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LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE AGENDA FEBRUARY 27, 2012 - 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. Staff Recommendations - Economic Development Office (Tabled by Committee on February 13, 2012) 2. Proposed Ordinance #2012-07 - Incentives for Redevelopment of Vacant Commercial Buildings 3. Authorization to Purchase Virtual Server (Police Department) 4. Adjournment by 7:00 P.M. /tm S:\AGENDAS & MINUTES\Committee-Agendas\2012\02-27-2012 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.

Memorandum City Manager P. O. Box 475 City Hall/ 15 Loockerman Plaza Dover, Delaware 19903-0475 Phone: (302) 736-7005 Fax: (302) 736-7002 E-mail: skoenig@dover.de.us TO: City Council FROM: Scott D. Koenig, P.E., City Manager DATE: February 22, 2012 SUBJECT: Recommendation for Economic Development Office/Downtown Dover Partnership In the discussion that has taken place in the last two months about the recommendation to separate the economic development function of the City from the staffing of the Downtown Dover Partnership, there have been a lot of details discussed in which the initial concept proposed seems to have become lost. In an effort to help move this discussion forward, I have developed a simplified graphic representation of the current Economic Development Office/Downtown Dover Partnership structure and the proposed structure, which would separate these functions. The long term cost savings of this recommendation apply in two ways: 1. Two positions would be cut from the budget, and the existing employees would be relocated to other departments where vacancies exist. 2. The City would continue to provide financial support for the Downtown Dover Partnership; however, there would be no unfunded liability or OPEB costs associated with staff hired by the Downtown Dover Partnership. As you are aware, these are costs that escalate over time and impact the budget on a long-term basis. I hope that the attached graphic helps to simplify the discussion, as the details can be worked out after there is a decision on the concept.

Current City Proposed City Council Structure Council Structure Planning & DDP Planning & DDP Board Inspections Board Inspections Economic Development Economic DDP Executive Office/DDP Staff Development Director Coordinator City Provides (3 City employees) (1 City Employee) Financial Support 2 employees re-assigned to fill vacancies within other departments

Memorandum Office of the City Manager PO Box 475 Dover, DE 19903 Phone: (302) 736-7005 FAX: (302) 736-7002 E-mail: skoenig@dover.de.us To: Legislative, Finance & Administration Committee From: Scott D. Koenig, P.E. City Manager Date: February 23, 2012 Subject: Economic Development Office / Downtown Dover Partnership Information – Response to previous inquiries At the last Legislative, Finance & Administration Committee meeting, it was pointed out that several inquiries from previous meetings had been unanswered. This memorandum is intended to address some of the inquiries previously raised. I have attached a highlighted email from the City Clerk’s office that identifies the inquiries. One of the inquiries focused on whether or not the Economic Development Office is “profitable”. Mr. Bill Neaton, Economic Development Manager, submitted the attached email dated February 21, 2012 to support the statement that the department is “profitable”. As I indicated previously, some of the activity used to support the position of “profitable” is subjective. The annual budget for this function has averaged approximately $223,000 over the past three (3) fiscal years. Also included in the attachments for this memorandum is a copy of December 15, 2011 City of Dover Top Employers Report (the Jobs Report) which had been previously requested by Councilman McGlumphy. This report was presented to the Parks, Recreation & Community Enhancement Committee. Attachments: Email dated 02/12/12 from City Clerk Email dated 02/21/12 from Economic Development Manager 12/15/2011 City of Dover Top Employers Report

