by Issue Governmental Activities Original Remaining Interest Maturity Arbitrage Purpose T 2003 General Obligation Bonds $3,430,000 $990,000 3.870% 7/1/04 - 7/1/16 No Refunding of '92 &'95 issues 2012 General Obligation Bonds $3,500,000 $3,488,997 2.600% 6/25/13 - No Construction of New Library, Street Paving 5/25/19 Program Business Type Activities Water/Wastewater Bonds 2000 State of Delaware - $750,000 $324,940 3.600% 10/1/00 - 4/1/20 No Wastewater Pump Station # 7 - Leipsic Revolving Loan Fund - Municipal Revenue 2003 Revenue Bonds $7,980,000 $2,300,000 3.790% 7/1/04 - 7/1/23 Yes Complete refund 1986B Series; partial refunding 1993 and 1993A Series; expansion and upgrades DR 2009 State of Delaware - Revolving Loan Fund - Municipal Revenue 2010 State of Delaware - Revolving Loan Fund - Municipal Revenue 2011 State of Delaware - Revolving Loan Fund - Municipal Revenue Electric Revenue Bonds 2010 Revenue Bonds $5,581,059 $2,404,017 $765,060 $8,810,000 $5,344,454 $2,254,263 $765,060 $5,440,000 2.000% 12/1/12 - 12/1/31 2.470% 4/1/12 - 10/1/30 2.000% 6/1/12 - 12/1/31 1.777% 7/1/11 - 7/1/15 No No No of water and sanitary sewer systems Pump station replacements/upgrades and sanitary sewer main relining Water quality improvements and main replacements Pump station replacements/upgrades and sanitary sewer main relining (Coverage ratio on Water/Wastewater Bonds requires net revenues to be at least 1.2 times the maximum annual debt service) Yes Complete refund 2004 Series 2008 Revenue Bonds $22,200,000 $20,670,000 4.810% 7/1/09 - 7/1/33 Yes Expansion and upgrades of electric system (Coverage ratio on Electric Bonds requires net revenues to be at least 1.25 times the maximum annual debt service) B. Status as of June 30, 2013 – General Obligation Bonds Long-term indebtedness of the City of Dover consists of the following general purpose General Obligation Bonds:

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 69 2003 Series $ 990,000 2012 Series 3,488,997 $ 4,478,997 The total General Obligation Bonds outstanding amount includes $430,000 payable within one year. C. Change in Long-Term Debt The following tables summarize the debt transactions for the year ended June 30, 2013: i. General Long-Term Debt Item Compensated Absences General Obligation Bonds OPEB Obligation AF Sub-total of General Long-Term Debt Balance 7/01/12 $ 2,280,124 2,126,500 11,179,542 $ 15,586,166 Additions $ 1,231,423 2,648,500 1,932,772 $ 5,812,695 Reductions $ 1,430,477 $ 296,003 - 1,726,480 Balance 6/30/13 $ 2,081,070 4,478,997 13,112,314 $ 19,672,381 Payable within $ $ one Year 1,014,753 430,000 1,444,753 - ii. Enterprise Funds Debt Water/Wastewater Fund Item Compensated Absences T Revenue Bonds-Water and Wastewater State of Delaware Municipal Revenue Bond - Wastewater $ Balance 7/01/12 184,335 2,610,000 365,083 $ Additions 109,804 - - Reductions $ 122,484 310,000 40,144 $ Balance 6/30/13 171,655 2,300,000 324,939 Payable within $ one Year 76,444 320,000 41,602 DR State of Delaware Municipal Revenue Bond - Wastewater State of Delaware Municipal Revenue Bond - Water State of Delaware Municipal Revenue Bond - Wastewater (a) OPEB Obligation Sub-total of Water/ Wastewater Fund 5,581,059 2,354,745 65,822 407,997 $ 11,569,041 $ 637,238 41,019 788,061 - - $ 236,604 100,482 809,714 - - Loan program for Wastewater projects. The amount of the Wastewater Bond is $765,060. The loan 5,344,455 2,254,263 program is set up for the City to draw down the funds as capital expenses are paid. The City pays 703,060 449,016 $ 11,547,388 (a) During fiscal year 2011 the City issued revenue bonds through the State of Delaware Revolving Fund interest only during the construction period, which is capitalized with the asset. The financed capital $ 241,360 103,121 15,287 - 797,814 projects have been completed by June 30, 2013 the final drawdown of $62,000 will be received in Fiscal 2014.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 70 iii. Enterprise Funds Debt Electric Revenue Fund Balance Balance Payable within Item 7/01/12 Additions Reductions 6/30/13 one Year Compensated Absences $ 663,066 $ 244,088 $ 279,438 $ 627,716 $ 176,303 Revenue Bonds 28,220,000 - 2,110,000 26,110,000 2,150,000 Sub-total of Electric Revenue Fund 28,883,066 244,088 2,389,438 26,737,716 2,326,303 Sub-total of Enterprise Fund Debt 40,452,107 1,032,149 3,199,152 38,285,104 3,124,117 Grand Totals of Long-Term Debt $ 56,038,273 $ 6,844,844 $ 4,925,632 $ 57,957,485 $ 4,568,870 AF The City does not receive reimbursement for debt service from any other governmental units. The City does not have any special assessment debt or defeased bonds as of June 30, 2013. D. Debt Service Requirements T The following are the debt service requirements to maturity on the City's general obligation bonds and revenue bonds. i. Governmental Activities: 2003 General 2012 General Fiscal Obligation Bonds Obligation Bonds Year Principal Interest Principal Interest Total 2014 $295,000 $32,440 $ 134,991 $ 90,412 $ 552,843 2015 220,000 22,950 138,650 86,753 468,353 2016 230,000 14,285 142,123 83,280 469,688 DR ii. 2017 2018 2019 Total 245,000 - - 4,900 $990,000 $74,575 Business-type Activities a. Water/Wastewater Fund - - 146,142 150,041 2,777,050 79,261 75,362 65,457 $3,488,997 $480,525 475,303 225,403 2,842,507 $ 5,034,096

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 71 Water/Wastewater Fund Fiscal 2003 Revenue Bonds 2000 Municipal Revenue Bonds Year Principal Interest Principal Interest 2014 $ 320,000 $ 89,813 $ 41,602 $ 11,327 2015 330,000 77,783 43,113 9,816 2016 155,000 68,490 44,679 8,250 2017 160,000 62,268 46,302 6,627 2018 165,000 55,685 47,984 4,945 2019 175,000 48,584 49,727 3,202 2020 180,000 40,995 51,533 1,396 2021 190,000 32,945 - - 2022 200,000 24,265 - - 2023 210,000 14,935 - - 2024 215,000 5,053 - - Total $ 2,300,000 $ 520,814 $ 324,940 $ 45,561 Fiscal 2009 Municipal Revenue Bonds Year 2014 $ 2015 AF Principal 241,360 $ 246,211 Interest 105,688 $ 100,837 Water/Wastewater Fund 2010 Municipal Revenue Bonds Principal 103,121 $ 105,831 Interest 58,168 $ 55,459 2011 Municipal Revenue Bonds Principal 15,287 $ 31,405 Interest 13,775 26,719 T 2016 251,160 95,888 108,611 52,679 32,547 25,578 2017 256,208 90,840 111,464 49,825 33,729 24,395 2018 261,358 85,690 114,392 46,897 34,955 23,170 2019 266,611 80,437 117,397 43,892 36,225 21,900 2020 271,970 75,078 120,481 40,808 37,541 20,584 2021 277,437 69,611 123,646 37,643 38,905 19,220 2022 283,013 64,035 126,895 34,395 40,318 17,806 2023 288,702 58,346 130,228 31,061 41,783 16,341 2024 294,505 52,543 133,649 27,640 43,302 14,823 2025 300,424 46,624 137,160 24,129 44,875 13,250 2026 306,463 40,585 140,764 20,526 46,505 11,619 2027 312,623 34,425 144,461 16,828 48,195 9,929 D 2028 2029 2030 2031 R 2032 Total $ 318,906 325,316 331,855 338,526 171,806 5,344,454 $ b. Electric Fund 28,142 21,732 15,193 8,522 1,718 1,075,934 $ 148,257 152,151 156,148 79,606 - 2,254,263 $ 13,033 9,138 5,141 1,039 - 568,299 $ 49,946 51,761 53,642 55,591 28,548 765,060 $ 8,178 6,364 4,483 2,534 514 281,182

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 72 Electric Revenue Fund Total Fiscal 2008 Revenue Bonds 2010 Revenue Bonds Business-type Year Principal Interest Principal Interest Activities 2014 $ 430,000 $ 975,704 $ 1,740,000 $ 193,000 $ 4,338,844 2015 450,000 953,704 1,810,000 130,700 4,371,577 2016 475,000 930,579 1,890,000 47,250 4,185,709 2017 695,000 901,329 - - 2,437,987 2018 730,000 865,704 - - 2,435,779 2019 765,000 831,580 - - 2,439,554 2020 800,000 798,706 - - 2,439,092 2021 840,000 763,856 - - 2,393,263 2022 880,000 726,756 - - 2,397,483 2023 925,000 686,694 - - 2,403,091 2024 970,000 644,056 - - 2,400,571 2025 1,015,000 599,394 - - 2,180,856 AF2026 2027 2028 2029 2030 2031 2032 1,065,000 1,120,000 1,175,000 1,230,000 1,290,000 1,355,000 1,420,000 551,928 501,400 446,125 386,000 323,000 256,875 187,500 - - - - - - - - - - - - - - 2,183,390 2,187,862 2,187,587 2,182,462 2,179,462 2,097,692 1,810,086 T 2033 1,485,000 114,875 - - 1,599,875 2034 1,555,000 38,875 - - 1,593,875 Total $20,670,000 $12,484,639 $ 5,440,000 $ 370,950 $ 52,446,095 The preceding tables do not include compensated absences. E. Bond Discounts/Issuance Cost Unamortized The following remaining bond discounts/issuance costs were expensed in the funds as of June 30, 2013: DR General Fund GO Bonds Discounts/Issuance Costs Water/Wastewater Bonds Discounts/Issuance Costs Electric Revenue Bonds Discounts/Issuance Costs 6. RESTRICTED NET POSITION In the government-wide financial statements the restricted net position of the governmental activities and business type activities are as follows: $40,685 $111,355 $224,975

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 73 Governmental Activities Grants-capital projects This represents the State DOT grant $85,867 reported in the non-major special revenue funds. Grants-public safety These represent the Police grants, ERLSP 216,344 grant and Substance Abuse Prevention grant in the special revenue type funds. Other Purposes These represent all other funds reported in 441,065 the special revenue type, except the grants reserved for capital construction and public safety. Also included is an endowment from Mary Elizabeth Paton and patronage stocks. AF Total Restricted Net Position Business Type Activities Net restricted position for construction purposes - expendable $743,276 T Water/Wastewater Restrictions on investments $3,890,328 imposed by bond covenants Electric Restrictions on investments 30,775,408 imposed by bond covenants Total Restricted Net Position $34,665,736 7. FUND BALANCES & NET POSITION In the governmental fund financial statements, fund balances are reported based on a DR hierarchy of constraints on the specific purposes for which the funds can be spent. Non-spendable fund balances represent items that are not in spendable form and not expected to be converted to cash. This criterion also applies to the corpus of permanent funds, which would include the Mary Paton library endowment. Restricted fund balances represent amounts that have externally imposed restrictions by creditors, grantors, enabling legislation or laws and regulations of other governments. The fund balances of the City’s grant funds fall into this category, as well as a couple of accounts that have contractual restrictions imposed by a third party. Committed fund balances represent amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority. These amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action to which it previously committed the amount. Assigned fund balances represent amounts constrained by the City’s intent to be used for specific purposes. These amounts represent the City’s capital asset appropriations and the City’s matching funds for grant related projects. Also, included are donated assets to be used for law enforcement purposes. The constraints placed on assigned fund balances are implemented through internal processes such as a budget ordinance

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 74 or motion of City Council. Therefore, they do not have the same restrictive nature of a restricted fund balance. Unassigned fund balance is the residual amount that has not met the criteria for the aforementioned classifications. The unassigned fund balance is available for expenditures as they are incurred. The composition of the City fund balances is as follows: Other General Governmental Fund Funds Total Fund balances: AF Nonspendable: Inventory & Prepaids $ 205,863 $ - $ 205,863 Patronage Stock 16,594 - 16,594 Library Endowment 5,000 - 5,000 Subtotal Nonspendable: 227,457 - 227,457 Restricted for: T Library Endowment Interest 1,658 - 1,658 Verizon cable franchise 129,579 - 129,579 Highway resurfacing - 85,867 85,867 ERLSP - 100 100 Realty Transfer Tax - 100 100 CDBG - 4,806 4,806 CDBG- State for ADA Improvements - 3,931 3,931 Substance Abuse Prevention - 41,008 41,008 Municiple Street Aid - 251,558 251,558 Library Grants - 27,839 27,839 DR Police Grants Subtotal Restricted for: Committed to: Contingency Parkland Subtotal Committed to: Assigned to: Capital Assets Police Investigations Highway resurfacing Subtotal Assigned to: Unassigned 131,237 733,985 202,914 936,899 3,504,253 14,759 - 3,519,012 3,391,714 - 175,236 590,445 - - - - - 123,349 123,349 - 175,236 721,682 733,985 202,914 936,899 3,504,253 14,759 123,349 3,642,361 3,391,714 Total fund balances $ 8,206,319 $ 713,794 $ 8,920,113 8. PROPERTY TAXES Property taxes are levied under the authority of the City Charter on all real property located within the City limits. The City assessor is in charge of the property assessments and the City Council levies the property tax rate. The following table provides important dates with reference to property taxes.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 75 Beginning of fiscal year for taxes July 1 Tax rate levied June Taxes billed July 1 Taxes due and payable at par July 31 Penalty of one and one half percent starts August 1 Lien established on property for property taxes July 1 Tax sales of property with unpaid taxes 2 years from date of billing There are no material delinquent property taxes as of June 30, 2013. 9. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of June 30, 2013 is as follows: AF A. Due to/from other funds – Charges and Allocations Receivable Fund General Fund Payable Fund Non-major governmental funds Water/ Wastewater Fund Electric Revenue Fund Amount $76,741 103,415 272,652 T Water/ Wastewater Fund Electric Fund Non-Major Governmental Funds Total General Fund General Fund Water/Wastewater Fund Non-major governmental funds General Fund 50,989 109,286 13,437 8,282 56,110 $690,912 DThe outstanding balances between funds result mainly from the time lag between the R dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. B. Interfund Transfers Transfers Out General Fund Transfers In - Electric Fund Total Non-major governmental funds $2,166,208 $8,282 $2,174,490 Water/ Wastewater Fund 500,000 - 500,000 Electric Revenue Fund 10,000,000 - 10,000,000 Total $12,666,208 $ 8,282 $ 12,674,490 Transfers are generally made for the purpose of providing operating capital or debt service subsidies to the receiving fund in accordance with City policy.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 76 10. RENTAL INCOME The City currently has three lease agreements at the Garrison Oak Technical Park (GOTP) that are included in miscellaneous revenue in the General Fund. The first lease is with a farmer for agricultural use of the undeveloped land on the GOTP which generated $34,390 in rental income. The second lease is with LS Power – White Oak Solar Energy LLC, which generated $57,080 in rental income and the third lease is with Garrison Energy Center which generated $25,760 in rental income. The City’s Electric Revenue Fund owns a professional office building which houses the City’s Customer Service, Finance and Information Technology Departments. At June 30, 2013, the City had leases with three tenants for the remaining space available. AF Lease revenue is $234,488 in the Electric Revenue Fund consisting of office space rental of $150,640, substation rental of $30,000 and pole rentals of $53,848. The City maintains several water tower leases for a group of telecommunications companies. These are recorded as revenue of the Water/Wastewater Fund and total $300,067 in the current fiscal year. T 11. MATERIAL COMMITMENTS A. The City budgets monies to assist the volunteer fire company with payments on two pieces of firefighting equipment. The apparatus payments are budgeted as expenditures in the Governmental Capital Projects Fund budget. The payments are as follows: DR Ladder #2 Ladder #1 $ 92,901 145,614 B. The City entered into a five-year management contract with The Energy Authority effective July 1, 2011 to provide a market-based approach for power supply management. The Energy Authority manages energy purchases and utilizes the City’s generating assets to provide a level of rate stability as necessary to mitigate the effects of rising and volatile energy prices. The Energy Authority also provides oversight of the plant operator contract and monitors their performance. C. The City also entered into a management contract with North American Energy Services (NAES) to operate and maintain the generating assets of the electric utility in May 2006. The City extended the contract with NAES in fiscal year 2010 through June 30, 2013. The City has incorporated the budgets and financial activity of the plant into its procedures used for all other divisions of the electric utility. These procedures include a line item budget and adherence to City policies. All personnel are employed by NAES and personnel costs are billed to the City bi-weekly. Any capital improvements are included in the City’s capital improvement plan. The contract also provides for a monthly management fee and a performance incentive based on budget and plant performance. The fiscal year 2013 annual cost for management and the incentive is $336,490 and is included in the plant-operating

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 77 budget. D. The City is the guarantor on a $1.3 million loan held by the Downtown Dover Partnership. The loan is secured by a parcel in the downtown business district that the Downtown Dover Partnership is marketing for its redevelopment initiative. The interest on the loan is paid monthly from rental receipts the Partnership receives from its current tenants in the property. Originally the principal balloon payment was due in July 2013. It has been extended to July 2014. 12. FORWARD CONTRACTS Pursuant to the July 1, 2011 Energy Management Agreement between the City and The AF Energy Authority (TEA), the City has formed an Executive Risk Management Committee (“ERMC”). The ERMC has adopted a Governing Policy for Energy Commodity Risk Management (Policy) aimed at addressing the energy commodity risks and the Procedures and Controls Manual for Energy Commodity Risk Management (“Procedures Manual”). The Procedures Manual further describes the risk management philosophy under which TEA, the City’s designated provider of energy risk management T services conducts its activities. The Procedures authorize TEA to enter into physical forward transactions which shall be governed by Edison Electric Institute (EEI), North American Energy Standards Board (NAESB), or similar agreements with counterparties approved by the City. These agreements will enable the City to hedge the forward price of purchased power, natural gas or fuel oil for delivery as needed to meet its load requirements. No speculative transactions for volumes in excess of forecasted power and fuel needs are DR permitted. TEA also provides advisory services to the City for financial hedges in determining if they would be beneficial to mitigate market and credit risk. Under the Procedures the City will not extend credit to any potential counterparty that has a credit rating below investment grade (defined as BBB as rated by Standard & Poor’s or Baa2 as rated by Moody’s). Any counterparty that is unrated by either S & P or Moody’s must be approved by the ERMC prior to the execution of any trading activities. Credit risk is mitigated through the use of collateral thresholds, credit limits, maximum nominal exposure and term limitations. A collateral threshold is the amount of unsecured credit granted to the counterparty. Unsecured credit exposure includes amounts owed by the counterparty, whether billed or not, and the market-to-market differences in value of any collateral held. Any net exposure above the collateral threshold will require the posting of collateral by the counterparty. Collateral thresholds, term limitations and credit exposure limits are subject to maximums as established by the ERMC.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 78 Counterparty Credit Risk ($000’s) Maxim um Am ount Counterparty of Loss due to Counterparty Line Counterparty or Guarantor Credit Risk w /o Collateral Description Threshold Availability Credit Rating Respect to Collateral ($) No Collateral if exposure under Barclays Bank, PLC A- $15,000 $13,856 $1,144 specified threshold No Collateral if exposure under BP Energy Company BBB+ $15,000 $15,000 $0 specified threshold No Collateral if exposure under Coectiv Energy Supply, Inc BBB- $3,000 $3,000 $0 specified threshold Up to $15,000 is guaranteed buy DB Energy Trading, LLC A $15,000 $13,648 $1,352 Deutsche Bank AG No Collateral if exposure under EDF Trading North America, LLC A- $18,000 $17,628 $372 specified threshold No Collateral if exposure under Exelon Generation Company, LLC BBB $30,000 $24,951 $5,049 AF specified threshold No Collateral if exposure under specified threshold in the event Integrys Energy Services, Inc BBB+ $10,000 $9,216 $784 of potential default, performance from counter party is required No Collateral if exposure under Macquarie Energy, LLC A $15,000 $14,023 $977 specified threshold Unlimited dollars are guaranteed Morgan Stanley Capital Group, Inc BBB+ $10,000 $8,974 $1,026 by Morgan Stanley Up to $10,000 is guaranteed by T NextEra Energy Pow er Marketing, LLC BBB+ $10,000 $6,884 $3,116 NextEra Energy Capital Holdings No Collateral if exposure under Public Service Electric and Gas Company BBB+ $12,000 $12,000 $0 specified threshold No Collateral if exposure under Sempra Energy Trading BBB+ $15,000 $15,000 $0 specified threshold 13. SUBSEQUENT EVENTS On August 15, 2013 the City closed on Series 2013 Water and Sewer Revenue Bonds in the amount of $6,125,000. The proceeds from the sale of the Bonds will be used to (i) finance certain water and sewer capital projects in relation to the Calpine project, (ii) D refund, on a current refunding basis, certain outstanding water and sewer bonds of the City of Dover, (iii) fund required reserves, if any, and, (iv) pay the costs of issuances of the Series 2013 Bonds. R 14. INSURANCE A. Health Insurance – State of Delaware The City participates in the State of Delaware Health Insurance Program. The State offers four health plan options. The administration of benefits is coordinated with Aetna and Blue Cross Blue Shield of Delaware. Pre-determined premiums consisting of the City and employee contributions are subsequently paid out to the State of Delaware. B. Workers’ Compensation Fund – Self-Insurance On July 1, 1990, the City began self-insuring its Workers’ Compensation insurance. For this purpose, the City has established a separate fund. Claims are processed and administered by a third party administrator. The City manages the revenue and expenditures in this fund and maintains all the records. The City maintains a fund balance to cover any incurred but not reported claims.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 79 The City’s actuary completed an updated valuation in fiscal year 2013. As of June 30, 2013, there is $481,951 reserved for open claims in this fund. An appropriate umbrella policy for the excess coverage has been purchased and is in effect as of June 30, 2013. The City received $61,625 in fiscal year 2013 for insurance reimbursements and amounts covered under the umbrella policy. Workers’ Compensation activity is as follows: 2013 2012 Claims payable beginning of year $474,281 $170,509 Claims incurred 433,214 1,769,964 Payment of claims (425,544) (1,466,192) Claims payable end of year $481,951 $474,281 AF C. Other than Health or Workers’ Compensation Insurance The City purchases commercial insurance policies to cover risks not insured through self-insurance funds. The City has designated a contingency account to provide for uninsured capital losses (See Note 7). There have been no significant reductions or T settlements exceeding coverage in the past five fiscal years. 15. COMPENSATED ABSENCES The City grants a specific number of vacation days with pay to its employees. Upon termination or retirement, an employee is paid for accumulated vacation days. The City also grants one paid sick day per month to all employees with the exception of employees covered by the International Brotherhood of Electric Workers (IBEW) contract. The IBEW employees are granted eleven sick days per year. DR The City of Dover follows a terminal leave policy which varies with each of the 4 unions as well as the non-bargaining group. The maximum accumulated sick days payable upon retirement is 150 days for 25 years of service. No accrued sick leave is paid when an employee is terminated. In the government-wide and proprietary fund financial statements, unpaid compensated absences are recorded as a liability as the vested employees' benefits accrue, to the extent it is probable that the employee will be paid for sick benefits at retirement. In governmental funds, compensated absences are recorded as expenditures as payments become due; accordingly, no liability is recorded in the Governmental Funds statement. Typically the General Fund has been used in prior years to liquidate the liability for compensated absences recorded in governmental activities. 16. OTHER POST EMPLOYMENT BENEFITS Plan Description On May 11, 2009 the City of Dover Other Post-Employment Benefits Trust (OPEB

