SPECIAL COUNCIL - BUDGET REVIEW AND EXHIBITS 1-3

SPECIAL CITY COUNCIL MEETING BUDGET REVIEW The Special City Council Meeting was held by video conference on June 1, 2021 at 6:00 p.m. with Council President Sudler presiding. Council members present via video or telephone were Mr. Anderson, Mr. Boggerty (arrived at 6:10 p.m.) Mr. Neil, Mr. Hare, Mrs. Arndt, Mr. Rocha, Mr. Taylor (arrived at 6:15 p.m.) and Mr. Lindell. Staff members present via video or telephone were Police Chief Johnson, Ms. Peddicord, Mr. Harline, Mr. Hugg, Mrs. Duca, Mr. Sylvester, Mr. Hamlett, Mr. Josefowski, Mrs. Hawkins, Mr. Eaton and Mrs. McDowell. ADOPTION OF AGENDA Mr. Neil moved for adoption of the agenda, seconded by Mr. Hare and carried by a unanimous roll call vote (Boggerty and Taylor absent). INTRODUCTION AND PRESENTATION OF FISCAL YEAR 2021 RECOMMENDED BUDGET AND HIGHLIGHTS OF OVER BUDGET Mr. Matthew Harline, Assistant City Manager, reviewed a presentation titled “FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program,” (Exhibit #1). Mr. Hare moved for Mr. Harline to give a quick overview of the budget and then allow Council to ask their questions. The motion failed for lack of a second. MAJOR FUND HIGHLIGHTS - GENERAL FUND Mr. Matthew Harline, Assistant City Manger, reviewed pages 7 - 38 of the “FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program.” Mr. Neil stated that if they wanted to get back to the current tax rate of 40 and a half cents, they were going to have to cut $2 million either in expenses or enhancements to bring in revenue. He asked if it would be possible to use money left over and if so, what would the tax rate be. Mr. Neil stated that they know some items like trucks need to be replaced and asked if they were to receive federal funds, not necessarily from the Recovery Act, but from Infrastructure, if passed by Congress. He asked if they could purchase those vehicles without having it in the current budget. Mr. Neil asked in terms of total enhancements that were proposed, if there were other enhancements that they could look at that would raise that amount so they could have money coming in. He noted that even though it would be a small amount, in combination with some of the delays, they may be able to stave off the total increase in the property tax. Responding to Mr. Neil, Mr. Harline stated that the current budget calls for a balance slightly over the 8% that is in the City policy and that it is a prudent reserve. He stated that 8% is about a month and a half worth of operating expenditures, so in the general fund there really is not left over money that he would recommend spending. Mr. Harline noted that, regarding additional revenue, they were in the process of doing a thorough comprehensive look at all of the fees and fines that the City

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 2 assesses. He advised that it would be difficult to get anywhere near $2 million from all of the sources if they increased those fees substantially, but that they might be able to find another $50,000 to $100,000 based on preliminary results. Mr. Harline stated that in addition to the sanitation fees and business licenses, they were looking at raising the fines for false alarms for the fire department because they were already looking at increasing the fines to the police department of about $30,000 total and that enhancement has been included. Mr. Harline advised that some of the proposed increases included disconnect fees and most of those fees would go to the utility for which they are disconnected. He stated that those fees tend to fall hardest on those who are least able to pay so that is not in this proposal and fees for credit card use were going to cover the actual costs. Mr. Harline advised that they do not like to charge a premium for bad checks, but they will review those fees. Mr. Harline stated that they are going to look at enhancements for red light cameras and review their agreement for the School Resource Officers. They are also looking at expenses that are not budgeted possibly in police. They could come up in some programmatic things that Mr. Harline and Police Chief Thomas Johnson have talked about. Mr. Harline advised that they did not know exactly how the costs for the mental health professionals ride along program would come out, but there is an assumption that they will get state funding. Mr. Neil asked about delaying items like the trucks and buying them if they had grant money or from other sources, possibly federal or infrastructure funds. Responding, Mr. Harline stated that he did not know, but that what he read of the infrastructure bills was that most of it is for projects. He noted that he would look and see if it is for vehicles and equipment and that those are the items that could allow them to reduce the fee. Mr. Harline stated that he did not feel responsible providing a budget based on possible federal funds that might come through for an infrastructure bill. He noted that they are going to be using equipment that is getting out of date and spending money repairing items that need to replaced. Mr. Harline advised that if that is the desire of Council, he would make it work, but that was not his recommendation at this time. Responding to Mr. Rocha, Mr. Harline stated that the capital projects that they have selected for this year’s budget are located in the proposed budget book under Capital Investment Plan and that he would provide the ones that have been delayed as well. Responding to Mr. Rocha, Mr. Harline stated that the Information Technology (IT) position for a LAN Analyst was for six months. He advised that the assumption was that they hire them for six months into the year and defer costs somewhat until next year. Responding to Mr. Rocha regarding the City’s parks, Mr. Harline provided the following information: • They have the Dover Park improvements which include a building and a splash pad and $310,000 budgeted in the current year. They are going to carry those funds into the next year and add that to the $690,000. That is their best estimate of how much it would cost

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 3 to do the building and splash pad. It is higher than they anticipated when they began developing the budget in January. • The skate park and dog park are budgeted in Fiscal Year 2023 and $800,000 budgeted for the Dover Park ADA Accessible playground. • They also knew they could not do all of the projects in one year, but with Council’s input they made the building a top priority and the splash pad is physically connected to that building. • If they were able to shift more money by using the American Recovery Project (ARP) money then they could put more into the Schutte Park skate park. Mr. Anderson, regarding creative cost shifting using the guidance of the ARP funds this year, stated that the ARP funds have the ability to be used for necessary older infrastructure. He stated that they could take about a half a million dollars of those funds and target it towards the older infrastructure. Mr. Anderson stated that they could use it to offset part of the stormwater portion of the general fund expense. He asked if they had calculated when about 50 staff members had to be off because of COVID. Mr. Anderson stated that they could recover their sick time and overtime that was required of other employees. He stated that he would email Mr. Harline the other ideas he had. Responding to Mr. Anderson regarding Tyler/Munis, Mr. Harline stated that the vast majority of the Munis costs are either covered directly or by transfers directly for Munis and that the vast majority of those funds are coming out of the electric fund, with a little from the water and wastewater funds. Responding to Mr. Anderson, Mr. Harline stated that much of the increase in streets is offset by state money. He advised that they are anticipating more money in Community Transportation Funds (CTF), but some of it is increased amount of transfer from the general fund. Mr. Hare asked how much money they would they save if they eliminated the North American Energy Services (NAES). Responding, Mr. Harline stated that he would get into that more the following day, but that it is about the operating of the plant and the lost revenue from the capacity in the first year is going to be fairly similar because they are going to have to pay for specific capacity. He noted that once the solar project comes online they are going to regain a lot of their capacity. Mr. Harline advised that they get credit for the physical plant or capacity that they own to generate electricity and McKee Run use to be a lot of that and they still have the VanSant Generating Station. He stated that the saved money in operations is going to be offset by a loss of capacity. Responding to Mr. Boggerty, Mr. Hare stated that there are about 100 to 150 fire alarms at Delaware State University (DSU) and a lot of those were attributed to the alarms going off in dorms. He noted that there are no contributions to the fire department from DSU or Wesley College. Mr. Hare stated that there were close to 100 alarms at Wesley College and Wilmington University had some, but not as many as the others. He advised that if they have a run fee that applies to everybody with the first two runs being free, then it could cut it down or they would start getting the revenue back to the fire department.

