Attachment

REGULAR COUNCIL MEETING AGENDA JUNE 25, 2012 - 7:30 P.M. CITY HALL COUNCIL CHAMBERS 15 LOOCKERMAN PLAZA DOVER, DELAWARE OPEN FORUM - 15 MINUTES PRIOR TO OFFICIAL MEETING (7:15 P.M.) The “Open Forum” segment is provided to extend the opportunity to the general public to share their questions, thoughts, comments, concerns, and complaints. Discussion of any item appearing on the agenda as a public hearing is prohibited during the Open Forum as an opportunity will be provided during consideration of that item. Citizen comments are limited to three (3) minutes. Council is prohibited from taking action since they are not in official session; however, they may schedule such items as regular agenda items and act upon them in the future. INVOCATION BY CHAPLAIN WALLACE DIXON PLEDGE OF ALLEGIANCE LED BY COUNCILWOMAN WILLIAMS AGENDA ADDITIONS/DELETIONS * CONSENT AGENDA Those items on the Council Agenda which are considered routine and non-controversial shall be marked with an asterisk (*) and will be acted upon by a single roll call vote of the Council. There will be no separate discussion of these items unless a member of Council so requests, in which event the matter shall be removed from the Consent Agenda and considered a separate item. * 1. Adoption of Minutes A. Special Council Meeting (Budget Review) of May 22, 23, 30 and June 4, 2012 B. Regular Council Meeting of June 11, 2012 2. Presentation - Dover Public Library Donation 3. Public Hearings - Violations of Dangerous Building Ordinance A. Property Located at 171 Orchard Avenue, Owned by William W. Jarman B. Property Located at 488 North East Avenue, Owned by Jeffrey F. Garrison C. Property Located at 827 Townsend Boulevard (Pool), Owned by Jennifer E. Brown 4. Board of Assessment Appeals Exemption Report - May 22, 2012 A. Union Missionary Baptist Church - Lot 8 Forest Street (Board Recommended Denial of Request for Exemption) B. Second Baptist Church - 136 South Queen Street (Board Recommended Denial of Request for Exemption) C. Chapter 850 Vietnam Veterans of America - Lot 1549 Rear - Forrest Avenue (Board Recommended Approval of Request for Exemption)

Council Agenda - June 25, 2012 Page 2 4. Board of Assessment Appeals Exemption Report - May 22, 2012 (Continued) D. EJB Inc. - (Serenity Place) 327 Martin Street (Board Recommended Approval of Request for Exemption) E. House of Pride Inc. e-1. 16 North New Street (Board Recommended Denial of Request for Exemption) e-2. 102 South New Street (Board Recommended Denial of Request for Exemption) e-3. 115 South New Street (Board Recommended Denial of Request for Exemption) * 5. Parks, Recreation, and Community Enhancement Committee Report - June 11, 2012 A. Proposed Amendment to 2011 Community Development Block Grant Action Plan (Committee Recommended That Staff Be Authorized to Reallocate $60,081 in FY11 CDBG Funding From the City of Dover Streets Program to Provide Funding For the FY11 Housing Rehabilitation Program, American Disabilities Act (ADA) Improvements to Council Chambers, and FY12 CDBG Projects As Presented) B. Proposed Ordinances b-1. #2012-13 - Amendment to Appendix B Zoning, Article 5 - Supplementary Regulations, Section 4 - Supplementary Sign Regulations (See Item #13-A) (Committee Recommended Adoption of Proposed Ordinance #2012-13) b-2. #2012-14 - Amendment to Appendix B Zoning, Article 3 - District Regulations, Section 23 - Agricultural Zone (A) (See Item #13-B) (Committee Recommended Adoption of Proposed Ordinance #2012-14) b-3. #2012-15 - Amendment to Appendix B Zoning, Article 3 - District Regulations, Section 9 - General Residence and Office Zoning (RGO) (See Item #13-C) (Committee Recommended Adoption of Proposed Ordinance #2012-15) b-4. #2012-16 - Amendment to Chapter 114 - Vegetation, to Create a New Article III - Bamboo (See Item #14-A) (Committee Recommended Adoption of Proposed Ordinance #2012-16) C. FY 2013 Five-Year Capital Investment Plan (CIP) (Committee Recommended Acceptance of the FY2013 Five-Year Capital Investment Plan (CIP)) D. Updates (Committee Action Not Required) * 6. Utility Committee Report - June 11, 2012 A. McKee Run Generating Station Industrial Wastewater Discharge System (Committee Recommended Approval of the New Capital Investment Plan (CIP) For the Industrial Waste Water Discharge System at the McKee Run Generating Station and the Transfer of Funding From Existing CIPs, As Recommended by Staff) B. Annual Engineering Consultant's Report on the Operation and Maintenance of the Electric System - Fiscal Year 2011 (Committee Recommended Acceptance of the Report) C. FY 2013 Five-Year Capital Investment Plan (CIP) (Committee Took No Action) D. Review of Utility Related Capital Investment Plan (CIP) (Electric and Water/Wastewater) (Committee Action Not Required) E. Updates (Committee Action Not Required)

Council Agenda - June 25, 2012 Page 3 7. Legislative, Finance, and Administration Committee Report - June 11, 2012 * A. Review and Recommendation - Filling Critical Positions - Library Clerk II - Dover Public Library (Committee Recommended Approval of the Request to Fill the Position of Library Clerk II, As Recommended by Staff) B. Proposed 15% Healthcare Premium Cost Sharing Arrangement - Non-Bargaining Only (Committee Recommended Approval of Employee Cost Sharing of Health Insurance Premiums for Non-Bargaining Employees Based Upon Scenario #2 - Premiums Based Upon First State Basic, To Be Effective July 1, 2012) * C. Proposed Ordinances c-1. #2012-10 - Amending Chapter 1 - General Provisions, Section 1-13 - Denial of Permits or Approvals for Failure to Comply with Requirements for Payment, Actions, or Filings (Clean Hands) With CA-#1 through #4 (Referred to Committee by City Council on May 14, 2012; Deferred by Council Committee of the Whole on May 29, 2012) (See Item #15-A) (Committee Recommended Adoption of Proposed Ordinance #2012-10, As Amended to Include CA#2, CA#3, and CA#4) c-2. #2012-17 - Amending Chapter 26 - Businesses, Article I - In General, Section 26-1 - Sale of Dangerous Substances (See Item #14-B) (Committee Recommended Adoption of Proposed Ordinance #2012-17) * D. Elimination of Pay For Performance (Anderson/Hutchison) (Committee Recommended That the Pay For Performance Be Eliminated Effective Upon the Approval of a New System To Be Brought Forth By the City Manager and Staff) * E. Reduced Rates for All-Electric Homes in December, January, and February (Due To Time Constraints, This Item Was Deferred Until the Next Meeting) 8. FOP Labor Contract Agreement 9. Evaluation of Bids - City Hall Generator (DEMA Grant) 10. Setting of Electric Utility Rate for Fiscal Year 2012/2013 11. Reappointments - Recommended by Mayor Carey A. Board of Adjustment - Three (3) Year Terms to Expire July 2015 a-1. James N. Keller a-2. Richard Senato B. Planning Commission - Three (3) Year Terms to Expire June 1, 2015 b-1. Michael J. Ambruso, Sr. - Second District b-2. Thomas Holt - Second District C. Public Advisory Committee (PAC) of the Dover-Kent County MPO - Dr. Carlton L. Cannon, Jr. - Two (2) Year Term to Expire July 2014 12. Appointment - Recommended by Mayor Carey - Planning Commission - Three (3) Year Term to Expire June 1, 2015 - Dean E. Holden - Third District

Council Agenda - June 25, 2012 Page 4 13. First Reading - Proposed Zoning Text Amendments The First Reading is offered on the following proposed ordinances. Since they are amendments to the Zoning Code, they are recommended for referral to the Planning Commission on July 16, 2012 and that a Public Hearing be set for August 13, 2012 at 7:30 p.m. and that the Second Reading and Final Action by Council take place at that time. Copies of all proposed ordinances are available at the entrance of the Council Chambers or can be obtained from the City Clerk’s Office. A. Ordinance #2012-13 - Amendment to Appendix B Zoning, Article 5 - Supplementary Regulations, Section 4 - Supplementary Sign Regulations (Parks, Recreation, and Community Enhancement Committee) B. Ordinance #2012-14 - Amendment to Appendix B Zoning, Article 3 - District Regulations, Section 23 - Agricultural Zone (A) (Parks, Recreation, and Community Enhancement Committee) C. Ordinance #2012-15 - Amendment to Appendix B Zoning, Article 3 - District Regulations, Section 9 - General Residence and Office Zoning (RGO) (Parks, Recreation, and Community Enhancement Committee) 14. First Reading - Proposed Ordinances The First Reading is offered on the following proposed ordinances. Final action by Council will take place during the Second Reading of the ordinances on July 9, 2012. Copies of all proposed ordinances are available at the entrance of the Council Chambers or can be obtained from the City Clerk's Office. A. Ordinance #2012-16 - Amendment to Chapter 114 - Vegetation, to Create a New Article III - Bamboo (Parks, Recreation, and Community Enhancement Committee) B. Ordinance #2012-17 - Amending Chapter 26 - Businesses, Article I - In General, Section 26-1 - Sale of Dangerous Substances (Legislative, Finance, and Administration Committee) 15. Final Reading - Proposed Ordinance #2012-10 The First Reading of the following proposed ordinance was accomplished during the Council Meeting of April 23, 2012. Copies of the proposed ordinance are available at the entrance of the Council Chambers. A. Ordinance #2012-10 - Amending Chapter 1 - General Provisions, Section 1-13 - Denial of Permits or Approvals for Failure to Comply with Requirements for Payment, Actions, or Filings (Clean Hands) With LF&A #1 through #3 (Legislative, Finance, and Administration Committee)

Council Agenda - June 25, 2012 Page 5 16. Final Reading - Proposed Ordinance #2012-18 The First Reading of the following proposed ordinance was accomplished during the Council Meeting of June 11, 2012. Copies of the proposed ordinances are available at the entrance of the Council Chambers. A. Ordinance #2012-18 - Budget Ordinances - 2012/2013 City of Dover Budget 17. Council Members Announcements /tm S:\AGENDAS-MINUTES-PACKETS\Council-Agendas\2012\06-25-2012.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.

SPECIAL COUNCIL MEETING BUDGET REVIEW A Special Council Meeting was held on May 22, 2012 at 6:00 p.m. with Council President Leary presiding. Council members present were Mr. Anderson (arrived at 7:30 p.m.), Mrs. Russell, Mr. Perza, Mrs. Williams, Mr. Hare, and Mr. Hutchison. Mr. Lynn and Mr. Bonar were absent. Council staff members present were Mr Koenig, Mrs. Mitchell, and Mrs. McDowell. Mayor Carey was also present. AGENDA ADDITIONS/DELETIONS Mr. Hutchison moved to adopt the agenda as presented, seconded by Mrs. Williams and unanimously carried. Mr. Hutchison stated that when the FY12 budget process began, the City had a shortfall of approximately $3.4M in the General Fund. Noting that members would be considering a $800,000 deficit in the General Fund in the draft FY13 budget, Mr. Hutchison conveyed his thanks to Mr. Scott Koenig, City Manager; Mrs. Donna Mitchell, Controller/Treasurer; the City’s management team; and City employees for accomplishing this reduction in the deficit. MISCELLANEOUS INFORMATION Staff provided members with additional documents, as follows: 1) City of Dover Potential Savings for FY 2012 (as of May 22, 2012) (Exhibit #1); and 2) Correspondence from Mrs. Donna Mitchell, Controller/Treasurer, dated May 21, 2012 regarding Assessment Project Memo and Reassessment Estimate Figures (Exhibit #2). INTRODUCTION AND PRESENTATION Mr. Scott Koenig, City Manager, stated that in the past, the budget was prepared and presented by Mrs. Terry Tieman, Senior City Administrator in the City Manager’s Office. He advised members that he worked closely with Mrs. Donna Mitchell, Controller/Treasurer, in preparing the FY13 budget; however, a number of staff members played a critical role in its development. He conveyed his appreciation to Mrs. Mitchell, Ms. Tracey Lisiecki, Financial Accounting and Reporting Manager (Finance Department); Ms. Jamie Fenske, Billing Clerk (Customer Service Department); Ms. Hollie Ford, Administrative Assistant (Human Resources Department); Mrs. Linda Gomes, Administrative Assistant (Finance Department); and Mrs. Marlene Loomis, Computer Operator (Information Technology Department) for their hard work and long hours spent preparing the budget. Mr. Koenig read a letter to the Mayor and Members of City Council dated May 15, 2012 into the record, as follows: Dear Mayor and Members of City Council: Enclosed is the proposed Fiscal Year 2012-2013 City of Dover Operating Budget to be considered by City Council over the next several weeks. As you are aware, we began the budget process this year with an expected shortfall in the General Fund of approximately $3.4 million dollars. Throughout this past year, members of city staff have worked extremely hard to cut expenses and consolidate operations as

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 2 much as possible. The proposed budget reflects our commitment to providing efficient basic municipal services for our citizens. Significant efforts have been made to comply with all financial policies. All budgets are balanced with current revenues equal to or greater than current expenses with the exception of the Electric Fund. As allowed by policy, we are proposing to use the Rate Stabilization Reserve for power cost adjustments. In addition, we are recommending a change in the transfer policy for utilities to a fixed dollar amount from the previous methodology to transferring a percentage of revenue. The proposed budget has a significant impact on the city’s existing workforce. The workforce will be contracted from 362 full-time personnel in Fiscal Year 2011-2012 to 347 full-time personnel in Fiscal Year 2012-2013, a reduction of 4.14%. This reduction affects almost every department in the City; however, it has the largest impact on the Economic Development Office. The proposed budget recommends the elimination of this office effective October 1, 2012. I have also proposed a 15% across-the-board healthcare premium cost sharing arrangement for all employees. In order for this recommendation to be fully implemented, we must successfully complete the collective bargaining process for all three (3) unions. In addition to the above impacts on our workforce, the budget was built without consideration for COLA raises in Fiscal Year 2012-2013 for any employee classification. The proposed budget does honor the contractual step increases in the FOP and IBEW contracts. The capital budget has also received significant scrutiny as we have progressed through the budget process. A number of General Fund Capital Purchases and Projects have been deferred or eliminated from consideration for this budget due to financial constraints in the General Fund. The Utility Capital Investment Purchases and Projects have generally remained intact and on schedule. Specific attention has been paid to long-term forecasting with respect to all of our funds (general, water/sewer & electric). Difficult decisions will be required to address significant structural problems related to future budgets in all of these funds. These decisions will include, but not be limited to, new revenue sources, increases in current revenue sources, further reductions in cost centers, revisions to capital plans, and the sale of assets. All of the above efforts combined have allowed us to close the projected budget gap from $3.4 million dollars to $801,700. The recommendation to close this gap and balance the Fiscal Year 2012-2013 is as follows: 1) Increase 90-gallon In-City Trash Fee from $11.70 per month to $17.00 per month (a 45.30% increase). All other In-City service categories will be prorated based on the $17.00 per month rate. This increase yields $487,100 in additional revenue.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 3 2) Increase the Tax Rate by $0.01 (a 3.00% increase). This increase yields $314,600 in additional tax revenue. On a positive note, the Electric Cost of Service Analysis is almost complete. The preliminary results of this analysis indicate we will exceed our projected 8.5% overall cost of service reduction. Greater details of this analysis will be provided by Burns & McDonnell upon completion of the analysis. If these recommendations are adopted as proposed, the Fiscal Year 2012-2013 Operating Budget is balanced as required. I appreciate your consideration of these recommendations and the potential impacts of all of the decisions necessary to present a balanced budget. I believe everyone involved in this process has put forth their best effort to balance the needs of our citizens, rate payers and employees. I am looking forward to the opportunity to present this document in detail at the budget hearings. Scott D. Koenig, P.E. City Manager Mr. Koenig reviewed a presentation entitled “City of Dover General Fund - Recap of Last Year” (Exhibit #3) which he stated was developed to provide members an idea of how the City’s budget has progressed since the development of the FY12 draft budget and provided a “backdrop” of where the City was in developing the FY13 budget. Mr. Koenig reviewed a presentation entitled “City of Dover Fiscal Year 2013 Proposed Budget: Highlights of Overall Budget” which included information on Financial Policies, considerations that were Applicable to All Funds, General Fund Factors, Property Taxes, Sanitation Operations, Economic Development, Parks and Recreation, Sale of Current Library or Weyandt Hall, General Fund Projected Debt Service, General Fund - Long Term Forecast, Water/Wastewater Fund, and Electric Fund. With regard to Financial Policies, Mr. Koenig explained that a change was recommended in the transfer policy for the utilities from a percentage of revenue to a fixed dollar amount. He explained that transferring 8% of total revenue in the Electric Fund (in accordance with the current policy) would have created a gap of approximately $700,000 in the General Fund, which would have created a number of problems in developing the General Fund budget. Referring to budget measures that would be Applicable to All Funds, Mr. Koenig advised members that the FY13 budget includes a proposed cost-sharing arrangement whereby all active employees would contribute 15% of the cost of health care premiums effective July 1, 2012. He stated that currently employees make no contribution for individual coverage and pay approximately 15.34% for family coverage, 8.75% for employee and child coverage, and 13% for employee and spouse coverage. Mr. Koenig indicated that the impact of this change on employees would vary depending on the type of coverage and plan selected. He emphasized that this was a proposal that was subject