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 80 Trust) was established pursuant to Section 115 of the Internal Revenue Code. Policy for and management of the OPEB benefits provided to retirees are the responsibility of the City of Dover. No stand-alone financial report is issued for the OPEB Trust. The OPEB Trust is a single-employer defined benefit plan. The OPEB Trust provides retirement medical coverage to pensioners and their eligible dependents in the City of Dover defined benefit and defined contribution pension plans. The City purchases health insurance from the State of Delaware through a cooperative purchasing arrangement permitted by State code. The State Office of Benefits provides the City with the medical insurance premiums by type of coverage and carrier during the budget cycle each year. The City also pays a five percent risk premium and contract administration fee for each contract in addition to the premium. Any premiums paid AF over or under the benefits paid out for City employees revert to the State. Membership of the plan consisted of the following at June 30, 2013: Retirees and beneficiaries receiving benefits 266 Terminated plan members entitled to but not yet receiving the benefits 14 T Active eligible plan members Total Substantially all City employees become eligible for post-retirement benefits if they reach retirement age while working for the City. The costs of providing these benefits are shared between the City and the retired employee. The Dover Organization of Employees (DOE) union employees hired after July 1, 1994 are not eligible for post- retirement medical benefits if they elect early retirement. The eligibility provisions are as follows: 308 588 DR • • • Age 55 with 10 years of continuing service, or If hired May 1, 1994 or later, Age 55, and whose attained age plus years of continuous service is equal to or greater than 80, or If hired before May 1, 1994, 25 years of continuous service, or has attained the age of 50 years and completed 20 years of continuous service Spouse and Survivor Coverage: Spouse and survivor coverage are both available under any of the plan options with similar retiree contributions with one exception. The International Brotherhood of Electrical Workers (IBEW) collective bargaining agreement does not include spouse and survivor coverage. Employer and Employee Contributions: The City started contract negotiations with its collective bargaining units in fiscal year 2012. The contract for the Fraternal Order of Police Lodge #15 was approved. As of July 1, 2012 the contract includes a provision for 15% employee contributions for all health care plans, including the individual coverage. The same provision was implemented for non-bargaining (management) employees as well effective July 1,

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 81 2012. Effective March 1, 2013 the IUE/DOE collective bargaining unit agreed to a 9.5% contribution of the total monthly individual coverage health care premium effective until July 1, 2013, after this date, these employees will be responsible for 15% of the total monthly individual coverage health care premium. The City is still in negotiations with the IBEW collective bargaining unit with proposed changes to employee contributions for all health care plans, including individual coverage. On July 27, 2012 a group of non-bargaining employees petitioned the Public Employment Relations Board for union representation by the American Federation of AF State, County, and Municipal Employees, Council 81. The petition was granted and a majority vote of the applicable employees approved the union affiliation. Contract negotiations began on July 11, 2013. As of June 30, 2013 these employees do not have a contract and will follow the same contributions as the non-bargaining employees until a contract is approved. T The City of Dover funds the other postemployment benefits for current retirees on a pay-as-you-go basis along with funding for future benefits at a rate that is approved in the annual budget, but not actuarially determined. Additional funding has also been provided on an ad hoc basis. The employer contributions towards retiree health care premiums this fiscal year are as follows: General Government $ 2,834,327 Water/Wastewater Fund 314,255 Electric Revenue Fund 871,196 D Total Benefit Provided $ 4,019,778 Transactions are recorded in the OPEB Trust for the payment of administrative and R investment expenses and financed through investment earnings. City appropriations and other employer contributions for health care are recorded in the OPEB Trust. The OPEB Board of Trustees is responsible for the management of the trust investments. Contributions The contribution rates for the employer are established annually by the budgeting process of the City. Those rates include an employer contribution based on projected pay-as-you-go financing requirements as a percent of premiums, with an additional amount to prefund benefits, which is not actuarially determined. Annual OPEB Cost and Net OPEB Obligation/ (Asset) The City’s annual OPEB cost is calculated based on the ARC of the employer, an amount actuarially determined in accordance with GAAP. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period of thirty years. Amounts “required” but not actually set aside to pay for these benefits are accumulated as part of the net OPEB obligations. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and the

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 82 City’s net OPEB obligation: Water/ Governmental Wastewater Electric Fund Total Activities Fund Activities Activities Annual Required contribution $6,098,972 $4,927,856 $361,274 $809,842 Interest on OPEB obligation 549,345 585,403 21,850 (57,908) Adjustment to annual required contribution (700,200) (746,160) (27,850) 73,810 Annual OPEB Cost 5,948,117 4,767,099 355,274 825,744 Employer Contributions (4,019,778) (2,834,327) (314,255) (871,196) Increase/(decrease) in net OPEB obligation 1,928,339 1,932,772 41,019 (45,452) Net OPEB obligation (asset) at beginning of year 10,463,722 11,179,542 407,997 (1,123,817) Net OPEB obligation (asset) at end of year $12,392,061 $13,112,314 $449,016 ($1,169,269.0) The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the AF plan, and the net OPEB obligation thru fiscal year 2013 are as follows: Percentage Fiscal Year Annual of Annual Net Ended OPEB OPEB Cost OPEB June 30 Cost Contributed Obligation T 2011 2012 2013 7,625,628 7,528,602 5,948,117 43.5% 75.0% 67.6% The City did not meet its funding obligation for Fiscal Year 2013. In 2009 the City 8,580,431 10,463,722 12,392,061 elected a ten-year phase-in plan to achieve the appropriate funding level. During this time the City will be researching alternative benefit plan options to reduce the AAL and ARC. D Funded Status and Funding Progress As of June 30, 2013, the most recent GASB 45 Actuarial Valuation date, the plan was R 15.4% funded. The actuarial accrued liability for benefits was $71.02 million, and the actuarial value of assets was $10.9 million, resulting in an unfunded actuarial accrued liability (UAAL) of $60.1 million for the primary government. The covered payroll (annual payroll of active employees covered by the plan) was $17.3 million, and the ratio of the UAAL to the covered payroll was 347%. The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information regarding whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 83 Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the OPEB plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The Projected Unit Credit Cost Method was used to determine the Annual Required Contribution for the June 30, 2013 actuarial valuation. Investments are valued at market rates. The actuarial assumptions included a 5.25% investment rate of return, AF which is a blended rate of the expected long-term investment returns on plan assets and on the City’s own investments calculated based on the funded level of the plan at the valuation date, and an initial medical trend rate of 7% with an ultimate rate of 3.5%. The discount rate of 5.25% is representative of the ten-year phase-in plan. The UAAL is being amortized as a level dollar amount over 30 years based on an open group using a 0% rate of salary increase. The inflation assumption is 7.80% < 65 and 7.20% T >= 65. 17. DEFERRED COMPENSATION PLAN Effective November 14, 1983, the City added a self-directed 457 Deferred Compensation Plan to its employee benefit options. The plan is administered by the International City Management Retirement Corporation (RC). The assets are held in the name of each participant with the ICMA (International City/County Management Associations) Retirement Trust. Employees are eligible to make contributions to the DR plan not to exceed the ceiling set by federal regulations. The City later added an alternative investment firm for the Deferred Compensation Plan with Nationwide Retirement Solutions. In May 1994, the City offered to employees the 457 Deferred Compensation Plan as their pension plan in lieu of participation in the General Employee Pension Plan. At that time 41 employees opted out of the Defined Benefit Pension Plan and enrolled in the Deferred Compensation Plan. Currently, the ICMA 457 Deferred Compensation Plan has assets of $7,010,217 (market value) as of June 30, 2013, with 140 employees participating. The Nationwide plan has assets of $3,102,033 (market value) as of June 30, 2013 with 30 employees participating. Quarterly statements are mailed to each participant by the plan administrators. All administration fees are borne by the participants. All contributions are 100% vested upon election of the plan. Employees are eligible to withdraw or rollover to another plan the employer and employee benefits upon separation of service. Withdrawals prior to age 59½ could be subject to penalty. Employees who select the defined benefit plan or the defined contribution plan are also eligible for the 457 Deferred Compensation Plan. No matching employer contribution is made to the 457 Deferred Compensation Plan. As of June 30, 2013, there are 313 employees eligible to enroll in the 457 Deferred Compensation Plan.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 84 18. RETIREMENT PLANS The City participates and/or manages four retirement plans on behalf of its employees. Three of the pension plans are defined benefit plans and one is a defined contribution plan with two plan providers. Two of the defined benefit plans are closed to new hires. All full-time employees are required to enroll in a pension plan. During fiscal year 2013 the total wages were $20, 411,248 and the total pensionable wages were $17,217,327 for all full-time employees. The number of active employees as of June 30, 2013 is 313. A. Defined Contribution Plan Effective July 1, 2000, the City implemented an IRC 401a Money Purchase Plan “401a Plan,” a self-directed defined contribution plan, as an alternative choice for AF pension benefits. The contribution and funding requirements of the plan are established by the City and may be amended by the City. The plan is administered by the International City Management Retirement Corporation (RC). The assets are held in the name of each participant with the ICMA (International City/County Management Associations) Retirement Trust. Quarterly statements are mailed to each participant by RC. All administration fees are borne by the participants. T The City provides a 3% match of the employees required contribution to the 401a Plan, and up to an additional 3% to the 401a Plan for a potential total contribution of 6%, if the employee contributes up to an additional 3% to their 457 Plan (see note 17 – Deferred Compensation). The 401a Plan and 457 Plan contributions are calculated on base wages plus on-call pay, pay adjustments, and scheduled overtime. All full- time regular employees are eligible, excluding law enforcement personnel. Personnel that elect the defined contribution plan are not eligible for the defined benefit plan. All contributions are 100% vested upon election of the plan. To be DR eligible for benefit payments, the participant must meet the same eligibility requirements as the participants in the defined benefit plan. Employees are eligible to withdraw or rollover to another plan the employer and employee benefits upon separation of service. Withdrawals prior to age 59 ½ could be subject to penalty. As of June 30, 2013, there were 98 eligible full-time employees in the 401a plan. The City contributed a total of $229,642 on wages of approximately $4.1 million and employees contributed $125,976 to the 401a Money Purchase Plan and $456,508 to the 457 ICMA Deferred Compensation Plan and $97,467 to the Nationwide Deferred Compensation Plan. The market value of the 401a plan assets totaled $3,778,471 as of June 30, 2013. B. Defined Benefit Plans The City participates in three defined benefit pension plans: City of Dover Police Pension Plan (closed), City of Dover General Employee Pension Plan (closed), and State of Delaware County and Municipal Police Pension Plan. The City of Dover Police Pension Plan, a single employee defined benefit plan, covers all uniformed police officers hired prior to September 1, 1982. The City of Dover General Employee Pension Plan, a single employer defined benefit plan, covers all full-time

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 85 permanent employees, other than police officers. The State of Delaware County and Municipal Police Pension Plan, a multi-employer cost sharing defined benefit plan, covers all uniformed police officers hired on or after September 1, 1982. The City makes employer contributions to all three plans. The City holds and administers the assets of the two single-employer defined benefit plans and, accordingly, is required to prepare pension trust fund financial statements using the accrual basis of accounting. As of June 30, 2013 there were no outstanding payables. Separate pension fund financial statements for each plan have not been issued. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each plan are recognized when due, pursuant to AF formal commitments, to provide contributions. Benefits or refunds are recognized when due and payable in accordance with the terms of each plan. Investment management and consultant fees are paid from the Pension Trusts Funds. All actuarial costs are paid from other City funds. Total eligible full-time employee wages covered by the two active defined benefit T pension plans were $13.1 million this fiscal year. i. City of Dover Police Pension Plan This contributory pension plan began on January 1, 1970 under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71 through 62-84. The contribution and funding requirements of the plan are established by the City and may be amended by the City. It is a closed plan. The last active employee retired June 29, 2006. An officer’s pension right is vested upon the completion of 15 years of D continuous service. As of June 30, 2013, there are 48 retirees and beneficiaries receiving benefits. The percentage of covered payroll, which employees contribute, is stated in the City R Code, and is considered by the actuaries in their determination of the actuarial requirement for employer normal cost. Fully vested employees who have completed 20 to 25 years of continuous service are entitled to annual benefits equal to 2 ½% of their average earnings for each year of continuous service. The maximum benefit is 62 ½% of average earnings. If a participant terminates after completing 15 years of service, the participant will be eligible for a deferred benefit commencing at age 60 with a benefit accrued at the date of termination. In place of this vesting, participants may elect to receive their accumulated contributions. Disability benefits are paid to a participant who is totally or partially disabled in the performance of his or her duties. The total duty-connected disability benefit is payable monthly and equal to 75% of the monthly rate of earning at the time of disability. The partial duty-connected disability benefit is the accrued benefit at the date of disability if not less than 50% of average earnings. Disability benefits cease if the participant recovers or dies. If the disabled participant reaches his normal retirement date, the

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 86 benefit is reduced by one-third. Survivor’s benefits are payable monthly in an amount equal to 75% of the participant’s rate of earnings, for a duty related death. Survivor’s benefits are payable monthly in an amount not to exceed 25% of the participant’s rate of earnings, for a non-duty related death, if the participant has completed 10 years of service. If a retired participant dies, his or her spouse receives 50% of the benefit. All benefits under the plan, including survivor’s benefits, are increased 2% per annum. The plan investments are managed by the City of Dover Police Pension Board which is established in the City Code. The State contributes to the City of Dover Police Pension Plan on behalf of the City. AF The State assesses a .25% surcharge on insurance policies issued in the state. Each year this amount is allocated to the municipalities in Delaware in direct ratio to the number of officers employed. The State also provides 75% for the annual cost of living increase (COLA) granted to police retirees on January 1 each year. These amounts are included as Grants received revenue and Public Safety and Law Enforcement expenditures in the General Fund. For the year ended June 30, 2013, T the State contributions totaled $577,765. The legally defined liability for the City of Dover Police Pension Plan is the full amount required to pay the current year’s total benefits. The City has met this liability for the current fiscal year. An actuarial valuation report as of June 30, 2013 in accordance with GASB Statement 25 and 27 has been completed. The City’s actuary is Milliman of Wayne, PA. The annual required contribution (ARC) conforms to the entry age normal cost method DR as defined in Statement 25. During the past year, the City contributions combined with the State insurance tax proceeds did not exceed the calculated annual pension cost and has resulted in a reduction of the overall net pension asset (NPA). The Governmental Activities accumulated value of contributions, deficiencies, or excesses over required contributions of $297,885 of which $106,065 is attributed to the Police Pension Plan is as follows: Annual required contribution Governmental Activities $1,155,796 Interest on net pension asset (13,885) Adjustment to annual required contribution 24,973 Annual pension cost 1,166,884 Contributions (1,074,599) (Increase)/decrease in net pension asset 92,285 Net pension (Asset) at beginning of year (198,350) Net pension (Asset) at end of year ($106,065) There have been no significant changes affecting benefits during the valuation periods

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 87 shown in the preceding table. The following summarizes activity for this plan for the past three years: Annual Percentage NPO (Asset) Pension Cost Contributed End of Year 2011 1,128,669 56% (535,811) 2012 1,005,735 66% (198,350) 2013 1,166,884 92% (106,065) Funded Status and Funding Progress AF As of June 30, 2013, the most recent actuarial valuation date, the plan was 53.8% funded. The actuarial accrued liability for benefits was $19.9 million, and the actuarial value of assets was $10.7 million, resulting in an unfunded actuarial accrued liability (UAAL) of $9.2 million for the primary government. There are no active officers, therefore there is no covered payroll or ratio of the UAAL to cover payroll. There have been no changes in Actuarial Assumptions or Methods since the prior valuation. T The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. The funding requirement for fiscal year 2012-2013 for this plan is presented below: 1. Employer’s Contribution Additional Lump Sum $495,000 Lump sum contribution as actuarially determined to DR 2. 3. 4. State of Delaware Contributions Annual Pension Cost Net Pension Asset fund the unfunded liability $577,765 Surcharge on insurance premiums and COLA $1,166,884 Actuarially computed using entry age cost method $106,065 As of June 30, 2013 The net pension asset is a result of matching funds that the State of Delaware provides (75%) for the annual cost of living increase granted to police retirees on January 1 of each year. The July 1, 2012 valuation takes into account the January 1, 2012 State COLA contributions and the State .25% surcharge on insurance policies. Actuarial methods and significant assumptions: Valuation date July 1, 2012 Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage of projected payroll Remaining amortization period 12 years Amortization Period Closed

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 88 Asset valuation method Current market value Actuarial Assumptions: Investment rate of return 7.0% Discount rate 7.0% Projected salary increases none, no remaining active participants Includes inflation at none, no remaining active participants Automatic Cost of Living (retirees) 2.0% ii. City of Dover General Employee Pension Plan The City of Dover General Employee Pension Plan started on July 1, 1967, under the authority of the City Code, Chapter 2, Article IV, Division 7, General Employee Pension Plan, Sections 2-321 through 2-370, and was made contributory on July 1, 1983. The AF contribution and funding requirements of the plan are established by the City and may be amended by the City. Employees contribute 3.5% of gross salary, exclusive of unscheduled overtime. An employee’s pension right is vested upon completion of 10 years of continuous service. At the present time, 123 employees and 207 retirees participate in the plan, while 98 employees are enrolled in the defined contribution plan, which began July 1, 2000. Current membership in the General Employee Pension Plan T as of June 30, 2013, is comprised of the following: Retired and beneficiaries currently receiving benefits 207 Active employees: Fully Vested 73 Non-Vested 50 Deferred Vested: 16 The percentage of covered payroll which employees contribute is stated in the City Code, and is considered by the actuaries in their determination of the actuarial D requirement for employer normal cost. For the year ended June 30, 2013, gross payroll earnings of $7.4 million were reported to and covered by this plan. An employee hired before May 1, 1994 is eligible for normal retirement benefits under R this plan: when he/she attains the age of 65 with 10 years of continuous service. This same employee is eligible for early retirement when he/she attains the age of 50 with 20 years of continuous service or has completed 25 years of service. Employees hired on or after May 1, 1994 who attained age 55 and whose attained age plus years of continuous service is equal to or greater than 80 are eligible for early- unreduced retirement benefits under this plan. The monthly benefits are 1/50 of the average monthly earnings multiplied by years and months of credited service upon retirement (highest 36 consecutive months in his/her final 10 years of continuous service). The monthly benefit shall not be less than $200 per month. Benefits are paid for the lifetime of the participant. Upon the death of the participant, 50% of the benefit continues to the eligible survivor. An employee may also take an early-reduced retirement on any date following the attainment of age 55 and the completion of 10 years of continuous service. However, the early retirement benefit is calculated in the same manner as the normal retirement benefit, reduced by one-half of one percent for each month the benefit commences prior