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 4 Mr. Boggerty asked if it was permissible to charge safety fees on nonprofits. He asked how they encourage them to pay a fee or give a donation and asked what message they send to their nonprofits. Responding, Mr. Hare stated that the ones that came in and complained the most were the ones who were going to have a public safety fee of $50.00. He stated that Bay Health has stepped up and contributed and helped the fire company immensely. They have also helped the police department with the Police Athletic League (P.A.L.) with contributions. Mr. Sudler advised that the legal opinion was that federally they could not provide any fee to a nonprofit according to state and federal statutes. He noted that DSU has contributed in other ways, such as partnering and trying to help with economic development and helped the City through finding grants and suitable applicants for job positions. Mr. Anderson advised that there were ways to do it, but it was problematic. He noted that the run fee Mr. Hare noted would be permissible, but a fee for police services, which is a general tax function, would be hard to pass unless it was tied to a service like false alarms. Mr. Neil noted that if they had a public relations problem, they have some people who did PILOT (Payment in Lieu of Taxes) programs and, unless everybody who was in this program as it was originally presented would pay their money, they would actually lose money from the organizations that voluntarily paid the City a PILOT. He noted that there was a balancing factor and that it was bad publicity because they cannot apply it just in one segment. Mr. Anderson stated that since they have the co-chairs of the Joint Finance Committee for the first time that it would be wise for them to pen a letter. He noted that the state has $800 million surplus to increase the PILOT, which has not been done in decades. Mr. Anderson suggested adjusting the formula slightly, noting that $1 million is under inflation for the last 10 years. He noted that it would be wise for Council to formally send a letter requesting that. Mr. Sudler stated that is one of the main objectives they would like Mr. Anderson and Mrs. Arndt to look into as liaisons to Kent County and to make this a top priority in that initiative. Mr. Anderson stated that he wanted to touch base with Mrs. Arndt and see if they would have a draft for the next evening and then they make a motion so they could discuss it. Mr. Anderson moved that a letter be drafted now. Mr. Sudler asked if Mr. Anderson would amenable to get feedback from his co-liaison, Mrs. Arndt, to prepare a draft and bring it tomorrow. Mr. Anderson stated that Mrs. Arndt’s skills would be valued and noted that he would value Mr. Hare’s input as well. Mrs. Arndt asked if they were talking about the state property and the payment in lieu of taxes and not about issues specific to Kent County and realty transfer taxes. She noted that while they have been talking, she reached out to a legislator for information on the process. Mrs. Arndt stated that she was willing to pursue that and do some research. Mr. Sudler requested a moment of silence for those who have served the country and those who have lost their lives doing so. He stated that they greatly appreciate and value their dedication and commitment to the United States of America.

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 5 Mr. Anderson moved to recess the meeting, seconded by Mr. Neil and unanimously carried. Meeting recessed at 8:13 p.m. TUESDAY, JUNE 2, 2021- 6:00 - 9:00 p.m. The Special Council Meeting - Budget Review reconvened on June 2, 2021 at 6:01 p.m. with Council President Sudler presiding. Council members present were Mr. Anderson, Mr. Boggerty, Mr. Neil, Mr. Hare, Mrs. Arndt, Mr. Rocha, Mr. Taylor, and Mr. Lindell. Council staff members present were Mr. Harline, Mr. Waddell and Mrs. McDowell. By unanimous consent, the meeting reconvened. Mr. Matt Harline, Assistant City Manager, reviewed a presentation titled “FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program,” (Exhibit #2). ELECTRIC FUND Mr. Matt Harline, Assistant City Manager, reviewed pages 19-28 of “FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program.” Mr. Harline advised that most of the 600 plus LED lights for phase one of the LED Streetlight project were installed and that there were about 80 left. Mr. Paul Waddell, Electric Director, noted that they would be there that week. Responding to Mr. Hare, Mr. Harline stated that for everything, the entire bill to the North American Energy Services (NAES) is about $6 million. He advised that if NAES were to get the contract to continue running the VanSant Generating Station, they have budgeted for the contractual services, based on some early models, $1.7 million, but that it was going to be less. Mr. Harline stated that when they were operating as an ancillary operation to the power plant and were on site there were some cost savings with the staff there. Responding to Mr. Hare, Mr. Harline stated that they have been working with the management at McKee Run and for NAES. He noted that some use to work for the City. Mr. Hare asked if there had been consideration of not putting a contract out there and letting those people that are running the operation now work for the City. He stated that if they were to take their salaries even with benefits, they were going to be under $480,000. Mr. Harline stated that a lot of the costs for operating the plant are environmental reporting, financial tracking and connecting to the PJM grid. He stated that they have looked at that possibility, but that is the cost to actually run that plant with all the different parts. He advised that they have built the costs for materials into that $1.7 million. The City and the Energy Authority (TEA) firmly believe that strategy and hiring out all the expertise they would need for all the other pieces are a small amount of costs to actually turning on and running the plant. Mr. Harline advised that is not going to be $480,000 to run the plant with the people who live in town. Mr. Hare stated that if NAES gets

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 6 the contract, they would be making money off of it which they get through TEA. Responding to Mr. Hare, Mr. Harline stated that if NAES puts in a proposal that is above what the market will bear they would lose the contract. He stated that the only viable way to do this is to continue paying NAES or someone else. Mr. Harline advised that he has discussed the idea of the City running the VanSant Generation Station with the representatives of TEA and NAES. He stated that there are a number of different disciplines, environmental tests and reporting requirements that nobody on the City staff can train the NAES personnel to do. He stated that NAES has that expertise, along with other firms. He noted that they can do the onsite work that needs to be done to keep the plant functioning, but there are a lot of other pieces that are done offsite and that the City would have to purchase those costs. Mr. Harline advised that he spoke with Stacy Johnson from NAES, and their charge will be much more if they do not have the rest of the operation and would charge a premium to do it on a cafeteria basis, which would require the City to go out for another set of RFPs. He stated that having discussed that possibility directly with Ms. Arlene Newton and other members of the TEA staff, they strongly recommend against trying to pursue that course of action. Ms. Lori Peddicord, Controller/Treasurer, regarding the transfer to the general fund from the electric fund, stated that she thought the transfer should be $10 million instead of $11 million. She stated that those changes and the transfer could decrease their net income, which offsets some of the abilities for them to cover operations, capital costs and infrastructure. Ms. Peddicord advised that the higher that they increase that in any given year, based on the changes in the projections, is going to drive down the net income and decrease the cash. She noted that she wanted to make sure that everyone was aware that changing that variable does have an effect, and that it also could affect their bond ratings. Responding to Mr. Hare, Ms. Peddicord stated that she did not know how much excess money was in the electric fund. She stated that they have financial policies that they are suppose to follow that houses the reserves for particular programs, replacements, contingency funds, and capital asset replacements. Mr. Hare stated that if they were to transfer more, it was going to reduce the net profits, but they have the money in the fund to give a refund back to the electric rate users, nonprofits and the people that do not pay taxes. He stated that if it costs $100 million to run the City and with all of the funds they have, they bring in $140 million, then why are they raising taxes. Mr. Harline stated that the ordinance from last year has the amounts in each of the reserves. He noted that there are specific reserves for specific things, and it is over $20 million. Mr. Harline advised that they have $10 million that they carefully set aside for the deconstruction of the power plant with a very long range and thoughtful process. WATER FUND Mr. Matt Harline, Assistant City Manager, reviewed pages 5-11 of “”FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program.” Mr. Harline advised that they have completed the Water Master Plan Update, West Street, West

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 7 Alley and Ross Street replacement of water lines. He stated that they have started with the contract for painting and other maintenance on the water towers. Mr. Harline advised that in FY22, they are looking at improving resiliency of the water treatment plant with a purchase of a mobile generator. Mr. Jason Lyon, Water and Wastewater Director, advised that it is not a wastewater treatment plant, it is a pump station. WASTEWATER FUND Mr. Matt Harline, Assistant City Manager, reviewed pages 12-18 of “FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program.” Mr. Harline advised that there was a slight decrease in the transfers and that there were expenses of $271,000, about 3.7% compared to the FY21 budget. He noted that they were expecting the service fees to have a 5.4% increase due to rate increase. Responding to Mr. Harline, Mr. Jason Lyon, Water and Wastewater Director, advised that the groundwater inflow adjustment would be going up this year with the other rates. Responding to Mr. Anderson, Mr. Harline advised that in constructing the budget, they were very conservative in trying to allocate any resources from the American Rescue Plan (ARP) fund. He noted that he did not disagree with Mr. Anderson’s assessment on almost everything he said that it could possibly be budgeted for. Mr. Harline noted that the $700,000 for the Innovative Readiness Training (IRT) project was never a City budgeted item, but it is a resource loss to the City. He noted that Mr. Taylor challenged them to look for a full $1.9 million worth of savings which he had, but was not ready, but he could share that. He noted that they could work with the 2% directed at the increases for public safety. Mr. Harline stated that there are some other places, particularly in the Water/Wastewater system, where they could find supportable uses for the ARP funds that they are anticipating. He noted that there are different ways that they could approach this by trying to come up with an ARP budget between now and June 14th for original adoption, for original presentation on June 28th , or they could work on a list of items, particularly in Water/Wastewater, and then some in general fund, then some other needs and wants in the community that Mr. Anderson mentioned. Mr. Harline stated that he had the cuts that he could propose from Mr. Taylor’s request. He noted that since they originally put the budget together in April he met with the department heads and shaved about $860,000 in expenditures, before they showed Council the budget that he originally asked for a 5.5% property tax increase. He advised that they could put together a budget with cuts, additional defensible revenue, easily defensible revenue enhancements through ARP funds, and then create a second list of things that if they could make a good argument for it, that they would also fund with ARP funds. Mr. Harline recommended having a primary list where they are comfortable, that they can count those revenues for those projects, put that into the ordinance that they present and then come back with a supplemental budget when they do a budget amendment to close out FY21 and carry forward into FY22. Mr. Harline reviewed a spreadsheet depicting the cuts proposed by staff and Council (Exhibit #3). He advised that he did not think they could cut without a significant burden and that the total costs could add back $194,000 of the spending and not raise the property tax.