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 4 to the collective bargaining processes for the FOP, IBEW, and IUE-CWA union groups and would have a large effect on the General Fund in the present and future. Mr. Koenig stated that bonus payments for interim directors/supervisors were proposed for three (3) months of the budget year as he hoped to have permanent directors/supervisors in these positions by October 1, 2012. Mr. Koenig explained that all vacation sell-back and retirement payouts were removed from the department/division budgets and the estimated cost was transferred to a fund expense, which more accurately reflects how departments are budgeting for existing staff. He noted that in the past, departments included this cost in the budget and if it remained unused, it became part of the perceived baseline of that budget. Mr. Koenig explained that making it a fund expense allows staff to pool the money and budget based on the history of use, with consideration of employees who will actually retire. He noted that this would create additional savings in each fund. In reviewing Sanitation Operations, Mr. Koenig advised members that one of the principal proposals for additional revenue in the draft proposed budget related to sanitation fees. He explained that initially sanitation was a pure General Fund expense and, over time, a fee was adopted that progressed from $5.00 per month, to $5.35, and ultimately to $11.70. Mr. Koenig proposed that the fee be increased to $17.00, which he stated would cover a majority of operating expenses and some capital expenses associated with the Sanitation Operation. He explained that the revenue projection for FY13 (Column #3), including the proposed fee increase, was $2,537,100, and expenses (including personnel, supplies, administrative expenditures, disposal fees at the landfill, overhead charges, and depreciation expenses) were estimated at $2,665,500. Under this proposal, the City would operate at a deficit of approximately$128,400. Mr. Koenig indicated that, after discussing this matter with Mrs. Mitchell, he would like to gravitate this service toward an enterprise fund; however, this would require additional accounting and place additional burdens on the Finance Department. For this reason, he indicated that the current plan was to gravitate toward cost recovery and consider an enterprise fund as an option for the future. Responding to Mrs. Williams, Mr. Koenig stated that the out-of-City rate was kept constant at $42.75 because other trash providers in the area offer this service at approximately $25 to $28 per month and the amount of associated revenue is relatively small. He noted that, in the past year, the City has divested all customers that were not on the City’s electric system and continues to provide service to approximately 150-200 out-of-City customers. Mr. Koenig stated that the out-of-City annualized revenue was approximately $10,000 and if service to these customers were eliminated, expenses for providing the service would only decrease by approximately $5,000 since these customers are paying a relatively high premium for the service. He indicated that typically neither additional personnel nor overtime are needed to serve these customers; therefore, eliminating the service (which is expected in time) would not significantly reduce expenses. In response to Mrs. Williams, Mr. Koenig stated that if the entire sanitation operation were subcontracted, the City’s expenses would be roughly unchanged. He explained that Kent County charges $4 per pick-up (per week) at each address and the County has significant sanitation restrictions. The City has many more vacant houses due to rentals, people disposing of large

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 5 amounts of material, yard debris, and outside the container set-outs than the County. He felt that a contract, if negotiated, would likely cost more than $4 per pick-up. In addition, he noted that if sanitation were contracted, the City would lose approximately 40% of its ability to plow snow because sanitation operators perform snow removal. The City would also have to find a way to provide special services, such as downtown trash pick-up and pick-up for special events (e.g., Dover Days). Mr. Koenig indicated that these functions could be contracted; however, this would represent a major change to City services. Responding to Mrs. Williams, Mr. Koenig stated that if Council did not approve the proposed trash rate increase, other options for raising revenue would be raising the tax rate, cutting City-wide operations, or some combination of these alternatives. Because the number of personnel in the Sanitation Department was reduced from 13 to 11, additional cuts could not be made if the current level of service were to be maintained. He stated that sanitation is regarded as one of the City’s high-quality services. With regard to the City’s Economic Development Office (EDO), Mr. Koenig explained that the budget was developed with the intention of eliminating this Office as of September 30, 2012; therefore, personnel and administrative costs were included for a three (3) month time period only. He suggested that current Economic Development Office personnel be laid off on October 1, 2012 if they have not secured alternative employment prior to that date. The budget was prepared assuming that the City would make a $60,000 contribution to the Downtown Dover Partnership (DDP) after October 1, 2012 (based on an annualized allocation of $80,000) to be used to address operations for the remainder of FY13. In addition, he noted that $35,000 was reserved in the budget to pursue other economic development options and he suggested that Council consider utilizing the Kent County Economic Development Office and the Kent County Economic Partnership to provide economic development services for the City. Mr. Koenig stated that, as of May 22, 2012, the DDP had requested a contribution of $235,750 for FY13. He advised members that the Business Improvement District (BID) tax typically amounts to approximately $51,000 per year. In response to Mrs. Williams, Mr. Koenig stated that the DDP receives parking revenue, revenue from DDP-owned properties, and other revenues; however, the main source of revenue from the City of Dover is the BID tax. His proposal was to budget $80,000 per year in the future, $51,000 of which would come from BID tax and $29,000 from general revenue. Responding to Mrs. Williams, Mr. Koenig explained that the DDP was initially supported through seed money from the City and had received additional seed money from the City on a short-term basis throughout their history. DDP funds were increased through the sale and transfer of property. The Main Street Corporation, which was previously a stand-alone corporation, traditionally received revenues from the BID tax (roughly $50,000), which was the main source of revenue. The Parking Authority received revenue from parking fees, and these funds were used for parking lot maintenance. These three (3) entities had different funding streams. Mr. Koenig stated that the City does not transfer BID tax income to the DDP; however, BID tax revenues are used to offset the cost

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 6 of the Economic Development Office. Parking fees go directly to the DDP and additional revenue incoms, grants, etc., are associated with their operations. In response to Mr. Hare, Mr. Koenig stated that at one time parking fees were as much $80,000 and are currently estimated to range from approximately $30,000 to $40,000. Responding to Mrs. Williams, Mr. Koenig stated that these operations were self-sustaining prior to the hiring of staff; however, their activity level (in terms of obtaining grants and performing high-profile projects) was not the same as the current level. He noted that the Economic Development Office receives rental income from some properties and has generated grants which are covering capital projects but not operational funds. In relation to Parks and Recreation, Mr. Koenig advised members that, from a programming standpoint, staff felt that the White Oak Park facility could be closed. He indicated that no savings were reflected in the FY13 proposed budget because this was only a proposal at this point. Noting that more non-residents use the Pitts Center for open gym than residents, Mr. Hare questioned whether staff had considered charging non-residents for this service. Mr. Koenig stated that this was considered at the staff level; however, specific recommendations had not been made in the budget document regarding cost recovery on specific recreational programs or setting the fees related to recreational programs because the amount of revenue would be relatively small compared to the budget gaps; however, this could be something that could be implemented during FY13. In response to Mr. Leary, Mr. Koenig stated that brief discussions had been held with the Boys and Girls Club to determine if they had an interest in the building; however, at this point no Request for Proposals (RFP) had been issued to determine if there was interest from non-profit groups. It was believed that staff could be transferred to the Pitts Center without reducing the level of service for recreation. He noted that the building was nearing the end of its life and needed repairs, including a roof, and if it were not used, the City would ultimately have to demolish it and build something in its place, such as an expanded playground or park attribute. He felt that upgrades would be needed to keep the building in operation and that these would require significant funds in upcoming budgets. Responding to Mrs. Williams, Mr. Koenig stated that if staff were relocated within the first quarter of FY13, a decision must be made within the following six (6) months as to whether someone else would maintain the facility or if the City would demolish it, due to the possibility of deterioration, vandalization, or risk of habitation by drug dealers. In reviewing considerations regarding the Sale of the Current Library or Weyandt Hall, Mr. Koenig advised members that the State of Delaware informed the City that the proposed purchase and refurbishment of the existing library did not meet State budget guidelines and did not “make the cut” in the Governor’s proposal to the General Assembly. Staff consulted a local senator who was working on the Bond Bill to request reconsideration; however, the proposed State purchase of the facility was “up in the air.” Consequently, Mr. Koenig stated that he and Mrs. Mitchell held discussions about whether the library or Weyandt Hall was best suited to meet the needs of the City

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 7 in the long term and concluded that the best alternative was to sell the library. (Mr. Koenig noted that if renovations to Weyandt Hall were made, they would be charged against the Electric Asset Fund since Weyandt Hall is an asset of the Electric Utility, not the General Fund.) Mr. Koenig felt that if an agreement were not obtained in the upcoming Bond Bill or the new State budget effective July 1, 2012, the City should pursue the library sale on its own in order to remove this property from City books so that debt associated with short-term borrowing could be paid down. Responding to Mr. Hare, Mr. Koenig stated that the appraisal for the old library was in excess of $1.3M, including the old library, the Carriage House, and one (1) row of parking. In response to Mrs. Williams, Mr. Koenig affirmed that the old library was in adequate condition for sale. Mrs. Mitchell reviewed the Computation of Legal Debt Limit, advising members that the projected debt limit for FY13 was $157,267,000 against the assessed value of approximately $3.1B. The debt limit per the City’s Charter was $6,425,000 (4.26%). She stated that the City was within the debt limit of 5% as required by the Charter; however, that the estimated debt applicable to the limit of $6,425,000 included the Garrison Farm improvements. If the City does not pay down the $1.2M that was planned to be paid through the sale of the library, the City would exceed the debt limit, as debt would be calculated at 5.1%. She indicated that the library must be sold in order to proceed with upgrading the infrastructure at the Garrison Farm. In reviewing the General Fund Projected Debt Service, Mr. Koenig noted that the figures listed the net debt service from FY13 to FY33, with the highest year being 2014 at $668,000, followed by deceleration over the remaining years of the planning horizon. He noted that these amounts reflected a significant amount of debt for the General Fund in excess of $500,000 for the next four (4) to five (5) years. In evaluating the information that was provided, Mrs. Williams stated she was troubled by the proposed policy change for the transfer from the Electric Fund to the General Fund because she recalled a time when the amount was 3%, then 4%, etc., and that each year the percentage increased. She felt the City was taking apart the savings fund that was carefully built years ago when the City contracted with Duke Energy. She felt that if the City were to go to a fixed monetary transfer figure of $8M, this approach would be solidified from policy to practice, then to preferred practice, and she believed this was not a preferred practice that the City could adhere to if the desire was to maintain solvency. Mr. Koenig stated that this was a “baited” issue because of recent discussions by the Governor regarding electric rates and transfers to the General Fund, as well as questions regarding how to fund municipal services. He noted that in FY11, Council authorized a transfer of approximately $8.8M. In FY12, as part of the budget discussion, Mrs. Mitchell requested that Council adopt an 8% transfer fee based on her discussion of past practice and after talking to the bonding companies. Responding to Mrs. Williams, Mr. Koenig stated that there has been a cost reduction resulting from the City’s hedged power purchases, causing a projection of decreased revenue for FY13. He noted

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 8 that the 8% policy resulted in a decrease in the transfer from $8.8M in FY11 to $7.83M in FY12. If the 8% transfer policy were maintained, it would have yielded a transfer of $7.1M for FY13; therefore, all of the work done to cut costs in the General Fund, including staff cuts, health coverage cost-sharing, etc., would have evaporated. For this reason, three (3) to four (4) weeks ago, Mrs. Mitchell sent out a memo regarding a trial of the 8% transfer and the flat transfer recommendation. Mrs. Williams was concerned that repeated withdrawals of $8M would deplete the fund, noting that the financial forecast reflected an $8M transfer for the five (5) year plan. In response to Mrs. Williams, Mrs. Mitchell stated that the electric fund transfer is taken out of current revenue each year and is, therefore, operating income rather than a reserve fund. She indicated that the General Fund transfer is considered an expense in the Electric Revenue Fund. She noted that electric rates are based on expenses and the transfer is considered an expense that is built into the rates to recover the cost of service. Responding to Mrs. Williams, Mrs. Mitchell explained that the City plans to maintain the $8M transfer for five (5) years and that customer electric rates will be reduced because the cost of the power supply has decreased. In addition, she noted that when the previous transfer was made at $8.8M, this was outside of City policy. The former City Manager recommended increasing the percentage to 9% (above policy) which was approved by Council. In FY12, it was returned to 8%, which was the percentage in effect prior to termination of the City’s agreement with Duke Energy. When the City’s fixed price agreement with Duke terminated, the City entered the real market. At the time, to keep the cost revenue neutral, the transfer was set at 6.5% so that ratepayers would not be charged for the increase, and the General Fund was in good condition. The policy change was made last year to return to the previous level of 8%. In response to Mrs. Williams, Mrs. Mitchell stated that at this time the City is underwriting the General Fund by $8M. Mr. Leary reiterated that this transfer is made from current revenue (profit), rather than a reserve fund that would be depleted. Responding to Mr. Hare, Mrs. Mitchell stated that the transfer of $8.8M two (2) years ago was made in order to balance the General Fund budget. Mr. Koenig stated his belief that the reason for the increase to $8.8M was to not to pay for the new library but to pay general operation expenses for the City because the City’s portion of the library expense was related to the asset reserves. Mr. Hare felt that the $25M reserve fund was financed by the ratepayers of the City over the years as a contingency fund to use when needed and felt that the City now had a situation where some of it might be needed. Mr. Leary stated that the purpose of the depreciation reserve fund was to replace assets and to partially or completely finance projects, such as the Cartanza Substation, and the future capacity reserve fund is to add capacity to the system, such as financing growth projects related to the plant.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 9 Mr. Hutchison inquired about the amount of interest earned from the $25M reserve fund per year, and Mrs. Mitchell stated she would provide this information. Responding to Mrs. Williams, Mrs. Mitchell stated that the City has raised electric rates, taxes, and trash fees in order to finance services provided by the City, and that the largest amount of money comes from ratepayers, because even in the General Fund there is more revenue from fee sources and fund transfers than from property taxes. SUMMARIES OF FUND REVENUE AND EXPENSES Mrs. Donna Mitchell reviewed the FY 2013 All Funds Summary - Fiscal 2013 Draft Budget including all budget balances, reserves, the operating revenues, transfers in, expenses and transfers out, and ending budget balances. She noted that balances were within the policy and that all revenues equal or exceed expenses. Mrs. Mitchell stated that the Rate Stabilization Reserves were used to help mitigate rate reductions in the Electric Fund. She advised members that the Rate Stabilization Reserve reflected a $5M expense/transfer out and the Future Capacity Reserve a $550,000 expense/transfer out (a capacity upgrade planned for the Van Sant generator). She noted additions in the Depreciation and Future Capacity Reserves in the amounts of $151,000 and $140,000, respectively, which was the interest on those two (2) reserves. Responding to Mrs. Williams, Mrs. Mitchell stated that $153,800 in interest was added to the Rate Stabilization Reserve. The beginning balance of $10M reflected a proposed transfer of $5M to this fund in the revised FY12 budget to fund a rate decrease in FY13. She noted that the $10M was not in the account at the current time, but would be transferred if Council approved the revised FY12 budget. It was projected that the rate reduction would create an overall revenue decrease of 12%. Mrs. Mitchell cautioned that this was an estimate and anticipated further information from a consultant on May 29, 2012. In reviewing the General Fund Cash Receipt Summary, Mrs. Mitchell noted that information provided in the central column, labeled 3/26/2012, reflected preliminary budget information reviewed by Council during their March 26, 2012 Financial Retreat. The column labeled 5/1/2012 included updated information proposed in the draft FY13 budget and included revenues received following the March Retreat. She noted that the figures proposed in March for General Fund Receipts totaled $34,218,300; however, the figures in the current draft FY13 budget were adjusted to $35,503,500, which included a trash fee increase, tax fee increase, and additional funds for School Resource Officers. Mrs. Mitchell advised members that revenue forecasts were examined by each department and all projected increases were provided. Responding to Mr. Hare, Mrs. Mitchell explained that the amount the City charges for extra duty police officers covers labor and benefits but not overhead such as billing, collections, and accounting. Some of the grants used for extra duty officers do not completely cover benefits; therefore, the charges listed for benefits may be slightly more than what the City pays for benefits in order to cover the amounts that the grants do not pay. She noted that increasing the fees to cover the overhead costs was discussed during the Financial Retreat but required further research. She noted that such a change would potentially cause a 30% cost increase for one (1) customer who