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 89 to the age 65. Survivor's benefits are payable to eligible survivors of a participant who dies after completing 10 years of continuous service. The amount of the death benefit is equal to 50% of the retirement benefit the participant would have received had he retired the day before he died. A participant is vested in the pension plan after completing 10 years of continuous service, with survivor benefits commencing when the employee would have attained the age of 65. The benefit is calculated using the normal retirement benefit formula and service at date of termination. If an employee terminated before becoming vested in the plan, they are eligible to withdraw this total contribution with interest compounded annually. AF The plan investments are managed by the City of Dover Employees’ Pension Board which is established in the Code. The City Council must authorize changes to the City Code. The rate of the City contribution is determined by the actuarial study. The Pension Board of Trustees does not issue a separate comprehensive annual financial report, and the City of Dover General Employee Pension Plan is included in the City’s Comprehensive Annual Financial Report as a Pension Trust. T The legally defined liability for the City of Dover General Employee Pension Plan is the full amount required to pay the current year's total benefits. The City has met this liability for the current fiscal year. An actuarial valuation report as of July 1, 2012 has been completed in accordance with GASB Statements No. 25 and 27. The City's actuary is Milliman of Wayne, PA. The annual required contribution (ARC) conforms to the aggregate entry age cost method as defined in Statement 25. During the past year, the City contributions D exceeded the calculated annual pension cost and have resulted in an increase of the overall net pension asset (NPA), defined as the accumulated value of contributions, deficiencies, or excesses over required contributions of $6,914,326. R The Governmental Activities have a net pension asset of $297,885 of which $106,065 is attributed to the City of Dover Police Pension Plan and $191,820 is attributed to the General Pension Plan as indicated in the table below. The Business-Type Activities have a net pension asset of $6,722,506 of which $479,537 is attributed to the Water/Wastewater Fund and $6,242,969 is attributed to the Electric Revenue Fund as included in the following table. Governmental Wastewater Electric Fund Total Activities Fund Activities Activities Annual required contribution $3,217,964 $1,752,130 $267,853 $1,197,981 Interest on net pension obligation (24,528) (4,532) (14,079) (5,917) Adjustment to annual required contribution 31,085 5,744 17,842 7,499 Annual pension cost 3,224,521 1,753,342 271,616 1,199,563 Contributions made (9,788,465) (1,880,436) (550,031) (7,357,998) (Increase)/decrease in net pension asset (6,563,944) (127,094) (278,415) (6,158,435) Net pension (Asset) at beginning of year (350,382) (64,726) (201,122) (84,534) Net pension (Asset) at end of year ($6,914,326) ($191,820) ($479,537) ($6,242,969)

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 90 There have been no significant changes affecting benefits provided by the Plan during the valuation periods shown in the preceding table. The following summarizes activity for this plan for the past three years: Annual Percentage NPO (Asset) Pension Cost Contributed End of Year 2011 3,151,824 106% (343,372) 2012 3,135,924 100% (350,382) 2013 3,224,521 304% (6,914,326) AF On May 1, 1994, a deferred compensation option was offered to employees in lieu of participation in the General Employee Pension Plan, and at that time 41 employees elected to switch to the deferred compensation plan. (See Note 18 – Deferred Compensation Plan) Effective September 29, 2009 the City Council voted to close the General Employee’s Pension plan to new hires. T Funded Status and Funding Progress As of July 1, 2012, the most recent actuarial valuation date, the plan was 40.3% funded. The actuarial accrued liability for benefits was $55 million, and the actuarial value of assets was $22.2 million, resulting in an unfunded actuarial accrued liability (UAAL) of $32.8 million for the primary government. The covered payroll (annual payroll of active employees covered by the plan) was $7.1 million, and the ratio of the UAAL to the covered payroll was 463%. D There have been no changes in Actuarial Assumptions or Methods since the prior valuation. R The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. The funding requirement for fiscal year 2012-2013 for this plan is as follows: 1. Employee 3.5% of As required by the City Code Contribution and the plan provisions payroll ($233,097) 2. Employer’s 4.67% Actuarially determined Contribution Plus percent of payroll for current July 2012– June 2013 $9.5 million normal cost ($9,788,463) 3. Annual Pension Actuarially computed using entry $3,224,521 Cost age cost method

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 91 4. Net Pension Asset $6,914,326 As of June 30, 2013 Actuarial Methods and significant assumptions: Valuation date July 1, 2012 Actuarial cost method Aggregate entry age normal cost method Amortization method Level percentage of projected payroll Remaining amortization period 23 years Amortization Period Closed Asset valuation method Current market value Actuarial Assumptions: Investment rate of return 7.0% AF Discount rate 7.0% Projected salary increases 0.0% Includes inflation at 3.5% iii. State of Delaware Police Pension Plan T The City participates in the State of Delaware “County and Municipal Police Pension Plan” for uniformed police officers whose employment with the City started on or after September 1, 1982 under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71. This is a cost–sharing multiple-employer defined benefit pension plan. The State of Delaware enacted legislation to provide for the plan and is responsible for setting benefits, contributions and amending plan provisions. This is a contributory plan with the employee contributing 7% of gross salary, exclusive of overtime. For the year ended June 30, 2013, $6.4 million in payroll earnings were reported to and covered by this plan. D The City’s contribution percentages were 13.9%, 14.53% and 14.75% for the fiscal years ended June 30, 2011, 2012 and 2013, respectively. The City’s contributions to the plan for years ending June 30, 2011, 2012 and 2013 were $848,349, $940,562 and R $936,894 and were equal to the required contributions for each year. These contributions cover the City’s total liability for funding, as determined by the State of Delaware’s actuary. The City does not have any unfunded liability in this plan. The pension plan is managed by the State of Delaware Board of Pension Trustees. The Comprehensive Annual Financial Report of the Delaware Public Employees Retirement System can be obtained from the Office of Pensions, 680 Silver Lake Boulevard, Dover, Delaware, 19904-2402 or at www.delawarepensions.com . As of June 30, 2013 city membership in this plan is comprised of the following: Retired and beneficiaries currently receiving benefits 35 Active employees: Fully Vested 10 years 47 Non-Vested 45 The State of Delaware County and Municipal Police Pension Plan provides benefits equal to 2½% of final average monthly compensation multiplied by years of service up to

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Notes to Financial Statements page 92 20 years inclusive, plus 3.5 % of final average monthly compensation multiplied by years of service above 20 years. Vesting occurs after 10 years of credited service. Retirement is at age 62 with 10 years of service, when age plus credited service (but not less than 10 years) equals 75, or 20 years of service. Disability benefits paid to a participant who is totally disabled in the performance of duty are 75% of final average compensation plus 10% for each dependent not to exceed 25% for all dependents. Partial disability benefits for duty-related or ordinary disability are calculated the same as a service pension (subject to maximum and minimum limitations). If a retired participant dies, the eligible survivor receives 50% of the monthly benefit. If an active employee dies, the survivor receives 50% of the monthly benefit that the AF employee would have received at age 62. Assets of the plan are managed by many investment firms approved by the State Pension Board. Details are available from the State Pension Office, Dover, Delaware at: www.delawarepensions.com. T DR

AF FINANCIAL SECTION T PART - D REQUIRED SUPPLEMENTARY INFORMATION DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Required Supplementary Information - Part D page 95 Services to Our Residents and Customers Animal Control Enforcement Beautification Building Inspections City Elections Community Development/Housing Community Policing Economic Development AF Electricity Emergency Preparedness Fire Protection Leaf Collection Library Parks Planning & Zoning T Police Protection Recreation Street Maintenance/Cleaning Snow Removal Trash Collection Bulk Trash Collection Tree Maintenance & Management Water/Sewage Service DR The City also Offers Historic Preservation Parking

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Required Supplementary Information - Part D page 96 CITY OF DOVER GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Non-GAAP Basis) For the Year Ended June 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 2,666,600 $ 3,752,200 $ 3,851,086 $ 98,886 REVENUES: Fines & Police Revenue 605,000 605,000 548,856 (56,144) AF 911 Fee 63,000 63,000 63,337 337 Interest Earnings 75,000 75,000 93,173 18,173 Library Revenues - General 66,200 66,200 64,584 (1,616) Library Revenues - County Reimbursement 405,900 405,900 406,481 581 Business Licenses 1,455,000 1,455,000 1,462,503 7,503 Permits & Other Licenses 1,053,300 1,053,300 1,162,765 109,465 Miscellaneous Revenues 55,500 70,900 106,997 36,097 T Police Extra Duty Fees 494,400 636,100 703,575 67,475 Property Taxes 10,997,400 11,039,200 11,076,335 37,135 Bid Revenue 51,600 51,600 50,060 (1,540) Recreations Revenue 130,000 130,000 144,490 14,490 Franchise Fees 550,000 600,000 618,347 18,347 Transfer Tax 1,370,000 1,370,000 1,107,959 (262,041) Trash Fees 2,690,200 2,676,500 2,624,877 (51,623) Garrison Farm Rent 62,000 117,200 117,247 47 Court of Chancery Fees 753,800 807,200 917,700 110,500 Intrafund Service Receipts Water/Wastewater 1,104,600 1,045,800 1,046,492 692 Intrafund Service Receipts Electric 3,224,500 3,177,100 3,195,818 18,718 D Grants: R Green Energy Grant DEMA Grant Miscellaneous Grants Police Pension Grant Verizon Reserve Transfer from Police Grant Funds Transfer from Municipal Street Aid Transfer from Civil Traffic Penalties Transfer from Verizon and CI Reserves Transfer from Water/Wastewater Fund Transfer from Electric Fund Total Revenues 98,500 - 25,000 500,000 - 85,000 527,400 750,000 11,000 500,000 8,000,000 35,704,300 98,500 - 25,000 500,000 - 112,100 527,400 350,000 11,000 500,000 8,000,000 35,569,000 - 92,641 1,224 577,765 50,000 170,337 531,121 299,828 4,485 500,000 8,000,000 35,738,997 (98,500) 92,641 (23,776) 77,765 50,000 58,237 3,721 (50,172) (6,515) 169,997 - - TOTAL BEGINNING BALANCE & REVENUES $ 38,370,900 $ 39,321,200 $ 39,590,083 $ 268,883 (continued)

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Required Supplementary Information - Part D page 97 (continued) VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) EXPENDITURES: Tax Assessor $ 187,500 $ 187,500 $ 187,438 $ 62 Fire 688,300 645,200 654,884 (9,684) Library 1,250,200 1,225,400 1,169,605 55,795 Recreation 713,400 674,900 644,346 30,554 Planning Commission 410,300 416,100 399,461 16,639 Public Inspections 592,200 577,100 493,902 83,198 Life Safety 469,900 451,800 452,175 (375) Code Enforcement 293,100 323,100 326,437 (3,337) Economic Development 231,100 231,100 219,947 11,153 Police 13,774,600 14,180,100 14,258,132 (78,032) AF Streets 756,700 772,200 705,071 67,129 Sanitation 2,140,700 2,072,000 2,003,887 68,113 Allocated Expenditures: Human Resources 319,700 310,800 295,146 15,654 Customer Services 901,200 866,900 860,657 6,243 City Manager 420,000 420,000 497,281 (77,281) Information Technology 642,700 633,300 611,301 21,999 T Finance 879,500 879,500 854,310 25,190 Public Services-Administration 468,600 401,200 360,118 41,082 Facilities Management 678,800 660,600 638,748 21,852 Central Services 576,900 578,700 530,208 48,492 Vehicle Maintenance 712,700 678,500 630,686 47,814 City Clerk 326,900 326,900 315,512 11,388 Mayor 82,400 82,400 81,073 1,327 Council 114,200 114,200 101,707 12,493 Grounds Maintenance 993,300 980,400 961,489 18,911 Insurance 600,000 600,000 628,633 (28,633) Contribution to Downtown Dover Partnership 180,000 180,000 180,000 - Tree Grant Expense 25,000 25,000 - 25,000 D Other Employment Expenses Retiree Benefits Subtotal R Debt Service - Principal and Interest Transfer to Capital Fund for Projects Transfer to Police Pension Fund Transfer to Uncollectbles trash and other Transfer to Verizon Reserve Appropriation to Police Pension Fund Appropriation to Pension Fund Street Lights Total Expenditures 463,400 1,620,600 31,513,900 624,200 613,400 500,000 10,000 - 95,000 1,310,500 869,700 35,536,700 94,700 1,620,600 31,210,200 474,200 613,400 500,000 10,000 - 495,000 1,693,500 869,700 35,866,000 - 1,620,600 30,682,754 369,073 613,400 577,765 10,000 50,000 495,000 1,693,500 878,760 35,370,252 94,700 527,446 105,127 - - (77,765) - (50,000) - - (9,060) 495,748 Budget Balance - Working Capital 2,834,200 3,455,200 4,219,831 (764,631) Total Budget Balance & Expenditures $ 38,370,900 $ 39,321,200 $ 39,590,083 $ (268,883) Budget Balance - Working Capital $ 4,219,831 Perspective and GAAP (Non-GAAP) Differences: Fair value of investment adjustment (52,736) Deferred Revenues - Non-spendable (569,518) Inventory & Prepaids - Non-spendable (205,863) Unassigned Fund Balance $ 3,391,714 The notes to financial statements are an integral part of this statement

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Required Supplementary Information - Part D page 98 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 1. GOVERNMENTAL BUDGETS A. Budgetary Basis of Accounting The City prepares its budget for the General Fund revenue on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. Encumbrances are established when purchase orders are issued and accounted for as a reservation of fund balance at year-end. The budget is amended in the subsequent year for the outstanding encumbrances of the prior year. The modified accrual basis of accounting is used for the fund financial statements. The City considers the beginning fund balance an item of revenue for budgetary purposes. AF General Fund actual revenues were higher than the final budget by $169,997 mainly as a result of increased interest earnings, business licenses and permits, miscellaneous revenues, police extra duty fees, Property taxes, Court of Chancery fees, DEMA and public safety grants. Several of the increases were offset by decreases in police fines, transfer taxes, trash fees, green energy grants, miscellaneous grants, and civil traffic T penalties. Expenditures were lower than budget by $495,748 across several functions as a result of personnel reductions through attrition. The police expenditures exceeded their budget as a result of increased extra duty work which is offset by the increased revenue. The net result is an increase of $764,631 to the General Fund ending fund balance. B. Budget Amendments During this fiscal year, the City Council amended the budget two times. These budget amendments or supplemental appropriation ordinances were primarily for the following DR purposes: 1. To amend the grant budgets, reserve accounts for the actual results of the prior fiscal year and to re-appropriate budget balances for ongoing capital projects. 2. To amend all carried forward budget balances for the major operating funds from the prior fiscal year, as well as program revenues and expenses based on the analyses provided by a mid-year review. 2. PENSION PLANS A. Police Pension Plan The unfunded actuarial accrued liability for this plan is being amortized over 30 years beginning July 1, 1994, 12 of which remain as of July 30, 2013 with payments increasing at 3½% per year. Investment gains or losses are spread over five years. The amortization period is closed. The City completed a full valuation for fiscal year 2013.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Required Supplementary Information - Part D page 99 Police Pension Fund Required Supplementary Information Schedule of Funding Progress Actuarial Unfunded Valuation Plan Accrued Accrued Date Assets Liability Liability Funded Ratio 7/1/07 13,950,322 17,589,169 3,638,847 79.3% 7/1/08 12,500,417 17,615,785 5,115,368 71.0% 7/1/09 10,188,899 17,651,507 7,462,608 57.7% 7/1/10 10,378,602 19,849,553 9,470,951 52.3% 7/1/11 11,553,751 19,737,000 8,183,249 58.5% AF 7/1/12 10,687,727 19,867,849 9,180,122 53.8% Police Pension Fund Required Supplementary Information T Schedule of Employers’ Contribution Year Ended Annual Required Percentage June 30 Contribution Contributed 2008 358,807 201% 2009 520,505 139% 2010 786,436 63% 2011 1,082,956 44% 2012 979,132 68% D 7/1/08 2013 B. Employee Pension Plan R Valuation Date 7/1/07 Plan Assets 17,616,172 19,381,391 General Employee Pension Fund Required Supplementary Information Schedule of Funding Progress Actuarial Accrued Liability 42,335,142 43,800,212 1,155,796 Unfunded Accrued Liability 24,718,970 24,418,821 Funded Ratio 41.6% 44.2% 93% Payroll 8,006,103 8,716,361 Unfunded as a Percent of Payroll 308.8% 280.1% 7/1/09 19,880,033 45,525,384 25,645,351 43.7% 8,786,981 291.9% 7/1/10 19,963,426 52,462,693 32,499,267 38.1% 8,256,751 393.6% 7/1/11 21,472,928 53,486,000 32,013,072 40.1% 7,990,890 400.6% 7/1/12 22,177,831 55,006,282 32,828,451 40.3% 7,076,322 463.9% The unfunded actuarial accrued liability for this plan is being amortized over 25 years beginning July 1, 2010, 23 of which remain as of June 30, 2012, with payments increasing at 3 1/2% per year. Investment gains or losses are spread over five years. The amortization period is closed. The City utilizes the level percentage of projected payroll method to amortize the unfunded liabilities.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Required Supplementary Information - Part D page 100 Employee Pension Plan Required Supplementary Information Schedule of Employer’s Contribution Year Ended Annual Required Percentage June 30 Contribution Contributed 2008 2,269,802 128% 2009 2,356,529 106% 2010 2,564,767 89% 2011 3,149,493 106% 2012 3,130,022 109% 2013 3,217,964 304% AF 3. OTHER POSTEMPLOYMENT PLAN The following information presents additional information related to funding status and progress of Other Postemployment Benefits. It is intended to help readers assess the individual plans’ funding status on a going-concern basis and assess progress made in accumulating sufficient assets to pay benefits when due. T The amount shown below as actuarial accrued liability is a measure of the difference between the actuarial present value of future plan benefits, and the actuarial present value of future normal cost. OPEB Trust Schedule of Funding Status and Progress (3) (6) DActuarial R Valuation Date 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 (1) Actuarial Value of Assets $ -0- 4,761,141 4,882,375 7,047,987 10,913,172 (2) Actuarial Accrued Liability (AAL) $64,297,063 64,812,543 83,518,121 83,441,000 71,021,484 Unfunded Actuarial Accrued Liabilities (UAAL) (2) – (1) $64,297,063 60,051,402 78,635,746 76,393,013 60,108,312 (4) Funded Ratio (1)/(2) 0.0% 7.3% 5.8% 8.4% 15.4% (5) Covered Payroll $18,162,177 18,797,853 18,292,104 18,454,162 17,335,618 UAAL as a % of Covered Payroll (3)/(5) 354% 319% 430% 414% 347%

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Required Supplementary Information - Part D page 101 Valuation Date July 1, 2012 Actuarial Cost Method Projected Unit Credit Cost Method Amortization Method Level Dollar Amount Open Remaining Amortization Period 30 years Asset Valuation Method Market Value Actuarial Assumptions: Investment Rate of Return 7.00% Discount Rate 5.25% Rate of Salary Increases N/A% AF Ultimate Rate of Medical inflation Varies between 5.00% and 5.70% Initial Rate of Medical Inflation 7.80%< 65 and 7.20% >=65 T DR

FINANCIAL SECTION AF PART - E S S T SUPPLEMENTARY INFORMATION COMBINING FUND STATEMENTS BUDGETARY SCHEDULES DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 103 FINANCIAL STATEMENTS GENERAL FUND COMBINING AF STATEMENTS The budgetary comparison for the Governmental Capital Projects Fund has its own separate budget and is presented in this section to show legal compliance. The perspective difference between the basis of budgeting and GAAP is explained in the reconciliation of the basis of T budgeting to GAAP. DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 104 The City of Dover Combining General Fund Balance Sheet June 30, 2013 General Total General Capital Projects General Fund Fund Funds Assets: Cash and Cash Equivalents $ 1,698,864 $ 125,402 $ 1,824,266 Restricted Cash and Cash Equivalents - 858,086 858,086 Investments 3,261,366 3,303,364 6,564,730 Restricted Investments 18,252 - 18,252 Receivables, net AF Accounts 1,200,815 7,919 1,208,734 Taxes 262,970 - 262,970 Due from Other Funds 377,129 75,680 452,809 Prepaid Items 58,213 - 58,213 Inventory, at Cost 147,651 - 147,651 Total Assets $ 7,025,260 $ 4,370,451 $ 11,395,711 Liabilities: Accounts Payable Deferred Revenue Due to Other Funds Other Total Liabilities Fund Balances: T $ 788,175 1,420,674 160,275 156,984 2,526,108 $ 239,862 367,312 56,110 - 663,284 $ 1,028,037 1,787,986 216,385 156,984 3,189,392 D Non-Spendable R Inventory and Prepaids Library Endowment Patronage Stock Restricted Library Endowment Verizon Cable Franchise Committed Contingency Parkland Reserve Assigned Police Investigations 205,863 5,000 16,594 1,658 129,579 733,985 14,759 - - - 202,914 - - - - - 205,863 5,000 16,594 1,658 129,579 733,985 202,914 14,759 Capital Assets - 3,504,253 3,504,253 Unassigned 3,391,714 - 3,391,714 Total Fund Balances 4,499,152 3,707,167 8,206,319 Total Liabilities and Fund Balances $ 7,025,260 $ 4,370,451 $ 11,395,711 The notes to financial statements are an integral part of this statement