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 8 Mr. Harline stated that they budgeted $200,000 for moving expenses for the City Manager, which also could have been used for any search this year and they usually budget $200,000 in legal expenses. He noted that they usually end up transferring that to projects that come up during the year, so they could probably cut some of that. Mr. Harline noted that there was a proposed program for a small amount of money to be paid to people if they referred somebody successfully for employment with the City, $10,000 was set aside for that. There is a proposal along with the rest of the Segal study for pay for performance, and the former City Manager Randy Robertson suggested $40,000 for that in the budget. He stated that they could remove $20,000 and still have the opportunity to address some type of a pay for performance incentives in FY22 or remove the entire $20,000. Mr. Harline advised that there were suggestions in the Segal study for advancing up in the range rather than just the base moving up , they based it on years in their current position and it’s market, or where the study recommends that the range for that job should be. He noted that there are also some positions which would probably be reclassified and that he did not want to get rid of all of that money, because there are some legitimate suggestions. Mr. Harline stated that based on the discussion with Council and with Segal, he would want to leave some money in for some of those positions. Mr. Harline stated that there is $100,000 in the Mayor’s budget for economic development, but if they cut out 25%, that would save $25,000. He noted that they were increasing the payment to the fire department, if they cut that from a $3,500 increase to only $2,500 increase, they would save $1,000. He noted that they budgeted $120,000 annually, even though the contract for life safety for the ambulance contract is $100,000 a year. The additional $20,000 was in case there were calls that outside vendors were required to respond to. He noted that so far, they had never needed the full $20,000 or anywhere near it, so they could cut that total money budgeted from $120,000 to $110,000 and free up $10,000 and still cover their $100,000 contract with St. Francis to provide annual ambulance service within the City of Dover. Mr. Harline stated that they have two trucks for code enforcement that could survive another year, one is replacing an old Crown Vic. He noted that they have budgeted $250,00 for demolition and the most that they have ever used is around $150,000, so they could cut that. Mr. Harline stated that he spoke with Police Chief Thomas Johnson, and he was forthcoming and trying to make offers that would help them reach the $1.9 million cut. He noted that if Chief Johnson deferred hiring four officers for six months it could save $199,000. He stated that they have to keep their staffing level up because they have accepted the COPS grant. Mr. Harline advised that they could save $199,000 by diverting that by a half a season, and they could probably survive with eight Tahoe SUVs instead of nine, six of those would go to patrol directly. Mr. Harline mentioned eliminating the Information Technology (IT) LAN analysts completely, instead of having one for the last six months. He noted that delaying the facilities craftsperson for six months would save $29,500; however, the department would prefer that the position not be removed. Mr. Harline advised that there is currently a crew of three and if they are doing a task that requires spotting another worker they cannot have two crews. If they have four workers, they can split to two crews and double their effectiveness. He noted that the department would prefer to have

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 9 the position for the full year, but at least for half the year. Mr. Harline noted that they could defer the $380,000 Street and Alley Project to Townsend Boulevard, Project Kent, North and South Alley, and save $818,000. He advised that if they do not buy the asphalt hotbox it would save $43,000. Mr. Harline noted that if they do not get rid of a 2000 backhoe, they would save $125,000. If they did not get rid of a 2001 dump truck, they would save $156,000. There is a yard waste truck that could be pushed back a year, although it is heavily used. They have $300,000 plus for a vac truck and it is possible that they could save an estimated $150,000 by buying a used truck. Mr. Harline noted that they do not use it daily, but frequently, and that is for eliminating blockages in the stormwater. Mr. Harline noted that in Parks and Recreation, there is a old van that Ms. Sherwanda Rachal, Recreation Program Specialist, drives and it is functional so they could delay that for $31,000. He noted that there is always something else they could cut, but those are the items that would have less of a debilitating effect on City operations. Mr. Harline advised that he mentioned over $2,100,000 worth of cuts. Responding to Mr. Lindell, Mr. Harline stated that all of those items they would be put off until next year. He stated that there were a couple of items that are choices and that they would be dealing with the same problem next year. Mr. Harline stated that all of those vehicles will have to be replaced and they bought no police cruisers last year. He noted that Mr. Casey Wallace, Mechanic, and his staff, baby the vehicles and have saved hundreds of thousands of dollars in maintenance and successfully deferred some expenses, but it does not last forever. They have to replace those items and do the road maintenance. Mr. Lindell asked if they had done a cost estimate to show taxpayers how much they were hemorrhaging from keeping these outdated vehicles around and the lack of cost effectiveness. Responding, Mr. Harline sated that Mr. Mike Hamlett, Central Services Director, could put something together. Mr. Lindell stated that he was talking about man hours with manufacturing their own parts. He noted that there has to be a point where it becomes counterproductive. Responding, Mr. Harline stated that information was a part of the analysis that Mr. Hamlett does every year. Responding to Mr. Lindell, Mr. Harline stated that they have reduced the number of staff members in the whole Central Services department, primarily in fleet maintenance and in building maintenance. He noted that fleet maintenance was steady, but the building maintenance is where they have really cut people. Responding to Mr. Rocha, Mr. Harline stated that the vehicles that needed to be replaced were costing the City more. He noted that there was also lost of time having the vehicles in service. Mr. Harline advised that the cost of repair is where they were getting past the point of diminishing return based on Mr. Hamlett’s assessment. Responding to Mr. Rocha, Mr. Harline stated that some of the vehicles were coming up on 20 years old. Mr. Rocha recommended finding money in the budget for vehicles that they could not longer get parts for.

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 10 Mr. Anderson moved to authorize sending the draft letter regarding the PILOT with the right to have the signers and Staff make technical corrections in formatting. The motion was seconded by Mr. Taylor. Mr. Lindell requested clarification on the motion. Mrs. Arndt stated that the letter was requesting the opportunity to revisit or to evaluate an increase in the percentage that Dover receives from the state. She noted that there is also a Senate bill being considered that is in committee and that bill does not increase the percentage for Dover. It proposes the addition of Newark to the program and for Newark to receive a percentage of their property tax from the state. Mrs. Arndt stated that there is an opportunity to work with the legislators to make changes to that bill to increase Dover's percentage. She noted that the letter is going to two of their local legislators, seeking a one-time increase to Dover. Mr. Sudler asked how could they incorporate that or integrate that into what they currently have as a long-term opportunity versus a short-term. He asked if they could pass this motion here or add that to the motion as an amendment. Responding, Mrs. Arndt stated that the letter as written does make mention of re-evaluating the percentage that is granted and that it is okay to move forward. Mr. Sudler asked Mr. Anderson and Mrs. Arndt to draft the recommendations and a second letter expressing the long-term opportunity through the body that would not only be able to recognize that but also authorize it. Mr. Anderson moved to authorize sending the draft letter regarding the PILOT with the right to have the signers and Staff make technical corrections in formatting. The motion was seconded by Mr. Taylor and unanimously carried. Mr. Neil stated that Mr. Harline brought up a contingency plan in terms of what would happen if they received the additional federal money, which they do not know if it is coming or the amount. Mr. Harline asked if they wanted him to bring back the cuts that have been described to reduce the potential tax increase to two cents or less, using discretion with whatever it is to get to that amount. He stated that he received guidance from one Councilman specifically saying to keep the officers, LAN analyst, crafts persons, the asphalt hotbox and the dump truck. He stated that he could work with staff to see if there are some trade-offs within there, and then come back with a package of things where they believe that there could be ARP money that would be either revenue offsets in the general fund or projects in the water and wastewater fund to come up with a secondary plan for additional expenditures. Mr. Harline stated that he would prefer to have that ready for Council either on the 14th or 15th. Responding to Mr. Sudler, Mr. Harline advised that last year the full amount for the economic development fund was $100,000 in the Mayor’s budget. He noted that it is used for a variety of different economic development and enhancement activities. Mr. Harline stated that in FY20, $90,866 of the $100,000 was spent. Mr. Sudler noted that while the Segal Study was a good study, there was no evidence-based observations done to confirm what duties were being done versus what was actually being done. He