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 10 currently permits the City to perform training on their site. It was felt that this customer might assess the City a fee for this service if their cost for extra duty officers was increased. In reviewing the General Fund Expense Summary, Mrs. Mitchell indicated that departmental totals for expenses were projected at $28,753,500 in March and in May were $28,515,900; total expenditures were $35,998,400 in March versus $35,330,700 in May. The budget balance was projected at $974,200 in March and in May was $2,839,400, which was at the policy limit. In response to Mr. Hare, Mrs. Mitchell stated that the Capital School District pays the City approximately $100,000, which covers the expense of one (1) School Resource Officer, and the second officer is being financed by the City at a cost of $100,000. Mrs. Mitchell stated that the amount for vacation sell-back and retirement lump-sum payout included under other employment expenses was estimated at $624,000 in March but was now reduced to $463,400 based on actual experience. She noted that some retirements projected for FY13 occurred prior to June 30, 2012, with payment from FY12 funds. Mrs. Mitchell stated that the Governmental Capital Projects Fund Summary showed revenues of approximately $3M in March compared to $5,257,200 currently, which included $2M extra for Garrison Farm upgrades. She reminded members that Council approved up to $6M for this project: $2M from the General Fund, $2M from the Water Fund, and $2M from the Wastewater Fund, all of which were very preliminary numbers. She noted that staff believed that less than $2M would be required from the General Fund; however, this amount was included as a placeholder until details were determined. Mrs. Mitchell stated that there was not much change in Water/Wastewater Fund Summary since March, noting that revenues were projected at $13,925,950 in March and at $13,997,000 in the proposed budget. She indicated that significant growth was not projected in either the Electric or Water/Wastewater funds. She noted that the Water/Wastewater and Electric Fund budgets include an amendment for FY12. Mrs. Mitchell stated that the Revised 2011/12 column reflected a transfer to the Water Improvement and Extension fund (increased by $2M from the original budget) and a transfer to the Wastewater Improvement and Extension Fund (increased by $1M). She indicated that these transfers would help with the brown water issue and inflow and infiltration projects. Since rate increases were implemented for the projected debt service and the timing of the projects was delayed, the City has not had to issue a lot of the debt service. This has allowed the City to roll funds into the cost of the projects, rather than using the funds to cover the debt service. Responding to Mrs. Williams, Mrs. Mitchell stated that the funds have been accumulated as a result of the cost of the power supply decreasing and this trend is not expected to continue. Mrs. Mitchell stated that Water/Wastewater Improvement and Extension Fund had a $5,225,000 revenue projection in March and that figure was adjusted to $7,575,000 in May due to $4M in bond issue due to the Garrison Project. Expenses changed from $5,590,700 to $9,379,800, which was also attributed to the Garrison Project.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 11 Mrs. Mitchell emphasized that the Electric Revenue Fund budget would change when the figures were received from the rate consultant. The March revenues for the Electric Fund were $94,029,900 and in May were projected at $91,631,300; however, Mrs. Mitchell indicated that the power cost adjustment of $8.2M would be closer to $11M when the rate study results were received. Responding to Mrs. Williams, Mrs. Mitchell stated that the purchase power adjustment would continue to increase beyond 36.7%; however, she stated that ultimately the City would zero out the purchase power cost adjustment because it would be included in the rate; therefore, the sales to customer amount would decrease by approximately $11M. Mrs. Mitchell stated that the expenses for the operating fund budget were $96,034,550 in March and in May were $90,983,200, with a budget balance of $7.8M. She indicated that the FY 2011/12 approved budget balance of $12,375,188 reflected funds that accumulated over the past couple of years from the decreased cost of the power supply, and that was where $5M was obtained for the FY12 budget amendment which placed these funds in the Rate Stabilization Reserve to be used in the rate study. Mrs. Mitchell stated that in March the Electric Improvement and Extension Fund reflected revenues of $4,070,500 and in May the figure was $4,090,700, due to interest charges. She noted that the transfer from the Electric Fund was reduced from the previous amount of $4,050,000 to $3.5M, which has been the City’s historical trend, and the $550,000 needed for the Van San generator was taken from the future capacity reserve. Project expenses were $4,385,300 in March and were currently at $3,970,000. She noted that staff reviewed all Capital Improvement Projects (CIPs) and tried to remove projects that they felt could be removed in order to keep that amount low and reduce the amount needed for transfer from the Electric Fund. PERSONNEL INFORMATION Mr. Koenig reviewed the Personnel Information section of the Proposed Budget. He noted that the City consists of not only projects and physical assets but also employees. He stated that the City is heavily invested in employee expenses that are necessary for delivery of service. Referring to the City of Dover Fiscal Year 2013 Proposed Budget - Personnel Table, Mr. Koenig noted that the FY2010-2011 budget included 369 full-time positions and the proposed FY13 budget included 346 full-time personnel. The largest drop occurred in the General Fund which decreased from 283 in FY11 to 279 in FY12, and 266 full-time positions were proposed for FY13. Referring to The Summary of Departmental Expenses by Fund, Mrs. Williams questioned why, with a reduction in force of 15 full-time employees in FY13, the budget reflected an increase of $2,483 per employee for average wages, overtime, and benefits. She stated that wages have increased by $589 per employee, in spite of the fact that the majority of employees received no wage increase in FY12. Mrs. Mitchell stated that employees of the Fraternal Order of Police (FOP) received an increase as a result of arbitration and noted that, due to attrition, average wages earned were now being divided among fewer employees. The raise was received only by police officers; however, attrition was across the board and this would have impacted employee expenses.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 12 Mr. Koenig explained that from FY12 to FY13, the General Fund personnel decreased from 279 to 266, the Electric Fund from 47 to 45, and the Water/Wastewater Fund staff has remained stable at 36 for both years. The total number of full-time and part-time personnel in FY12 was 397, the number proposed for FY13 was 383. Mr. Koenig reviewed a table listing personnel changes that occurred over the past year and positions that were removed from the budget, including a number at the department head level. He stated that the Senior City Administrator, the Central Services Director, and Parks and Recreation Director positions were not budgeted, and a number of other higher-level position and labor-grade positions were eliminated as they became open. He indicated that as positions become open, they are being reviewed to determine if they meet the City’s current needs; for example, Water Serviceman and Heavy Equipment Operator vacancies were downgraded to Equipment Operator positions so that staff could focus on the maintenance aspect of the Water and Sewer Utility. Referring to the City of Dover Projected Personnel Budget, Fiscal Year 2013 - Total City by Fund, Mr. Koenig stated that the City would spend an estimated $28.95M on personnel-related expenses to accommodate full-time and part-time help and that the City is dependent upon its employees to deliver services. He reminded members that the past year has been difficult for employees. Positions have been consolidated or eliminated, a proposal was included in the draft budget to eliminate an entire office, difficult labor negotiations were being conducted, cost-sharing for health care has been proposed, and all of these factors have had varying effects on the labor force, some positive, some innocuous, and some very negative in the employees’ eyes. A number of priorities were being balanced as the City moves forward; and Mr. Koenig expressed the need for all parties to “meet in the middle.” He stated that if rate and fee increases are implemented, the City should demonstrate that attempts have been made to cut costs where appropriate and to manage the organization in areas where residents have criticized the level of salaries or number of employees. He stated that, while the proposed FY13 budget was not a perfect plan, it demonstrated that the employees were trying to do the best they could to meet the service levels that Council is requesting. Mr. Koenig stated that each decision made now has a face to it, and some employees have expressed hostility, anger, and frustration. Mr. Koenig stated his hope that there would be understanding, although possibly not agreement, from the employee groups about the City’s position in going forward with the budget. Responding to Mr. Hare, Mr. Koenig stated that disallowing overtime pay for those who work less than a 40-hour week (due to vacation or other leave taken during the course of the week) has been discussed during labor negotiations and this matter has yet to be determined. He stated that overtime costs in some areas are substantial; however, in many divisions there is not a great deal of overtime. He felt that the only true way to cut significant costs was to discontinue a service or reduce the number of employees, since the cost of the benefit load and hourly rate are significant. He noted that $50,000 in overtime savings barely covers the cost of one (1) Equipment Operator plus benefits. Mr. Hare suggested that smaller savings of $10,000, $20,000, $30,000, etc., can add up to substantial savings and if $50,000 could be saved in actual hours worked over 40 hours, this would assist in reducing spending and saving citizens money. Mr. Koenig acknowledged that all potential savings were “on the table” and open for discussion. He advised members that an analysis of overtime was

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 13 included in the document titled City of Dover Overtime Trends - Fiscal Year 2010 Through 2013. He indicated that City-wide, approximately $917,000 was estimated for overtime costs, which he believed was included in the personnel costs of $29M. He concurred with Mr. Hare that ultimately managing time and schedules was necessary to control costs. Responding to Mrs. Williams, Mr. Koenig stated that attrition has had an effect on overtime; however, this effect has not been quantified and varied by department. Noting the variance reflected between actual and budgeted overtime in Systems Operations (176.7%), Transmission/Distribution (93.8%), and Construction and Maintenance (158.4%), Mrs. Williams questioned whether these variances were the result of new supervisors, rescheduling, or vacant positions. Mr. Koenig stated that some overtime was project-driven and created by the need to meet deadlines. However, he felt that these variances could be the result of a budgeting issue and that the City may not have budgeted according to historical averages, noting that only $4,500 was budgeted in FY12 for Construction and Maintenance; however, $19,362 was spent in 2010, $10,462 in 2011, and $7,128 thus far in FY12. Mrs. Mitchell stated that she found that in previous budgets department heads were encouraged to reduce the overtime line item but would then come in over budget because of work demands. She indicated that, in the draft budget, she attempted to make the overtime match the trends; therefore, overtime was increased from prior years. Mr. Koenig stated that in the past, departments that generate overtime were asked to reduce overtime expenses; however, they budgeted for being fully staffed or at 98%. Positions that became vacant were not filled until they were paid out (in the case of a retirement). This meant that the overtime expense was there, but when you looked at the salaries and benefits in total, the departments were within the budget. He explained that department managers consider the total summation of the salaries and benefits line item when they look at personnel expenses. Mr. Hutchison stated that in the past the City participated in the Police Prosecution Program at the Justice of the Peace Court and suggested that strong consideration be given to becoming involved again as he felt this would reduce court overtime at the Police Department. Responding to Mrs. Williams, he explained that under this program, the Department could be represented by one (1) to two (2) officers who could plea bargain for 50-100 traffic offenses through J.P. Court 7, rather than handling these offenses through the Court of Common Pleas. Responding to Mr. Hare, Mr. Koenig stated that staff had discussed the possibility of scheduling Electric crews to work Sunday through Thursday and Tuesday through Saturday rather than having two (2) crews working on the weekend, but the details of how this would work had not been determined. He noted that much of the weekend work was scheduled to reduce inconvenience to business customers to avoid having to cut their power during the weekdays. Mr. Koenig stated that it was not his intent to review each department’s budget by line item as was done previously, unless there were specific requests to do so. He stated that his intent for the following night was to review the financial models for the General Fund, Water/Sewer Fund, and

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 14 Electric Fund and then present an overview of the Capital Improvement Program (CIP) and provide members with some of the preliminary results of the cost-of-service analysis that would affect electric rates. He encouraged members to call or email any questions so that detailed answers could be provided. Without objection, Council President Leary indicated that the Budget Review would continue on the following evening, May 23, 2012, at 6:00 p.m. with a consideration of the Financial Forecast by Fund. Meeting recessed at 7:55. WEDNESDAY, MAY 23, 2012 - 6:00 P.M. The Special Council Meeting reconvened on Wednesday, May 23, 2012 at 6:00 p.m. with Council President Leary presiding. Council members present were Mr. Anderson, Mrs. Russell, Mr. Lynn, Mr. Perza, Mrs. Williams, Mr. Hare, and Mr. Hutchison. Mr. Bonar was absent. Council staff members present were Mr. Koenig, Mrs. Mitchell, and Mrs. McDowell. Mayor Carey was also present. MISCELLANEOUS INFORMATION Based on the previous discussion and requests, staff provided members with additional documents, as follows: 1) Electric Fund Transfers (Exhibit #4); 2) Updated Fiscal 2013 DRAFT Capital Investment Plan - FY13 - FY17 Projects by Department and Funding Source Summary, dated Wednesday, May 23, 2012 (Exhibit #5); and 3) Updated Information Technology Fiscal Year 2013 Organization Chart and Departmental Budget (Exhibit #6). FINANCIAL FORECAST BY FUND Mrs. Mitchell reviewed a presentation entitled “City of Dover General Fund Updated Financial Projections - 2013-2017.” She noted that the fixed amounts for General Fund Transfers were stated on Page 2 of the presentation as $8.5M; however, this amount should be corrected to $8M. In reviewing the City of Dover Financial Summary By Account on Page 3 of the Presentation, Mrs. Mitchell explained that expenditures exceeded revenues by more than $2M in the projections for FY14 - FY17 and subsequent years. The deficit for FY13 was projected at approximately $2.2M and Mrs. Mitchell stated that a tax increase of approximately a $.07 would be necessary to achieve a positive balance and this increase would carry the City through the next five (5) years, with the exception of a possible shortfall during a portion of the final year. Mrs. Williams stated that, according to her calculations, since 2001, the City had transferred $77,906,000 from the Electric Fund into the General Fund, and she felt that this reflected an over-expenditure on the part of the City. Responding, Mr. Koenig stated that if the City did not have the Electric Utility, an additional $72M in revenue would have been required in the General Fund in order to provide the level of services that was enjoyed during the previous ten years. This could only have been accomplished through fee or tax increases, deferred purchases, or service cuts.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 15 Mrs. Williams emphasized that when the outyears are considered, the General Fund should not be viewed as a fund that could be constantly remedied by the Electric Fund. Mr. Leary stated that the purpose of establishing the Electric Department nearly a century ago was to augment property tax, and he felt that this goal was being accomplished. Mr. Hare concurred that the Electric Utility was initiated to augment property tax revenues and to assist in balancing the budget. He felt that $800,000 from this fund could be used toward this effort and no taxes and fees would have to be raised. Mr. Anderson questioned why Mr. Koenig recommended changing the percentage formula (currently 8%) used to calculate the annual Electric Fund transfer to the General Fund to a stagnant level of $8M regardless of inflation or cost. Responding, Mr. Koenig explained that as the City’s hedge costs (cost of purchased power) were decreasing, income from customer sales was declining over the planning horizon. If the transfer were set at a percentage of that revenue, the transfer into the General Fund would decline, and the General Fund was the area where the City was experiencing instability. At 8% of total revenue, the $8M transfer would have amounted to approximately $7.1M, which would have "blown a $700,000 to $900,000 hole" in the General Fund; therefore, Council would be considering a deficit of approximately $1.5M rather than the current $800,000. He stated that Council would have to make a decision as to whether they agreed with the methodology or not, and make adjustments to the budget accordingly. He noted that, when making these decisions, Council must consider the City’s bond counsel, bondholders, ratepayers, and taxpayers in balancing the budget. Mr. Koenig felt that all decisions were tied together and not one can be made in a vacuum because there are reactions in the financial system to every decision that must be made before the budget is adopted. Mr. Anderson questioned whether property transfer taxes would remain level over the next five (5) years. Mrs. Mitchell stated that the projections were increased in FY13 based on one-time, non-recurring receipts that the City has been receiving each year but were kept level in the outyears. She noted that, based on the Tax Assessor’s input, there has not been much growth or turnover in real estate. Responding to Mrs. Williams, Mr. Koenig stated that discussions were held with the Governor’s Office and the City’s legislative contingent, who were informed that restoring Payment in Lieu of Taxes (PILOT) or Municipal Street Aid payments to FY08 or FY09 levels (approximately $150,000 for PILOT and $200,000 for Municipal Street Aid) would provide relief to the City’s General Fund, and specific numbers were provided in this regard. He indicated that if any commitments were obtained, this would not occur until June 30, 2012 with the adoption of the State budget. Mrs. Mitchell reviewed a presentation entitled “City of Dover Water and Wastewater Fund Updated Financial Projections 2013-2017.” In reviewing Net Margins (Page 3), Mrs. Mitchell stated that cash flow from operations would be $3,992,800, which were funds that would be removed for projects, principal on the debt service, and reserve contributions needed. She noted that the bottom line on the chart showed a difference of $99,200, which was the cash that would remain after paying