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 105 The City of Dover Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund - Budgetary Basis For the Year Ended June 30, 2013 General Total General Capital Projects General Fund Fund Funds Revenues Fines $ 612,193 $ - $ 612,193 Library Revenue- General 64,584 - 64,584 Library Revenue County Reimbursement 406,481 - 406,481 Licenses and Permits 2,625,268 - 2,625,268 Sanitation Fees and Rebates 2,624,877 - 2,624,877 Miscellaneous Services 1,690,656 711,351 2,402,007 Property Taxes 11,126,395 - 11,126,395 AF Grants Received 721,630 2,003,665 2,725,295 Court of Chancery Fees 917,700 - 917,700 Investment Income 93,173 25,987 119,160 Total Revenues 20,882,957 2,741,003 23,623,960 Expenditures Current: General Government 1,074,271 33,000 1,107,271 T Library Services 1,169,605 4,070,899 5,240,504 Public Safety and Law Enforcement 17,258,295 429,534 17,687,829 Public Works 1,343,800 221,642 1,565,442 Recreational Services 644,346 6,995 651,341 Streets and Sanitation Services 2,708,958 281,472 2,990,430 Financial Administration 807,288 102,589 909,877 Garage and Stores 431,541 - 431,541 Insurance 241,395 - 241,395 Retiree Health Care 1,620,600 - 1,620,600 Employee Pension 1,693,500 - 1,693,500 Community and Economic Development 223,109 - 223,109 Street Lights 878,760 - 878,760 D Debt Service: Principal Retirement Interest and Fiscal Charges Bond Issuance Costs R Total Expenditures Excess (deficiency) of Revenues over Expenditures Other financing Sources and Uses Proceeds from Sale of Bonds Reserve Transfers Interfund Transfers Total other Financing Sources and Uses Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at Beginning of Year - Restated Fund Balances at End of Year $ 296,003 73,071 - 30,464,542 (9,581,585) - (45,515) 9,995,845 9,950,330 368,745 3,851,086 3,851,086 4,219,831 $ 1,029 5,147,160 (2,406,157) 2,648,500 2,670,363 5,318,763 2,912,606 - (100) 145,647 145,647 - 35,611,702 (11,987,742) 2,648,500 (45,615) 12,666,208 15,269,093 3,281,351 3,996,733 3,996,733 3,058,253 $ 7,278,084 296,003 73,071 1,029 Perspective and GAAP (Non-GAAP) Differences: Fair value of investment adjustment $ (52,736) $ (53,389) $ (106,125) Deferred Revenues - Non-spendable (569,518) (7,919) (577,437) Inventory & Prepaids - Non-spendable (205,863) - (205,863) Capital Asset - Assigned - (2,996,945) (2,996,945) Unassigned Fund Balance $ 3,391,714 $ - $ 3,391,714 The notes to financial statements are an integral part of this statement

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 106 CITY OF DOVER GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Non-GAAP Basis) For the Year Ended June 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 2,666,600 $ 3,752,200 $ 3,851,086 $ 98,886 REVENUES: Fines & Police Revenue 605,000 605,000 548,856 (56,144) 911 Fee 63,000 63,000 63,337 337 Interest Earnings Police Extra Duty Fees AF Library Revenues - General Library Revenues - County Reimbursement Business Licenses Permits & Other Licenses Miscellaneous Revenues 75,000 66,200 405,900 1,455,000 1,053,300 55,500 494,400 75,000 66,200 405,900 1,455,000 1,053,300 70,900 636,100 93,173 64,584 406,481 1,462,503 1,162,765 106,997 703,575 18,173 (1,616) 581 7,503 109,465 36,097 67,475 T Property Taxes 10,997,400 11,039,200 11,076,335 37,135 Bid Revenue 51,600 51,600 50,060 (1,540) Recreations Revenue 130,000 130,000 144,490 14,490 Franchise Fees 550,000 600,000 618,347 18,347 Transfer Tax 1,370,000 1,370,000 1,107,959 (262,041) Trash Fees 2,690,200 2,676,500 2,624,877 (51,623) Garrison Farm Rent 62,000 117,200 117,247 47 Court of Chancery Fees 753,800 807,200 917,700 110,500 Intrafund Service Receipts Water/Wastewater 1,104,600 1,045,800 1,046,492 692 Intrafund Service Receipts Electric 3,224,500 3,177,100 3,195,818 18,718 Grants: D Green Energy Grant 98,500 98,500 - (98,500) DEMA Grant - - 92,641 92,641 Miscellaneous Grants 25,000 25,000 1,224 (23,776) Police Pension Grant 500,000 500,000 577,765 77,765 R Verizon Reserve Transfer from Police Grant Funds Transfer from Municipal Street Aid Transfer from Civil Traffic Penalties Transfer from Verizon and CI Reserves Transfer from Water/Wastewater Fund Transfer from Electric Fund Total Revenues TOTAL BEGINNING BALANCE & REVENUES $ (continued) - 85,000 527,400 750,000 11,000 500,000 8,000,000 35,704,300 38,370,900 $ - 112,100 527,400 350,000 11,000 500,000 8,000,000 35,569,000 39,321,200 $ 50,000 170,337 531,121 299,828 4,485 500,000 8,000,000 35,738,997 39,590,083 $ 50,000 58,237 3,721 (50,172) (6,515) - - 169,997 268,883

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 107 (continued) VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) EXPENDITURES: Tax Assessor $ 187,500 $ 187,500 $ 187,438 $ 62 Fire 688,300 645,200 654,884 (9,684) Library 1,250,200 1,225,400 1,169,605 55,795 Recreation 713,400 674,900 644,346 30,554 Planning Commission 410,300 416,100 399,461 16,639 Public Inspections 592,200 577,100 493,902 83,198 Life Safety 469,900 451,800 452,175 (375) Code Enforcement 293,100 323,100 326,437 (3,337) Economic Development 231,100 231,100 219,947 11,153 Police 13,774,600 14,180,100 14,258,132 (78,032) AF Streets 756,700 772,200 705,071 67,129 Sanitation 2,140,700 2,072,000 2,003,887 68,113 Allocated Expenditures: Human Resources 319,700 310,800 295,146 15,654 Customer Services 901,200 866,900 860,657 6,243 City Manager 420,000 420,000 497,281 (77,281) Information Technology 642,700 633,300 611,301 21,999 Finance 879,500 879,500 854,310 25,190 T Public Services-Administration 468,600 401,200 360,118 41,082 Facilities Management 678,800 660,600 638,748 21,852 Central Services 576,900 578,700 530,208 48,492 Vehicle Maintenance 712,700 678,500 630,686 47,814 City Clerk 326,900 326,900 315,512 11,388 Mayor 82,400 82,400 81,073 1,327 Council 114,200 114,200 101,707 12,493 Grounds Maintenance 993,300 980,400 961,489 18,911 Insurance 600,000 600,000 628,633 (28,633) Contribution to Downtown Dover Partnership 180,000 180,000 180,000 - Tree Grant Expense 25,000 25,000 - 25,000 Other Employment Expenses 463,400 94,700 - 94,700 D Retiree Benefits Subtotal Debt Service - Principal and Interest R Transfer to Capital Fund for Projects Transfer to Police Pension Fund Transfer to Uncollectbles trash and other Transfer to Verizon Reserve Appropriation to Police Pension Fund Appropriation to Pension Fund Street Lights Total Expenditures Budget Balance - Working Capital 1,620,600 31,513,900 624,200 613,400 500,000 10,000 - 95,000 1,310,500 869,700 35,536,700 2,834,200 1,620,600 31,210,200 474,200 613,400 500,000 10,000 - 495,000 1,693,500 869,700 35,866,000 3,455,200 1,620,600 30,682,754 369,073 613,400 577,765 10,000 50,000 495,000 1,693,500 878,760 35,370,252 4,219,831 527,446 105,127 - (77,765) - (50,000) - - (9,060) 495,748 - (764,631) Total Budget Balance & Expenditures $ 38,370,900 $ 39,321,200 $ 39,590,083 $ (268,883) Budget Balance - Working Capital $ 4,219,831 Perspective and GAAP (Non-GAAP) Differences: Fair value of investment adjustment (52,736) Deferred Revenues - Non-spendable (569,518) Inventory & Prepaids - Non-spendable (205,863) Unassigned Fund Balance $ 3,391,714 The notes to financial statements are an integral part of this statement

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 109 FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS AF Special Revenue Funds include the group of funds classified as grant funds and a Realty Transfer Tax Fund. The proceeds from specific revenue sources are restricted to specified expenditure purposes. The City adopts budgets for selected Special Revenue Funds. Combining and individual statements appear in this section. POLICE GRANTS T The City of Dover Police Department receives various grants from the State of Delaware for public and highway safety and the U.S. Department of Justice for local law enforcement. All grant transactions are recorded in this fund. LIBRARY GRANTS The City of Dover Public Library receives various grants from the State of Delaware, Kent County, and the Federal Government. Activities associated with these grants are recorded in this fund. MUNICIPAL STREET AID D The State of Delaware has passed legislation to share a portion of Delaware’s motor fuel tax revenue with local municipalities through grants. The amount of the grant the City receives depends on its population and miles of streets maintained. The grant is used R for street light expense within the City. CDBG HOUSING GRANTS & NEIGHBORHOOD STABILIZATION PROGRAM The City receives a U.S. Department of Housing and Urban Development Entitlement Grant for the Community Development Block Grant Program. This provides housing to low or moderate-income persons as well as public housing rehabilitation and community policing. Combined with the CDBG Fund is the Neighborhood Stabilization Program (NSP) that provides low interest loans for low to moderate-income families.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 110 FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS (continued) AF GAMES GRANT The City of Dover, in coordination with Aid in Dover, received a grant from the Criminal Justice Council for a program called GAMES. This program provides youth programming for at-risk girls and boys. STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS T The State of Delaware Department of Transportation grants provide funds for specific street projects in the City. State law provides funds to the State’s elected officials for suburban street aid, which officials can then provide to their districts. The City receives these funds for designated street projects and records all transactions for this fund. SUBSTANCE ABUSE PREVENTION GRANT The State of Delaware General Assembly Grant-In-Aid Program provides funds to implement a substance abuse prevention program for at-risk and/or disadvantaged youths in the City of Dover. D ELECTRONIC RED LIGHT SAFETY PROGRAM (ERLSP) The State of Delaware Department of Transportation provides a grant to municipalities that implement the Electronic Red Light Safety Program. Under this program, the City is R granted a portion of the fines collected from drivers who are ticketed for running red lights installed with electronic photo identification equipment within the City limits. GARRISON OAK TECHNOLOGY PARK The State of Delaware Economic Development office appropriated funds to the City for infrastructure improvement to the Garrison Oak property. REALTY TRANSFER TAX Delaware Code states that realty transfer tax realized by the City shall be segregated from the general fund and the funds shall be expended solely for the capital and operating costs of public safety services, economic development programs, public works services, capital projects and improvements, infrastructure projects and improvements and debt reduction.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 111 CITY OF DOVER SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET JUNE 30, 2013 MUNICIPAL CDBG/NSP STATE SUBSTANCE GARRISON REALTY POLICE LIBRARY STREET HOUSING GAMES D.O.T. ABUSE ERLSP OAK TECH. TRANSFER GRANTS GRANTS AID GRANTS GRANT GRANTS PREV. GRANT PARK TAX TOTALS AF ASSETS: Cash $ 197,220 $ 35,083 $ 265,521 $ 8,946 $ (6,521) $ 217,743 $ 43,251 $ 100 $ - $ 114 $ 761,457 Receivables 629 225 - - - - 450 - - - 1,304 Due from other funds-charges - - - - - 56,110 - - - - 56,110 Due from other governments 15,863 - - 38,928 9,235 60,238 - 19,099 - - 143,363 TOTAL ASSETS $ 213,712 $ 35,308 $ 265,521 $ 47,874 $ 2,714 $ 334,091 $ 43,701 $ 19,199 $ - $ 114 $ 962,234 LIABILITIES AND FUND BALANCE: Liabilities: Vouchers Payable $ 38,476 $ 7,469 $ - $ 38,471 $ 2,714 $ 13,358 $ 2,693 $ - $ - $ - $ 103,181 T Deferred Revenue - - - - - 60,236 - - - - 60,236 Due to other funds-charges - - 13,963 666 - 51,281 - 19,099 - 14 85,023 Total Liabilities 38,476 7,469 13,963 39,137 2,714 124,875 2,693 19,099 - 14 248,440 Fund Balances: Restricted 175,236 27,839 251,558 8,737 - 85,867 41,008 100 - 100 590,445 Assigned - - - - - 123,349 - - - - 123,349 Total Fund Balances 175,236 27,839 251,558 8,737 - 209,216 41,008 100 - 100 713,794 TOTAL LIABILITIES AND FUND BALANCES $ 213,712 $ 35,308 $ 265,521 $ 47,874 $ 2,714 $ 334,091 $ 43,701 $ 19,199 $ - $ 114 $ 962,234 The notes to financial statements are an integral part of this statement DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 112 CITY OF DOVER SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCES YEAR ENDED JUNE 30, 2013 MUNICIPAL CDBG/NSP STATE SUBSTANCE GARRISON REALTY POLICE LIBRARY STREET HOUSING GAMES D.O.T. ABUSE PREV. ERLSP OAK TECH. TRANSFER GRANTS GRANTS AID GRANTS GRANT GRANTS GRANT PARK TAX TOTALS AF REVENUES: Grants received $ 531,883 $ 271,544 $ 663,953 $ 592,902 $ 34,291 $ 263,965 $ 40,574 $ - $ - $ - $ 2,399,112 Recreation revenue - - - - - - 40,446 - - - 40,446 Police fines - - - - - - - 299,811 - - 299,811 Transfer taxes - - - - - - - - - 1,107,686 1,107,686 Investment income (loss) 443 - 459 - - 207 - 17 - 273 1,399 TOTAL REVENUES 532,326 271,544 664,412 592,902 34,291 264,172 81,020 299,828 - 1,107,959 3,848,454 EXPENDITURES: T Program expenditures 360,542 273,713 - 600,362 34,291 192,963 61,632 - 20,571 - 1,544,074 TOTAL EXPENDITURES 360,542 273,713 - 600,362 34,291 192,963 61,632 - 20,571 - 1,544,074 Excess (deficiency) of revenues over (under) expenditures 171,784 (2,169) 664,412 (7,460) - 71,209 19,388 299,828 (20,571) 1,107,959 2,304,380 OTHER FINANCING SOURCES (USES): Operating transfers-out (170,337) - (545,084) - - (51,282) - (299,828) - (1,107,959) (2,174,490) Net Change in fund balances 1,447 (2,169) 119,328 (7,460) - 19,927 19,388 - (20,571) - 129,890 FUND BALANCE AT BEGINNING OF YEAR 173,789 30,008 132,230 16,197 - 189,289 21,620 100 20,571 100 583,904 FUND BALANCE D AT END OF YEAR The notes to financial statements are an integral part of this statement R $ 175,236 $ 27,839 $ 251,558 $ 8,737 $ - $ 209,216 $ 41,008 $ 100 $ - $ 100 $ 713,794

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 113 CITY OF DOVER POLICE GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ 178,400 $ 173,789 $ (4,611) Interest earned - - 443 443 Grants received 382,600 505,100 531,883 26,783 TOTAL REVENUES & BEGINNING BALANCE 382,600 683,500 706,115 22,615 EXPENDITURES: Program expenses/supplies Furniture and fixtures Computer software Computer hardware Telephone/fax AF Training/Conf/Food/Travel 64,000 - - - 15,000 17,000 129,100 16,500 1,400 139,900 15,000 29,500 90,821 18,158 - - 12,556 21,045 (38,279) 1,658 (1,400) (139,900) (2,444) (8,455) T Consulting/audit fees 1,000 1,000 - (1,000) Contractual services - 161,900 147,938 (13,962) Vehicle purchases 10,500 35,100 24,635 (10,465) Technology equipment 57,000 - 101,744 101,744 TOTAL EXPENDITURES 164,500 529,400 416,897 (112,503) Other financing uses: Operating transfers - out (218,100) (154,000) (113,982) 40,018 BALANCE CARRIED TO NEXT YEAR $ - $ 100 $ 175,236 $ 175,136 D The notes to financial statements are an integral part of this statement R \

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 114 CITY OF DOVER LIBRARY GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ 12,700 $ 30,007 $ 17,307 Grants received: State 280,500 270,100 270,044 (56) Grants received: Federal - 1,500 1,500 - AF TOTAL REVENUES & BEGINNING BALANCE EXPENDITURES: Program expenditures/supplies Office Supplies Printing/duplicating 280,500 15,300 15,000 9,500 284,300 27,500 20,000 8,900 301,551 27,900 20,363 11,360 17,251 400 363 2,460 T Postage 200 100 55 (45) Books 95,000 120,900 114,926 (5,974) Furniture 52,300 21,400 27,193 5,793 Audio visual supplies 65,000 72,000 67,900 (4,100) Training/conference/food/travel 4,000 3,500 2,016 (1,484) Office equipment repairs 4,200 2,000 2,000 - Computer hardware 20,000 8,000 (8,000) TOTAL EXPENDITURES 280,500 284,300 273,713 10,587 BALANCE CARRIED TO NEXT YEAR $ - $ - $ 27,838 $ 27,838 D The notes to financial statements are an integral part of this statement R

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 115 CITY OF DOVER MUNICIPAL STREET AID FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 100 $ 132,200 $ 132,230 $ 30 State Grant - Operations 527,400 527,400 530,868 3,468 State Grant - Capital - 132,200 133,085 885 AF Interest Earned - - 459 459 TOTAL REVENUES & BEGINNING BALANCE 527,500 791,800 796,642 4,842 Other financing uses: Operating transfers-out (527,400) (791,700) (545,084) 246,616 T BALANCE CARRIED TO NEXT YEAR $ 100 $ 100 $ 251,558 $ 251,458 The notes to financial statements are an integral part of this statement DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 116 CITY OF DOVER HOUSING PROGRAMS - CDBG & NSP SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance CDBG $ - $ - $ 2,013 $ 2,013 Beginning balance NSP - - 10,253 10,253 Federal grant received 235,300 317,400 219,512 (97,888) AF Revenue from NSP - - 373,390 373,390 TOTAL REVENUES & BEGINNING BALANCE 235,300 317,400 605,168 287,768 EXPENDITURES: 2010 Closing cost/downpayment program - 100 83 17 2011 First state RC&D - 30 (30) T 2012 Closing cost/downpayment program - 5,900 5,894 6 2012 Dover interfaith ministry - 7,100 7,148 (48) 2012 Homeowner rehab assistance - 4,300 3,485 815 2012 First state RC&D - 7,000 6,939 61 Current year closing cost/downpayment prog 30,000 60,000 49,807 10,193 Current year Dover interfaith ministry 27,500 27,500 14,022 13,478 Current year First state RC&D 35,000 35,000 20,972 14,028 Current year Elizabeth W Murphey school 20,000 32,800 32,782 18 Current year Ncall Research Inc. 7,800 7,800 5,000 2,800 Current year Serenity place 28,000 30,000 30,000 - Current year Milford housing H/O rehab 40,000 52,800 - 52,800 D Current year salaries NSP expense R TOTAL EXPENDITURES CDBG BALANCE CARRIED TO NEXT YEAR NSP BALANCE CARRIED TO NEXT YEAR $ $ The notes to financial statements are an integral part of this statement 47,000 235,300 - - - $ $ 47,100 - 317,400 - - $ $ 43,350 380,850 600,362 2,013 2,793 $ $ 3,750 (380,850) (282,962) (2,013) (2,793)