SPECIAL COUNCIL MEETING OF JUNE 1 - 2, 2021 PAGE 11 noted that there is a discrepancy in providing or increasing individuals pay based off of assessment with no evidence-based observations. Mr. Sudler recommended that entire budget be forfeited or cut. Mr. Neil moved to adjourn the meeting, seconded by Mr. Anderson. Responding to Mr. Lindell, Mr. Sudler stated that they were adjourning and waiting for another meeting with Mr. Harline to update Council in a couple of weeks on the supplemental budget. Mr. Harline stated that he would have an update on June 15th during the Council Committee of the Whole/Legislative, Finance, and Administration Committee. Mr. Neil moved to adjourn the meeting, seconded by Mr. Anderson and unanimously carried. Meeting adjourned at 8:38 p.m. TRACI A. McDOWELL CITY CLERK All ordinances, resolutions, motions, and orders adopted by City Council during their Special Meeting - Budget Review of June 1-2, 2021 are hereby approved. ROBIN R. CHRISTIANSEN MAYOR /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Council-Minutes\2021\06-01-2021 SPECIAL COUNCIL - BUDGET REVIEW.wpd Exhibits Exhibit #1 - Presentation titled “FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program” Exhibit #2 - Presentation titled “FY 2021-2022 Proposed Budget with FY 22 - 26 Capital Improvement Program” Exhibit #3 - Spreadsheet depicting the cuts proposed by staff and Council

EXHIBIT #1 Special Council Meeting - Budget Review of 06/01 and 06/02/2021 City of Dover FY 2021 -2022 Proposed Budget With FY 22 – 26 Capital Improvement Program

MAJOR FUND HIGHLIGHTS • General Fund • Electric Fund • Water Fund • Wastewater Fund

MAJOR FUND HIGHLIGHTS Adherence to Financial Policies Water and General Water Wastewater Wastewater Electric Fund Utility Utility Fund Fund * Revenues 48,354,900 7,349,100 10,470,600 17,819,700 87,057,400 Expenses (49,780,626) (7,353,200) (8,635,300) ($15,988,500) (80,815,300) Surplus/(Deficit) ($1,425,726) ($4,100) $1,835,300 $1,831,200 $6,242,100 Ending Budget Balance 3,915,174 $637,900 $3,507,570 $4,145,470 $11,959,500 % of Revenue 8.1% 8.7% 33.5% 23.3% 13.7% Beginning Budget Balance 5,340,900 642,000 1,672,270 $2,314,270 10,913,400 Less PCA Credit (5,196,000) Adjusted Beginning Budget Balance 5,717,400 Capital Improvement Transfers 4,385,900 1,536,100 799,200 $2,335,300 3,711,100 Revenue Policy #6 x ✓ ✓ ✓ ✓ Budget Balance Policy #1 ✓ ✓ x ✓ ✓ Expenditure Policy #3 x ✓ ✓ ✓ ✓

MAJOR FUND HIGHLIGHTS Fee and Transfer Trends – General Fund Major Rate & Fee Trends Actual Actual Actual Actual Actual Actual Actual Actual Actual Proposed GENERAL FUND 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Property Tax Rate Approved $0.3378 $0.3378 $0.3378 $0.4050 $0.4050 $0.4050 $0.4050 $0.4400 $0.4050 $0.4600 Proposed Property Tax Rate Increase $0.0551 $0.0350 ($0.0350) $0.0550 Trash Fees (in City) $17.00 $17.00 $17.00 $17.00 $17.00 $21.00 $21.00 $21.00 $21.00 $23.00 Trash Fees (outside City) $42.75 $42.75 $42.75 $42.75 $42.75 $54.00 N/A N/A N/A N/A Transfer from Electric Utility $8 million $8 million $10 million $10 million $10 million $10 million $10 million $10 million $10 million $11 million % of Electric Fund Revenues 8.3% 9.6% 12.5% 12.2% 12.3% 12.2% 12.2% 11.8% 11.8% 12.6% % of General Fund Revenues 22.3% 22.5% 25.7% 23.9% 23.7% 23.4% 23.4% 22.0% 21.4% 22.7% Transfer from Water/Wastewater Utility $500,000 $500,000 $500,000 $850,000 $875,000 $900,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 % of Water/Wastewater Fund Revenues 3.7% 3.6% 3.4% 5.7% 5.7% 5.8% 5.8% 5.8% 5.7% 5.7% % of General Fund Revenues 1.4% 1.1% 1.3% 2.0% 2.1% 2.1% 2.1% 2.2% 2.1% 2.1%

MAJOR FUND HIGHLIGHTS Fee and Transfer Trends – Enterprise Funds Major Rate & Fee Trends Actual Actual Actual Actual Actual Actual Actual Actual Actual Proposed WATER/WASTEWATER FUND 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Water per 1,000 gal (Tier 1) $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $2.49 $2.66 Water per 1,000 gal (Tier 2) $3.11 $3.33 Water per 1,000 gal (Outside City Tier 1) $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $3.74 $4.00 Water per 1,000 gal (Outside City Tier 2) $4.67 $5.00 Water Customer Charge $1.25 $1.25 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $5.00 $5.00 Wastewater per 1,000 gal. Charge $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.84 $3.03 Wastewater per 1,000 gal (Outside City) $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $4.25 $4.55 Wastewater Customer Charge $1.25 $1.25 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $5.00 $5.00 Kent County Sewer Treatment Fee - Rate set by County $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.58 $2.58 $2.58 Kent County Sewer Adjustment (I & I flows) $1.05 $1.05 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.61 $1.72 ELECTRIC FUND Residential Rates $0.1316 $0.1204 $0.1204 $0.1203 $0.1203 $0.1203 $0.1206 $0.1206 $0.1209 $0.1209 Increase % -3.5% -8.5% 0.0% -0.1% 0.0% 0.0% 0.2% 0.2% 0.2% 0.0% Power Cost Adjustment ($0.00252) ($0.00855) ($0.00382) ($0.00382) ($0.00700) ($0.00700) Electric Fund Customer Charge $5.00 $5.00 $5.00 $7.50 $7.50 $7.50 $8.46 $8.46 $9.42 $9.42 Reconnect Fees $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 Return Check Fees $25 $25 $25 $40 $40 $40 $40 $40 $40 $40

MAJOR FUND HIGHLIGHTS Fee and Transfer Affects • $250,000 home with 8 Tgal usage per month ❖ Water bill increase $17.52/year ❖ Wastewater increase $28.80/year ❖ Property tax increase $137.50/year ❖ $183.82 Total increase • $150,000 home with 4 Tgal usage per month ❖ Water bill increase $8.16/year ❖ Wastewater increase $14.40/year ❖ Property tax increase $82.50/year ❖ $105.06 Total increase

GENERAL FUND BUDGET REVIEW Fiscal Year 2021-2022 Presented June 1, 2021

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

General Fund Revenues - Summary GRANTS 4.8% COURT OF CHANCERY FEES POLICE FINES & FEES 2.9% 2.9% LICENSES & PERMITS FRANCHISE FEES 6.0% 1.2% TRANSFER TAXES LIBRARY & RECREATION 2.9% FEES 1.0% SANITATION FEES OTHER MISCELLANEOUS 7.1% RECEIPTS 0.4% INTERFUND SERVICE FEES 11.1% PROPERTY TAXES 34.9% UTILITY TRANSFERS 24.8%