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 16 those items. She stated that staff tries to keep a positive cash amount and ensures that the debt covenant is met. Mrs. Mitchell explained that the Projected Debt Service listed on Page 7 included an additional $2M which was added to each fund for FY13 for infrastructure upgrades at the Garrison Tract associated with the Calpine project. Mr. Anderson complimented staff on their work preparing the budget, noting that he had reviewed many budgets from the City over the past twenty years and this budget was very professional and easy to understand. In response to Mr. Anderson, Mrs. Mitchell stated that current revenues for the Calpine project covered the debt service and a 2% increase was added to the projection for FY15 to cover increased costs. She explained that the models were slightly pessimistic because they include costs (which would not be incurred if the project does not occur) but no revenue assumptions (such as property taxes and water charges) since these would not be built into any of the models until these amounts could be forecasted. For clarification, Mr. Koenig stated that Calpine would be seeking a building permit on approximately January 1, 2013, and the City would begin construction of these projects at around the same time in order to complete the projects and pay the contractors by June 2015, when energy would be produced to the grid. The City’s sales to Calpine were not included as revenue at this point because the amounts were unknown; however, the figures for the debt were known. If construction were to be delayed, revenue may not be received until FY16. Mrs. Mitchell stated that Calpine was waiting for their air permit (expected in July or August), which was the last foreseeable hurdle. She indicated that Calpine had “cleared” the PJM auction. Mr. Anderson expressed his feeling that this project might affect the forecasted outyear shortfalls. Responding to Mrs. Williams, Mr. Koenig indicated that revenue projections related to expected water use by Calpine were approximately $1.8M annualized. Mrs. Mitchell reviewed a presentation entitled “City of Dover Electric Revenue Fund - Updated Financial Projections - 2013-2017.” Referring to the Net Margins on Page 3, Mrs. Mitchell explained that the Power Cost Adjustment (PCA) credit was included at the top of each column. She noted that the City’s current rates are set on the PJM cycle which is a three (3) year cycle, so the FY16 and FY17 were tentative figures only. Mrs. Mitchell explained that the rate consultant was asked to set a three (3) year rate, which would provide one (1) reduced rate for all three (3) years rather than -8.5%, -15.5%, and -17.5%, so the rate would not be adjusted year to year. Referring to the debt service ratio of 2.31 for FY13, she noted that staff tries to maintain a ratio of 2 to 2.5 for the bond rating agencies. She anticipated that the ratio would be close to 1.25 when the forecast was received from the consultant because the Rate Stabilization Reserve was being used to pay back customers due to the lower power supply cost. Mrs. Mitchell was confident that the ratio would increase to approximately 2% in the next year.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 17 Referring to Page 6, Capital Investment Plan 2013-2017, Mrs. Mitchell stated that Mr. Jeremy Johnson, Interim Electric Director, and his crew did a good job of reducing these projects so that a $3.5M transfer could be maintained from the operating fund to lower the rates as much as possible. Referring to Page 5, Mr. Anderson questioned why PJM credits were projected to decline from $1.285M to $427,000. Mrs. Mitchell stated that she was unsure what caused the decline but stated that should would email members with this information. Responding to Mr. Anderson regarding the cost of power supply management, Mrs. Mitchell explained that the fees being paid to The Energy Authority (TEA) were less than those previously paid to PACE, and this change was reflected in the cost. The cost of power supply itself decreased from approximately $80 - $90 per MWH to approximately$50 per MWH or less; therefore, a significant amount could be returned to ratepayers. She stated that capacity credits were based on the PJM market, and the auction had cleared approximately $10 higher than projections provided by TEA. In response to Mr. Leary, Mrs. Mitchell stated that typically, when she explains the rationale for decisions made by the City to rating agencies, she generally receives a positive response. She stated that these agencies do like to see stable policies that are adhered to; therefore, she suggested that if Council opted to adopt a flat $8M transfer policy, that this policy be maintained over the planning horizon. Responding to Mrs. Williams, Mrs. Mitchell stated that she did not anticipate any change in the City’s AA Moody bond rating. In response to Mr. Perza, Mrs. Mitchell stated that the transfer to the General Fund has always come from the operating fund in her experience; however, if Council chose to take these funds from a reserve account rather than the operating fund, they could do so. Referring to Page 5, Projected Purchased Power Expenses, Dover Sun Park, Mr. Anderson stated that the Purchased Power Expense for the Dover Sun Park was $1.618M (excluding the credit purchases required), was projected at $1.4M for next year, and would then increase over the next five (5) years. Mrs. Mitchell confirmed that the contract includes an escalator. Responding to Mr. Hare, Mr. Koenig confirmed that it would cost the City approximately $1.6M in FY12 to purchase power generated in FY12 and the City would recover the kilowatt hours sold at the City’s rate. He stated that the contract obligates the City to purchase the energy that the field generates over the next 20 years at a cost of $80,000 per month, and the more power that is produced, the more it will cost the City, unless that power cost drops below the cost to purchase from the grid or another source. REVIEW OF CAPITAL INVESTMENT PLAN (CIP) Members reviewed an updated Fiscal 2013 Draft Capital Investment Plan, FY13 - FY17 Projects by Department, dated Wednesday, May 23, 2012 (Exhibit #5). Mr. Koenig stated that Parks and

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 18 Recreation projects were the area of greatest change from the FY12 to the FY13 CIP due to their effect on the General Fund. He stated that projects that remained in the plan were basic service improvements. Mr. Koenig noted the Dover Park roof replacement was the only project slated for FY13. If closing of that facility were pursued, the $30,000 allocated would likely be used for demolition. He explained that several projects were allocated to outyears. Responding to Mr. Leary, Mr. Koenig advised members that staff has a large backlog on pump station rehabilitations, had spent a great deal of time in the last few years advocating for the capital projects, and has structured rates to fund the CIP. He felt it important to continue the momentum on these projects. Mr. Koenig stated that staff had done an excellent job in maintaining the stations; however, they were reaching the end of their service lives, and failure would be expensive and “not pretty.” He emphasized that continuous maintenance of the wastewater system would be necessary to keep the City’s ratepayers and customers happy, as well as attract new businesses and residential units. In reviewing water management projects, Mr. Koenig stated that all projects listed would either maintain current capacity at wells, expand capacity at new wells, or regenerate the piping system for the utility. He indicated that these were large projects that require design, permits for drilling, or additional capacity upgrades, so they are multi-year projects with long planning horizons, requiring a great deal of time for engineering and planning side and a great deal of money to construct. Mr. Koenig noted that the engineering and operational staff in the Electric, Water, and Sewer Divisions had done a great job in getting utilities to the current state and planning for future growth. He noted that the budget would not improve unless the City is growing because without new customers and businesses, revenue streams would remain static. Responding to Mr. Anderson, Mr. Koenig stated that it would take approximately $1M per year for 20 years to resolve the City’s brown water problem; however, he noted that operational changes made in regard to flushing and the replacement of approximately two (2) miles of pipe during the past year have assisted in that regard. He noted that the entire system is approximately 200 miles in length. Mr. Koenig stated that the recommended standard would be to replace 1% of a system each year, which would amount to two (2) miles per year at a cost of $1M per mile. Mr. Koenig indicated that the City does not have an aggressive soil, so soil and ground conditions do not “attack” and reduce the life of pipes. Old pipe that has been removed shows that the interior diameter has not been compromised with scale and sediment. The area of the system that has had difficulty is the unlined, cast iron portion of the system, which comprises approximately 50%. Based on pure mileage, it would require 50 years at two (2) miles per year to replace the system. Mr. Koenig emphasized that, from a public health standpoint, the system is better off than a decade ago, but not necessarily from a customer satisfaction standpoint In regard to Electric Engineering, Mr. Koenig noted that it is expensive to own and maintain a utility, but there is an expected rate of return. The Electric Utility requires a lot of work, investment, and time, but the intent is that the return would be worth the effort. He felt that the City receives a very good return on this investment. He stated that staff does an excellent job of keeping the lights on and responding to outages, noting that the City’s objective is to have power, because without it the City is not making money.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 19 Mr. Koenig reviewed the Power Plant CIPs and informed members that all projects would be assessed by the operator at the facility, TEA, staff, and Mrs. Mitchell to determine if the CIP should be changed. He advised members that the plan was subject to change as projects are addressed. Responding to Mrs. Williams, Mr. Koenig stated that Unit 1 was no longer in operation; however, all units were bid in through the 2015 auction and must be serviced through that horizon, because if called upon, the City must produce through these units. Staff was unsure how long the units would last. He noted that some of the projects included were related to the City’s insurance company review, noting that the City was obligated to attend to issues pointed out by insurance company engineers. In regard to vehicle replacement, Mr. Koenig noted that no replacements were proposed in the Code Enforcement, Facilities, Life Safety, Parks and Recreation, Permitting and Inspections, or Planning Divisions. Six (6) vehicles were proposed for replacement in the Police Department, which was a reduction from the nine (9) that were originally proposed. In the Public Works Department, two (2) vehicles were proposed for the Grounds Division and refurbishment of a truck was requested included in the Sanitation Division. This would involve requesting the vendor to use the original chassis and replace the lifting and capacity mechanisms at a cost of approximately $150,000 versus the cost of $250,000 to purchase a new truck. It would be expected that this would extend the life of the vehicle for five (5) or six (6) more years. Responding to Mr. Anderson, Mr. Koenig noted that the reason for an increase in vehicle cost of $399,000 in FY 13 to approximately $2M in FY14 was due to deferred vehicle purchases, in some cases because vehicles were not ready for replacement, in others because the CIP did not support a vehicle purchase at this time. He explained that if the trash utility were taken to an enterprise fund, he would suggest targeting $300,000 for vehicles because it costs approximately $250,000 to replace a top-end vehicle. However, he felt that the budget could not accommodate this amount at this time. Mr. Koenig noted that the purchase of a 2006 Vaccon Jet Vac Truck was allocated 50% to Wastewater Management and 50% to Water Management, with a purchase price of approximately $300,000. He stated that this piece of equipment was critical to the operation of the utility as it cleans sewer lines, vacuums out the excavation area around a water main in the event of a break, and gets to the repair quickly. Responding to Mr. Perza, Mr. Koenig indicated that the existing truck could be used for jetting the storm sewer system and other operations. If the vehicle became irreparable or beyond use, it would be sold at the highest price possible. Mr. Koenig noted that the Electric Utility capital purchases budgeted in FY13 for vehicles were relatively small due to previous vehicle purchases and their fleet was in good condition. After completing the budget presentations, Mr. Koenig stated that he would like to revisit and highlight some of the issues. He again thanked staff who worked a considerable number of hours on the budget. He noted that citizens and ratepayers of the City enjoy a high level and outstanding quality of services, which he attributed to the investment of money, personnel, and time into

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 20 managing these systems. Mr. Koenig stated that the preparation of the budget involved difficult choices. He reminded members that revenues were fairly flat and that the proposed budget included a trash fee increase from $11.70 to $17.00, a modest tax increase of $0.01, and cutbacks in capital improvement projects and vehicle purchases, as well as a reduced staff (including a proposal to lay off three (3) employees). He explained that staff has been concerned and upset about reduced staffing (including the proposal to lay off three (3) current staff members, a proposal for 15% health care cost sharing, and no salary increases for non-bargaining employees for two (2) years. Mr. Koenig stated his feeling that these decisions were necessary in order to come to the Budget Review stating that employees and staff had done everything possible to reasonably cut the budget and maintain the current level of services in most areas. The workforce was reduced by 12 employees (in some cases these were department heads) and that work had to be distributed to other employees. He reminded Council that many staff members had taken on additional responsibilities quietly, without compensation, consideration, or accolades. He emphasized that it is the 300 plus workforce that accomplishes the goals of Council, the citizens, and ratepayers. Mr. Leary expressed his appreciation to staff for the long, arduous process of developing the draft budget. Responding to Mr. Hare regarding the number of employees who take City vehicles home and reside outside the City, Mrs. Mitchell stated that this list was being prepared; however, she estimated that if on-call employees were excepted, this number was fewer than 10. In response to Mr. Anderson, Mr. Koenig stated that it would be difficult to quantify the potential loss to the City by the elimination of the Economic Development Office (EDO). He felt that there would be a potential loss of opportunity by no longer having an employee titled Economic Development Director, and that potential contacts would have to be picked up by the Mayor, City Manager, or another employee. Mr. Anderson commented on the work performed by the EDO, noting that the Downtown Coordinator serves as a liaison to help small businesses, a United States Department of Agriculture (USDA) program has funded business start-up capital through the EDO, and the Economic Development Coordinator is helping to manage millions of dollars in projects. Mr. Anderson expressed his concern that the City could lose millions of dollars in the next phases of some of these programs if the EDO were eliminated. During the Legislative, Finance, and Administration Committee Meeting held on February 27, 2012, Mr. Koenig presented a Recommendation for Economic Development Office/Downtown Dover Partnership. He stated that he was unable to obtain approval by the Committee for the “soft landing” approach he proposed at that time. For this reason, he felt that he needed to create a “hard line” in the budget to maintain the staff for three (3) months, transfer a portion of money to the Downtown Dover Partnership (DDP) to handle the partnership and Main Street activities, and leave a portion of money to pursue other economic development opportunities. He stated that it is not a perfect recommendation and affects three (3) existing staff members. The amount of money allocated in the budget was $60,000 prorated for the remaining three-quarters of the year or $80,000 for the year. The request he received from the DDP via email for funding was for approximately $235,000 and he felt that this was not a realistic figure.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 21 Responding to Mr. Anderson, Mr. Koenig noted if the City were to adopt an economic development budget for FY13 that equated to the FY12 budget, the DDP’s request would exceed that amount. This would require investment of an additional $100,000 and this would have to be paid through taxes and/or fees. Mr. Anderson felt that if the EDO were eliminated and the DDP fully funded, there would be no guarantee that the same level of professionalism and success would be achieved, and the City would have no control over the employees hired. Mr. Lynn noted that economic development was one of his primary concerns and that other jurisdictions (such as Kent County) were investing in economic development, whereas the City was contemplating eliminating its Economic Development Office. He questioned whether consideration had been given to contacting experts, such as academics or economists, on this matter. Responding to Mr. Lynn, Mr. Koenig stated that staff had not contacted academic experts or economists regarding the importance of an economic development office or long-term ramifications of eliminating the office. Mrs. Williams stated that one of the items included in the budget was the possibility of subsidizing the Kent Economic Partnership for regional development efforts. She felt that if a donation were made to the DDP, this would take care of the downtown area. She felt that if the EDO were eliminated, economic development would not be abandoned but would be reassigned and reallocated. Mr. Hare believed that heading economic development was established as part of the Mayor’ job description when that position became full time, and the Mayor worked in concert with the City Manager and Kent County economic development individual for many years prior to 2008 and he felt this arrangement worked very well. He felt that the DDP could hire their own staff member with BID tax funds. He concurred with staff’s proposal. Mr. Hutchson stated that he was currently serving on the Kent County Economic Development Board (representing the Council President), which consists of eight (8) members, including business leaders in Kent County, as well as Mr. Alan Levin, State of Delaware Economic Director. He felt that no economic development would come to the City or County without the State, County, and City working together. He felt the City had an opportunity and a responsibility to make an effort to become a part of the Kent County Partnership. Responding to Mr. Anderson regarding the reduction of funding for the Fourth of July Celebration and the African American Festival, Mr. Koenig stated that the proposed budget included a 50% reduction in funding for these events ($5,000 and $7,500 respectively), Mr. Koenig indicated that he had spoken to Mr. Reuben Salters (former City Councilman and founder and organizer of the African American Festival) and Mr. Greg Patterson, President/Vice Chairman of the Fourth of July Celebration Committee on this subject.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 22 In response to Mr. Anderson regarding the possibility of consolidating departments, Mr. Koenig stated that, over time, he would like to see consolidation of some operations where improvements could be made in the areas of operational efficiency or service delivery; however, he felt that the employee base was agitated and concerned, and until that level of concern started to die down, such changes should proceed slowly. In response to Mr. Anderson regarding the avoidance of a tax increase, Mr. Koenig stated that, in his opinion, if tax or fee rates were not increased, the structural problem in the General Fund could not be addressed. He was unsure if a tax increase could be avoided in FY13 without creating a need for substantial increases in the future. Noting that the proposed budget estimated that approximately $300,000 would be generated by the proposed tax increase, Mrs. Williams questioned if this relatively small amount (for a $100M budget) could be raised any other way. Responding, Mr. Koenig stated that an additional $802,000 was needed, and there were pros and cons to putting all of that amount on the tax rate. He noted that covering the deficit would then apply only to those who pay property tax. Alternatively, the funds could have been obtained by increasing the trash fee to cover the entire deficit, which would have caused the trash fee to exceed operational expenses. He stated that he ultimately decided to propose a trash fee increase to approximately $17 and a tax rate increase of $0.01. Noting the time, by unanimous consent, members agreed to recess until Wednesday, May 30, 2012 at 6:00 p.m. Meeting recessed at 8:09 P.M. WEDNESDAY, MAY 30, 2012 - 6:00 P.M. The Special Council Meeting reconvened on Wednesday, May 30, 2012 at 6:00 p.m. with Council President Leary presiding. Council members present were Mr. Anderson (arrived at 6:18 p.m.), Mrs. Russell, Mr. Lynn, Mr. Perza (arrived at 6:05 p.m.), Mr. Bonar, and Mr. Hutchison. Mrs. Williams and Mr. Hare were absent. Council staff members present were Mr. Koenig and Mrs. Mitchell. Mayor Carey was also present. MISCELLANEOUS INFORMATION Based on the previous evening’s discussion and requests, staff provided members with additional documents, as follows: 1) Presentation - City of Dover FY2012-2013 Draft Budget - Budget Meeting - May 30, 2012 (Exhibit #7); 2) Correspondence from Mrs. Donna Mitchell, Controller/Treasurer dated May 30, 2012 regarding Health Benefits Committee Information (Exhibit #8); 3) Correspondence from Mrs. Donna Mitchell, Controller/Treasurer dated May 29, 2012 regarding Downtown Dover Partnership - Monthly Report - March 2012 and the History of Parking Permit Revenues (Exhibit #9); and 4) Correspondence from Mr. Greg Moore dated May 24, 2012 on behalf of the Downtown Dover Partnership (DDP) regarding the DDP Budget Request (Exhibit #10).