ACTION FORM PROCEEDING: Legislative, Finance and Administration Committee DEPARTMENT OF ORIGIN: Planning & Community Development DATE SUBMITTED: 2/21/12 PREPARED BY: Ann Marie Townshend, AICP, Director of Planning & Community Development SUBJECT: Draft Ordinance # 2012-07- Create a New Appendix E- Commercial Building Redevelopment REFERENCE: N/A RELATED PROJECT: N/A REVIEWED BY: Scott D. Koenig, P.E., City Manager; Donna Mitchell, CPA, City Controller/Treasurer EXHIBITS: Draft Ordinance EXPENDITURE REQUIRED: N/A AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): N/A TIMETABLE: First Reading on March 12, 2012; Final Reading and Council Action on April 9, 2012. RECOMMENDED ACTION: Staff recommends that the proposed ordinance be forwarded to City Council with the above timeline for action. BACKGROUND AND ANALYSIS The proposed ordinance would allow for waiver of half of the building permit fee, half of the City water and wastewater impact fees, and tax abatement on the value of improvements for redevelopment of commercial buildings of 5,000 square feet or greater, located along Route 13, Bay Road, Court Street between Bay Road and Route 13, and Route 8 west of the railroad tracks. The proposed ordinance is modeled after the downtown redevelopment incentives. Due to the economic downturn, municipalities in Delaware and elsewhere are offering waivers of certain fees to help spur economic growth. The proposed ordinance is drafted with a sunset of December 31, 2015, so incentives are available for a finite period of time while the City attempts to encourage economic growth and filling of commercial vacancies on the City’s primary commercial corridors. The costs involved with this incentive are associated with loss of revenue related to the waiver and are difficult to quantify, as they will depend upon the cost of specific commercial building renovations, changes in use that would require additional plumbing fixtures, and the demand for the incentives. An example is provided of a recent renovation that meets the eligibility in the proposed ordinance. In this example, the total permit cost was $5,931. There were not impact fees applicable to the project, as there was no increase in the number of equivalent dwelling units (E.D.U). The value of the improvements would increase the property taxes by $519 per year. If the proposed incentive program were available at the time of this renovation, the value of the incentive to the business in this example would be $3,484 for the first year and $519 per year for the subsequent nine years. The City would have brought in added revenue in permit fees of $2,966, plus an additional $777 in sign permit fees, certificate of occupancy fees, business license fees for tenants (to be renewed annually), and a construction trailer placement fee. Total revenue for the general fund in relation to this project, even with the incentives, would be $3,742.50. Additionally, there would be utility revenue associated with water/wastewater and electric service.

Waiver of Fee - Example Type of Fee Fee Calculation Example - Permit Cost without Waiver Building Permit $25.00 for first $1,000.00 of costs and $8.00 $4,228 for each additional $1,000.00 of costs or multiples thereof up to $10,000,000.00 of costs, $6.00 for each additional $1,000.00 of costs or multiple thereof up to $20,000,000.00, and $5.00 for each additional $1,000.00 of costs or multiple thereof above $20,000,000.00 Plumbing Permit Fixtures: $25.00 first five fixtures and $2.00 $1,593 for each additional fixture Garbage Disposal & Hot Water Heaters: minimum fee of $25.00 Gas, water and sewer inspection underground: $20.00 for first 150 feet and $0.50 for each additional ten feet or multiple thereof Mechanical Permit Heating Permit: $30.00 first 10,000 BTUs and $5.00 each additional 10,000 BTUs or multiple thereof Air Conditioning Permit: $30.00 per ton for the first five tons and $5.00 per ton over five tons or multiple thereof Heat Pump Permit: $15.00 first 10,000 BTUs and $2.50 for each additional 10,000 BTUs or multiple thereof and an additional $15.00 for the first five tons and $2.50 per ton for over five tons or multiple thereof Fire Prevention Permit $12.00 for each $1,000.00 of costs or multiple $110 thereof of the fire protection system; provided that a minimum fee for each permit shall be $50.00 City Sewer Impact Fee $1,900 per E.D.U. N/A City Water Impact Fee $2,100 per E.D.U. N/A Tax Abatement – Example Pre-Construction Value (land and building): $1,645,900 Post Construction Value (land and building): $1,799,500 Difference $153,600 $ 153,600 x .003378 (current tax rate) = $518.86 x 10 years = $5,188.60 (based on current rate)