General Fund Revenues - Summary • Projected revenues without enhancement will be inadequate • Major increases affecting revenues • Asking for a $0.055 increase in the Property Tax $1.93 M • Increased transfer from Electric Fund $1.0 M • Incorporating a small amount of ARP funding (Library, Parks) $520,000 • Recommending an increase in Sanitation Fees $330,400 • COPS Grants transfer for salary $308,900 • Increase/Adjust Business Licenses $100,000 (net + $30,000) • Major decreases affecting revenues • Fund balance (end FY 20 v end FY 21) is projected lower $1.13 M • W/o adjustment business licenses $70,000

General Fund Revenues - Summary • Forecast model without revenue enhancement • Expenditures have exceeded revenues for three consecutive fiscal years • Trends in revenues are stagnant and labor and material costs continue to increase

General Fund Revenues – Property Taxes CITY OF DOVER PROPERTY ASSESSMENT PROJECTION 2020 BASE YEAR TAXABLE ASSESSED VALUE AS OF APRIL 8 2021 $ 3,588,943,800.00 $ 3,588,943,800.00 Abatement Incentives $ (35,642,700.00) $ (35,642,700.00) Filed Tax Exemption Requests $ (4,691,400.00) $ (4,691,400.00) Supplemental Billing (April) (ALREADY INCLUDED IN TAXABLE VALUE) Annual Appeals Estimate Only $ (5,000,000.00) $ (5,000,000.00) Senior Citizen/Disability Exemption(approx 400 approved; revenue loss $81,000) Estimate Only $ (20,000,000.00) $ (20,000,000.00) TOTAL ASSESSED VALUE $ 3,523,609,700.00 $ 3,523,609,700.00 CITY OF DOVER PROJECTED PROPERTY TAX RECEIPTS ACCRUAL METHOD OF ACCOUNTING 7/01/21 - 6/30/22 Using a tax of $0.405 or $0.460 per $100 of assessment, the estimated gross 7/01/21 billing will be $ 14,270,619.29 $ 16,208,604.62 Penalties $ 70,000.00 $ 70,000.00 Estimated Quarterly Billing $ 22,000.00 $ 22,000.00 PROJECTED PROPERTY TAX RECEIPT SUBTOTAL $ 14,362,619.29 $ 16,300,604.62 Pay In Lieu of Taxes ESTIMATE Luther Towers; State of Delaware; Milford Housing; DE State Housing Auth; $ 552,700.00 $ 552,700.00 Dover Housing Authority; Whatcoat Village; Liberty Court $ - $ - PROJECTED PROPERTY TAX RECEIPTS FOR FY 2022 $ 14,915,319.29 $ 16,853,304.62 $0.01 of tax rate equates to: $ 352,360.97 PROJECTED DOVER REALTY TRANSFER TAX RECEIPTS $ 1,100,000.00 $ 1,400,000.00

General Fund Revenues – Sanitation Rates CURRENT RATES & REVENUES FY 2022 PROPOSED RATES & REVENUES FY 2023 PROPOSED RATES & REVENUES Rate Service # of Cont. Monthly Annual Rate Monthly Annual Rate Monthly Annual $21.00 Res. 90 gal 10,267 $215,600.00 $2,587,200.00 $23.00 $240,700.00 $2,888,400.00 $25.00 $266,700.00 $3,200,400.00 $24.00 RMH 280 6,700.00 80,400.00 $23.00 6,400.00 76,800.00 $25.00 $7,000.00 $84,000.00 $43.00 90 gal 2x 183 7,900.00 94,800.00 $46.00 8,400.00 100,800.00 $50.00 $9,200.00 $110,400.00 $63.00 90 cal 3x 6 400.00 4,800.00 $69.00 400.00 4,800.00 $75.00 $500.00 $6,000.00 $72.00 300 gal 358 25,800.00 309,600.00 $72.00 25,800.00 309,600.00 $75.00 $26,900.00 $322,800.00 $85.00 90 gal 4x 3 300.00 3,600.00 $92.00 300.00 3,600.00 $100.00 $300.00 $3,600.00 $143.00 300 gal 2x 20 2,900.00 34,800.00 $144.00 2,900.00 34,800.00 $150.00 $3,000.00 $36,000.00 SUBTOTALS 11,117 $259,600.00 $3,115,200.00 SUBTOTALS $284,900.00 $3,418,800.00 SUBTOTALS $313,600.00 $3,763,200.00 Bulk total $1,000.00 $12,000.00 Bulk total $1,000.00 $12,000.00 Bulk total $1,000.00 $12,000.00 TOTALS $260,600.00 $3,127,200.00 TOTALS $285,900.00 $3,430,800.00 TOTALS $314,600.00 $3,775,200.00 • Proposed rate increases for FY22 and FY23 • Operating Revenues only cover Expenditures with overhead allocation • These rate increases allow the Sanitation Department to progress toward being a stand-alone Enterprise Fund where rates cover operating costs, capital expenditures, overhead and admin, and build a prudent reserve

General Fund Expenditures - Summary • Overall Expenditures are up 7.1% as compared to the FY21 Original Budget ($3.28M), mostly due to capital expenditures • Major increases affecting expenditures • Increased in transfer to CIP budget (%111) – $2.3M • Police Operations – $691,600 • A 3.9% overall increase • Five new officers in this year’s budget • Nine new police cars (in GF CIP budget) • Increase in Public Works CIP $2.3M • Persimmon Park funding from State • Increase in Streets & Sidewalk improvements ($556K) • Replacement vehicles left out of FY21 budget • Added personnel in Central Services • Added personnel in IT (budgeted at 6 months)

General Fund Expenditures – Summary (cont.) • Major decreases affecting expenditures • Reduced Police – Extra Duty – but offset by reduced revenue • Cut $511,000 of original capital requests • Cut two positions from FY21 Customer Service budget • Denied requests for additional personnel

General Fund Expenditures – Personnel City of Dover Fiscal Year 2022 Budget Personnel Table 2019-2020 2020-2021 2021-2022 DEPT/DIVISION BUDGET BUDGET RECOMMENDED CHANGE CITY CLERK 4.0 4.0 4.0 0.0 CITY MANAGER 5.0 6.0 6.0 0.0 CODE ENFORCEMENT 6.0 6.0 6.0 0.0 CUSTOMER SERVICES 16.0 16.0 14.0 (2.0) FACILITIES MAINTENANCE 5.0 4.0 6.0 2.0 FINANCE 8.0 8.0 8.0 0.0 FIRE DEPARTMENT 5.0 5.0 5.0 0.0 FLEET MAINTENANCE 7.0 6.0 5.0 (1.0) GROUNDS 14.0 14.0 14.0 0.0 HUMAN RESOURCES 4.0 4.0 4.0 0.0 INFORMATION TECHNOLOGY 4.0 4.0 5.0 1.0 INSPECTIONS 7.0 6.0 6.0 0.0 LIBRARY 14.0 14.0 15.0 1.0 LIFE SAFETY 3.0 4.0 4.0 0.0 MAYOR 2.0 2.0 2.0 0.0 PARKS AND RECREATION 9.0 9.0 9.0 0.0 PLANNING 6.0 6.0 6.0 0.0 POLICE - TOTAL* 135.0 135.0 140.0 5.0 PROCUREMENT AND INVENTORY 4.0 5.0 5.0 0.0 PUBLIC WORKS - ADMINISTRATION 7.0 5.0 5.0 0.0 PUBLIC WORKS - ENGINEERING 2.0 2.0 2.0 0.0 SANITATION 10.0 11.0 11.0 0.0 STREETS 7.0 7.0 7.0 0.0 STORMWATER 7.0 7.0 7.0 0.0 TAX ASSESSOR 3.0 3.0 2.0 (1.0) GENERAL FUND AND CDBG TOTAL 294.0 293.0 298.0 5.0 *106 Offi cers ; 34 Ci vi l i a ns - 140 Total Empl oyees