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 23 QUESTIONS AND ANSWERS Mr. Koenig, City Manager, advised members that one (1) of the more extensive recommendations in the proposed budget related to the Economic Development Office (EDO). He reviewed his proposal to disband the EDO after three (3) months of operation in FY13, noting that draft budget included three (3) months of salary and operation expenses for current staff, with the expectation of laying off these staff members if they did not apply for other jobs in the City or find employment before October 1st. Additional recommendations were to transfer $60,000 to the Downtown Dover Partnership (DDP) after October 1, 2012 to offset operational costs for the DDP, which would then hire its own staff to address its objectives. The $60,000 amount was based on an annualized contribution of $80,000. The remaining amount in the budget of approximately $35,000 was reserved to pursue other economic development opportunities, possibly a more vertical alignment with the Kent County Economic Partnership. Reviewing the Economic Development budget, Mr. Koenig noted that the amount proposed for FY13 associated with his proposal reflected a difference of approximately $92,000 versus maintaining the status quo for the EDO. With objection, Mr. Greg Moore, President of the DDP, reviewed correspondence dated May 24, 2012 on behalf of the Downtown Dover Partnership (DDP) regarding the DDP Budget Request (Exhibit #10). He explained that the request of $235,750 was to allow the DDP to continue their current efforts in the upcoming year. He stated that the total budget for the organization last year was close to $290,000 and the request was for a reduced amount. Mr. Moore explained that the DDP’s cash account was at an all-time dangerously low level at approximately $150,000 as a result of decisions made over the past year and a half regarding properties purchased and projects undertaken. Mr. Moore reminded members of the many contributions and accomplishments of the DDP in the downtown area, including the installation of security cameras, appropriations to the Police Department for night patrols, improved lighting, and work with the Safety Task Force. Mr. Moore stated that safety downtown was of paramount importance to the DDP and they have been dealing with the Police Department on this issue. The DDP appropriated approximately $80,000 to purchase and install cameras and this has helped with safety downtown. It appropriated approximately $25,000 to work with the Police Department to address issues such as shootings at night and nightclubs that caused problems. He reminded members that the North Street Project will bring a significant amount of lighting to the area, which will also improve safety at night. Safety problems hurt the DDP’s ability to rent stores and make property move. Mr. Moore advised members that the DDP was well represented on the Safety Task Force and has been working with the Mayor, the City planners, and the Police Department to solve the problems in the downtown area, including issues relating to policing, housing stock, rental properties, and youth. He felt that the organization has great participation and momentum Mr. Moore noted that homelessness is a big issue in the City and that the DDP rented a facility for $6,000 per year for 10 years to the Interfaith Mission to serve the homeless. He stated that the DDP supports that mission in every way possible and obtained $1M from the Department of Natural Resources and Environmental Control (DNREC) for reclamation of that brownfield property.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 24 Mr. Moore noted that the DDP received $3M in grants from the State of Delaware, and $1M of these funds would be contributed to the complete improvement of North Street, including repaving, new sidewalks, curbing, lighting, and hiding unsightly utilities. He noted that this amounted to a $1M investment in the City’s public works infrastructure. He expressed his appreciation for Mrs. Mitchell’s oversight of these grant funds, noting that this was very important to the State and to the DDP and requested that this stewardship continue. Mr. Moore stated that the return on the City’s investment in the DDP has amounted to $4.5M that had been secured in grant funding over the past few years. Mr. Moore felt that the City would not be able to secure these funds on its own, and the DDP could not obtain them without the City’s partnership. Mr. Moore advised members that the requested budget allocation was similar to the amount budgeted in FY12 because decisions were made over the past few years to invest nearly $500,000 of cash into projects, including the Acme site (which is now under contract and the City has co-signed on that loan). The DDP will invest $500,000 in 220-222 Loockerman Street (former C. Moore’s property), which is being renovated inside and outside. This would provide the opportunity to sell the property or use the funds from leasing to help sustain the DDP. Mr. Moore reminded members that the three (3) North Street projects are at their inception. Verizon will begin $500,000 of utility work on June 11, 2012 on North Street on the parking lot and Loockerman Way; projects which have been let to a contractor. He felt it was essential that they are finished and executed effectively and that staff and resources were needed to do that. Continued work was needed for the reclamation of the 680-684 Forrest Avenue property, where the Interfaith Housing Mission is housed, and remaining funds from the $1M received from DNREC for that project that must be spent. Mr. Moore emphasized that this would not be a good time to completely change DDP status, due to the many projects underway, money invested, and depletion of cash. He felt that momentum and a vision had been created for downtown and that it was being executed for the first time in a positive way. Mr. Moore felt that after this year, the DDP (when the C. Moore project would be finished had occupied by renters who could pay cash) the DDP would have an opportunity to prepare and to use rental income to sustain itself and reduce dependence on the City’s budget. He stated that this could not be accomplished this year because the planning occurred before the organization was aware of the current budget problem. Mr. Moore indicated that he came to realize the problem in the past three (3) months after reviewing the books, evaluating expenditures, the amount of funds remaining, and the many projects occurring in sequence, and hoped that these projects would be implemented under his watch and would be viewed favorably in the future. Responding to Mr. Perza, Mr. Moore stated that land values have plummeted since the DDP purchased the Acme site; therefore, the funds realized from the sale could be 30% - 40% less than the purchase price. The DDP received a nearly full-price contract from a strong buyer, and if the property were sold to the buyer, the DDP would have to contribute a significant amount of cash to offset the difference in the land value. If the DDP must contribute $50,000 to $70,000 and their existing funds are only $150,000, the DDP would seriously deplete available cash and would be

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 25 close to extinction. Mr. Moore felt that the chances of the DDP returning to the City to request additional funds were not high since the organization could use rental income from the C. Moore building to sustain itself in the following year. In response to Mr. Lynn, Mr. Moore stated that two (2) staff members were required to keep the projects going, and these individuals must have the ability to operate the land and knowledge of handling construction projects (three (3) of which were underway). If the projects were not successful, the organization would become extinct or the DDP would return to the City requesting a great deal more money because conditions facing the organization caused them to run out of money. It was his belief that when the DDP returned to the City for funding requests in the future, they would have more flexibility because: 1) they will have had an opportunity to prepare from actions taken by Council in regard to the budget; and 2) the properties that are either under contract or almost finished and ready for lease, will be better producing properties. He indicated that time was required to sell properties on the west side of the downtown area at the highest rate possible, and time would be required to accomplish this. Mr. Bonar felt that economic development was exceptionally important to the City of Dover and that a down time is the time to pump money into this effort to bring a return. He stated that the City must work to attract new business, whether this meant allocating funding to the DDP, the Kent Economic Partnership, the DDP, or the Mayor’s Office. He did not think that the amount of money requested was unreasonable; however, given the City’s economic situation, he did not see how it was possible to grant this amount in FY13. He suggested an amount of approximately $150,000 to $160,000. Mr. Moore stated that the current BID tax on the downtown area produces $50,000 to $60,000 which is targeted to the DDP. He indicated that his request could be said to be approximately $180,000 in addition to the BID tax. Mr. Hutchison stated that there was no question that the DDP is the single force behind the changes that are needed downtown and he was a firm believer in the DDP and the work done. He felt that the downtown was moving in the right direction and felt that next year the DDP would hopefully be better prepared to handle matters better than today. Responding to Mr. Perza, Mr. Moore stated that the only DDP asset that is encumbered by a mortgage is the Acme site. The mortgage was approximately $1.3M and was co-signed by the City. Regarding future projects, Mr. Moore indicated that the DDP has applied for two (2) $1M transportation enhancement grants, one (1) for Bradford Street and one (1) for another block on North Street, and is actively pursuing funding for a riverfront walk along the St. Jones River in concert with the Department of Natural Resources and Environmental Control (DNREC) and the Delaware Department of Transportation (DelDOT). He advised members that the vision is to create a City park in that area that would allow access and beautification to the riverfront and hopefully clean-up the former treatment plant in that area. He was unsure of the time frame regarding these projects (due to the pending status of the State Bond Bill), but estimated two (2) to three (3) years.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 26 Mr. Bonar suggested consideration of expanding the BID tax to a City-wide temporary business development tax to accomplish a revenue stream that would aid in economic development and support the DDP for a two (2) year period or a one-half cent tax on properties in the City strictly for economic development. Mr. Gerry Street, member of the Downtown Dover Partnership, stated that if the DDP does not receive the funding requested, some of the events that the DDP sponsored during FY12 (First Fridays, Home for the Holidays, Festival of Lights) in the amount of $20,000 would likely be discontinued. The cost of paying two (2) staff people at the current salary and benefits ($125,000) would deplete cash reserves to $25,000. He requested flexibility in hiring staff, noting that an attempt would be made to hire individuals who do not need benefits in order to conserve funds. In regard to mortgages, Mr. Street noted that the organization had collateral but not cash flow. The organization’s cash flow last year, apart from City financing, was approximately $20,000 in parking permits that comes into the Parking Authority, approximately $20,000 cash flow from the Acme site (an interest only payment that would cease if the property were sold and would then become an expense). Mr. Street stated that income is expected when the front one-third of the C. Moore property is completed, as this project is expected to generate approximately$20,000 - $25,000 per year, which will support approximately $100,000 in borrowing, which is needed to finish the rear two-thirds of the building so that it can be rented as well. Responding to Mr. Anderson, Mr. Moore stated that the benefit of a healthy economic development strategy is a vibrant downtown that looks good, is safe, has businesses and is a calling card for the rest of the world to say that Dover is a good place to be and a desirable place to locate. It can become the engine to help sustain a larger economic development approach. The downtown is the heart, where people congregate and remember their experiences from Dover, and when the heart is healthy, the body is healthy. Mr. Street noted that when the North Street project is complete, there will be approximately 50 new parking spaces that did not exist. He felt that people would be drawn downtown if they knew there would be convenient, well-lit parking with greater safety due to five (5) security cameras. Mr. Anderson felt that the DDP had experienced tremendous success in the last three (3) years with the new strategy being pursued by the City and questioned why the City was in discussion about which way to completely disrupt it. He understood the possibility of transitioning over a year to a different strategy; however, the numbers being requested seemed reasonable to him. He felt the current strategy should be continued and might save money. Mr. Hutchison felt that the City of Newark had committed to revitalization in the downtown area and done a wonderful job, and that the City of Dover had the same opportunity, in view of Dover’s four (4) college campuses and Dover Air Force Base. Mr. Moore stated that the DDP is modeled after Newark; however, Newark created its partnership approximately 12-15 years ago, whereas the DDP was established two (2) to three (3) years ago. He felt that this was not enough time to make the same imprint; however, felt this could be achieved with a continuation of the current operation.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 27 Mr. Street stated that the State was very clear that it wanted the City government to administer State grant funds, and the DDP supported this. The State reviewed the Downtown Dover Charrette, approved of the DDP’s plans and progress, granted funds, and encouraged the DDP to return for additional funding. He expressed his fear of having to inform the State that the budget had been halved and staffing has changed and felt this was “not a good sales technique.” He felt that if proposed projects, such as expanding the North Street project one block further were stopped abruptly, this would not send a positive message to the State in terms of future funding. Concurring, Mr. Anderson felt that the City could be risking the loss of millions of State dollars in order to save thousands. Mr. Street advised members that Senator Brian Bushweller and Representative Darryl Scott were in favor of the City overseeing DDP funds and that Sen. Bushweller had made it clear that there would be no future money without the Controller/Treasurer and her staff administering money. Responding to Mr. Perza, Mr. Moore stated that currently the three (3) EDO staff members share City economic development and DDP responsibilities and that it has been problematic for staff to answer to two (2) different entities. In the long-term, he felt it would be better for the DDP to have two (2) staff members (an administrative person and a leader) who did not share responsibilities with economic development. Mr. Street explained that the DDP’s certificate of authority limits the DDP to a ten-block geographic area (which would exclude Calpine, the Garrison Tract, etc.); therefore, wrapping the entire scope of economic development in the City into the DDP’s mission or vice versa would be problematic. He noted that there was no space or time on the DDP’s current agenda to tackle expanding to the whole City; however, he stated that this might be a matter for discussion during the budget talks next year. Mayor Carey felt it was important to maintain the EDO in downtown Dover as well as the DDP. He stated that the DDP has done more for downtown in the last five (5) years than has been done in the last 15 years and it was essential to maintain this movement. Noting the evolution of the DDP and the improvements that have occurred downtown, Mr. Bonar stated it would be unwise to remove the “knitting needle” that has “knit the area together” halfway through the project. He stated that he would be willing to sponsor measures that would either place BID tax on all commercial development in the City or increase property taxes by one (1) cent geared specifically toward economic development with a portion to DDP. Mr. Lynn was concerned about the proposed allocation of $38,000 to Kent County for economic development. He felt it was in the best interest of the City to maintain the EDO rather than subcontracting this function to another local government that is in direct competition with the City (noting that the Wal-Mart Distribution Center was not located in Dover, and the former Wal-Mart relocated the Cheswold). He felt that the EDO is the only office whose job it is to increase the City’s tax base and electric, water, and wastewater customer base. In reviewing the funding, Mr. Lynn determined that the EDO is funded 56% through the General Fund, 13% from