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 117 CITY OF DOVER STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 435,700 $ 189,300 $ 435,160 $ 245,860 Grants received: State 300,000 300,000 245,857 (54,143) Transfer from Other Funds 1,606,700 60,000 660 (59,340) AF Interest earned 500 500 209 (291) TOTAL REVENUES & BEGINNING BALANCE 2,342,900 549,800 681,886 132,086 EXPENDITURES: Program expenditures Grant Related 700,000 324,500 271,888 (52,612) Program expenditures City Appropriated 1,606,700 225,300 152,709 72,591 TOTAL EXPENDITURES T Other financing sources (uses): Operating transfers-out BALANCE CARRIED TO NEXT YEAR $ 2,306,700 The notes to financial statements are an integral part of this statement 36,200 - $ 549,800 - - $ 424,597 (68,000) 189,289 $ 125,203 (68,000) 189,289 DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 119 FINANCIAL SCHEDULES PROPRIETARY FUND TYPES ENTERPRISE FUNDS AF The following schedules pertaining to the major enterprise funds are not required under GAAP, but are included for public review of budgetary compliance. Accordingly, no reconciliation to the GAAP financial statements is provided. WATER/WASTEWATER FUND T The Water/Wastewater Fund accounts for all operating activity of the Water/Wastewater Utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, sewerage treatment fees, debt service, and transfers to other funds and the Improvement and Extension Fund. The Water/Wastewater Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized. D ELECTRIC REVENUE FUND The Electric Revenue Fund accounts for all operating activity of the electric utility. This R includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, purchased power cost, debt service, and transfers to other funds and the Improvement and Extension Fund. The Electric Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 120 CITY OF DOVER WATER/WASTEWATER FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Water $ 865,100 $ 1,075,800 $ 1,075,800 $ - Beginning Balance - Wastewater 853,000 991,100 991,100 - Beginning Balance - Kent County Treatment Fee (553,500) (626,400) (626,400) - TOTAL BEGINNING BALANCES 1,164,600 1,440,500 1,440,500 - REVENUES: Water fees 4,730,700 4,730,700 4,551,840 (178,860) AF Wastewater fees 3,834,600 3,642,700 3,564,615 (78,085) Wastewater adjustment 3,090,800 2,980,400 2,926,616 (53,784) Groundwater adjustment 1,257,600 1,324,600 1,314,033 (10,567) Miscellaneous services 77,000 81,400 73,312 (8,088) Water tank space rent 313,500 313,500 300,067 (13,433) Interest earnings 25,800 18,900 13,507 (5,393) State Reimbursement - DEMA - - 50,876 50,876 Sewer Impact Fees 317,000 380,000 385,986 5,986 T Water Impact Fees 350,000 350,000 220,362 (129,638) Total Revenues 13,997,000 13,822,200 13,401,214 (420,986) TOTAL BEGINNING BALANCES & REVENUES $ 15,161,600 $ 15,262,700 $ 14,841,714 $ (420,986) EXPENSES: Water services $ 408,200 $ 415,000 $ 415,700 $ (700) Engineering & inspection 597,900 601,900 486,714 115,186 Water construction 345,700 353,200 333,511 19,689 Water treatment plant 1,522,600 1,535,400 1,390,347 145,053 Wastewater services 993,000 997,000 802,551 194,449 Kent County sewer fees 3,600,000 3,537,000 3,631,516 (94,516) Intrafund service fee 1,235,400 1,176,600 1,182,905 (6,305) D Retirees health care Pension Unfunded Liability Debt Service - Water Debt Service - Wastewater R Inventory/Fixed Asset Writeoffs Other Employment Expenses Transfer to Capital Asset Reserve- Water Transfer to Capital Asset Reserve- Wastewater Transfer to Water Improvement & Extension Fund Transfer to Wastewater Improvement & Extension Fund Transfer to General Fund from Water Transfer to General Fund from Wastewater Transfer to Impact Fee Reserve-Wastewater Transfer to Uncollectible Reserve Total Expenses 220,000 309,800 532,100 731,500 5,000 16,200 70,000 22,000 1,700,000 1,200,000 250,000 250,000 - 5,000 14,014,400 220,000 509,800 438,100 636,300 5,000 15,400 70,000 22,000 1,700,000 1,200,000 250,000 250,000 - 5,000 13,937,700 220,000 509,800 410,632 579,394 5,000 - 70,000 22,000 1,700,000 1,200,000 250,000 250,000 219,757 5,000 13,684,827 - - 27,468 56,906 - 15,400 - - - - - - (219,757) - 252,873 Budget Balance - Water 482,700 770,800 732,740 38,060 Budget Balance - Wastewater 664,500 412,600 441,414 (28,814) Budget Balance - Kent County Treatment Fee - 141,600 (17,267) 158,867 Total Budget Balances - Working Capital 1,147,200 1,325,000 1,156,887 168,113 TOTAL BUDGET BALANCES & EXPENSES $ 15,161,600 $ 15,262,700 $ 14,841,714 $ 420,986 The notes to financial statements are an integral part of this statement

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 121 CITY OF DOVER WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance -Water $ 3,071,800 $ 3,811,200 $ 3,811,200 $ - Beginning Balance -Wastewater 1,013,600 2,641,000 2,641,000 - TOTAL BEGINNING BALANCES 4,085,400 6,452,200 6,452,200 - REVENUES: AF Bond Proceeds-Water 2013 2,000,000 2,000,000 - (2,000,000) Bond Proceeds-WW 2013 2,000,000 2,000,000 - (2,000,000) State Loan Fund-Water 2010 - 142,700 142,719 19 State Loan Fund-Wastewater 2011 - 494,500 494,520 20 Interest earnings 25,000 25,000 101,327 76,327 Income from sale of assets - - 11,339 11,339 Transfer from Water Fund 1,700,000 1,700,000 1,700,000 - T Transfer from Wastewater Fund 1,200,000 1,200,000 1,200,000 - Transfer from Wastewater Impact Fee Reserve 250,000 250,000 250,000 - Transfer from Water Impact Fee Reserve 300,000 - - - Total Revenues 7,475,000 7,812,200 3,899,905 (3,912,295) TOTAL BEGINNING BALANCES & REVENUES $ 11,560,400 $ 14,264,400 $ 10,352,105 $ (3,912,295) EXPENSES: Engineering & Inspection $ 23,400 $ 29,200 $ 29,208 $ (8) Water 5,140,000 5,971,600 1,154,852 4,816,748 Wastewater 3,817,300 5,922,500 1,815,569 4,106,931 D Water Treatment Plant Water Construction Bond issue costs Total Expenses R Budget Balance - Water Budget Balance - Wastewater Total Budget Balances - Working Capital TOTAL BUDGET BALANCES & EXPENSES $ 9,379,800 1,675,500 2,180,600 11,560,400 $ The notes to financial statements are an integral part of this statement 24,100 31,000 344,000 505,100 0 29,200 31,000 - 11,983,500 1,620,000 660,900 2,280,900 14,264,400 $ 0 29,208 35,899 6,597 3,071,333 4,473,776 2,806,996 7,280,772 10,352,105 $ 0 (8) 8,923,663 (2,853,776) (2,146,096) (4,999,872) 3,923,791 11,496

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 122 CITY OF DOVER ELECTRIC REVENUE FUND SCHEDULE OF REVENUE AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 7,184,000 $ 14,567,100 $ 14,567,100 $ - REVENUES: Direct base sales 85,071,400 87,519,500 86,887,345 (632,155) Rental income 225,000 200,000 234,488 34,488 Miscellaneous services 850,700 985,700 1,553,812 568,112 Utility tax 1,595,200 1,498,900 1,443,852 (55,048) Green Energy 129,000 129,000 129,195 195 Grants DEMA - - 108,632 108,632 AF Interest earned-operating 107,800 107,800 137,718 29,918 Transfer from Rate Stabilization 5,400,000 5,400,000 5,400,000 - Intrafund Services - Water/Wastewater 130,800 130,800 136,413 5,613 Total Revenues 93,509,900 95,971,700 96,031,455 59,755 TOTAL BEGINNING BALANCE & REVENUE $ 100,693,900 $ 110,538,800 $ 110,598,555 $ 59,755 EXPENSES: Power Supply & Generation Power Supply $ 39,468,900 $ 37,701,000 $ 37,698,282 $ 2,718 T Power Supply Management 996,000 996,000 996,000 - Dover Sun Park Energy 1,414,500 1,587,600 1,595,826 (8,226) Solar Renewal Energy Credits - 351,600 370,256 (18,656) Capacity Charges 12,564,800 11,817,200 11,587,934 229,266 PJM Charges - Transmission & Fees - 6,100,700 7,103,571 (1,002,871) PJM Charges - Load 17,508,300 5,697,700 6,024,702 (327,002) Total Power Supply 71,952,500 64,251,800 65,376,571 (1,124,771) Plant Operations 5,914,900 5,914,900 5,719,083 195,817 Capacity Credits (14,318,600) (14,318,600) (14,318,588) (12) PJM Credits (427,000) (488,400) (502,983) 14,583 PJM Spot Market Energy (772,700) (1,865,600) (1,930,510) 64,910 Generation Fuels 586,000 948,800 1,023,574 (74,774) Total Generation (9,017,400) (9,808,900) (10,009,424) 200,524 D Utility Tax Administration Transmission/Distribution Electrical Engineering Systems Operations R Meter Reading Contractual Services - Power Supply Provision for Uncollectible Retirees Health Care Pension Trust Contribution Green Energy Payment to DEMEC Interest on Deposits Intrafund Service Fees Other Appropriations: Electric Capital Project Fund General Fund Debt Service 1,595,200 501,200 3,223,600 1,163,900 517,600 212,500 190,000 150,000 696,500 1,074,200 129,000 35,000 3,224,500 3,500,000 8,000,000 3,323,600 1,498,900 501,200 3,233,700 1,171,300 526,300 212,500 190,000 150,000 696,500 7,274,200 129,000 35,000 3,177,100 3,500,000 8,000,000 3,323,600 1,443,853 393,666 3,230,473 1,098,315 544,405 219,010 157,955 150,000 696,500 7,274,200 129,195 25,576 3,195,818 3,500,000 8,000,000 3,376,564 55,047 107,534 3,227 72,985 (18,105) (6,510) 32,045 - - - (195) 9,424 (18,718) - - - (52,964) Workers Compensation - 500,000 500,000 - Future Capacity Reserve - 2,100,000 2,100,000 - Rate Stabilization Fund - 12,400,000 12,400,000 - Other Employment Expenses 157,900 149,200 - 149,200 Inventory Reserve 175,000 175,000 175,000 - TOTAL EXPENSES 90,804,800 103,386,400 103,977,677 (591,277) Budget Balance - Working Capital 9,889,100 7,152,400 6,620,878 531,522 TOTAL BUDGET BALANCE & EXPENSES $ 100,693,900 $ 110,538,800 $ 110,598,555 $ (59,755) The notes to financial statements are an integral part of this statement

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 123 CITY OF DOVER ELECTRIC IMPROVEMENT AND EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 2,714,600 $ 3,534,600 $ 3,534,600 $ - TOTAL BEGINNING BALANCES 2,714,600 3,534,600 3,534,600 - REVENUES: Transfer from Electric Revenue Fund 3,500,000 3,500,000 3,500,000 - AF Interest Earnings 40,700 40,700 52,751 12,051 Income from Sale of Assets - - 5,203 5,203 General Service Billing - 91,100 191,956 100,856 Transfer from Future Capacity Reserve 550,000 - 2,000,000 2,000,000 Total Revenues 4,090,700 3,631,800 5,749,910 2,118,110 TOTAL BEGINNING BALANCES & REVENUES $ 6,805,300 $ 7,166,400 $ 9,284,510 $ 2,118,110 T EXPENSES: Power Plant $ 1,441,300 $ 1,236,600 $ 834,336 $ 402,264 Transmission/Distribution 596,000 1,232,000 1,183,603 48,397 Engineering 1,932,700 1,606,800 1,294,674 312,126 Transfer to General Fund - - 2,000,000 (2,000,000) Total Expenses 3,970,000 4,075,400 5,312,613 (1,237,213) Budget Balance - Improvement & Extension Fund 2,835,300 3,091,000 3,980,178 (889,178) Total Budget Balances - Working Capital 2,835,300 3,091,000 3,980,178 (889,178) TOTAL BUDGET BALANCES & EXPENSES $ 6,805,300 $ 7,166,400 $ 9,292,791 $ (2,126,391) D The notes to financial statements are an integral part of this statement R

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 125 FINANCIAL STATEMENTS PROPRIETARY FUND TYPES INTERNAL SERVICE FUNDS AF WORKERS’ COMPENSATION INSURANCE FUND The City has created this fund to account for the revenues and expenses related to a self- insured Workers’ Compensation Fund. The revenues are received from the City's various funds. These funds contribute to the Workers’ Compensation Fund an amount based on salaries at a pre-determined assessment rate. Claims paid, reinsurance cost and third party T administrator's fees are charged to this fund. Budgetary schedules are included for public review of budgetary compliance. DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 126 CITY OF DOVER INTERNAL SERVICE FUNDS WORKERS' COMPENSATION INSURANCE BALANCE SHEET AS OF JUNE 30, 2013 & JUNE 30, 2012 2013 2012 ASSETS: Cash $ 383,114 $ 467,599 Investment 1,351,527 610,024 Due from Other Funds - - AF Due from PMA - 15,564 Prepaid Expenses 11,250 11,250 Receivables 4,000 4,000 TOTAL ASSETS $ 1,749,891 $ 1,108,437 LIABILITIES: Claims Payable T Bank Fee/Vouchers Payable Payable to Other Funds TOTAL LIABILITIES RETAINED EARNINGS: Reserved for Workers Compensation TOTAL LIABILITIES AND RETAINED $ $ 481,951 98 - 482,049 $ 1,267,842 $ $ $ 474,281 - 1,105 475,386 633,051 D EARNINGS The notes to financial statements are an integral part of this statement R $ 1,749,891 $ 1,108,437

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 127 CITY OF DOVER INTERNAL SERVICE FUNDS WORKER'S COMPENSATION INSURANCE STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET ASSETS AS OF JUNE 30, 2013 & JUNE 30, 2012 2013 2012 OPERATING REVENUES: City Contribution $ 1,152,388 $ 24,528 Insurance Refunds - Excess Ins. & Other 57,525 533,979 Miscellaneous revenue 4,100 6,380 AF TOTAL OPERATING REVENUE 1,214,013 564,887 OPERATING EXPENSES: Program Expenses 433,214 1,769,964 Insurance 74,789 67,652 Self-Insurance Taxes 29,114 24,337 Contractural Services TOTAL OPERATING EXPENSES NET OPERATING INCOME/(LOSS) T NON OPERATING REVENUE/(EXPENSE): Interest Earned Net Increase (Decrease) in Fair Market Value of Investments 33,700 570,817 643,196 12,459 (20,864) 31,100 1,893,053 (1,328,166) 19,987 4,533 D TOTAL NON OPERATING REVENUE/(LOSS) (8,405) 24,520 UNRESERVED RETAINED EARNINGS AT BEGINNING OF YEAR 633,051 1,936,697 R UNRESERVED RETAINED EARNINGS AT END OF YEAR The notes to financial statements are an integral part of this statement $ 1,267,842 $ 633,051

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 128 CITY OF DOVER INTERNAL SERVICE FUNDS WORKERS' COMPENSATION INSURANCE STATEMENT OF CASH FLOWS AS OF JUNE 30, 2013 & JUNE 30, 2012 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES City Contributions $ 1,152,388 $ 24,528 Miscellaneous Revenue 4,100 6,380 Insurance Reimbursement - Excess Coverage 57,525 533,979 Claims Paid (425,544) (1,481,756) Internal Activity - Payments from (to) other funds 14,459 (27,430) Payments to Suppliers (137,603) (101,532) AF Net Cash Provided by Operating Activities $ 665,325 $ (1,045,831) CASH FLOWS FROM INVESTING ACTIVITIES Interest Earned $ (8,308) $ 24,520 Redemption (Purchase) of investments (741,502) 974,491 Net Cash Flows from Investing Activities $ (749,810) $ 999,011 NET INCREASE IN CASH AND CASH EQUIVALENTS $ (84,485) $ (46,820) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR Reconciliation of operating income to net cash provided (used) by operating activities: Operating Income(loss) Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities: (Increase)/Decrease in Due from Other Funds (Increase)/Decrease in Receivables T $ $ $ 467,599 383,114 $383,114 $0 643,196 - 15,564 $ $ $ 514,419 467,599 $467,599 $0 (1,328,166) 500 (15,564) D(Increase)/Decrease in Prepaid Expenses Increase/(Decrease) in Payable to Other Funds Increase/(Decrease) in Accrued Expenses R Net Cash Provided by (Used for) Operating Activities Noncash Investing, Capital Financing Activities: Change in fair value of investments The notes to financial statements are an integral part of this statement $ $ - (1,105) 7,670 665,325 (20,864) $ $ 56,402 (27,930) 268,927 (1,045,831) 4,533

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 129 CITY OF DOVER INTERNAL SERVICE FUND - WORKERS' COMPENSATION SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2013 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) OPERATING REVENUES: Beginning Balance Interest Earned City Contribution Insurance Refund Miscellaneous Revenue AF $ 943,400 25,000 626,700 - 4,600 $ 633,100 25,000 1,126,700 4,600 - $ 633,051 $ (7,716) 1,152,388 57,525 4,100 (49) (32,716) 25,688 52,925 4,100 T TOTAL REVENUES $ 1,599,700 $ 1,789,400 $ 1,839,348 $ 49,948 OPERATING EXPENSES: Program Expenses $ 450,000 $ 450,000 $ 433,214 $ 16,786 Contractual Services 32,000 32,000 33,700 (1,700) Insurance 68,300 68,300 74,789 (6,489) Bank Fees 1,500 1,500 689 811 State of Delaware - Self-Insurance Tax 37,000 37,000 29,114 7,886 D TOTAL EXPENSES R BUDGET BALANCE - CARRY FORWARD $ 1,010,900 $ 588,800 $ 588,800 $ 1,200,600 $ 571,506 $ 1,267,842 Note: The above schedule is not required under GAAP, but is included for public review of budgetary compliance. Accordingly, no reconciliation to the GAAP financial statements is provided. GASB 31 Adjustment $4,533. $ $ 17,294 67,242

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 130 FINANCIAL STATEMENTS FIDUCIARY FUND TYPES AGENCIES AF DOWNTOWN DOVER PARTNERSHIP The City established the Downtown Dover Partnership as an agency for the development of the downtown urban area. TFOURTH OF JULY CELEBRATION COMMITTEE The Fourth of July Celebration Committee is designed to provide recreation enjoyment and educational events commemorating the birth of our nation. DOVER LIBRARY FOUNDATION The Dover Library Foundation was formed to provide fund raising for the construction of a new regional library. DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 131 CITY OF DOVER COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2013 BALANCE BALANCE JUNE 30, 2012 ADDITIONS DEDUCTIONS June 30, 2013 DOWNTOWN DOVER PARTNERSHIP ASSETS: Cash $ 255,950 $ 2,431,690 $ 2,447,011 $ 240,629 Receivables 54,854 5,042 9,125 50,771 Prepaid Items 3,064 45 3,064 45 AF Total Assets $ 313,868 $ 2,436,777 $ 2,459,200 $ 291,445 LIABILITIES: Vouchers Payable $ 49,255 $ 2,245,909 $ 2,219,364 $ 75,800 Deposit Payable 7,015 - - 7,015 Due to Agencies 257,598 - 48,968 208,630 Total Liabilities $ 313,868 $ 2,245,909 $ 2,268,332 $ 291,445 T 4TH JULY CELEBRATION COMMITTEE ASSETS: Cash Total Assets LIABILITIES: Vouchers Payable Due to Agencies $ $ $ 25,896 25,896 - 25,896 $ $ $ 44,312 44,312 340 22,650 $ $ $ 45,406 45,406 - 24,084 $ $ $ 24,802 24,802 340 24,462 D Total Liabilities R DOVER LIBRARY FOUNDATION ASSETS: Cash Prepaid Items Total Assets LIABILITIES: Vouchers Payable Due to Agencies $ $ $ $ 25,896 171,564 171,640 - 76 171,640 $ $ $ $ 22,990 362,496 - 362,496 41,314 290,140 $ $ $ $ 24,084 534,060 76 534,136 41,314 461,780 $ $ $ $ 24,802 - - - - - Total Liabilities $ 171,640 $ 331,454 $ 503,094 $ - (Continued)

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Supplementary Information - Part E page 132 (Continued-Combining Statement of Changes in Assets & Liabilities all Agency Funds) BALANCE BALANCE JUNE 30, 2012 ADDITIONS DEDUCTIONS JUNE 30, 2013 TOTAL-ALL AGENCY FUNDS ASSETS: Cash & Investments $ 453,410 $ 2,838,498 $ 3,026,477 $ 265,431 Receivables 54,854 5,042 9,125 50,771 Prepaid Items 3,140 45 3,140 45 Total Assets $ 511,404 $ 2,843,585 $ 3,038,742 $ 316,247 LIABILITIES: Vouchers Payable $ 49,255 $ 2,287,563 $ 2,260,678 $ 76,140 Deposit Payable 7,015 - - 7,015 AF Due to Agencies 455,134 312,790 534,832 233,092 Total Liabilities $ 511,404 $ 2,600,353 $ 2,795,510 $ 316,247 The notes to financial statements are an integral part of this statement T DR