General Fund Expenditures – Segal Study Amount Below Time in Position Total Segal Job Title Business Unit Minimum Adjusment ($) Adjustments GIS Manager PW- Admin $0 $6,792 $6,792 Central Services Director Central Serv - Admin & Warehouse $3,406 $1,928 $5,333 Contract & Procurement Manager Central Serv - Admin & Warehouse $6,262 $3,300 $9,562 Assistant to the Dir Council Affairs & Constituent Svc City Clerk Dept $2,940 $0 $2,940 Assistant City Clerk City Clerk Dept $3,503 $0 $3,503 Executive Assistant to the City Manager City Manager Dept $0 $471 $471 Customer Service Supervisor Customer Services $1,870 $3,630 $5,500 Customer Service Manager Customer Services $0 $4,966 $4,966 Billing & Collections Supervisor Customer Services $4,564 $2,615 $7,179 Electric Director Electric -Admin $0 $657 $657 Construction Manager Engineering -PW $0 $4,724 $4,724 Civil Engineer I Engineering PW $0 $3,468 $3,468 Financial Reporting & Accounting Manager Finance Dept $0 $2,695 $2,695 Human Resources Coordinator Human Resources Dept $2,058 $2,420 $4,478 Human Resources Director Human Resources Dept $0 $10,113 $10,113 Human Resources Coordinator Human Resources Dept $3,410 $0 $3,410 Librarian II Library $0 $2,809 $2,809 Librarian II Library $4,398 $1,307 $5,705 Librarian I Library $2,885 $1,094 $3,979 Planner I Planning & Admin $3,098 $0 $3,098 Principal Planner Planning & Admin $0 $8,977 $8,977 Planner I Planning & Admin $3,098 $3,630 $6,728 Senior LAN Analyst Police Civilians $6,580 $4,238 $10,818 Field Supervisor II Recreation $11,322 $2,825 $14,147 Recreation Center Coordinator Recreation $0 $9,779 $9,779 Field Supervisor II Streets $6,434 $7,063 $13,497 $69,935 $108,217 $178,152

General Fund Expenditures – Summary By Expenditure Category

City Manager 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 801,400 701,100 701,100 -13% MATERIALS & SUPPLIES 7,500 43,100 43,100 475% ADMINISTRATIVE EXPENDITURES 235,900 244,500 244,500 4% OPERATING EXPENDITURES 1,044,800 988,700 988,700 -5% Highlights: • Decrease in Personnel Costs primarily due to changing of City Manger position. • Materials & Supplies increase due to web site update and reimbursement of moving expenses. • Key goal is to continue momentum on building relationships with Dover’s stakeholders

City Manager 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE Highlights: PERSONNEL COSTS 801,400 701,100 701,100 -13% Decrease in Personnel Costs primarily due to changing of City Manger MATERIALS position. & SUPPLIES 7,500 43,100 43,100 475% Materials & Supplies increase due to web site update and ADMINISTRATIVE reimbursementEXPENDITURES 235,900 of moving expenses. 244,500 244,500 4% Key goal OPERATING is to continue momentum EXPENDITURES 1,044,800 on building 988,700 988,700 -5% relationships with Dover’s stakeholders Highlights: • Decrease in Personnel Costs primarily due to changing of City Manger position. • Materials & Supplies increase due to web site update and reimbursement of moving expenses. • Key goal is to continue momentum on building relationships with Dover’s stakeholders

City Manager 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 801,400 701,100 701,100 -13% MATERIALS & SUPPLIES 7,500 43,100 43,100 475% ADMINISTRATIVE EXPENDITURES 235,900 244,500 244,500 4% OPERATING EXPENDITURES 1,044,800 988,700 988,700 -5% Highlights: • Decrease in Personnel Costs primarily due to changing of City Manger position. • Materials & Supplies increase due to web site update and reimbursement of moving expenses. • Key goal is to continue momentum on building relationships with Dover’s stakeholders

City Clerk 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 451,100 481,700 481,700 7% MATERIALS & SUPPLIES 8,600 8,900 8,900 3% ADMINISTRATIVE EXPENDITURES 48,700 43,400 43,400 -11% OPERATING EXPENDITURES 508,400 534,000 534,000 5% Highlights: • Personnel Costs increase primarily due to increase in pension funding. • Slight decrease in Administrative Expense, over FY21, due to it being a non- election year. • Key goal is to redraw Council district lines once the 2020 Census infomration is available

Customer Service 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 1,050,600 990,400 990,400 -6% MATERIALS & SUPPLIES 35,500 35,000 35,000 -1% ADMINISTRATIVE EXPENDITURES 21,500 22,000 22,000 2% OPERATING EXPENDITURES 1,107,600 1,047,400 1,047,400 -5% Highlights: • Employee turnover is accounting for the decrease in Personnel Costs. • Other Operating Expenses will be relatively flat for FY22. • Key goals are: • Implementation of Utility billing in MUNIS-ERP software • Integrating Assessor functions and eliminating two vacant positions • Using technology and creativity to improve customer service • Hosting a student intern summer 2021

Finance Highlights: • Administrative Expenses decrease due to shifting MUNIS costs to General Fund non-operating • Key goal is implementing the MUNIS-ERP payroll/HR module and utility billing module

Human Resources 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 424,000 455,800 455,800 8% MATERIALS & SUPPLIES 32,000 93,200 143,200 348% ADMINISTRATIVE EXPENDITURES 68,200 49,300 49,300 -28% OPERATING EXPENDITURES 524,200 598,300 648,300 24% TOTAL EXPENDITURES $ 524,200 $ 598,300 $ 648,300 24% Highlights: • Segal Study Implementations figure into Personnel Cost increases (bottom of range only). • Pay for Performance and referral program added to Program Expense for Fy22.

Information Services 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 593,400 479,200 479,200 -19% MATERIALS & SUPPLIES 71,500 65,900 65,900 -8% ADMINISTRATIVE EXPENDITURES 247,900 192,800 192,800 -22% OPERATING EXPENSES 912,800 737,900 737,900 -19% CAPITAL OUTLAY 61,600 26,600 26,600 -57% TOTAL EXPENDITURES $ 974,400 $ 764,500 $ 764,500 -22% Highlights: • Personnel Costs decrease; FY21 saw the retiring of the IT Director, position as well as replacement was budgeted in FY21. • New LAN Analyst budgeted for second half of the year. • Key goals are: • Improved and enhanced cybersecurity techniques and possibly equipment • Evaluate and replace/update phone system • Improved turnaround on help-desk items

Library 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 1,327,900 1,454,900 1,454,900 10% MATERIALS & SUPPLIES 83,400 83,500 83,500 0% ADMINISTRATIVE EXPENDITURES 411,400 319,800 319,800 -22% OPERATING EXPENDITURES 1,822,700 1,858,200 1,858,200 2% CAPITAL OUTLAY - 25,000 25,000 100% TOTAL EXPENDITURES $ 1,822,700 $ 1,883,200 $ 1,883,200 3% Highlights: • New full-time Director and Assistant director added to staff. • Reduction in Contractual Services driving decline in Administrative Expenditures. • Capital Outlay for temperature control in facility. • Key goals are: • Reducing barriers to use of the library and building relationships with DAFB and others • Celebrating the Dover Public Library’s 80th anniversary

Recreation 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 820,500 870,100 870,100 6% MATERIALS & SUPPLIES 77,300 88,400 88,400 14% ADMINISTRATIVE EXPENDITURES 231,900 231,800 231,800 0% OPERATING EXPENDITURES 1,129,700 1,190,300 1,190,300 5% CAPITAL OUTLAY 395,000 787,000 787,000 99% TOTAL EXPENDITURES $ 1,524,700 $ 1,977,300 $ 1,977,300 30% Highlights: • Personnel Cost increases due mainly to the raise in Temporary Help wages and pension. • Increase in Materials & Supplies due to the addition of $15k in playground repairs (included in CIP in previous years). • Replacing vehicle • Key goals • Constructing Dover Park building and Spray pad. • Small park revitalization

Police 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE TOTAL PERSONNEL COSTS $ 17,424,300 $ 17,989,876 $ 17,879,826 3% MATERIALS & SUPPLIES 352,000 372,000 359,000 2% ADMINISTRATIVE EXPENDITURES 793,600 772,600 772,600 -3% OPERATING EXPENDITURES 18,569,900 19,134,476 19,011,426 2% CAPITAL OUTLAY 912,400 588,600 588,600 -35% TOTAL EXPENDITURES $ 19,482,300 $ 19,723,076 $ 19,600,026 1% Highlights: • Five new officers hired and community policing fully staffed in FY22 • Replace nine vehicles (2 budgeted in FY21) • Increase in operating somewhat offset by decrease in capital expenditures • Key goals • Implementing body-worn cameras program • Expansion of the camera system