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 28 Water/Wastewater Fund, and 31% from the Electric Fund and, therefore, did not impose a large impact on the General Fund. To resolve the economic development issue, Mr. Lynn proposed two (2) options, as follows: 1) Option A - reduce the cost to General Fund by taking the City-wide economic development function, including a full-time economic development professional, and assigning this function to the Mayor’s Office, with an allocation of funding as follows: 20% General Fund, 14% Water/Wastewater Fund, and 66% from the Electric Fund. This would cut the current cost of the EDO to the General Fund by one-half. 2) Option B - reduce the cost to the General Fund by taking the City-wide economic development function, including a full-time economic development professional, and assign this function to the City Manager’s Office, with an allocation of funding as follows: 36% General Fund, 14% Water/Wastewater, and 50% from the Electric Fund. This would cut the current cost of the Economic Development Office to the General Fund by over 40%. Mr. Lynn stated that either of these solutions would address the concerns raised by Mr. Koenig in the draft budget. He suggested that $38,000 not be given to the County and those funds be retained to fund the City’s Economic Development Office rather than funding competitors. Mr. Lynn moved to significantly reduce the cost to the General Fund by taking the City-wide Economic Development Office (including the three (3) current staff members), assigning that function to the Mayor’s Office, and funding that office with 20% from the General Fund, 14% from the Water/Wastewater Fund, and 66% from the Electric Fund, cutting the current cost of the Economic Development Office to the General Fund by one-half. The motion was seconded by Mr. Anderson. Mr. Anderson stated that, per the City’s charter and the current necessity for restructuring in the City, the EDO should be in the Mayor’s Office, as this was part of the logic behind a full-time Mayor. He noted that the City was on the verge of significant growth, with several large projects, including Calpine, downtown projects, redevelopment of Wal-Mart, and a new manufacturer coming into the City on a corner of Route 13. He felt that the City must reinvest in economic development and agreed that the funds should not be allocated to the County. Mr. Hutchison reminded members that he served as the first full-time Mayor in the City and expressed his feeling that economic development was a two (2) phase operation that included both the downtown area and the larger picture. In the past, the larger picture included projects such as Wilmington Unversity, Dover Downs Hotel, maintaining Playtex in Dover, Sunroc, Dover Air Force Base, Kraft Foods, and now this includes projects such as the Kent County Sports Complex being examined, the Dover Air Force Base Air Cargo Terminal, and Calpine. As a representative on the Kent County Economic Development Board, he felt that the Board speaks with one (1) voice.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 29 On call for the question, the motion to significantly reduce the cost to the General Fund by taking the City-wide Economic Development Office (including the three (3) current staff members), assigning that function to the Mayor’s Office, and funding that office with 20% from the General Fund, 14% from the Water/Wastewater Fund, and 66% from the Electric Fund, cutting the current cost of the Economic Development Office to the General Fund by one-half, carried by a roll call vote of six (1) yes, one (1) no (Mr. Hutchison), and two (2) absent (Mr. Hare and Mrs. Williams). At the request of Mr. Koenig, Mr. Lynn clarified that the intent of the motion was to move the entire Economic Development Office (including three (3) staff members) under the Mayor’s Office. Mr. Bonar noted that the motion did not address the matter of funding for the DDP. Mr. Koenig advised members that, in the long term, he would like to create a sanitation fund that would operate similar to an enterprise fund; however, there were additional accounting requirements that would be necessary; therefore, he did not feel that this was an appropriate time to do so. There being no objections, Council President Leary declared a brief recess. Meeting recessed at 7:06 and reconvened at 7:13 p.m. Mr. Koenig reviewed a presentation entitled “City of Dover FY2012-2013 Draft Budget - Budget Meeting - May 30, 2012” (Exhibit #7). Referring to Page 2 of the Presentation titled “City of Dover Sanitation Fund - Estimated Impact on General Fund,” he advised members that center column, labeled Sanitation Fund (ver 1), was the proposal in the draft budget to increase rates from $11.70 per month to $17.00 per month for the typical 90-gallon service, which would result in an increase of roughly 45% in the trash rate, but that this would not cover the full cost of the trash collection operation. The third column was an estimate of the total cost that would have to be recovered if it were viewed as a cost recovery for the service, which would increase the rate from $11.70 to $19.00 per month. He noted that Mrs. Mitchell indicated that this proposal would cover the costs of trash collection and the associated personnel and other expenses for that service for the five (5) years of the model. This increase would include complete cost recovery and would create an enterprise fund. Referring to Page 3, Mr. Koenig stated that the draft budget presented to Council included a shortfall in the General Fund of $801,700 and staff proposed a balancing plan that included a $0.01 tax increase and a 45% trash rate increase. Both approaches were included because Mr. Koenig felt that the City should attempt to recover the cost of trash service and there were a number of tax-exempt properties in the City that would not be affected by the tax rate increase. He stated that members had expressed concern about several items that were removed from the budget, mainly the Fourth of July Celebration, which was cut from $10,000 to $5,000, and the African American Festival, which was cut from $15,000 to $7,500. He indicated that the discussion of the Economic Development Office (involving $92,000 currently accounted for in the General Fund) was another matter of concern.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 30 Mr. Koenig stated that if Council were to express interest in restoring all of those items back into the budget, the shortfall would be increased from $801,700 to $906,200. Mr. Koenig stated that another way to address that deficit would be to increase property taxes by $0.02, which would raise $629,100, along with a smaller trash fee increase that would raise $288,000. The rate of that increase for trash would be approximately 15.4% for in-City customers and 12.9% for out-of-City customers. He presented this as one option to cover the shortfall. Mr. Lynn advised members that, historically, street lights were paid out of the Electric Fund; however, in the middle of the last decade, this expense was moved from the Electric Fund into the General Fund, thus incurring $985,000 of expenses to that fund. Mr. Lynn suggested moving the street lights back into the Electric Fund, which would save the General Fund approximately $985,000, which would cover the General Fund shortfall, address the adjustment issues described above by Mr. Koenig, and allow funding of the DDP at the requested level as well. Mr. Lynn stated the bond agencies may not be happy with this; however, for decades the street lights were paid for out of the Electric Fund and the bond agencies did not question this and bond ratings were not negatively affected. He felt that this should be considered prior to discussions on tax increases or trash fees. In response to Mr. Leary regarding the practical effects of this approach, Mrs. Mitchell stated that between 2002 to 2003, a Government Accounting Standards Board (GASB) 34 accounting standard was implemented that created a massive change to financial statements and reporting procedures. A consultant was brought in to help with the implementation of that accounting standard, and it was discovered that the Electric Fund was billing itself for street lights. The City was billing itself and showing the amounts as being collected by crediting a Street Light Fund within the Electric Fund. The consultant inquired about the Street Light Fund and it was discovered that there was no Street Light Fund, it was simply a way to show the billing, and it was offset by a credit to this fund. This was not proper accounting and was against the City’s debt covenant because revenue indicated that the City was billing itself but the General Fund was not being billed. The Street Lights were moved to the General Fund at that time, and the General Fund now pays the Electric Fund for those street lights. In response to Mr. Anderson’s inquiry as to whether a transparent, legitimate street light surcharge (similar to the 911 fee and trash surcharges) could be included on the customer bills and would comply with debt covenant requirements, Mrs. Mitchell stated that such a charge could be attached to the electric bill as a surcharge; however, the money would have to be recorded as a transfer to the General Fund. Mr. Anderson stated that this would accomplish the goal of legitimate, transparent, and real accounting. For clarification, Mrs. Mitchell explained that the City must adhere to the debt covenant for bondholders, not for the bond rating agencies. Responding to Mr. Lynn, Mrs. Mitchell stated that she would explore this concept and provide further information to Council.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 31 For clarification, Mr. Koenig stated that if the Electric Fund were to transfer $985,000 to the General Fund, the City would have to either: 1) develop a new charge that goes on the electric bill, or 2) reduce the decrease in electric rates by $985,000 going forward. Mr. Anderson concurred that these were the only two (2) options and stated he did not necessarily “buy into” either of those options but that both should be explored. Mr. Koenig stated that the “flip side” to doing that methodology was that the cash for the operation would somehow be coming out of the Electric as either a new fee or a reduction in the decrease in electric rates. Mr. Bonar stated that establishing a charge on the electric bill would provide transparency to ratepayers and made common sense. Mr. Anderson stated his appreciation for the tremendous job that staff had done in preparing the budget, particularly Mr. Koenig and Mrs. Mitchell. He questioned why a 45% trash fee increase was proposed rather than the amount needed to achieve a level that breaks even at a cost of approximately $0.50 more. He noted that the electric rates would be reduced enough to make up for the trash fee increase and questioned the idea of eliminating the EDO when these measures could fund the Office. Mr. Koenig felt that this was an issue that Council could consider; however, noted that the proposed trash fee increase was significant. In reviewing Page 4 of the Presentation, FY12 Review of YTD Expenses, Mr. Koenig noted that that current expenses had been reviewed and believed there would be some savings; however, those savings were committed to the unfunded Other Post- Employment Benefit (OPEB) liabilities earlier in the year, and while staff believed the savings might be as much as $500,000, there was potential for that number to erode rapidly before the end of the fiscal year if additional retirements come forward. Mr. Lynn requested that staff seek an opinion from bond counsel regarding the street light suggestion. Mr. Lynn stated his concern about the possible abandonment of Dover Park because that facility serves a population that does not have access to the Pitts Center. He noted his concern with putting a $30,000 roof on the property. He suggested that the property be leased as-is to a third-party entity without charging rent, on the condition that they replace the roof and offer either summer programs or programs for youth out of that facility. This would take that $30,000 line item out and maintain the facility to service a vulnerable population on that side of town that may not have access to City resources. Mr. Koenig stated that the budget proposal was not meant to rule out such a possibility. No operational savings were included in the budget because staff was unsure of what the decision regarding the facility would be; however, if Council were to desire, an RFP could be prepared to solicit interest from qualified non-profit agencies for such use. He felt this was an excellent idea that could easily be pursued.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 32 Mr. Leary noted that abandonment of the building was being considered, rather than abandonment of the park. He noted that $30,000 was included in the budget to either replace the roof or demolish the building. In response to Mr. Lynn regarding the possibility of increasing rental license fees, Mrs. Ann Marie Townshend, Director of Planning and Community Development, stated that in 2007 staff proposed an increase in the rental permit fee. This was met with opposition, and staff was directed to develop an entire fee package for all Planning and Inspections fees for the following fiscal year, which was also met with opposition and was rejected. Mrs. Townshend stated that whenever this has been brought up, the real estate community has come out in full force stating that the fee increase would be passed on to the renters. When the market was high and housing prices were high, a fee increase was unpopular because it was believed that it would hurt affordable housing, when the market was strong, it was felt that people could barely stay in their properties, and again it was felt that this would hurt affordable housing. She stated that staff was not opposed to this change and research had determined that the City’s fee is low in comparison to other areas, but there had not been support for an increase. Mr. Koenig stated that part of that discussion was a proposal that the fee would escalate every year based on the Consumer Price Index (CPI), and that was soundly objected to. Mr. Lynn stated he had in mind a simple 20% increase in the rental license fee, noting that he personally paid approximately $50 per year for a single-family dwelling for a rental license. In the aggregate, this would amount to a substantial dollar amount and small pieces put together could help the City. He asked that this be examined by staff. Mr. Lynn noted that there were two (2) proposed hires in the Public Utilities Department, a Public Works Director and an Electric Director. He stated that, historically there was a unified Public Utilities Department under one director and that subsequently the City Manager received approval from Council to unify the Public Utilities. It was his understanding that when Mr. Koenig became the City Manager, he split the Department into two (2) separate utilities. Mr. Lynn felt that since Council approved the unification, there should be a vote from Council to separate them. He believed that this would allow for the elimination of a very expensive management position and create greater synergy and efficiency. Responding, Mr. Koenig stated that, prior to 2006, the historical model of those two (2) entities was a traditional Public Works Department and an Electric Department that were accounted for separately. The Electric Fund solely addressed the operations of the Electric Department and the Power Plant. The Water and Sewer Fund was a separate accounting fund that addressed the operation of the Water and Sewer Utility, and the Water and Sewer Utility was attached to a more traditional Public Works Department that included engineering, sanitation, streets, vehicle maintenance, and grounds. There was a vote by Council to create positions called Public Utilities Manager and Public Services Manager (previously Mr. Koenig) and the departments were always accounted for separately. The Public Services Department incorporated the traditional Public Works operations of streets, sanitation, grounds, building construction, the Fire Marshal’s Office, and Economic Development Office.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 33 Mr. Koenig explained that since he became the Interim City Manager and subsequently the City Manager, the Central Services Director position has remained unfilled (duties were split between the Finance Office and Public Works), the Senior City Administrator position remained unfilled (some of these duties were sent to the Finance Department and some of that personnel was sent to the Human Resources Department). Mr. Koenig noted that the budget proposal does not include the Recreation Director position and that those services would be sorted out as part of the budget process. He felt that a vote of City Council was not necessarily needed to make these changes since all of those functions are under the domain of the City Manager within the Charter. He stated that he had signaled his intent to Council to make these changes. He stated he would like to return to a more traditional Public Works structure, with the Electric Department as a separate department, while keeping in mind there has been a significant amount of pressure to reduce electric rates and value the electric system to determine whether it would be in the City’s economic advantage in the long term to remain in that business. He felt that reconsolidation would run counter to discussions that have happened at the Council level. Mr. Lynn stated he would like to explore the possibility of unifying the Public Utilities Department under one (1) central head rather than hiring two (2) people to administer Public Works and Electric separately. Responding to Mr. Leary regarding the practical effect of this proposal on the General Fund, Mr. Koenig stated that the only savings would be one (1) less administrator; however, the administrator of that department would be overseeing approximately 130 positions over a very wide range of services, which would be difficult to manage under one (1) department head. Mrs. Mitchell advised members that one (1) of the two (2) positions being discussed was budgeted in the Water Fund and the other in the Electric Fund; therefore she was unsure how the General Fund would be impacted and said she would have to put the numbers together. Mr. Bonar suggested that, due to the complexity of electricity and the funds involved, and the simplicity of water by comparison, a very large salary would be required to attract a candidate that was qualified to administer both, estimated at $250,000 on the open market. Mrs. Mitchell stated that Mr. Ted Kelly, Principal, Business & Technology Services, Burns & McDonnell, performed the electric rate analysis which reflected a 12% reduction for street lights. She was unsure if street lights receive the advantage of a Power Cost Adjustment (PCA) credit (noting that they are not metered), or if this was 12% straight true credit. She noted that if the 12% was truly against the budget and City’s street light budget is $985,000, this would remove $118,000 from that cost. Mr. Koenig reminded members that they had approved the retention of the EDO fully staffed at three (3) people and moving the Office under the Mayor’s Office. He noted that the DDP funding still needed to be addressed. He stated that the DDP’s request was for $235,000, which was not included in the proposed budget. The DDP’s request assumed that the EDO would solely focus on economic development and a payment would be made to the DDP for its operations.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 34 For clarification, Mr. Lynn stated that his suggestion was not to physically move the EDO into the Mayor’s Office but to put them under the Mayor’s purview. Mr. Anderson stated that the Mayor could loan one (1) or two staffers (2) to help the DDP if he believed that this was part of the economic development strategy and the Mayor was conducive to this. He felt that the entire $235,000 would not be necessary because the goal was to transition for one (1) year and keep the expertise of people who are familiar with the operation. He stated it might be helpful to transfer some money so the DDP could hire a new director. He felt the amount and source of funds should be a matter of discussion. Mr. Leary advised members that FY12 would end on June 30, 2012; therefore, the second and final reading of the budget ordinance would be scheduled for June 25, 2012 and the first reading for June 11, 2012. To meet these goals, he indicated that the budget must be prepared by June 6, 2012. By unanimous consent, members agreed to continue the Special Council Meeting (Budget Review) on June 4, June 5, and June 6, 2012, as necessary, from 6:00 to 9:00 p.m. Mr. Lynn moved to amend the budget to fully fund the Downtown Dover Partnership (DDP) to the level of the request made this evening ($235,750), seconded by Mr. Bonar. Mr. Anderson moved to lay the amendment on the table, seconded by Mr. Perza. The motion failed by a roll call vote of five (5) no and two (2) yes (Mr. Anderson and Mr. Perza). On a call for the question, the original motion to amend the budget to fully fund the DDP failed by a roll call vote of three (3) no, three (3) yes (Mrs. Russell, Mr. Lynn, and Mr. Leary). (Clerk’s Office Note: During the roll call, Mr. Anderson abstained from voting; however, following the roll call, he changed his vote to a no.) Mr. Bonar moved to fund the Downtown Dover Partnership (DDP) in the amount of $180,000 for FY13, seconded by Mr. Lynn. The motion passed by a roll call vote of five (5) yes, two (2) no (Mr. Anderson and Mr. Perza), and two (2) absent (Mr. Hare and Mrs. Williams). Without objection, Council President Leary indicated that the Special Council Meeting (Budget Review) would reconvene on Monday, June 4, 2012, at 6:00 p.m. Meeting recessed at 8:06 P.M. MONDAY, JUNE 4, 2012 - 6:00 P.M. The Special Council Meeting reconvened on Monday, June 4, 2012 at 6:00 p.m. with Council President Leary presiding. Council members present were Mr. Anderson (arrived at 6:52 p.m.), Mrs. Russell, Mr. Perza, Mr. Bonar, Mr. Hare, and Mr. Hutchison. Mr. Lynn and Mrs. Williams were absent. Council staff members present were Mr. Koenig and Mrs. Mitchell. Mayor Carey was also present.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 35 QUESTIONS AND ANSWERS Mr. Koenig reviewed a presentation entitled “City of Dover FY2012-2013 Draft Budget - Budget Meeting - June 4, 2012 (Exhibit #11), which he stated reflected the current status of the budget with the motions that were carried on May 30, 2012 and open items before Council. He explained that during the May 30, 2012 session, members approved the reinstatement of the EDO into the budget. The estimated cost of this was $92,000, since the recommendation in the FY13 budget was to disband the EDO and entirely allocate economic development to the General Fund. The motion was to put the full amount back into the budget for economic development and fund it at roughly $230,000. Subsequent to that, the motion indicated that the funding allocation of the Mayor’s Office should be followed, which would be19.6% General Fund, 14.2% Water/Sewer Fund, and 66% Electric Fund (as shown at the bottom of Page 2). Mr. Koenig advised members that the change in funding allocation from FY12 to FY13 would realize some savings over what was anticipated in the General Fund. Mr. Koenig noted that staff had reviewed the Public Services Administration and noted that moving this area back into the Public Works Department would change allocation percentages back to previous levels. In reviewing the model on Page 3, Mr. Koenig stated that both the Public Services Administration budget and the Economic Development budget were charged to the General Fund in the draft FY13 budget. The current proposal for the reallocation of the EDO and a proposal to reallocate the Public Services Administration would yield a net savings in the General Fund of $277,900, an increase to the Water/Sewer Fund of $217,300, and an increase to the Electric Fund of $152,600; however, it would more appropriately allocate each of those divisions as as they have been allocated in the past or consistent with the recommendation of the motion from Council on May 30, 2012. Mr. Koenig advised members that Mrs. Mitchell was waiting to hear from bond counsel regarding the payment of street lights entirely from the Electric Fund. In addition, he stated that the General Fund was due a credit for the street lighting expense based on the rate study that was presented to Council during their Regular Meeting of May 29, 2012. If the City Council adopted the rates proposed by Mr. Ted Kelly, Principal, Business & Technology Services, Burns & McDonnell, the General Fund would realize a savings of $116,000 for street lighting over FY12 charges. Mr. Koenig explained that no action had been taken regarding the discussions relating to the restoration of full funding for the Fourth of July Celebration and the African American Festival. In reviewing Page 5 of the Presentation (Exhibit #11), Mr. Koenig stated that the budget shortfall that was projected at $801,700 on May 15, 2012, was now projected at $600,300 if motions were made this evening to account for those considerations. Responding to Mr. Leary, Mr. Koenig stated that, in accordance with his previous recommendations, the gap could be closed solely by a trash rate increase of nearly 35%, which would increase the residential rate from $11.70 to $15.75, yielding approximately $600,000. If it was closed solely based on a tax increase, a $0.02 tax increase would yield approximately $629,000 in revenue. If a combination of these approaches were used, a $0.01 tax increase would yield $314,600 and a trash