STATISTICAL SECTION AF T DTHIS SECTION OF THE CITY OF DOVER ‘S COMPREHENSIVE ANNUAL FINANCIAL REPORT R PRESENTS INFORMATION AS A CONTEXT UNDERSTANDING DETAILED WHAT INFORMATION IN THE FINANCIAL FOR THE STATEMENTS, NOTE DISCLOSURES, AND REQUIRED SUPPLEMENTARY INFORMATION SAYS ABOUT THE GOVERNMENT’S OVERALL FINANCIAL HEALTH.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 131 AF STATISTICAL SECTION This part of the City of Dover’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. T FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. REVENUE CAPACITY These schedules contain information to help the reader assess the City’s most significant local revenue source, property tax. D DEBT CAPACITY These schedules present information to help the reader assess the affordability of the City’s current R levels of outstanding debt and the City’s ability to issue additional debt in the future. DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. OPERATING INFORMATION These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 132 Table 1 City of Dover Net Position by Component Last Ten Fiscal Years (Accrual basis of accounting) Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 AF Governmental Activities Invested in capital assets, net of related debt $ 49,577,021 $ 49,642,124 $ 38,839,995 $ 35,742,504 $ 35,752,624 $ 35,255,463 $ 29,709,046 $ 27,056,161 $ 23,343,787 $ 21,824,685 Restricted 743,276 482,780 1,774,167 1,250,342 1,758,470 1,602,932 1,591,678 887,235 2,023,096 1,852,754 Unrestricted (4,813,147) (6,759,433) (99,435) 4,820,682 9,536,614 15,155,125 13,849,061 11,590,341 7,431,716 4,067,810 Total governmental activities net position 45,507,150 43,365,471 40,514,727 41,813,528 47,047,708 52,013,520 45,149,785 39,533,737 32,798,599 27,745,249 Business-type activities Invested in capital assets, net of related debt 100,079,972 98,303,263 97,270,906 96,660,480 91,471,776 101,154,934 89,289,351 89,089,027 82,878,764 81,968,635 Restricted 34,665,736 33,836,315 34,148,330 31,302,487 34,372,050 23,758,183 29,762,946 33,801,000 32,620,056 36,010,001 Unrestricted 39,534,763 33,947,753 23,286,232 19,318,633 18,614,907 16,263,139 14,371,418 11,859,329 11,569,305 4,831,263 T Total business-type activities net position 174,280,471 166,087,331 154,705,468 147,281,600 144,458,733 141,176,256 133,423,715 134,749,356 127,068,125 122,809,899 Primary government Invested in capital assets, net of related debt 149,656,993 147,945,387 136,110,901 132,402,984 127,224,400 136,410,397 118,998,397 116,145,188 106,222,551 103,793,320 Restricted 35,409,012 34,319,095 35,922,497 32,552,829 36,130,520 25,361,115 31,354,624 34,688,235 34,643,152 37,862,755 Unrestricted 34,721,616 27,188,320 23,186,797 24,139,315 28,151,521 31,418,264 28,220,479 23,449,670 19,001,021 8,899,073 Total primary government net position $ 219,787,621 $ 209,452,802 $ 195,220,195 $ 189,095,128 $ 191,506,441 $ 193,189,776 $ 178,573,500 $ 174,283,093 $ 159,866,724 $ 150,555,148 DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 133 City of Dover Changes in Net Position Last Ten Fiscal Years (Accrual basis of accounting) Fiscal Year AF 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Expenses Governmental activities: General government $ 1,426,396 $ 905,382 $ 836,668 $ 1,472,104 $ 1,384,276 $ 1,855,983 $ 1,510,308 $ 1,248,124 $ 1,180,327 $ 1,474,045 Public safety 12,319,713 12,533,566 13,879,609 14,509,849 15,120,737 15,929,187 16,357,692 16,848,343 17,638,304 17,989,463 Public Works 4,536,928 4,547,747 4,493,296 4,791,235 4,355,206 7,539,463 7,115,319 6,257,946 8,135,172 6,099,484 Library and recreation 1,371,944 1,706,743 1,309,601 1,875,872 2,108,664 2,417,236 2,265,205 2,731,492 2,377,363 2,313,048 Community and economic development 545,899 711,743 600,907 639,545 497,914 724,555 2,228,744 1,173,546 773,208 939,966 Central services 297,857 236,451 447,877 552,042 586,274 550,886 544,611 599,498 469,385 454,816 Financial administration 1,902,719 1,582,911 1,774,380 1,588,425 1,425,074 2,557,465 2,353,180 2,463,426 1,146,524 1,122,830 T Other post-employment benefits - - - - - 2,441,541 2,843,480 6,142,627 6,534,630 5,119,778 Interest on long-term debt 224,155 129,352 118,130 106,815 82,657 87,491 78,581 75,397 90,161 114,785 Total governmental activities expenses 22,625,611 22,353,895 23,460,468 25,535,887 25,560,802 34,103,807 35,297,120 37,540,399 38,345,074 35,628,215 Business-type activities Water and Sewer 9,291,404 8,678,186 9,263,236 9,846,771 10,387,198 11,196,913 11,971,445 10,912,722 11,068,607 10,905,358 Electric 53,387,490 56,384,796 58,620,196 88,297,987 88,442,048 94,475,940 90,940,056 90,296,244 77,625,673 74,595,585 Total business-type activities 62,678,894 65,062,982 67,883,432 98,144,758 98,829,246 105,672,853 102,911,501 101,208,966 88,694,280 85,500,943 Total primary government expenses 85,304,505 87,416,877 91,343,900 123,680,645 124,390,048 139,776,660 138,208,621 138,749,365 127,039,354 121,129,158 Program Revenues Governmental activities: Charges for services: General government 1,117,648 1,209,067 1,428,996 1,683,817 1,603,935 1,426,972 1,307,296 1,503,243 4,043,168 2,463,437 D Public safety 2,956,135 3,684,792 4,487,028 4,499,315 4,571,911 4,358,641 4,309,516 4,682,687 4,803,827 4,240,847 Public works 1,083,894 1,081,064 1,253,313 1,312,328 1,334,492 1,396,801 1,340,729 2,173,434 1,903,623 2,624,877 Library and recreation 443,925 447,948 549,959 1,100,412 788,875 715,404 650,283 632,861 632,824 656,001 Operating grants and contributions 2,090,106 2,267,722 3,156,369 3,108,545 2,511,244 2,758,194 3,813,842 5,032,926 2,654,051 2,914,696 Capital grants and contributions 1,154,728 1,983,669 500,103 790,612 647,724 1,090,838 169,130 856,338 6,292,303 2,107,444 Total governmental activities program revenues 8,846,436 10,674,262 11,375,768 12,495,029 11,458,181 11,746,850 11,590,796 14,881,489 20,329,796 15,007,302 R (Continued)

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 134 (Table 2 Continued - Changes in Net Position) Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Expenses Business-type activities Charges for services: Water and Sewer 10,454,520 10,804,685 12,224,877 11,819,643 12,158,812 11,319,027 11,531,595 14,033,678 13,775,833 13,387,706 Electric 59,476,870 63,303,032 68,005,332 87,014,071 96,858,790 101,420,982 100,278,474 101,902,619 93,529,401 90,685,693 Capital Contributions 211,390 368,740 272,000 705,572 2,078,040 - 392,855 997,750 441,285 - AF Total business-type activities program revenues 70,142,780 74,476,457 80,502,209 99,539,286 111,095,642 112,740,009 112,202,924 116,934,047 107,746,519 104,073,399 Total primary government program revenues 80,817,042 85,852,225 92,997,238 110,997,467 122,842,492 124,330,805 123,793,720 137,263,843 128,076,315 119,080,701 Net (expense)/revenue: Governmental activities (11,679,633) (12,084,700) (13,040,858) (14,102,621) (22,356,957) (22,356,957) (23,706,324) (18,015,278) (18,015,278) (20,620,913) Business-type activities 5,079,798 6,593,025 (17,642,549) 710,040 5,422,789 7,067,156 9,291,423 28,239,767 19,052,239 18,572,456 Total primary government net revenue (expense) (6,599,835) (5,491,675) (30,683,407) (13,392,581) (16,934,168) (15,289,801) (14,414,901) 10,224,489 1,036,961 (2,048,457) General Revenues and Other Changes in Net Position Governmental activities: Property taxes 7,183,124 7,370,318 8,792,652 9,032,995 9,557,982 10,075,401 10,029,584 10,904,908 11,050,198 11,126,395 T Transfer taxes 1,627,172 2,379,548 3,048,064 3,008,371 3,515,422 1,197,425 867,692 1,461,983 1,373,103 1,107,686 Gain (loss) on sale of capital assets - 3,750 - - - - - - - - Investment earnings 97,171 332,853 640,381 1,230,540 726,683 585,264 268,748 137,218 141,925 36,793 Transfers 6,636,740 6,611,024 6,338,741 5,385,000 7,166,269 5,533,055 7,306,120 8,856,000 8,300,796 10,491,718 Total governmental activities 15,544,207 16,697,493 18,819,838 18,656,906 20,966,356 17,391,145 18,472,144 21,360,109 20,866,022 22,762,592 Business-type activities: Gain (loss) on sale of capital assets 16,213 (13,264) (127,477) - - - - - - - Investment earnings 198,661 1,312,098 1,528,672 2,664,831 2,652,414 1,748,376 837,564 554,787 630,420 112,402 Transfers (6,636,740) (6,611,024) (6,338,741) (5,385,000) (7,166,269) (5,533,055) (7,306,120) (8,856,000) (8,300,796) (10,491,718) Total business-type activities (6,421,866) (5,312,190) (4,937,546) (2,720,169) (4,513,855) (3,784,679) (6,468,556) (8,301,213) (7,670,376) (10,379,316) Total primary government 9,122,341 11,385,303 13,882,292 15,936,737 16,452,501 13,606,466 12,003,588 13,058,896 13,195,646 12,383,276 Change in Net Position Government activities 3,864,574 4,612,793 5,778,980 4,554,285 (1,390,601) (4,965,812) (5,234,180) 3,344,831 2,850,744 2,141,679 D Business-type activities (1,342,068) 1,280,835 (22,580,095) (2,010,129) 908,934 3,282,477 2,822,867 19,938,554 11,381,863 8,193,140 Total primary government $ 2,522,506 $ 5,893,628 $ (16,801,115) $ 2,544,156 $ (481,667) $ (1,683,335) $ (2,411,313) $ 23,283,385 $ 14,232,607 $ 10,334,819 R

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 135 Table 3 City of Dover Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified accrual basis of accounting) Fiscal Year AF 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 General Fund Reserved $ 720,698 $ 1,099,450 $ 2,158,007 $ 2,023,169 $ 528,145 $ 709,817 $ 315,580 $ - $ - $ - Unreserved 3,729,125 4,156,574 6,515,829 7,046,831 9,387,795 8,305,396 7,242,323 - - - Non-spendable - - - - - - - 191,567 198,175 227,457 Restricted - - - - - - - 85,070 83,356 131,237 Committed - - - - - - - 3,484,203 920,475 936,899 Assigned - - - - - - - 614,559 658,890 3,519,012 Unassigned - - - - - - - 3,385,209 3,007,983 3,391,714 Total General Fund 4,449,823 5,256,024 8,673,836 9,070,000 9,915,940 9,015,213 7,557,903 7,760,608 4,868,879 8,206,319 All other governmental funds Special revenue funds NOTE Unreserved Non-spendable Restricted Assigned Total all other governmental funds Total fund balances $ 2,119,882 - - - 2,119,882 6,569,705 $ T 2,984,929 - - - 2,984,929 8,240,953 2,829,793 $ 11,503,629 - - - 2,829,793 5,248,929 $ 14,318,929 - - - 5,248,929 The fiscal years prior to 2011 show fund balances as they were classified and reported prior to GASB 54. 5,180,097 $ 15,096,037 - - - 5,180,097 $ 881,332 881,332 9,896,545 - - - $ 872,309 - - - 872,309 8,430,212 $ - 4,203 764,512 289,221 1,057,936 8,818,544 - 13,099 399,424 171,381 583,904 $ 5,452,783 - 123,349 713,794 $ 8,920,113 - 590,445 DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 136 Table 4 City of Dover Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified accrual basis of accounting) Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenues AF Fines $ 619,493 $ 1,117,440 $ 1,759,979 $ 1,314,246 $ 1,262,180 $ 1,323,041 $ 1,418,354 $ 1,665,496 $ 1,202,615 $ 912,004 Library revenue 333,157 346,652 451,705 989,006 517,697 514,458 465,387 444,455 475,822 471,065 Licenses and permits 2,017,287 2,251,091 2,465,845 2,689,348 2,916,749 2,599,948 2,424,768 2,417,363 2,816,866 2,548,913 Sanitation fees and rebates 1,083,894 1,081,064 1,253,313 1,293,399 1,333,436 1,396,801 1,340,729 2,173,434 1,903,623 2,624,877 Recreation - - - 12,793 34,111 47,079 36,100 44,292 44,522 40,446 Miscellaneous services 988,511 916,244 996,174 1,367,960 1,351,160 1,278,251 1,247,096 1,480,845 3,940,294 2,470,200 Taxes 8,810,296 9,749,866 11,840,716 12,041,366 13,073,404 11,272,826 10,897,276 12,366,891 12,462,532 12,333,520 Grants 3,244,834 2,812,082 3,919,800 4,550,607 3,148,194 3,513,365 4,482,259 5,551,175 8,909,758 5,119,089 Court of Chancery fees 559,260 710,380 792,280 929,120 883,880 738,240 675,390 766,340 863,220 917,700 Investment income 95,127 315,642 603,451 1,154,829 638,782 513,873 237,631 112,722 117,405 45,198 T Total revenues 17,751,859 19,300,461 24,083,263 26,342,674 25,159,593 23,197,882 23,224,990 27,023,013 32,736,657 27,483,012 Expenditures General government 693,874 902,139 836,419 1,000,622 1,319,774 1,661,742 1,525,854 1,348,911 1,093,772 1,107,122 Library services 1,132,413 1,144,289 1,162,301 1,253,300 1,391,974 2,150,585 1,951,347 4,369,578 13,518,569 5,514,217 Public safety 11,755,081 12,432,257 13,922,271 15,055,746 15,068,451 15,680,044 15,948,298 16,139,953 17,001,619 18,048,642 Public works 2,864,345 2,478,911 3,340,643 2,551,962 2,928,236 3,219,659 2,504,061 2,535,060 2,074,061 1,758,405 Recreational services 486,789 617,624 705,241 1,452,987 2,699,725 869,134 746,868 834,124 827,230 651,341 Streets and sanitation services 2,957,758 2,711,775 3,242,649 3,018,222 3,675,282 3,279,188 3,181,025 3,383,465 3,280,165 2,990,430 Engineering services 225,658 253,299 289,208 314,728 - - - - - - Financial administration 597,973 687,450 725,963 829,002 1,055,619 1,009,240 895,570 866,314 902,009 909,877 Garage and stores 382,851 418,710 417,202 402,915 486,966 491,450 526,286 490,113 503,036 431,542 Insurance 203,997 168,430 153,202 165,584 176,947 199,643 197,723 203,343 198,241 241,395 Retiree health care lump sum 541,715 590,587 645,457 736,286 758,185 3,265,857 1,006,397 1,297,509 1,614,241 1,620,600 D Employee pension unfunded liability - - - 402,204 134,775 - - 1,544,978 1,545,000 1,693,500 Street lights 470,110 534,682 545,426 624,243 917,438 937,013 956,860 968,562 986,430 878,760 Community and economic development 545,899 711,743 600,907 639,545 497,914 724,555 2,228,744 1,173,546 773,208 939,966 Miscellaneous - 16,000 - - - - - - - - (Continued) R

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 137 (Table 4 - Continued Changes in Fund Balances of Governmental Funds) Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Expenditures Debt service Principal 668,341 490,171 464,480 368,384 350,000 365,000 260,000 270,000 275,000 296,003 Interest 217,374 121,350 107,959 96,644 87,468 77,319 68,410 65,225 52,734 73,071 Other charges (Issuance of debt) 122,387 - - - - - - - 27,255 1,029 Total expenditures 24,675,998 27,198,410 29,019,785 31,576,314 33,925,578 32,111,352 35,483,866 44,652,806 44,672,570 37,155,900 Excess of revenues over(under) expenditures Other financing sources (uses) Bond proceeds Transfers in Transfers out Payments to refunded bond escrow agent Sale of capital assets AF (5,375,537) 3,430,000 8,249,757 (1,928,012) (3,244,281) - (3,115,147) - 8,965,067 (2,354,043) - 3,750 (2,677,111) - 8,850,767 (2,512,026) - - (6,416,721) - 8,316,722 (2,931,722) - - (10,727,696) - 12,369,176 (5,202,907) - - (10,732,547) - 12,683,925 (7,150,870) - - (8,772,453) - 9,156,575 (1,850,455) - - (11,916,149) - 12,420,329 (3,564,329) - - (11,935,913) 851,500 10,959,204 (2,658,408) - - (9,672,888) 2,648,500 12,666,208 (2,174,490) - - T Total other financing sources (uses) 6,507,464 6,614,774 6,338,741 5,385,000 7,166,269 5,533,055 7,306,120 8,856,000 9,152,296 13,140,218 Net change in fund balances $ 1,131,927 $ 3,499,627 $ 3,661,630 $ (1,031,721) $ (3,561,427) $ (5,199,492) $ (1,466,333) $ (3,060,149) $ (2,783,617) $ 3,467,330 Debt service as a percentage of noncapital expenditures 4.53% 2.43% 2.25% 1.66% 1.49% 1.42% 1.05% 0.85% 1.07% 1.14% Capital outlay included in total expenditures (1) $ 2,425,801 $ 2,084,385 $ 3,523,649 $ 3,554,679 $ 4,559,625 $ 2,698,627 $ 2,434,391 $ 5,296,536 $ 13,927,288 $ 4,872,122 NOTES (1) Capital outlay has been included in functional expenditures. Debt service as a percentage of non-capital expenditures excludes capital outlay expenditures. DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 138 Table 5 City of Dover Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) Fiscal Property Transfer Year Tax Tax Total 2004 $7,183,124 $1,627,172 $8,810,296 2005 7,370,318 2,379,548 9,749,866 AF 2006 8,792,652 3,048,064 11,840,716 2007 9,032,995 3,008,371 12,041,366 2008 9,557,982 3,515,422 13,073,404 2009 10,075,401 1,197,425 11,272,826 2010 10,029,584 867,692 10,897,276 2011 10,904,908 1,461,983 12,366,891 NOTES 2012 2013 T 11,050,198 11,126,395 1,373,103 1,107,686 1. Property Tax rate $.3378 of 100% assessed value (See Table 6 for tax rates) includes payments in lieu of taxes, farm land roll back and penalties. 12,423,301 12,234,081 D 2. Transfer Taxes equal 1.5% of the real property sales value. 3. Assessed value by major component not available. (See Table 6 for R total assessed value.)