CITY OF DOVER PROPOSED ORDINANCE #2012-07 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL 2 MET: 3 That the City of Dover Code of Ordinances be amended by inserting a new Appendix E - Commercial 4 Building Redevelopment, as follows: 5 APPENDIX E - COMMERCIAL BUILDING REDEVELOPMENT 6 ARTICLE I. - INTENT. 7 The city council has deemed it to be in the best interests of the residents of the city and in furtherance 8 of their health, safety, and welfare to promote the renovation and utilization of commercial buildings 9 on the city's principal commercial corridors. In order to promote the business growth and 10 reutilization of vacant commercial buildings along these corridors, city council has determined that 11 incentives in the forms of tax abatements, impact fee waivers, and building permit waivers should 12 be offered. 13 ARTICLE II. - ELIGIBILITY. 14 Section 1. - Eligible project. 15 Eligible project shall mean the renovation and establishment of a business in an existing 16 commercial building or tenant space which: 17 (a) Is located or addressed on U.S. Route 13, Bay Road, Court Street between U.S. Route 13 and 18 Bay Road, and Delaware Route 8 west of the railroad tracks; 19 (b) Is a minimum of 5,000 square feet of floor area; 20 (c) The fair market value of the materials to be used in and the labor to be performed on the 21 project exceeds the sum of $15,000.00; 22 (d) Is for commercial or office use; 23 (e) The establishment of a new business is proposed; and 24 (f) Conforms to the intent of this ordinance. 25 Construction or renovation of accessory buildings as defined in Appendix B - Zoning, Article 12 26 - Definitions, of the Dover code of ordinances shall not be eligible for redevelopment incentives. 27 Construction or renovation which constitutes ordinary replacement or routine maintenance shall not 28 qualify as an eligible project. Construction of new buildings shall not qualify as an eligible project. 29 Section 2. - Redevelopment incentive ineligibility. 30 An otherwise eligible project shall be ineligible for redevelopment incentives if: 31 (a) An application for a building permit for the project was filed prior to the effective date of this 32 ordinance; or 33 (b) Construction or renovation commenced prior to the effective date of this ordinance;

Proposed Ordinance #2012-07 - New Appendix E - Commercial Building Redevelopment Page 2 34 (c) Issuance of the certificate of occupancy and/or the completion and finalization of the building 35 permit occurs before the application for redevelopment incentives is received; 36 (d) Construction or renovation commenced prior to the issuance of a building permit by the city 37 of Dover; 38 (e) Applications for incentives provided in this ordinance shall be subject to the provisions of 39 Chapter 1 - General Provisions, Section 1-13 - Denial of permits or approvals for failure to 40 comply with requirements for payment, actions, or filings. 41 ARTICLE III - INCENTIVES. 42 Section 1. - Waiver of fees. 43 Renovations meeting the eligibility requirements shall be eligible for the following incentives: 44 (a) Partial waiver of permit fees. Fifty percent of the fees for building, plumbing, mechanical, 45 and fire protection permits shall be waived for eligible projects. Sign permit fees shall not 46 be waived. 47 (b) Partial waiver of impact fees. For projects where renovation will constitute an increase in 48 equivalent dwelling units (EDU's) and require payment of impact fees, fifty percent of the 49 City's portion of the water and sewer impact fees shall be waived. The Kent County impact 50 fees and administrative charges shall not be waived. 51 Section 2. - Tax abatement. 52 Eligible projects shall receive property tax waivers for a period not to exceed ten years so that 53 improvements to the properties made in accordance with the intent of this ordinance will not be 54 taxed for a period of time not to exceed ten years from the date of the making of the 55 improvements. The said ten-year period will commence with the date of issuance of a building 56 permit. The property tax waiver shall apply only to the improvements and not to the property 57 value assessed prior to the improvements. 58 ARTICLE IV. - ADMINISTRATION. 59 The city manager and his staff shall develop the administrative procedures necessary to implement 60 this ordinance. The city manager and his staff shall promulgate reasonable standards to be used in 61 determining whether an eligible project shall receive redevelopment incentives and, if so, which incentives 62 shall be granted. Administrative staff shall review applications for redevelopment incentives and grant 63 incentives to eligible projects. Applicants shall be notified in writing of the action taken on their 64 applications. 65 ARTICLE V. - APPEALS. 66 Applicants denied redevelopment incentives shall have the right to appeal the decision to the city 67 council within 30 days from the date of mailing of the formal notification. Such appeal shall be in writing, 68 signed by the owner of the property in question, and filed with the city clerk.