Recreation 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 450,400 632,200 632,200 40% MATERIALS & SUPPLIES 28,600 25,700 27,600 -3% ADMINISTRATIVE EXPENDITURES 176,800 177,200 177,200 0% OPERATING EXPENDITURES 655,800 835,100 837,000 28% CAPITAL OUTLAY 700,000 50,000 - -100% TOTAL EXPENDITURES $ 1,355,800 $ 885,100 $ 837,000 -38% Highlights: • Employee turnover is accounting for the decrease in Personnel Costs. • Other Operating Expenses will be relatively flat for FY22. • Key goals are: • Implementation of Utility billing in MUNIS-ERP software • Integrating Assessor functions and eliminating two vacant positions • Using technology and creativity to improve customer service • Hosting a student intern summer 2021

Central Services – Facilities Management 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 450,400 632,200 632,200 40% MATERIALS & SUPPLIES 28,600 25,700 27,600 -3% ADMINISTRATIVE EXPENDITURES 176,800 177,200 177,200 0% OPERATING EXPENDITURES 655,800 835,100 837,000 28% CAPITAL OUTLAY 700,000 50,000 - -100% TOTAL EXPENDITURES $ 1,355,800 $ 885,100 $ 837,000 -38% Highlights: • Adding one new position in Maintenance • Shifting half of the expenses of F&F Manager from Fleet Maintenance to Facilities • Weyandt Hall HVAC project

Planning – Code Enforcement 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 530,400 467,400 467,400 -12% MATERIALS & SUPPLIES 26,000 27,600 27,600 6% ADMINISTRATIVE EXPENDITURES 258,600 259,100 259,100 0% OPERATING EXPENDITURES 815,000 754,100 754,100 -7% CAPITAL OUTLAY - 50,300 50,300 100% TOTAL EXPENDITURES $ 815,000 $ 804,400 $ 804,400 -1% Highlights: • Capital outlay includes the purchase of two new vehicles • Key goal • Thorough housing assessment

Planning – Life Safety (Fire Marshal) 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 277,700 316,600 316,600 14% MATERIALS & SUPPLIES 8,900 45,600 22,400 152% ADMINISTRATIVE EXPENDITURES 146,100 142,800 142,800 -2% OPERATING EXPENDITURES 432,700 505,000 481,800 11% CAPITAL OUTLAY 48,900 - - -100% TOTAL EXPENDITURES $ 481,600 $ 505,000 $ 481,800 0% Highlights: • Increase in supplies is for lighting package for incident response. • Knox Box upgrade delayed a year. • Personnel increases due largely to health insurance increase (coverage choices made by staff changed).

Public Works - Streets 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 547,600 480,400 480,400 -12% MATERIALS & SUPPLIES 118,900 120,000 120,000 1% ADMINISTRATIVE EXPENDITURES 33,200 35,200 35,200 6% OPERATING EXPENDITURES 699,700 635,600 635,600 -9% CAPITAL OUTLAY 936,000 1,492,000 1,492,000 59% TOTAL EXPENDITURES $ 1,635,700 $ 2,127,600 $ 2,127,600 30% Highlights: • Major Capital projects include purchase of a dump truck, and new backhoe and an asphalt “hotbox” that will allow staff to make hot-mix repairs without renting equipment

Public Works - Stormwater 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 420,200 408,600 408,600 -3% MATERIALS & SUPPLIES 70,200 105,400 105,400 50% ADMINISTRATIVE EXPENDITURES 295,500 304,400 259,600 -12% OPERATING EXPENDITURES 785,900 818,400 773,600 -2% CAPITAL OUTLAY 1,110,700 2,896,200 2,546,200 129% TOTAL EXPENDITURES $ 1,896,600 $ 3,714,600 $ 3,319,800 75% Highlights: • Capital expenditures include major improvements to Persimmon Park drainage, purchase of a streetsweeper and a vac truck • Major goal • Hire/promote manager of a Stormwater Utility

Tax Assessor 2020-2021 2021-2022 2021-2022 % DESCRIPTION BUDGET REQUESTED RECOMMENDED CHANGE PERSONNEL COSTS 215,400 182,100 182,100 -15% MATERIALS & SUPPLIES 4,400 2,900 2,900 -34% ADMINISTRATIVE EXPENDITURES 26,100 78,300 78,300 200% OPERATING EXPENDITURES 245,900 263,300 263,300 7% Highlights: • Current Assessor retires in July 2021. • Upon Council approval, the Assessor’s office will be absorbed into Customer Service. City will pursue an agreement with Kent County who will begin five-year reassessment plan

EXHIBIT #2 Special Council Meeting - Budget Review of 06/01 and 06/02/2021 City of Dover FY 2021 -2022 Proposed Budget With FY 22 – 26 Capital Improvement Program

MAJOR FUND HIGHLIGHTS • General Fund • Water Fund • Wastewater Fund • Electric Fund

MAJOR FUND HIGHLIGHTS Fee and Transfer Trends – Enterprise Funds Major Rate & Fee Trends Actual Actual Actual Actual Actual Actual Actual Actual Actual Proposed WATER/WASTEWATER FUND 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Water per 1,000 gal (Tier 1) $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $2.49 $2.66 Water per 1,000 gal (Tier 2) $3.11 $3.33 Water per 1,000 gal (Outside City Tier 1) $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $3.74 $4.00 Water per 1,000 gal (Outside City Tier 2) $4.67 $5.00 Water Customer Charge $1.25 $1.25 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $5.00 $5.00 Wastewater per 1,000 gal. Charge $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.65 $2.84 $3.03 Wastewater per 1,000 gal (Outside City) $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $3.98 $4.25 $4.55 Wastewater Customer Charge $1.25 $1.25 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $5.00 $5.00 Kent County Sewer Treatment Fee - Rate set by County $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.58 $2.58 $2.58 Kent County Sewer Adjustment (I & I flows) $1.05 $1.05 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.61 $1.72 ELECTRIC FUND Residential Rates $0.1316 $0.1204 $0.1204 $0.1203 $0.1203 $0.1203 $0.1206 $0.1206 $0.1209 $0.1209 Increase % -3.5% -8.5% 0.0% -0.1% 0.0% 0.0% 0.2% 0.2% 0.2% 0.0% Power Cost Adjustment ($0.00252) ($0.00855) ($0.00382) ($0.00382) ($0.00700) ($0.00700) Electric Fund Customer Charge $5.00 $5.00 $5.00 $7.50 $7.50 $7.50 $8.46 $8.46 $9.42 $9.42 Reconnect Fees $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 $50 - $100 Return Check Fees $25 $25 $25 $40 $40 $40 $40 $40 $40 $40

Planning for the future Utility rate studies

WATER UTILITY FUND BUDGET REVIEW Fiscal Year 2021-2022 Presented June 2, 2021

• Water Utility Fund Public Safety, General & Community Services Water Engineering * Water Maintenance * Water Treatment Plant * Capital Improvements

Water Fund Operations • Accomplishments in FY21 • Bulk Water Station fully operational • Completion of Water Treatment Plant Improvements • Initial Assessment of Elevated Water Storage Tanks. • Water Master Plan Update. • Completed West Street, West Alley, and Ross Street. • Initiated a long-term Elevated Water Storage Tank Maintenance Contract

Water Fund Operations • Goals planned in FY22 • Improve resiliency at WTP with the purchase of mobile generator • Water Main Replacement –Wellhead Redevelopment of four (4) deep wells. • Begin implementation of backflow testing as required by DNREC. • Develop public relations plan to educate public and City staff about environmental mandates • Continue to work with Tyler / MUNIS for Integration and utility billing. ❖ NW Water Tower – Earmark request

Water Fund Budget - Revenue • Revenue overall flat compared over FY21 Original Budget $25,000 (0.3%) • Rate increase offset by reduced impact • Major increases/(decreases) affecting revenues • Water Service fees $$122,100 (2.0%) due to rate increase, but tempered buy low usage • Decrease in Impact Fees $ 150,000 (26.3%) ( based on trends

Water Fund Budget - Expenses • Major increases/(decreases) affecting expenses • Increase in Water Treatment Plant expenses due to new equipment $$148,100. • Increase of 78,800 (69.6%) in Retiree Healthcare and $58,000 (20.4%) pension expenses due to splitting out Water and Wastewater funds • Capital Project Appropriation increase $286,700 (22.1%) • Decrease in Water Impact Reserve Fund of $285,100 • Decrease in Engineering and Inspections contractual services for the Water Master Plan Update completed last year $104,200 net (26%)

Planning for the future - Water • Goals planned in FY22 • Improve resiliency at WTP with the purchase of mobile generator • Water Main Replacement –Wellhead Redevelopment of four (4) deep wells. • Begin implementation of backflow testing as required by DNREC. • Develop public relations plan to educate public and City staff about environmental mandates • Continue to work with Tyler / Mu for Integration and utility billing.