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 139 Table 6 City of Dover, Delaware Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years REAL PROPERTY Ratio of Less: Total Taxable Direct Fiscal Total Assessed Exempt Total Taxable Estimated Value to Total Tax Year Value Properties Assessed Value Actual Value Assessed Value Rate 2004 $ 2,576,251,900 $ 841,436,800 $ 1,734,815,100 $ 2,576,251,900 67.34% 0.4110 AF 2005 2,605,638,000 841,290,300 1,764,347,700 2,605,638,000 67.71% 0.4110 2006 3,146,043,800 618,735,300 2,527,308,500 3,146,043,800 80.33% 0.3300 2007 3,516,580,775 618,433,400 2,898,147,375 3,516,580,775 82.41% 0.3300 2008 3,406,762,915 616,277,700 2,790,485,215 3,406,762,915 81.91% 0.3300 2009 4,124,562,920 1,225,269,600 2,899,293,320 4,124,562,920 70.29% 0.3300 2010 4,139,869,700 1,232,858,580 2,907,011,120 4,139,869,700 70.22% 0.3300 2011 4,363,518,360 1,226,879,300 3,136,639,060 4,363,518,360 71.88% 0.3378 2012 4,469,369,160 1,300,061,400 3,169,307,760 4,469,369,160 70.91% 0.3378 T 2013 4,510,303,860 1,328,807,500 3,181,496,360 4,510,303,860 70.54% 0.3378 Source: Tax Assessor's Office, City of Dover. NOTES 1. There is no tax on personal properties. Therefore, no figures are presented. 2. In 2003 the City changed assessed values to 100% of estimated actual values from 60%. In doing so, the tax rate was lowered from $ .685 to $ .411. Had the tax rate been rolled back to a DR 3. 4 revenue nuetral rate, the rate would have been $ .3310. The revised rate represents an $ .08 increase. In 2005, the City property values were reassessed, effective for tax year 2006. The tax rate was lowered from $ .411 to $ .330. Had the tax rate been rolled back to a revenue nuetral rate, the rate would have been $ .310. The revised rate represents a $ .02 increase. In 2010, the City property values were reassessed, effective for tax year 2011. The tax rate was increased from $ .330 to $ .3378. Had the tax rate been rolled back to a revenue nuetral rate, the rate would have been $ .3108. The revised rate represents a $ .027 rate increase.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 140 Table 7 City of Dover, Delaware NOTES Property Tax Rates - All Direct and Overlapping Governments with the Capital School District 1. Section 48 of the City of (Per $100 of Assessed Value) Dover charter provides Last Ten Fiscal Years that the amount of money to be raised through property taxes shall not exceed 2% of the total taxable assessment. Direct Overlapping City Capital Vo-Tech Total 2. Kent County Property Fiscal of Kent School School Direct & AF tax rates reflect the 1987 Year Dover County District District Overlapping reappraisal of properties in Kent County. 2004 $ 0.4110 $ 0.250 $ 1.173 $ 0.0870 $ 1.921 2005 0.4110 0.250 1.403 0.0887 2.153 * 3. The City of Dover reassessed 2006 0.3300 0.250 1.459 0.1180 2.157 * property values and "rolled 2007 0.3300 0.250 1.534 0.1160 2.230 * back" the tax rate in 2006. 2008 0.3300 0.250 1.480 0.1219 2.182 T 2009 0.3300 0.310 1.543 0.1219 2.305 4. In 2010, the City property 2010 0.3300 0.310 1.769 0.1304 2.539 values were reassessed, 2011 0.3378 0.300 1.832 0.1351 2.605 effective for tax year 2011 2012 0.3378 0.300 1.832 0.1351 2.605 Tax rate increased to $ .3378 2013 0.3378 0.300 1.909 0.1372 2.684 Sources: Tax Assessor's Office - City Receiver of Taxes Office - Kent County * Corrected Capital School District & Vo-tech tax rates DR 1.909 Property Tax Rates - FY 2013 All Direct & Overlapping Governments 0.137 0.338 0.300 City of Dover Kent County Capital School Vo-Tech School

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 141 Table 8 City of Dover, Delaware Principal Tax Payers Current Year and Nine Years Ago PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL 2013 TAXABLE 2004 TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAX PAYERS VALUATION RANK VALUATION VALUATION RANK VALUATION Dover Downs Prop, Inc. $146,847,600 1 4.62% $87,257,686 1 5.12% Dover Mall LP/Dover Commons 80,921,800 2 2.54% 45,018,200 2 2.64% AF Dover Medical Center 27,270,100 3 0.86% - - - Dover South Coast Partnership 25,035,100 4 0.79% 9,777,500 9 0.57% Kraft-General Foods Corp. 19,565,300 5 0.61% 31,425,800 3 1.84% Robino Bay Court Plaza 14,400,000 6 0.45% 6,593,000 - - T Berks City Real Estate LLC 13,492,400 7 0.00% 7,635,700 - - Millers Dover Downs 13,463,600 8 0.42% 4,632,200 - - G & I VA Dover Country Club LLC 13,176,500 9 0.41% 7,184,200 - - McKee Road Business Park LLC 12,774,400 10 0.40% 8,821,700 - - Del-Homes Catalog Group - - - 9,241,600 10 0.54% Dover Wipes - - - 20,965,800 4 1.23% D K.W. Lands/Sheraton/Hampton Playtex Apparel Inc. R Energizer(was Playtex Products Inc.) Woodmill Capital Advisors LLC Source: Tax Assessor's Office, City of Dover - - - - $366,946,800 - - - - - - - - 11.11% 9,987,300 10,812,400 13,724,600 12,367,200 $285,444,886 8 7 5 6 0.59% 0.63% 0.80% 0.73% 14.69%

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 142 Table 9 City of Dover, Delaware Property Tax Levies and Collections Last Ten Fiscal Years Total Collected Within Collection Collected in Total Collection Fiscal Tax the Fiscal Year as Percentage Subsequent Collections as Percentage Year Levy of the Levy of Levy Years to Date of Levy 2004 $ 7,011,906 $ 6,941,843 99.0% $ 70,063 $ 7,011,906 100.00% AF 2005 7,109,977 6,941,217 97.6% 168,750 7,109,967 100.00% 2006 8,287,536 8,081,411 97.5% 206,125 8,287,536 100.00% 2007 8,448,462 8,242,898 97.6% 204,732 8,447,630 99.99% 2008 9,074,777 8,937,384 98.5% 135,399 9,072,783 99.98% 2009 9,512,522 9,206,158 96.8% 296,166 9,502,324 99.89% 2010 9,525,034 9,314,327 97.8% 202,280 9,516,607 99.91% 2011 10,481,734 10,166,681 97.0% 236,992 10,403,673 99.26% T 2012 10,549,631 10,280,930 97.5% 229,452 10,510,382 99.63% 2013 10,594,623 10,398,888 98.2% - 10,398,888 98.15% Source: City of Dover Assessor & Customer Service Reports. PROPERTY TAXES LEVIED LAST TEN FISCAL YEARS 12 11 10 D 9 8 7 Millions 6 5 4 R 1. 2. 3 2 1 0 2004 2005 2006 2007 2008 NOTES 2009 2010 Section 48 of the City of Dover charter provides that the maximum budget to be raised through property taxes shall not exceed 2% of the total taxable assessment. Total Tax Levy represents the annual tax billings, quarterly billings and adjustments 2011 2012 2013 from tax appeals. 3. The table excludes payments in lieu of taxes and farm land roll back taxes.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 143 Table 10 City of Dover Ratios of Outstanding Debt by Type Last Ten Fiscal Years Fiscal Year Governmental Activities General Obligation Bonds Capital Leases AF Water/Sewer Revenue Bonds Business-type Activities Electric Revenue Bonds Capital Leases Total Primary Government Percentage of Personal Income Per Capita Population 2004 2005 2006 2007 2008 2009 2010 2011 2012 $ 3,685,113 3,363,115 3,038,286 2,703,457 2,363,628 2,008,800 1,758,971 1,499,143 2,085,815 $ 313,035 152,864 - - - - - - - $ T 9,376,999 8,087,613 6,752,131 5,391,320 4,769,332 4,126,124 3,765,547 7,913,384 10,865,354 $ 22,400,030 21,496,483 19,741,258 18,115,568 16,439,872 36,690,524 34,543,730 30,033,446 27,995,025 $ 309,915 161,836 68,892 - - - - - - $ 36,085,092 33,261,911 29,600,567 26,210,345 23,572,832 42,825,448 40,068,248 39,445,973 40,946,194 5.7% 5.3% 4.7% 4.1% 3.7% 6.3% 5.7% 4.9% 5.0% 1,116 1,037 914 807 690 1,200 1,112 1,070 1,122 33,829 33,829 34,288 35,197 35,200 36,359 36,627 37,341 36,492 2013 D 4,478,997 - Source: City of Dover Financial Records R 10,926,717 26,110,000 Population Source: Delaware Population Consortium Annual Population Projections - 41,515,714 5.0% 1,138 36,492

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 144 Table 11 City of Dover, Delaware Ratio of Net General Obligation Bonded Debt To Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Ratio of Net Net Bonded Bonded Fiscal Year 2004 AF Population 32,043 Assessed Value $ 1,734,815,100 Gross Bonded Debt $ 3,805,000 Net Bonded Debt $ 3,805,000 Debt To Assessed Value 0.22% Debt Per Capita 118.75 2005 2006 2007 2008 2009 2010 2011 2012 (2) (2) (2) (2) (2) (2) T 32,043 32,043 32,043 32,043 32,043 36,047 36,047 36,047 2,527,308,500 2,898,147,375 2,790,485,215 2,879,943,320 2,907,011,120 3,136,639,060 3,169,307,760 3,169,307,760 3,140,000 2,795,000 2,445,000 2,080,000 1,550,000 1,550,000 1,499,143 2,085,815 3,140,000 2,795,000 2,445,000 2,080,000 1,550,000 1,550,000 1,499,143 2,085,815 0.12% 0.10% 0.09% 0.07% 0.05% 0.05% 0.05% 0.07% 97.99 87.23 76.30 64.91 48.37 43.00 41.59 57.86 DR 2013 (2) 36,047 3,181,496,360 4,478,997 4,478,997 Source: City of Dover Financial Records, Tax Assessor’s Office and Planning's Census information. NOTES 1. This table includes all long-term general obligation bonded debt only. The Enterprise Funds have no general obligation debt. 2. Assessed value reflects the net billable tax base and does not include the exempt value, 0.14% 124.25 exemption for Senior Citizens and exemption for disability.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 145 Table 12 City of Dover, Delaware Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years Ratio of Debt Service Total Total to Total AF Fiscal Debt General General Year Principal Interest Service Expenditures(1) Expenditures 2004 $ 485,000 $ 200,740 $ 685,740 $ 26,084,149 2.63% 2005 330,000 110,371 440,371 27,912,865 1.58% T 2006 335,000 103,718 438,718 30,169,206 1.45% 2007 345,000 96,232 441,232 34,651,840 1.27% 2008 350,000 87,468 437,468 35,703,156 1.23% 2009 365,000 77,319 442,319 33,766,292 1.31% 2010 260,000 68,410 328,410 32,786,465 1.00% 2011 270,000 65,225 335,225 38,898,945 0.86% 2012 275,000 52,734 327,263 47,743,864 0.69% 2013 296,003 73,071 369,074 40,517,512 0.91% DR Source: City of Dover Financial Records. NOTES 1. The General Expenditures include all operating items, capital items and debt service.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 146 Table 13 City of Dover, Delaware Computation of Direct and Overlapping Debt with the Capital School District June 30, 2013 Percentage Amount Net Debt Applicable to Applicable to Jurisdiction Outstanding City of Dover City of Dover City of Dover Kent County (1) AF $ 4,478,997 49,035,043 100% 6% $ 4,478,997 2,942,103 T Capital School District TOTAL (2) 74,853,725 $ 128,367,765 Sources: City of Dover Financial Records, Kent County Levy Court - Accounting Department and $ - 7,421,100 DR Capital School District - Administration Department. NOTES 1. Kent County: Total debt for Kent County is $49,035,043 at June 30, 2013. Although, Kent County's bonds are general obligation bonds, $43,969,906 is payable from the Kent County Sewer Fund(s) or other committed sources. 2. Capital School District: As of June 30, 2013 the net outstanding debt was $74,853,725. Percentage and amount applicable to the City is not available.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 147 Table 14 City of Dover, Delaware Computation of Legal Debt Margin Last Ten Fiscal Years (amounts expressed in thousands) AF Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Debt Limit $ 433,704 $ 441,087 $ 631,827 $ 724,537 $ 697,621 $ 144,965 $ 144,341 $ 155,838 $ 156,429 $ 159,075 Net (Taxable) Assessed Value on Books 1,734,815 1,764,348 2,527,309 2,898,147 2,790,485 2,899,293 2,886,826 3,116,765 3,128,586 3,181,496 Total Net Debt applicable to limit 3,805 3,475 3,140 2,795 2,445 2,080 1,820 1,550 2,127 4,479 Legal debt margin $ 429,899 $ 437,612 $ 629,848 $ 721,742 $ 695,176 $ 142,885 $ 142,521 $ 154,288 $ 154,302 $ 154,596 T Total Net Debt applicable to limit as a percentage of debt limit 0.89% 0.79% 0.50% 0.39% 0.35% 1.46% 1.28% 1.00% 1.38% 2.90% Legal Debt Margin Calculation for Fiscal Year 2013 Net (Taxable) Assessed Value on Books $ 3,181,496 Debt Limit - 5 Percent of Total Assessed Value $ 159,075 DEBT (For which the City's full faith and credit has been pledged) DR Gross Bonded Debt LEGAL DEBT MARGIN Source: City of Dover Financial Reports, City of Dover Charter, Section 50(b), and Tax Assessor's Office $ July 2009 the Charter was amended and the debt limit was reduced from 25% of the total assessed value to 5%. 4,479 154,596

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 148 Table 15 City of Dover, Delaware Revenue Bond Coverage - Electric Revenue Bonds Last Ten Fiscal Years Available Fiscal Gross Operating For Debt Debt Service Requirements of Each Fiscal Year Year Revenue Expenses Service Principal Interest Total Coverage 2004 $ 59,611,552 $ 47,393,103 $ 12,218,449 $ 1,255,000 $ 1,380,002 $ 2,635,002 4.64% 2005 63,467,514 51,505,300 11,962,214 1,335,000 1,115,728 2,450,728 4.88% 2006 68,377,892 53,839,945 14,537,947 1,855,000 910,256 2,765,256 5.26% AF 2007 87,606,858 83,006,505 4,600,353 1,730,000 859,048 2,589,048 1.78% 2008 97,354,991 82,132,360 15,222,631 1,780,000 828,076 2,608,076 5.84% 2009 101,562,292 89,853,449 11,708,843 1,840,000 1,753,447 3,593,447 3.26% 2010 100,316,323 86,089,451 14,226,872 2,260,000 1,716,134 3,976,134 3.58% 2011 102,734,764 84,195,802 18,538,962 2,370,000 1,609,192 3,979,192 4.66% 2012 93,650,277 71,607,021 22,043,256 2,060,000 1,260,054 3,320,054 6.64% 2013 90,876,162 68,546,508 22,329,654 2,110,000 1,205,554 3,315,554 6.73% T Source: City of Dover Financial Records. 1. Coverage required by the bond resolution is 1.25%. 2. Calculation of gross revenue for fiscal year 2013 is as follows: Gross Revenue: Operating Revenues Interest Earned-Operating Funds $ NOTES 5. In August 2004, the City issued Electric Revenue refunding bonds in the amount of $22,535,000 to refund the outstanding Electric Revenue Bonds Series 1990 and Electric Revenue Refunding Bonds Series 1993. 90,685,693 6. In July 2008, the City issued Electric Revenue bonds in the 190,469 amount of $22,200,000. Fiscal year 2009 includes $1,026,999 D Total Gross Revenue 3. Direct operating expenses do not include R depreciation expense. $ 4. Figures presented in this table compare the net revenue available for debt service to the debt service requirements of the same fiscal year. 90,876,162 of interest related to this bond issue. 7. In November 2011, the City issued Electric Revenue Refunding Bonds in the amount of $8,810,000 to refund the 2004 Series. This refunding reduced the principal payable by $2,620,000.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 149 Table 16 City of Dover, Delaware Revenue Bond Coverage - Water/Wastewater Bonds Last Ten Fiscal Years Maximum Requirements Net Revenue Maximum Direct Available Debt Fiscal Gross Operating For Debt Service Actual Year Revenue Expenses Service Requirement Coverage 2004 2005 2006 2007 AF $ 10,101,660 10,619,688 12,372,563 12,294,847 $ 7,608,196 7,223,283 7,805,396 8,242,898 $ 2,493,464 3,396,405 4,567,167 4,051,949 $ 1,553,713 1,553,713 1,551,228 797,748 1.60% 2.19% 2.94% 5.08% 2008 2009 2010 2011 2012 2013 T 11,594,402 11,067,901 11,204,911 13,758,048 13,647,145 13,282,782 8,763,407 9,510,814 10,319,728 9,222,105 9,063,553 8,841,757 Source: City of Dover Financial Records. 2,830,995 1,557,087 885,183 4,535,943 4,583,592 4,441,025 797,748 797,708 416,423 416,423 993,837 1,019,315 3.55% 1.95% 2.13% 10.89% 4.61% 4.36% DR 1. Coverage required by bond resolution is 1.20%. NOTES 2. The maximum debt service requirement presented above covers all revenue bond requirements. Rates were increased in 2011 for debt service coverage on multi-year projects that are still under construction. Once these projects are completed, debt service requirements will increase. 3. Direct operating expenses do not include depreciation expense for coverage purposes as per the bond indenture. 4. In October 2003, the City issued Water and Sewer Revenue Bonds in the amount of $7,980,000. These bonds were issued to fully defease Water and Wastewater Revenue Bond Series 1986 B and to partially defease Water and Wastewater Revenue Bond Series 1993 and Series 1993 A and to provide approximately $1,600,000 for future capital projects.

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 150 Table 17 City of Dover Demographic and Economic Statistics Last Ten Calendar Years Per Capita Personal Personal Median School Unemployment Year Population Income Income Age Enrollment Rate 2004 33,511 $ 651,621,395 $ 19,445 32.9 6,886 3.9% 2005 33,858 658,368,810 19,445 32.9 6,882 3.2% 2006 33,962 660,391,090 19,445 32.9 6,956 2.9% AF 2007 34,735 675,422,075 19,445 32.9 6,973 3.8% 2008 36,107 702,100,615 19,445 32.9 6,977 5.7% 2009 36,627 712,212,015 19,445 32.9 6,996 10.2% 2010 36,627 712,212,015 19,445 32.9 7,117 10.2% 2011 36,560 818,158,759 22,697 31.3 7,185 9.9% 2012 36,492 828,258,924 22,697 33.2 6,984 9.3% T 2013 36,722 826,538,776 22,508 31.1 6,344 9.6% Population Source: City Count Personal Income Source: Estimation based on Population times Per Capita Personal Income Per Capital Personal Income and Median Age Sources: American Community Survey 2006-2010 Dover, DE Capital School Enrollment Source: includes kindergarten through 12th grade. Unemployment Rate Source: Delaware Department of Labor Statistics adjusted yearly average DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 151 Table 18 City of Dover, Delaware Major Employers FY 2013 and FY 2004 2013 2004 Percentage of Number of Percentage of Name Numbers of Total City Employees Total City Employees Rank Employment 06/30/2004 Rank Employment Dover Air Force Base (1) 6,504 1 32.8% 8,900 1 43.6% State of Delaware 4,500 2 22.7% 8,791(3) 2 31.5% Bayhealth Medical Center (2) 3,000 3 15.1% 2,754 4 13.5% Dover Downs Co., Inc. 1,454 4 7.3% 896 7 4.4% Dover Mall LP (3) AF 1,000 5 5.0% 3,200 3 11.7% Capital School District 905 7 4.6% 750 8 3.7% Delaware State University 958 6 4.8% 1,150 5 5.6% Kraft Foods Inc. 633 8 3.2% 621 9 3.0% Energizer Personal Care (Playtex Products) 499 9 2.5% 1,105 6 5.4% Bank of America - - - 650 10 3.2% City of Dover 389 10 2.0% 378 11 1.9% T 19,842 20,404 Source: City Economic Development Office NOTES 1. Dover Air Force Base total includes active duty, reservists and civilian employees. 2. Number of employees working in Kent County. 3. Figures estimated by Employer. DR

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 152 Table 19 City of Dover Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years 2004 2005 2006 2007 2008 2009* 2010 2011 2012 2013 Assessor 2.0 2.0 2.0 3.0 4.5 4.5 4.5 3.0 3.0 3.0 City Clerk 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 City Manager 3.0 3.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 3.0 Customer Services 16.0 16.0 14.0 16.0 16.0 16.0 16.0 15.0 14.0 14.0 Delaware Prevention Network 2.0 1.0 - - - - - - - - Facilities Management 13.0 13.0 12.0 12.0 13.0 13.0 13.0 13.0 12.0 9.0 Finance 7.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 Fire 5.5 5.5 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Fleet Maintenance 5.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Human Resources 3.5 3.5 3.5 4.0 4.0 4.0 4.0 3.0 3.0 3.0 AF Information Technology 7.0 8.0 8.0 8.0 8.0 8.0 8.0 7.0 5.0 5.0 Library 17.0 17.0 17.0 17.0 18.0 18.0 18.0 17.5 12.0 13.0 Mayor 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Parks and Recreation 5.0 5.0 5.0 5.0 8.0 8.0 8.0 8.0 6.0 5.0 Police Civilian 29.0 29.0 29.0 29.0 29.0 29.0 29.0 29.0 29.0 29.0 Police Law Enforcement 85.0 87.0 90.0 91.0 93.0 93.0 90.0 91.0 93.0 93.0 Procurement & Inventory aka Central Services 7.0 7.0 8.0 8.0 8.0 8.0 8.0 6.0 6.0 4.0 Public Services, Administration 4.0 4.0 4.0 4.0 5.0 4.0 4.0 4.0 5.0 6.0 Public Services, Inspections 14.5 14.5 15.0 15.0 16.0 7.0 7.0 7.0 7.0 7.0 T Public Services, Life Safety - - - - - 4.0 4.0 4.0 3.0 3.0 Public Services, Economic Development - - - - - 3.0 3.0 3.0 3.0 3.0 Public Services, Weed and Seed 1.0 1.0 1.0 - - - - - - - Planning 3.0 3.0 4.0 5.0 5.0 6.0 6.0 5.0 5.0 4.5 Code Enforcement - - - - - 5.0 5.0 4.5 4.0 4.0 Community Development 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 0.5 Public Works, Grounds Maintenance 15.0 15.0 16.0 16.0 16.0 16.0 16.0 15.0 14.0 14.0 Public Works, Sanitation 13.0 13.0 13.0 13.0 13.0 13.0 13.0 12.0 13.0 11.0 Public Works, Streets 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 10.0 Public Works E & I 3.0 3.0 - - - - - - - - General Fund Total 277.5 281.5 283.5 288.0 298.5 301.5 298.5 289.0 279.0 269.0 Public Utilities, Electric Administration 3.0 3.0 3.0 3.0 4.0 4.0 4.0 4.0 4.0 3.0 Public Utilities, Electric Engineering 18.5 19.5 20.5 20.5 12.5 12.5 12.5 10.0 10.0 10.0 D Public Utilities, Electric System OPS Public Utilities, Electric Meter Reading Public Utilities, Electric Transmission and Distribution Emergency Preparedness R Electric Tree Trimmers Electric Fund Total Public Utilities, Construction Public Utilities, Wastewater Engineering Public Utilities, Wastewater T & D Public Utilities, Water T & D Public Utilities, Water Treatment Plant Water Meter Reading Water/Wastewater Fund Total Total Full-Time Equivalents Source: City of Dover Budget - 5.0 29.0 - - 55.5 8.0 - 9.5 4.5 8.0 1.0 31.0 364.0 - 5.0 29.0 - - 56.5 8.0 - 9.5 4.5 8.0 1.0 31.0 369.0 - 5.0 29.0 - - 57.5 8.0 3.0 11.0 5.0 8.0 1.0 36.0 377.0 - 5.0 29.0 - - 57.5 8.0 3.0 11.0 5.0 9.0 1.0 37.0 382.5 5.0 5.0 28.0 - - 54.5 7.0 8.0 11.0 5.0 10.0 1.0 42.0 395.0 5.0 4.0 28.0 - - 53.5 7.0 8.0 11.0 5.0 10.0 1.0 42.0 397.0 5.0 4.0 28.0 - - 53.5 7.0 8.0 11.0 5.0 10.0 1.0 42.0 394.0 5.0 3.0 25.0 - - 47.0 6.0 6.0 9.0 4.0 10.0 - 35.0 371.0 5.0 3.0 25.0 - - 47.0 6.0 6.0 10.0 4.0 10.0 - 36.0 362.0 5.0 3.0 24.0 - - 45.0 5.0 6.0 10.0 5.0 10.0 - 36.0 350.0