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 36 rate increase of approximately 15.4% would yield $288,000 and the combined revenue would yield approximately $603,000. Responding to Mr. Perza, Mr. Koenig stated the City has made a $15,000 contribution in recent history to the African American Festival and that conversations with Mr. Reuben Salters (former City Councilman and Founder/Organizer of the African American Festival) revealed that he would consider it a significant blow to his efforts if the contribution were to be reduced. Mr. Koenig stated that a reduction in funding for the Fourth of July Celebration would diminish the quality of the fireworks program. Mrs. Mitchell stated that the Dover Fourth of July Celebration Committee monitors its fund to ensure a balance of $5,000 or greater; however, she was unaware of the status of this account for 2013. Responding to Mr. Hare, Mrs. Mitchell stated that invoices are not submitted in connection with the African American Festival due to the extra demands that would be imposed on staff in the City’s Finance Department in accounting for $15,000. In addition, she noted that these contributions do not necessarily have to come out of the General Fund. Responding to Mr. Bonar, Mrs. Mitchell stated that the Fourth of July Celebration fund is an agency fund that the Finance Department staff reviews; however, auditors do not audit agency funds. Funds allocated to the African American Festival are considered a donation and are not reviewed. Mrs. Russell felt that an audit should not be required of the African American Festival funding since this has not been required in past years. She felt that this was a worthwhile effort that brings people to the City and if an audit were required, a policy should have been in place previously. Mr. Hare stated that since funds are reviewed for the Fourth of July Celebration, this should also be performed for the African American Festival. Mr. Koenig explained that the Fourth of July Celebration is a City-sponsored event, similar to Old Dover Days, and staff is actively involved in planning for the event, whereas the African American Festival is not City sponsored. Mr. Bonar felt that both the African American Festival and the Fourth of July Celebration should be funded to the greatest extent possible; however, they should conform to generally accepted principles of accounting and the City should be accountable for ensuring that the funds are expended properly. In response to Mr. Leary, Mr. Koenig indicated that he was proposing that the in-City trash rate for a 90-gallon containerbe increased from $11.70 to $15.75, an approximate 34.62% increase. There would be a proration of that rate for the business classifications that use larger containers and an increase in the out-of-City rates of just under 17%, which would bring this rate up to $50.00 per month. He confirmed that the amount of the increase would be lower than the original proposal and there would be no proposed property tax increase at this time.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 37 Mr. Hare expressed reservations regarding the proposal to move the three (3) members of the EDO staff, place them under the Mayor, eliminate their responsibilities connected with the DDP, continue to pay these members full-time salaries, and also provide the DDP $180,000 to hire two (2) staff members to handle DDP responsibilities. Mr. Leary felt that the $180,000 was to be used as seed money for DDP properties. Mr. Bonar stated that the intent of the motions were to help the DDP transition from having its staff spend half of their time working for the City of Dover, to allow the DDP to hire their its director so that the organization could fund itself, and to provide the City with an EDO within the City of Dover. He felt the EDO they would be required to spend 100% of their time working for the City of Dover, not just one entity within the City. Responding to Mrs. Russell, Mr. Koenig stated that trash fees for in-City businesses with 300-gallon trash containers currently pay $39.00 per month, which would be increased to $52.40 per month under the proposal. The City has only one (1) out-of-City commercial customer, whose rates would increase from $142.50 to $166.00 per month. Responding to Mr. Perza, Mrs. Mitchell stated that there would be no changes to the electric rate reductions based on the current budget presentation. In response to Mr. Bonar, Mr. Koenig noted that the goals could be accomplished with a $0.01 increase in property taxes and a $15.4% increase in the overall trash fees and still provide for an electric rate reduction for City electric customers. He stated that the proposed rate reduction was 3.38% overall to residential customers and the rate for business customers varied by classification to a maximum of 16%. In response to Mr. Leary, Mr. Koenig confirmed that the electric rate reduction proposal was independent of the tax rate or trash fee proposals. In reference to the EDO, Mr. Hutchison suggested that if the EDO were kept, that it be left as is; however, if the EDO were eliminated, he preferred to partner with Kent County for economic development. Mr. Koenig stated his understanding that the intent of the motion made regarding the EDO was that the EDO would maintain their office at the CenDel Building, but the three (3) staff members would report to the Mayor’s Office, the budget for City-wide economic development would be $230,000; those three (3) people would work on City-wide economic development and whatever other tasks are assigned to them to make sure their 40 hours per week are expended to the maximum extent possible. The funding for these positions would be reallocated the Mayor’s Office. The subsequent motion related to the DDP was to authorize payment to the DDP in the amount of $180,000 for FY13. Mr. Hare felt that the City could not fund both the EDO and the DDP. He stated that in 1997 the City went to a full-time Mayor with one of the responsibilities of the Mayor being economic

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 38 development in concert with the City Manager and Kent County. This arrangement worked well from 1997 to 2008 when the three (3) economic development staff members were hired. He felt that if the function were restored to the Mayor’s Office, the Mayor should perform this function and the three (3) positions eliminated. If the staff were retained, he felt the City should not fund the DDP. Responding to Mr. Hare, Mrs. Mitchell stated that the budget shortfall could be balanced with funds from the Depreciation Reserve; however, she indicated that she would need to confirm this with the bond counsel. She stated that this reserve is identified in the City’s bond covenants for replacing assets. Mr. Bonar stated that whether funds are transferred from one account to another, all funds come from taxpayers’ pockets. He indicated that if taxes were raised by $0.02, taxpayers would be able to write this off their income taxes if this is needed to balance the budget; however, if they were raised by $0.01 and trash fees increased by 15.4%, this could not be written off. He noted that an increase of $0.02 would provide approximately $629,000, which would provide a surplus of approximately $29,000. Mrs. Russell felt that the DDP and the EDO were both doing a good job and brought growth to the City. She felt that both of these organizations were needed and believed that results would be seen in the next few years. Responding to Mr. Perza, Mrs. Mitchell stated that all of the City’s reserve funds were forecasted to be fully funded at the end of the seven (7) year horizon, and the Depreciation Reserve had $10M and was projected to be fully funded in 2017. She explained that the City would pull from these reserves in three (3) of those upcoming years and then replenish the funds with accrued interest. The policies mandate that if funds are pulled from those reserves for funding assets, they must be replenished over a seven (7) year time frame. She stated that this policy applies to the Future Capacity Reserve as well. The Rate Stabilization Reserve was being used to fund the rate decrease over three (3) years. Burns and McDonnell gave the City a three (3) year rate and the City would use that reserve for operating income to attain margins over the next three (3) years. In response to Mr. Bonar, Mrs. Mitchell stated that she did not believe that the City was overcharging for electricity. She stated that when she prepares the net margins and forecast model, she achieves a positive cash level, giving everything back to the ratepayers each year, and making sure that the City meets its debt covenants. She stated her goal was not to keep accounts flush; decisions are based on policy and levels that should be attained for replacement of assets; for example, when the Cartanza Substation was put in, half of the reserves were used to help build this asset and funds were then replenished. She explained that this was the purpose of the reserves. She stated that the City has approximately $20M in the Depreciation and Future Capacity Reserves, $5M in the Rate Stabilization Reserve, and $750,000 in the Insurance Reserve. Mr. Leary advised members that a motion was needed on the floor in regard to the budget in order to allow for a First Reading on June 11, 2012 and Final Reading and action on June 25, 2012. At that point, amendments could be offered. He explained that to change motions approved previously by rescinding or amending, a two-thirds vote of all members (six (6)), would be required.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 39 Reconsideration would require a simple majority (five (5)) and two (2) motions: a motion to reconsider (made by a member who voted in the affirmative on the item) and a subsequent motion to amend the earlier motion. Mr. Bonar expressed his appreciation to Mr. Koenig and Mrs. Mitchell for bringing the budget to a manageable level. He stated that Council should be very proud of what staff had accomplished. He felt that the City administration had done a complete turnaround and become a cohesive group. There being no objections, Council President Leary declared a brief recess. Meeting recessed at 6:55 p.m. and reconvened at 7:09 p.m. Mr. Bonar moved for acceptance of budget, as presented by staff, with a First Reading to be held on June 11, 2012 and Final Reading on June 25, 2012, seconded by Mr. Hutchison. Mr. Anderson moved to amend the motion to include the addition of $7,500 to the City’s contribution for the African American Festival and $5,000 to the City’s contribution for the Fourth of July Celebration, to restore these amounts to previous levels, seconded by Mrs. Russell. Mr. Hare requested that the City track the finances dedicated to the African American Festival, as is done for the Fourth of July Celebration, so that there would be accountability for the City’s contribution. After further discussion, Mr. Anderson and Mrs. Russell agreed to include a provision in the motion to state that the City’s $15,000 contribution for FY13 would be accounted for by the City of Dover Finance Department subject to the same standards as the Fourth of July Celebration and Old Dover Days beginning in FY13. On a call for the question, the motion, as amended, to amend the draft budget to include the addition of $7,500 for the African American Festival and $5,000 for the Fourth of July Celebration, with the understanding that the $15,000 contribution for the African American Festival would be accounted for by the City of Dover Finance Department subject to the same standards as the Fourth of July Celebration and Old Dover Days beginning in FY13, passed by a roll call vote of six (6) yes, one (1) no (Mr. Perza), and two (2) absent (Mr. Lynn and Mrs. Williams). Mr. Hutchison moved to reconsider the reassignment of the EDO staff, indicating he favored having the EDO report to the City Planner or City Manager and forgoing the $180,000 donation to the DDP. Noting that Mr. Hutchison did not vote in the affirmative on the original motion regarding the reassignment of the EDO staff, Mr. Leary advised him that he was ineligible to move for reconsideration of this matter; however, he could make a motion regarding the $180,000 allocation to the DDP.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 40 Mr. Hutchison withdrew his motion. In response to Mr. Anderson, Mr. Koenig indicated that three (3) positions were proposed for funding in the Human Resources (HR) Department for FY13, the HR Director, an Administrative Assistant, and a HR Coordinator. He explained that there were currently two (2) active employees in the office (the HR Director and Administrative Assistant); however, it was his assessment that three (3) were needed since the office was being closed when those employees were engaged in matters outside the office. Mr. Anderson questioned if it would be possible to relieve the burden in the HR Department by sharing the Administrative Assistant from the EDO. Responding, Mr. Koenig indicated that the open HR Coordinator position required more HR experience than an Administrative Assistant would offer. He expressed his feeling that, currently, there was a gap in the service level and that HR was a critical function that was vital in order for the City to have an integrated, dynamic workforce. Mr. Koenig noted that currently a number of hiring processes typically undertaken by the HR Coordinator were being handled by the HR Director at the present time. He noted that orientations, benefits administration, coordination with the Finance Department, harassment training, and other workplace training were HR functions critical to providing a workplace that has low turnover and few lawsuits. In response to Mr. Anderson, Mr. Koeng stated that the estimated shortfall of $600,300 could be covered by a trash increase of just under 35%, which would take the base rate from $11.70 to $15.75 and prorate other fees over the different classifications which would be made up with electric rate cuts. He indicated that for a residential bill, the homeowner would see an increase of just under $4.00 in their trash fee but a 3% decrease in their electric bill. Depending on how much electric the customer uses, the total bill may actually go down. Mr. Anderson felt this approach would offer more honest accounting so that customers would know exactly where their money was going, as opposed to overcharging on electric bills and transferring funds elsewhere. Responding to Mr. Hare, Mr. Koenig stated that he would consider outsourcing many other functions before considering the HR Department. He noted that the workforce was in a highly agitated state with proposals related to health care and union contracts, and he felt that outsourcing would do more harm than good in the long run. Concurring with Mr. Koenig, Mrs. Russell felt that the morale of the workplace was essential and the HR Department should bond and connect with workers. Noting that a 35% or 40% trash fee increase was significant, Mr. Anderson questioned if using funds from the Electric Depreciation Fund would help to bridge the trash fee over a couple of years and if a two (2) step increase could be implemented. Responding, Mr. Koenig noted that Council adopts a budget for a one (1) year period, so there would be no guarantee that the rate increase could be accounted for. He expressed concern about using the Electric Depreciation Fund, noting that the five (5) year forecast for FY14 to FY19 presented some challenges. He felt that some of the

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 41 baseline revenue should be adjusted to meet expenses in the trash area. He felt that the proposals were not extravagant but were cost recovery issues related to taking trash to the landfill, personnel, and equipment. Without addressing the baseline budget, he anticipated that the same issues would be reviewed in the next budget. Mr. Anderson moved to amend the draft budget to allocate $4,000 for an economic development study in conjunction with Delaware State University’s economic development grant (a $20,000 grant proposal for which a matching contribution of $4,000 is being requested from the City), for a study to build data regarding economic conclusions, as well as business and demographic problems being encountered. The motion failed for lack of a second. Mr. Bonar moved to reconsider the allocation of funding for the DDP and the reassignment of the Economic Development Office to the Mayor’s Office, seconded by Mrs. Russell. On a roll call vote of four (4) yes and three (3) no (Mr. Anderson, Mr. Perza, and Mr. Leary), the motion failed for lack of a majority vote of members. Mr. Leary explained that a majority of Council was needed to pass the motion. Mr. Bonar moved to amend the draft budget to reinstate $33,000 for the installation of cameras in the downtown area, requested by Mayor Carey for security purposes, seconded by Mr. Anderson, and carried by a roll call vote of four (4) yes, three no (3) (Mr. Perza, Mr. Hare, and Mr. Hutchison), and two (2) absent (Mr. Lynn and Mrs. Williams). Mrs. Mitchell stated that this item was removed from the budget due to the inclusion of additional maintenance costs. A maintenance contract was recently taken out for cameras currently owned by the City at a cost of $20,000 and she wanted members to be aware that there would be an additional cost for the cameras. In response to Mr. Hare, Mr. Leary stated that Mr. Hare could move to rescind previous motions; however, six (6) votes would be needed. Mr. Hare confirmed that the current plan was to retain the EDO as well as the $180,000 budget line item for the DDP. Mr. Hare moved to rescind the motion to significantly reduce the cost to the General Fund by taking the City-wide Economic Development Office (including the three (3) current staff members), assigning that function to the Mayor’s Office, and funding that office with 20% from the General Fund, 14% from the Water/Wastewater Fund, and 66% from the Electric Fund, cutting the current cost of the Economic Development Office to the General Fund by one-half, seconded by Mr. Hutchison. By a roll call vote of four (4) yes and three (3) no (Mr. Anderson, Mrs. Russell, and Mr. Leary), the motion failed for lack of a majority vote of members. Mr. Hare moved to rescind the motion to fund the Downtown Dover Partnership (DDP) in the amount of $180,00 for FY13, seconded by Mr. Anderson. By a roll call vote of four (4) no and three (3) yes (Anderson, Perza, and Hare), the motion failed.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 42 Responding to Mr. Anderson, Mr. Leary confirmed that the budget being voted on contained an increase in trash fee but no tax increase. In response to Mr. Anderson, Mr. Koenig confirmed that if Council accepted the proposal to increase trash fees from $11.70 to $15.75 and prorate that rate among the different categories, there would be no shortfall, but the rate would have to be adopted. Mr. Hare moved to amend the draft budget, as presented, by transferring funds from the from the Electric Depreciation Fund to balance the budget and to forego any tax rate or fee increases, seconded by Mr. Anderson. Without objection, members agreed to amend the motion to allocate the funds from the Future Capacity Reserve rather than the Electric Depreciation Fund, as suggested by staff. In response to Mr. Bonar, Mr. Koenig stated that the total amount needed to cover the budget shortfall and purchase the security cameras that were discussed previously would be $633,300. Without objection, members agreed to amend the motion to specify that $633,300 would be transferred from the Future Capacity Reserve Fund to balance the budget. Mr. Anderson expressed concern regarding the escalating cost of the City’s trash operation due to the doubling of gas prices, increases in tipping fees, and additional yard waste charges. He was concerned that this action would not be sustainable and wondered if there was a plan to deal with this matter in the future. The motion, as amended, to amend the draft budget, as presented, by transferring $633,300 from the Future Capacity Reserve Fund to balance the budget and forego any tax rate or fee increases carried, by a roll call vote of five (5) yes, one (1) no (Mr. Leary), one (1) abstention (Mr. Anderson), and two (2) absent (Mr. Lynn and Mrs. Williams). On a call for the question, the motion for acceptance of the draft budget, as presented by staff and amended by Council, with a First Reading to be held on June 11, 2012 and a Final Reading on June 25, 2012, carried by a unanimous roll call vote (Mr. Lynn and Mrs. Williams absent). Mr. Leary complimented staff on the long hard work done on the budget. Mr. Bonar moved for adjournment, seconded by Mr. Hare and unanimously carried. Meeting adjourned at 7:48 P.M.