WASTEWATER UTILTY FUND BUDGET REVIEW Fiscal Year 2021-2022 Presented June 2, 2021

• Wastewater Utility Fund Wastewater Engineering * Wastewater Maintenance * Capital Improvements

Water Fund Operations • Accomplishments in FY21 • Completed studies for Turnberry, College Road and Lepore Road projects for FY22 implementation. • Replacement of Camera Truck Equipment. • Upgraded SCADA Equipment for Pump Stations. • Completion of Pump Station upgrade of #7 Pump Station Upgrades. • Completion of Kent County upgrade of US13 force main reduces stress on Pump Station #7

Wastewater Fund Operations • Goals planned in FY22 • Begin City Wide Inflow and Infiltration Investigation – 2 year project. • Lepore Road Sanitary Sewer Upgrade. • Turnberry Pump Station Upgrade and College Road Pump Station Replacement. • Meeting House Branch Sanitary Sewer Replacement • Transfer mobile generator from Water Utility to Pump Station #7. • Continue to work with Tyler / MUNIS for Integration.

Wastewater Budget - Revenue • Starting Fund balance increase over FY21 Budget $1.62M • Decrease in transfers and expenses of $271,100 or -3.7% compared to FY21 Budget • Major increases/(decreases) ) affecting revenues • Wastewater Service Fees $242,000 (5.4%) due to rate increase • Groundwater Inflow Adjustment Revenue increase of $198,500 (10.8%) due to rate increase (7.1%).

Wastewater Budget - Expenses • Major increases/(decreases) affecting expenses • Increase of 11,500 (14.1%) in Retiree Healthcare. • Capital Project Appropriation decrease of $339,000 (33.4%)

Planning for the future - Wastewater • Goals planned in FY22 • Implementation of cost of service rates and modeling • Presented to City Council in January 2020 • Implementation continues in this Budget • Customer Service enhancements • Roll out of new billing system with Tyler / MUNIS • Continue inflow & infiltration improvements with relining program and sewer main replacements • Capacity improvements • Continuation of pump station replacements and upgrades • Technology updates to SCADA equipment and systems

ELECTRIC FUND BUDGET REVIEW Fiscal Year 2021-2022 Presented June 2, 2021

• Electric Utility Fund Electric Administration * Engineering * Transmission & Distribution * Power Plant Operations * Power Supply * System Operations * Meter Reading

Electric Fund Budget - Summary • Revenue decreased v. FY20 Original Budget-to-Budget (BTB) - $830K Million (-1.0%) before Rate Stabilization transfer in of $2.8 Million • No planned rate changes, PCA Credit remains $.0070/kwh • Implementing the cost of service model in FY21 reduced most business and commercial bills • Overall the utility is in excellent financial condition with adequate reserves • Decrease in Power Supply and Plant Operations costs offset by decrease in capacity credits budget to budget (McKee closure). • Major capital expenditures to be financed or paid from targeted reserves

Electric Fund Budget - Summary • Major increases/(decreases) affecting revenues • Customer sales decrease $2,269,000 (-2.7%) due to rate reductions • Major increases/(decreases) affecting expenses • Power Supply cost decrease of $5.4 M budegte to budget (56%) • Estimated FY21 v Budget FY22 shows decrease of $3.0M • Actual capacity credits offset by reduced operation costs; net result, loss of McKee will not impact power supply costs • Operation costs decreased with closing of McKee ($2.5M) • Would be even lower except costs to run Van Sant are not known yet – RFP pending • Capital expenditures increased from $6.2M to $21.7 • $7M will be financed for the Garrison Oak Substation • $9M from Depreciation Reserve for decommissioning of the McKee Power Plant – set aside from utility fees for this exact purpose

Electric Fund Budget - Summary • Major increases/(decreases) affecting revenues • Customer sales decrease $2,269,000 (-2.7%) due to rate reductions • Transfers to other accounts as follows • Transfer to Rate Stabilization Reserve $2.0 million • Transfer to Improvement & Extension Reserve of $3.7 million • Transfer to General Fund of $11 million (approximately the same % of total revenue as FY15 first year of $10M transfer

Electric Debt Coverage

Electric Fund Operations • Accomplishments in FY21 • Restored power (with help from other cities and contractors) to 8,200 customers in 4 days after EF1 tornado on August 4. • Signed Renewable Energy Purchased Power Agreement (PPA). • 50MW dedicated to the City of Dover • Includes Solar Renewable Energy Credits which have recently tripled in value • Market competitive energy costs plus capacity credits in PJM • Completed Phase 1 implementation of LED streetlight installation (before close of FY21). • Downtown installation • City-wide installation to be done in-house • Developed specifications for Garrison Oak substation.

Electric Fund Operations • Accomplishments planned in FY22 • Provide a more customer centric approach to our business model with outreach and programs geared toward energy efficiency and large customers. • Renewable energy RFP. Recommendation to increase renewable energy resources. • Complete conversion of Electric GIS information into ACR-GIS (ESRI product) from ARC-FM (not ESRI). • Phase 1 and 2 (engineering, environmental) of the McKee #3 decommissioning budgeted at $1 million. • Build Garrison Oak Substation. • Integration of new billing system with Tyler Munis. • Enter into an agreement to run Van Sant for 6 six year (projected life span).

Planning for the Future • Integrated Resource Plan • Energy Generation/Purchase • Unit 3 McKee to go out of service May 31, 2021 • 50 MW Solar Farm ~ Dec – Jun 2022 • Future Capacity • Solar PPA includes some capacity • Evaluating options with TEA, customers and system • Enhancements Substations • Garrison Oak Business & Technical Park RFP in FY21 • DAFB Replacement & Consolidation • Improved Operations • Technology • LED street lights • Advance Metering Infrastructure (AMI) • Better partnerships with DAFB and large volume customers

Planning for the Future Yearly Percent of Runs in the Market for sale of Energy

EXHIBIT #3 Special Council Meeting - Budget Review of 06/01 and 06/02/2021 Available to spend $ 653,000 Spending Additional Description Department Staff Cuts Council cuts approved approved $ (765,000.00) $ (1,749,100.00) $ 786,000 No Property Tax Increase $ 352,000 3% (v. 2,5%) NB raise $ 50,000 Moving Expense City Manager $ 20,000 Legal Expenses City Manager 50,000 Special Projects HR 50,000 25% Economic Development Mayor 25,000 Delete van replacement Recreation 31,000 Delete 2 FTE Customer Service $ 97,800 LAN Analyst deleted IT 37,500 Subtotal Admin/Rec $ 248,800.00 Reduce inc to Fire Fire 1,000 50% buffer for Ambulance Contract Life Safety 10,000 Knox Box Update Life Safety 23,200 2 Trucks Code Enforcement 50,300 40% cut Demolition Code Enforcement 100,000 Defer hiring 4 officers 6 mos Police 199,000 OT and Ed Asst Police 75,000 Tahoe Police 62,600 Subtotal Public Safety $ 322,100.00 Remote Access Facilities Maint. 25,000 City Hall Improvements Facilities Maint. 50,000 Craftsperson (2nd additional) Facilities Maint. 59,000 Craftsperson defer 6 mos Facilities Maint. 29,500 Warehouse Improvements Procurement & Inv 90,000 River Road (MLK - US13) Streets 380,000 Townshend (US13 - End) Streets 421,500 Kent Ave N Alley Streets 7,500 Kent Ave S Alley Streets 9,000 Asphalt Hot Box Streets 43,000 Replace 2000 Backhoe Streets 125,000 Replace2001 Dump Truck Streets 156,000 Cyclomedia Software Streets 48,000 Replace Automated Truck Sanitation 290,400 Replace Vac Truck Stormwater 364,000 Mirror Lake Drainage Basin Stormwater 350,000 Reduce Mulch Process Costs Stormwater 44,800 Subtotal Public Works/City Buildings $ 1,943,200.00