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 153 Table 20 City of Dover, Delaware Operating Indicators and Capital Assets Used in Operations Last Ten Fiscal Years June 30, 2004 June 30, 2005 June 30, 2006 June 30, 2007 June 30, 2008 June 30, 2009 June 30, 2010 June 30, 2011 June 30, 2012 June 30, 2013 Date of Incorporation Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Land area - Acres 14,571.35 14,714.60 14,674.58 14,914.27 14,904.90 14,904.90 14,909.33 14,909.33 14,909.33 14,909.33 Land area - Square Miles 22.7677 22.991 22.929 23.303 22.586 22.586 23.29 23.29 23.29 23.29 Total Miles of Street 150.69 152.96 153.76 155.62 159.62 159.62 159.62 158.94 162.81 164.08 AF City Maintained Miles of Streets 91.34 93.61 94.41 96.27 100.27 100.27 100.27 101.59 103.46 104.73 State Maintained Miles of Streets 59.35 59.35 59.35 59.35 59.35 59.35 59.35 57.35 59.35 59.35 Dover Population-U. S. Census data 32,043 32,043 32,043 32,043 32,043 32,043 32,043 36,047 36,047 36,047 Dover Population-City Count 33,829 33,829 34,288 35,197 35,200 36,359 36,627 37,341 36,492 36,722 Registered Voters 18,259 18,714 19,502 19,084 20,181 21,897 21,897 21,454 22,362 21,998 Electric Utility: Generating Units 4 4 4 4 4 4 4 4 4 4 Co-Generating Unit 0 0 0 1 1 1 1 1 1 1 4 4 4 5 5 5 5 5 5 5 T Generating Capacity 175 mw 175 mw 175 mw 176 mw 176 mw 175 mw 175 mw 175 mw 175 mw 175 mw Co-Generating Capactiy 0 mw 16 mw 16 mw 16 mw 16 mw 16 mw 16 mw 16 mw 175 mw 175 mw 175 mw 192 mw 192 mw 191 mw 191 mw 191 mw 191 mw 191 mw Area of Service 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. Substations 16 16 16 15 15 15 15 15 15 15 High Peak Load 163 mw 160 160 176 mw 175 mw 155.656 mw 164.082 mw 162.6 mw 172 mw 171 mw Customers: Residential 17,757 17,867 18,297 18,807 19,075 19,635 19,827 19,730 19,804 19,804 Commercial 2,915 2,813 3,280 3,535 3,602 3,096 3,141 3,140 3,103 3,103 Primary 33 32 32 38 38 41 41 42 43 43 Vapor Lights Only 874 867 867 872 880 850 843 820 811 811 69 KV Industrial 4 4 4 3 3 3 3 3 3 3 Municipal- Total number of meters 148 149 149 0 0 0 0 0 0 0 D Total Customers Sales $ $57,151,810 $60,170,424 $63,844,353 $83,109,810 $94,037,212 $99,642,490 $93,195,907 $99,513,157 $91,947,980 $91,947,980 Total Customers Sales kWh 741,523,091 731,635,019 736,810,231 734,072,008 731,024,065 719,949,121 711,907,207 711,907,207 725,244,000 725,244,000 PowerSupply $ $37,675,178 $39,628,388 $41,871,486 $70,800,844 $68,831,697 $74,928,897 $72,695,602 $69,616,078 $77,079,848 $77,079,848 kWh 780,677,900 767,750,050 781,466,220 788,824,000 770,997,000 751,171,000 751,250,000 768,254,000 725,244,000 725,244,000 Fire Department: Stations Officers Equipment (Continued) R Firemen - Membership (Volunteers-Active) 2 8 100 15 2 8 100 11 2 8 100 14 2 8 100 14 2 8 100 18 2 8 80 14 2 8 120 14 2 8 100 14 2 8 100 15 2 8 100 15

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 154 Table 20 (Continued) June 30, 2004 June 30, 2005 June 30, 2006 June 30, 2007 June 30, 2008 June 30, 2009 June 30, 2010 June 30, 2011 June 30, 2012 June 30, 2013 Parks and Recreation: Major Parks 3 3 3 3 3 3 3 3 3 3 Small Parks 23 22 22 22 22 22 22 22 24 24 Police Department: Station 1 1 1 1 1 1 1 1 1 1 Substation 0 0 0 0 0 0 0 0 0 0 Uniformed Personnel 85 87 88 90 92 92 90 93 93 93 AF Automobiles 74 79 71 66 66 66 66 67 78 75 Motorcycles 5 5 5 5 7 7 7 7 7 7 Motor Boats 1 1 1 1 1 1 1 1 0 0 Bicycles 5 4 4 4 4 4 4 4 12 12 Specialty Vehicles 5 5 6 6 6 6 7 7 7 7 Trailers 3 3 4 4 3 3 3 3 2 2 Public Library: Books 97,820 101,631 111,496 120,203 119,392 121,312 138,931 103,091 93,050 97,801 Audiovisual Materials (VCRs, DVDs, 9,823 10,138 7,171 11,507 11,917 15,356 15,572 14,409 15,265 16,929 T CDs, Cassettes, Recorded Books) Members 46,318 48,626 39,202 37,036 37,587 39,354 36,534 33,466 32,717 34,308 Magazines Subscriptions 359 359 359 359 287 193 201 178 217 187 Newspapers 12 12 12 15 29 19 19 19 11 11 Circulation of Books 348,269 398,842 398,666 400,336 408,827 428,633 375,632 400,130 407,611 444,333 Electronic Downloads - Books - - - - - - - - 2,635 11,770 Should we add: # Xs Computer Used; wireless use; # programs & # in attendance; or other info submitted? Water Utility: Supply - Wells 22 22 22 22 22 22 22 22 22 22 Storage Tanks 6 6 6 6 6 6 6 6 6 6 Total Storage Capacity (Gallons) 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 Water Mains (miles) 175 185 miles 176 miles 176 miles 196 miles 215.7 miles 215.7 miles 215.7 miles 217.5 miles 222.3 Average Day (Gallons Pumped) 5,149,613 4,898,000 5,218,000 4,721,174 4,974,526 4,429,115 4,474,063 4,656,334 4,405,923 4,245,153 Peak Day (Gallons) 7,400,000 8,421,000 8,358,000 8,672,000 9,278,000 8,058,000 6,756,000 8,620,000 8,620,000 1 7,169,000 Water Production (Gallons Pumped) 1,879,000,000 1,788,000,000 1,904,666,300 1,869,585,000 1,815,702,000 1,616,627,000 1,633,033,000 1,699,562,000 1,608,161,895 1,553,727,000 Total Water Consumption (Gallons Billable) 1,626,940,000 1,580,677,000 1,641,119,000 1,640,082,000 1,554,000,000 1,531,526,000 1,466,943,000 1,539,590,000 1,459,923,000 1,345,432,000 D Avearge Day (Gallons Billable) 4,457,370 4,330,622 4,496,216 4,493,375 4,257,534 4,195,962 4,019,022 4,218,055 3,988,861 3,686,115 Number of Metered Customers 11,150 11,625 11,764 11,962 13,229 13,375 13,863 12,330 12,385 12,373 Number of New Connections 298 475 139 198 284 146 488 0 55 0 Wastewater Utility: Pumping Stations 34 34 38 42 42 42 42 42 40 40 Wastewater Mains Peak Day (Gallons Pumped) Number of New Connections Water Treatment Plant: Capacity Sales to Customers: Water Fees R Average Day (Gallons Pumped) Wastewater Discharge (Gallons Pumped) Wastewater Discharge (Gallons Billable) Average Day (Gallons Billable) Wastewater Fees Wastewater Adjustment Sources: Various City departments 155 miles 5,708,000 7,000,000 2,083,000,000 1,493,172,000 4,090,882 250 4.6 MGD $3,769,635 $2,521,499 $2,743,359 160 miles 5,127,000 5,983,000 1,871,000,000 1,411,324,000 3,866,641 350 4.6 MGD $3,791,254 $2,719,577 $2,611,290 185 miles 4,241,798 Not Measured 1,548,256,115 1,460,882,000 4,002,416 Not Available 4.6 MGD $4,289,413 $2,605,428 $3,865,683 185 miles 4,631,172 Not Measured 1,722,795,930 1,467,498,000 4,020,542 Not Available 4.6 MGD $4,250,634 $2,619,013 $3,854,100 185 miles 4,202,974 Not Measured 1,538,796,919 1,458,043,000 3,994,638 Not Available 4.6 MGD $4,203,972 $2,589,539 $4,109,166 185 miles 4,115,281 Not Measured 1,502,077,732 1,410,347,000 3,863,964 146 4.6 MGD $4,070,523 $2,351,885 $3,733,644 185 miles 5,389,524 Not Measured 1,965,547,000 1,328,195,000 3,638,890 488 4.6 MGD $4,274,966 $3,015,856 $3,100,547 185 miles 4,230,586 Not Measured 1,544,249,000 1,303,587,000 3,571,471 0 4.6 MGD $4,945,385 $3,694,020 $3,058,656 186.87 miles 4,379,033 Not Measured 1,598,347,045 1,316,656,000 3,607,277 55 4.6 MGD $4,707,918 $3,722,985 $3,050,127 186.87 miles 4,312,742 Not Measured 1,574,151,000 1,242,238,000 3,403,392 5 4.6 MGD $4,551,840 $3,564,615 $2,926,616

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 155 City of Dover, Delaware Summary of Insurance as of June 30, 2013 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Property Blanket Building & Contents $157,343,818 $10,000 Deductible (Special Form, RC, Agreed Amount) Earthquake $2,000,000 $50,000 Deductible Flood Zones X or C $2,000,000 $50,000 Deductible Flood Zones (Zones unidentifiable) $100,000 $50,000 Deductible Zones located A, B Shaded X, V & D are excluded AF Blanket Business Earnings & Expense Accounts Receivable Civil Authority - 30 days Claims Expense (Inv/Appraisals) Covered Leasehold Interest Debris Removal $200,000 $250,000 $25,000 $100,000 $250,000 T Deferred Payments Electronic Vandalism EDP Data & Media Employee Tools ($2,500 item) Expediting Expenses Exhibitions (Property Damage) Extra Expense Fine Arts Fire Dept Services Charge - Included $25,000 $10,000 $50,000 $25,000 $250,000 $50,000 $25,000 $250,000 $1,000 Deductible D Fungus, Wet Rot, Bacteria $25,000 Furs, Fur Garments $25,000 Jewelry, gold, Silver, Platinum $25,000 Green Bldg Alternatives $25,000 R Loss of Master Key Newly Acquired or Constructed Real Property (180 days) Non-Owned Detached Trailers Ord & Law Coverage A Ord & Law Coverage B $25,000 $2,000,000 $25,000 $250,000 $250,000 Ord & Law Coverage D - Included up to Extra Expense Limit Outdoor Property Outside Signs –Described – Prem Personal Effects Personal Prop at Undescribed Premises $250,000 $100,000 $250,000 $50,000 Personal Prop in Transit out of Coverage Territory $25,000 Pollution & Contaminants $100,000 Preservation of Property-Direct Loss or Damage $250,000

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 156 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Property in Transit $50,000 Personal Property of Others $250,000 Reward Coverage $25,000 Spoilage $10,000 Stamps, Tickets and letters Of Credit $5,000 Stored Water $25,000 Temporary Location $50,000 Undamaged Parts of Stock In Process $50,000 Valuable Papers on Premises $100,000 AF Valuable Papers off Premises $100,000 Water Damage Back up of Sewers or Drains $250,000 Appurtenant Buildings And Structures $100,000 Overseas Business Travel Personal Property $25,000 T Utility Service Direct Damage $50,000 Confiscated Property $100,000 Street Lights – Each Item $2,500 Street Lights – Per Occur $50,000 Street Signs – Each Item $2,500 Street Signs – Per Occur $50,000 Traffic Signs and Lights –Each $2,500 Traffic Signs and Lights Per Occur $50,000 DR Stadium Lights – Each Item Stadium Lights – Per Occur Spoilage Coverage Extension Sewer or Drain Backup Boiler & Machinery Coverage Limit - Property Limit Deductible Expediting Expenses Hazardous Substance Spoilage Ammonia Contamination $2,500 $50,000 $10,000 $250,000 $10,000 $250,000 $250,000 $250,000 $250,000 Inland Marine Contractors Equipment – Replacement Cost - 90% co-insurance Scheduled Equipment $3,500 Employee Tools $112,702 Not to exceed $18,000 per item Unlisted Items $100,000 Not to exceed $5,000 per item Leased or Rented Items $100,000 Not to exceed $100,000 per item New Acquired Equipment $250,000 Rental Cost (per Item) $5,000 Loss to any one Replacement Item $100,000 Scheduled Property $54,885

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 157 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Basic Deductible $1,000 Employee Tool Deductible $250 Flood Deductible $50,000 Earthquake Deductible $50,000 Windstorm Deductible $1,000 Crime Employee Theft per Loss $500,000 $500 Deductible Forgery or Alteration $100,000 $1,000 Deductible Inside the Premises – Theft of Money & Securities $35,000 $500 Deductible AF Inside the Premises $25,000 $500 Deductible Robbery or Safe Burglary of Other Property Outside the Premises $30,000 $500 Deductible Computer Fraud $100,000 $1,000 Deductible Money Orders and Counterfeit Paper Currency $100,000 $1,000 Deductible T Faithful Performance of Duty Coverage Endorsement – Governmental Employees LIABILITY Coverage: Commercial General Liability Each Event General Aggregate Limit Products Completed Operations Aggregate $1,000,000 $3,000,000 $3,000,000 DR Limit Personal & Advertising Injury Each Person Damages to Premises Rented to You Limit (Any One Premises) Medical Expenses Sewer Back Up Failure to Supply Sexual Abuse Each Person Sexual Abuse Total Limit Statutory Cap Limits of Coverage Endorsement Delaware Each Occurrence Statutory Cap Limit $1,000,000 $100,000 $0 $1,000,000 (resulting from negligence) $1,000,000 $1,000,000 $2,000,000 $300,000 Employee Benefit Plans Administration Liability - Claims Made Retroactive Date: None Aggregate Limit $3,000,000 Each Employee Limit $1,000,000 Deductible $1,000 Law Enforcement Liability - Occurrence Aggregate Limit $3,000,000 Each Wrongful Act Limit $1,000,000

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 158 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Each Wrongful Act Deductible $15,000 Statutory Cap Limits of Insurance Endorsement Delaware Statutory Cap Limit $300,000 Public Entity Management Liability - Claims Made Retroactive Date: 7/1/1996 Aggregate Limit $3,000,000 Each Wrongful Act Limit $1,000,000 Deductible $25,000 AF Employment Practices Liability - Claims Made Retroactive Date: 7/1/1996 Aggregate Limit Each Wrongful Employment Practice Offense Limit Deductible $5,000,000 $5,000,000 $25,000 BUSINESS AUTO POLICY Coverage: Automobile Liability T Personal Injury Protection Uninsured/Underinsured Motorist (Physical Damage Applies to Police & $1,000,000 $300,000 $1,000,000 DR Specified Electric & Sanitation Trucks) Non-owned Liability Hired Auto Liability Employees as Additional Insured Hired Auto Physical Damage Hired Car Physical Damage Deductibles Comprehensive Deductible Collision Deductible Statutory Cap Limits of Coverage Endorsement Delaware Statutory Cap Limit $1,000,000 $1,000,000 $90,000 $250 $250 $300,000 EXCESS CRIME POLICY Coverage: Excess Crime Employee Theft per Loss $500,000 excess of $500,000 (Over Policy# 630OB165227)

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 159 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS UMBRELLA EXCESS LIABILITY Coverage: Umbrella General Aggregate Limit $4,000,000 Products & Completed Work Aggregate Limit $4,000,000 Personal Injury $4,000,000 Advertising Injury $4,000,000 Each Occurrence $4,000,000 Retained Limit Any One Occurrence $10,000 Or Event AF Umbrella Underlying Policies: General Liability Employment Benefits Auto Liability Law Enforcement Liability Public Entity Management $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 T Employers Liability (Safety Nat) CYBER LIABILITY Coverage: Cyber Liability – Claims Made Retroactive Date: 12/01/2012 Aggregate Limit Third Party Liability – Each Wrongful $1,000,000 $25,000 $25,000 DR Act Limit Network & Information Security Liability First Party Liability Security Breach Notification & Remediation Expenses Deductible Crisis Management Service Expenses Deductible POLLUTION LIABILITY $1,000 $10,000 $1,000 $10,000 $1,000 Coverage: Pollution Liability Each Pollution Event Limit $5,000,000 Aggregate Policy Limit $10,000,000 Deductibles $25,000 Each Pollution Event $100,000 Total For All Pollution Events Deductible $10,000 Maintenance Deductible

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 160 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Claims Made Retroactive Date 4/1/1997 Includes: 2 underground storage tanks-710 Williams St., Dover, DE & 2 Power Plants EXCESS WORKER'S COMPENSATION Coverage: Employers Liability Limit: $1,000,000 Specific Limit: Statutory Aggregate Limit: $2,000,000 AF $600,000 Retention (Police) $500,000 Retention (All Other) WORKER'S COMPENSATION-TPA SERVICES (Charges based on claim count, this number could fluctuate) TRAVEL ACCIDENT POLICY T Principal Sum: $100,000 $0 Deductible Covered Positions: Mayor, Police Captain, Board of Adjustments, Police Chief, City Manager, City Clerk, Asst. City Clerk, Accounting Manager, Tax Assessor, Generation Manager, Police Major, Planning Commission, Human Resources Manager, Information Services Manager, Chief Inspector/ Planner, Chief Electric Engineer, Fire Marshall, Finance Director, Support Services Manager, Line Crew Foreman, Councilman, Administrative Services Manager, Civilian Member of Council Committee, Public Works Manager, Asst. Public Works Manager, Community Services Director, Fire Chief, Library Director, Asst. Inspector/ Director of Planning. D BOND-SELF INSURED WORKER'S COMPENSATION - STATE OF DELAWARE Limit: $750,000 BOND – PUBLIC OFFICALS BOND - Donna Mitchell – Treasurer R Limit: $100,000 BOND- PUBLIC OFFICIALS BOND - Traci McDowell – City Clerk/Asst Treasurer Limit: $100,000 POWER PLANTS – PROPERTY & BOILER AND MACHINERY (2 policies 50/50) Locations: McKee Run Generating Plant VanSant Station Policy #1 XL Insurance Company – $50,000,000 per Occurrence (50% Carrier Capacity Limit of $100,000,000) Coverages: 50% policy limit: $50,000,000 Per Occurrence Agreed Amount, Special Extra Expense: $2,000,000 Errors & Omissions $2,000,000 Expediting Cost: $1,000,000

2013 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section page 161 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Property in the Course of Construction: $5,000,000 Earthquake: $20,000,000 Flood: $10,000,000 Debris Removal $2,500,000 Property in Transit $2,500,000 Demolition & Increase Cost of Construction $10,000,000 Deductibles: $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; Policy #2 AF 72 hours per Occurrence in respect of Service Interruption Ace American Insurance Company – $50,000,000 per Occurrence (50% Carrier Capacity Limit of $100,000,000) Coverages: 50% policy limit: Extra Expense: Errors & Omissions Expediting Cost: T Property in the Course of Construction: Earthquake: Flood: Debris Removal $50,000,000 Per Occurrence Agreed Amount, Special $2,000,000 $2,000,000 $1,000,000 $5,000,000 $20,000,000 $10,000,000 $2,500,000 DR Property in Transit Demolition & Increase Cost of Construction Deductibles: $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; $2,500,000 $10,000,000 72 hours per Occurrence in respect of Service Interruption