Proposed Ordinance #2012-07 - New Appendix E - Commercial Building Redevelopment Page 3 69 ARTICLE VI. - SEVERABILITY AND EFFECTIVE DATES. 70 Section 1. - Severability. 71 Should any section or provision of this ordinance be declared to be unconstitutional or otherwise 72 invalid, such decision shall not affect the validity of the ordinance as a whole or any part thereof 73 other than the parts so declared to be unconstitutional or invalid. 74 Section 2. - Effective dates. 75 This ordinance shall be effective as of April 15, 2012. The provisions of this ordinance shall no 76 longer apply after December 31, 2015. 77 ADOPTED: * 78 S:\ORDINANCES\2012\Draft\2012-07 - New Appendix E - Commercial Building Redevelopment.wpd 79 SYNOPSIS 80 The proposed ordinance would allow a partial waiver of building permit fees 81 and city impact fees, as well as tax abatement on improvements, for 82 redevelopment of vacant commercial buildings on Route 13, Bay Road, Court 83 Street between Bay Road and Route 13, and Route 8 west of the railroad 84 tracks. 85 (SPONSORS: STAFF) 86 Actions History: 87 Feb. 27, 2012 - Scheduled for consideration by the Legislative, Finance, and Administration Committee

ACTION FORM PROCEEDING: Legislative and Finance Committee AGENDA ITEM NO.: 2/27/12 DEPARTMENT OF ORIGIN: Police DATE SUBMITTED: 2/1/12 PREPARED BY: Captain Steven Getek / Administrative Division Commander SUBJECT: Authorization to Purchase Virtual Server (Sole Vendor Purchase) REFERENCE: Grant Funding RELATED PROJECT: N/A APPROVALS: City Manager, Controller/Treasurer EXHIBITS: None EXPENDITURE REQUIRED: $42,600.00 PROJECT BUDGET: $42,600.00 FUNDING SOURCE (Dept./Page in CIP & Budget): Grants TIMETABLE: Upon receipt of council approval, the computer hardware will be ordered. The Legislative and Finance Committee approve the purchase and RECOMMENDED ACTION: recommend approval by the Council. BACKGROUND This Committee/Council action form is submitted to obtain approval for the sole vendor purchase of a Virtual Server/Storage Array at a cost of $42,600. This purchase has not previously been addressed or approved. The purchase will be made from Dell, which is a state contract vendor source for computer hardware. We need to purchase Dell equipment to ensure this new hardware integrates and communicates properly with the other existing servers and storage hardware currently in use in the Police Department. Funding: As shown below, funds from three grants will be combined for this purchase. Estimated Grant Source Amount Buffer Zone Protection Grant – from the License Plate DEMA $10,150.00 Reader Portion of funds 2010 Justice Assistance Grant 10DJBX0020 USDOJ 29,357.08 2011 SALLE Grant S-9-11 State Office of 3,092.92 Public Safety Total $42,600.00 The Buffer Zone Protection Grant from DEMA includes $32,500 for the purchase of a license plate reader system. The cost for the reader system itself is $22,350, so the remainder will be used to purchase a portion of the space available on this virtual server to satisfy the system requirements for running the license plate reader program and for storage of the data collected. The remainder of the space on the virtual server will be used for other systems and storage requirements within the department as identified below and this portion of the cost will be funded from remaining funds on our 2010 Justice Assistance Grant and a 2011 SALLE grant.

Following is more information that explains the concept of a virtual server system.  A Virtual Server, in a sense, is just a large file that thinks it is a physical server. Over time, rather than purchasing separate physical servers that control or store data for several systems and/or run on different programs/applications, we can purchase one larger virtual server/storage array (one machine) and divide it into several volumes or sections to run/control the various functions/programs and store the associated data.  The Dell virtual server/storage array will be divided up into several volumes, or sections. Each of those sections can store any type of data we wish to store on it. Some examples of what may be on this storage unit include: o Our main File Server Storage which includes all user documents and unit shared files o Future License Plate Reader data (SQL Database) o Parking Citation Data (Oracle Database) o IT related helpdesk data (SQL Database) o Building Access Security System Data (SQL Database) o Alchemy Document Scanning Storage (SQL Database) o Pretty much everything except for specialized systems that have large arrays (like our video recorders)  A virtual server/storage array will make it easier to back up data, and over time it will potentially save costs associated with backup software licensing since we won’t have to purchase a backup client license for each physical server like we do now since each server has its own data on it.  Having different volumes on a virtual server/storage array will allow for more flexible control of enforcing storage limits per user in order to avoid misuse of the storage system In summary, migrating to virtual servers and consolidating our computer data storage in a storage array will yield many benefits and savings over time. The Police Department will be able to reduce their physical hardware footprint and hardware costs, power consumption costs, and possibly some software licensing costs if vendor licensing methods remain the same. ACTION REQUESTED The Legislative and Finance Committee approve the purchase and recommend approval by the Council.