SPECIAL COUNCIL MEETING (BUDGET REVIEW) MAY 22, MAY 23, MAY 30, AND JUNE 4, 2012 PAGE 43 TRACI A. McDOWELL CITY CLERK All orders, ordinances, and resolutions adopted by City Council during their Special Meeting of May 22, 2012, are hereby approved. CARLETON E. CAREY, SR. MAYOR /TM S:\AGENDAS-MINUTES-PACKETS\Council-Minutes\2012\05-22-2012 BUDGET HEARINGS.wpd Exhibits Attached to Original Exhibit #1 - City of Dover Potential Savings for FY 2012 (as of May 22, 2012) Exhibit #2 - Correspondence from Mrs. Donna Mitchell dated May 21, 2012 - Assessment Project Memo and Reassessment Estimate Figures Exhibit #3 - Presentation - City of Dover General Fund - Recap of Last Year Exhibit #4 - Electric Fund Transfers Exhibit #5 - Updated Fiscal 2013 DRAFT Capital Investment Plan - FY13 - FY17 Projects by Department and Funding Source Summary, dated Wednesday, May 23, 2012 Exhibit #6 - Updated Information Technology Fiscal Year 2013 Organization Chart and Departmental Budget Exhibit #7 - Presentation - City of Dover FY2012-2013 Draft Budget - Budget Meeting - May 30, 2012 Exhibit #8 - Correspondence from Mrs. Donna Mitchell dated May 30, 2012 - Health Benefits Committee Information Exhibit #9 - Correspondence from Mrs. Donna Mitchell - dated May 29, 2012 - Downtown Dover Partnership - Monthly Report - March 2012, and the History of Parking Permit Revenues Exhibit #10 - Correspondence from Mr. Greg Moore dated May 24, 2012 On Behalf of the Downtown Dover Partnership (DDP) - DDP Budget Request Exhibit #11 - Presentation - City of Dover FY2012-2013 Draft Budget - Budget Meeting - June 4, 2012

REGULAR COUNCIL MEETING The Regular Council Meeting was held on June 11, 2012 at 7:30 p.m. with Council President Leary presiding. Council members present were Mr. Anderson, Mrs. Russell, Mr. Lynn, Mr. Perza, Mr. Bonar, Mr. Hare, and Mr. Hutchison. Mrs. Williams was absent. Council staff members present were Police Chief Hosfelt, Mrs. Mitchell, Mrs. Townshend, Fire Chief Fortney, Mr. Koenig, City Solicitor Rodriguez, and Mrs. McDowell. Mayor Carey was also present. OPEN FORUM The Open Forum was held at 7:15 p.m., prior to commencement of the Official Council Meeting. Council President Leary declared the Open Forum in session and reminded those present that Council was not in official session and could not take formal action. Mr. Robert Hartman, Lotus Street, Dover, speaking as an interested taxpayer, stated that it was not any easy time for the City, the City employees, or the Dover taxpayers. Each year the City is faced with budget shortfalls and they struggle with how to come to terms with them. He noted that some members of Council have indicated a willingness to increase taxes and fees to cover the shortfalls. Mr. Hartman stated that, as a taxpayer, he was willing to shoulder his share of the burden for the running of the City and pay his fair share of taxes. He also believed that the City employees should be treated fairly but that they should be prepared to pay a portion of their healthcare. Mr. Hartman stated that, as a State worker, his pay has been cut and his healthcare cost has increased. Mrs. Patricia Virdin read the following statement: My name is Patricia Virdin, I live at 70 Peach Blossom Lane in Camden. I have been an employee of the city for over 20 years and I have the honor of working at the Police Department. At a prior council meeting, the city manager made the comment that he felt 92 dollars was not a significant amount. I beg to differ. At the current rate, nearly 6% of my pension will go toward this new expense. And that is at TODAY's rate of 92 dollars per month. We all know that the cost will go up. Combined with the lack of pay increases for the past two years, I fully expect this new expense to wipe out more than 10% of my pension. I hardly call that insignificant. As I am coming towards the end of my career, I have had no time to adequately plan for this expense. My husband is also a city employee, so this measure hits my family doubly hard. However, if this proposal is implemented on my husband's salary, it will be because the FOP negotiated, voted, and agreed to it. As a non-bargaining employee, I have not been afforded that opportunity. All I have - the only thing I have - is a city handbook that was issued to me upon my hire in 1992. This handbook has 11 chapters that cover both my responsibility to the city and the city's responsibility to me. Clearly stated in Article 9 is the fact that the city will pay 100% of an employee's healthcare and will continue to do so for retirees.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 2 If, as the city manager believes, the handbook is simply a "guideline" and the city is not required to abide by the statements therein, it seems to follow that the employees who are not otherwise governed by a union contract cannot be required to adhere to the policies in the handbook. Policies governing such things as absences, use of city equipment, outside employment, personal conduct, disciplinary actions, and so on, would be useless. Although morale among employees is at a record low, the non-bargaining employees are united and more organized than I have ever known. I stand with my 77 non-bargaining co-workers to ask that you abide by the city handbook and implement this policy on new hires only. We have honored and abided by the terms of this handbook for our entire careers; we ask that you do the same. Mr. David Truax (Fire Marshal), 35 Upland Avenue, Dover, stated that it appeared that if the City could transfer funds for carnivals and cameras, it seemed that the $66,000 (amount recovered through a 15% healthcare cost share to employees) could be covered for this budget year to allow time for employees and City Council to look at this issue. He stated that previous administrations and Councils did not plan for this and he did not think it should be left to the non-bargaining employees to resolve. Mr. Truax felt that the means for covering the healthcare shortfall should be further explored and a reasonable decision made. Maj. Paul Bernat read the following statement: Good evening, my name is Paul Bernat and I reside at 185 Captain Davis Dr., Camden, Delaware. I am the Deputy Chief of Police for the Dover Police Department. I have been a loyal City employee for the past 23 years. I am standing before you this evening asking you not to lessen my health benefits. I was promoted to the rank of Major in April of 2010. With my promotion I left the FOP Union and became part of the non-bargaining group of the City, which is predominately management. In fiscal year 2012 all of the Unions received raises. The non-bargaining group did not receive a raise and are not receiving raises again this year. The three City Unions are currently in contract negotiations and are in the bargaining process. The Unions will receive "something" in exchange for the 15% healthcare cost sharing. Last year around this time I contacted the Public Employment Relations Board (PERB) and began the process to join the FOP. I later withdrew my application, after Chief Hosfelt requested I do so. Chief Hosfelt felt confident that the City Council will do the right thing and take care of the non-bargaining employees. Little did I know that ten months later the City Manager would propose in the City budget that the non-bargaining group pay 15% towards their healthcare. I also need to mention that I attended all of the Salary and Benefits Compensation Comparison Committee meetings and was disappointed when my salary was called out as "above the maximum for the pay grade". I looked into it further and

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 3 discovered that the pay information that was provided to the committee from the City was the "2008 MAG" study. It is not reasonable to compare 2008 wages to 2012 wages. In my 23 year career I have never felt as unappreciated as I do now. I feel that Council has the mind set that city employees are merely an expense and do not contribute to the excellent service that is provided to your constituents. I do understand that the growing trend is to reduce government employees' benefits. However, I believe any lessening of benefits should apply to new hires or take effect in ten years for tenured employees. Currently the City has several employees that are at the 20 year mark and will retire within the next ten years. It is imperative that the City not lose all of the knowledge and expertise from tenured employees. Lessening current employees benefits are causing good employees to retire early. This is causing the City to pay retirement benefits and new employee benefits as well. In conclusion, I would like to reiterate that the non-bargaining employees did not receive a raise last year, when Union employees did. The proposed 15% healthcare cost share would only save the City a nominal amount but will continue to affect employees in their retirement for the rest of their lives. Thank you for your time and much needed support. Mrs. Nancy Swaggard, 2629 Farm Lane, Wyoming, stated that 18 years ago, when she applied to the City of Dover, she signed paperwork that stated that she would receive 100% medical insurance through employment and retirement and that was very important to her decision to accept the position. She stated that 18 years later employees are doing more and more work because of the hiring freeze, which they gladly accept; however, there is a limit and they feel they need to be appreciated somehow. Mrs. Swaggard asked Council to keep the promise that was made to her and other employees when they accepted their positions. Ms. Carolyn Courtney, 24 Lamplighter Lane, Dover, stated that she is a City of Dover resident and has been all of her life. She stated that she felt that Council could look at other ways to find this unfunded portion of the budget this year and give employees another year (to prepare). Ms. Courtney stated that it was a “slap in the face” to the employees who have not had raises, noting that those who did receive raises had them taken away with days off (employee furloughs). Ms. Courtney stated that the employees came up with so many avenues (to raise funds) that Council has either rejected or was not interested in hearing. She requested Council to hear the employees now - they are disgruntled, upset, and no longer can they keep bearing the burdens of the City budget on their back. Employees needed a pay raise this year, not money taken out of their paychecks. She felt that the unfunded liabilities that put the City into this position should not be paid for out of employees’ paychecks. Mr. Paul Cookson, 233 Hibiscus Terrace, Magnolia, stated that he has been a loyal and dedicated employee for over 20 years, and that his employment began with an unpaid internship that he chose over paid positions with other police departments. When looking at potential employers, the City’s benefits won him over. He he felt that he had picked an organization that he could trust and retire securely with the benefits outlined for him. He stated that every employee, regardless of position,

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 4 plays an important part. He advised Council that non-bargaining employees, from middle-management right up to department heads, are what hold everything together in the City and are the longest serving and most experienced employees. He felt that these employees are the foundation, and if they cannot trust their employer, that foundation is undermined. Mr. Cookson stated that when a foundation is not sound, neither is what is above it. He advised members that they must honor what was offered to employees when they came on board, and stop putting the burden of financial woes on their shoulders; otherwise, they will be setting a precedent that will surely be weighed by the City’s future foundation. The invocation was given by Chaplain Dixon, followed by the Pledge of Allegiance. AGENDA ADDITIONS/DELETIONS Mr. Bonar moved for approval of the agenda, seconded by Mr. Lynn and unanimously carried. Mrs. Russell requested that Item #8 - Board of Assessment Appeals Exemption Report, be removed from the Consent Agenda. Mr. Bonar moved for approval of the Consent Agenda, as amended, seconded by Mr. Hutchison and carried by a unanimous roll call vote (Mrs. Williams absent). ADOPTION OF MINUTES - COUNCIL RETREAT OF MARCH 26, 2012 The Minutes of the Council Retreat of March 26, 2012 were unanimously approved by motion of Mr. Bonar, seconded by Mr. Hutchison, and bore the written approval of Mayor Carey (Mrs. Williams absent). ADOPTION OF MINUTES - REGULAR COUNCIL MEETING OF MAY 29, 2012 The Minutes of the Regular Council Meeting of May 29, 2012 were unanimously approved by motion of Mr. Bonar, seconded by Mr. Hutchison, and bore the written approval of Mayor Carey (Mrs. Williams absent). CERTIFICATE OF APPRECIATION AND CONGRATULATIONS - ZACHERY CARTER The following Certificate of Appreciation and Congratulations was read into the record by the City Clerk: MAYOR AND COUNCIL Be It Hereby Known To All That The Mayor and Council Commend ZACHERY CARTER for Dedicated Service to the City of Dover September 1988 - June 2012 23 Years of Service The Mayor and Council Extend Sincere Appreciation and Congratulations

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 5 On behalf of the Mayor and Council, Mayor Carey presented the Certificate, City Plaque, and Dover Cup in appreciation for the years and service provided by Mr. Carter. Mr. Carter stated that it had been a privilege and an honor to be able to work at the City with all of the citizens and employees. He said that it would not be possible to hold all of the events without the help of all of the departments. Mrs. Russell, on behalf of the Parks, Recreation, and Community Enhancement Committee, expressed appreciation for Mr. Carter’s assistance and congratulations on his retirement. Mr. Hutchison thanked Mr. Carter for his friendship and leadership and for serving the citizens well. Mr. Lynn stated that Mr. Carter had become a fixture in the community and he thanked him for his years of dedicated service. Mr. Leary expressed his appreciation for Mr. Carter’s service to the City. Mr. Bonar stated that Mr. Carter’s assistance had been invaluable to him and praised his accomplishment of the construction of the new library. CERTIFICATE OF CONGRATULATIONS - REVEREND RICHARD AVANT - 30TH ANNIVERSARY OF MINISTRY The following Certificate of Appreciation and Congratulations was read into the record by the City Clerk: WHEREAS, Reverend Richard M. Avant, Ph.D., was ordained a minister of the gospel in 1979 and was called to pastor Calvary Baptist Church in Dover, Delaware in 1982; and WHEREAS, under Reverend Avant’s leadership, Calvary Baptist Church has experienced unprecedented growth and has greatly expanded outreach programs that serve disadvantaged populations in the Greater Dover area; and WHEREAS, in 1982 Reverend Avant established the Interdenominational Ministerial Alliance of Dover and Vicinity, an organization of pastors, ministers, and evangelists that brings the worshiping community together to share their faith and resources to benefit those in need in Kent County and to support area non-profit organizations, and served as the President of this organization from its inception until 2010; and WHEREAS, Reverend Avant is celebrating his 30th year in ministry in the Dover area and throughout his service has worked tirelessly to spread the gospel through word and deed, inspire his dynamic congregation to acts of faith and outreach, break down racial barriers in the church and the community, and serve the poor and disadvantaged, all of which have greatly benefitted the City of Dover and surrounding area.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 6 NOW, THEREFORE, THE MAYOR AND COUNCIL OF THE CITY OF DOVER, DELAWARE, are privileged to present this Certificate of Congratulations to Reverend Richard M. Avant, Ph.D. on this 11th day of June, 2012 in recognition of his dedication to his congregation and to the residents of the Greater Dover Area. On behalf of the Mayor and Council, Mayor Carey presented the Certificate to Reverend Avant. Reverend Avant expressed appreciation for the recognition and the relationship that he and Calvary Baptist Church have enjoyed with the City for many years. VIOLATION OF DANGEROUS BUILDING ORDINANCE - PROPERTY LOCATED AT 14 SOUTH QUEEN STREET, OWNED BY CHARLES E. MARSHALL On March 12, 2012, City Council held a public hearing regarding violation of the Dangerous Building Ordinance for the property located at 14 South Queen Street. Mr. Charles Marshall, the owner of the property, testified at the hearing, stating that he had obtained a building permit and was making the necessary repairs to the property. Following the public hearing, City Council approved the following motion: Mr. Hare moved that, if a valid permit is obtained, the property owner be provided 30 days prior to inspection by City staff to determine if one-third of the work has been completed and if so, that the permit be extended and the property be inspected every 30 days until the end of the 90 days requested; however, if one-third of the required work has not been accomplished at the end of each 30-day period, that the structure located at 14 South Queen Street be declared a dangerous building and subject to demolition, as recommended by staff. The motion was seconded by Mr. Bonar and carried by a unanimous roll call vote (Mrs. Russell and Dr. McGlumphy absent). Mrs. Ann Marie Townshend, Director of Planning and Community Development, advised members that since the City Council Meeting of March 12, 2012, the owner obtained a renovation permit. There had also been a permit issued for a roof replacement. To date, no inspections had been scheduled or performed relating to either permit. The rear of the house has been removed. A City code enforcement officer has made contact on multiple occasions with the owner or the people performing the work; however these contacts have not resulted in scheduling any inspections. As reported previously, work performed under a previous permit was disapproved, and that permit expired. Mrs. Townshend provided a chronological history and presentation on the conditions of the house located at 14 South Queen Street (Exhibit #1). Mrs. Townshend advised members that the house had been totally gutted and there was no kitchen or bathroom. Due to the extent of the renovations, it would now have to meet current building code and would require full building plans submitted by an architect to move forward. Mrs. Townshend stated that it appeared that the property was being occupied, as evidenced by a sofa and a propane tank hooked to a burner.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 7 Given the continued lack of progress and the lack of inspections to confirm that any repairs or renovations made are compliant with City codes, staff recommended the following: 1) Declare this building and all accessory structures on this property dangerous. 2) Order the property repaired or demolished by July 11, 2012 by the owner or equity owner at their own risk. 3) Order the Building Inspector to cause the repair or demolition of the structures, if not completed by the owner within 10 days of the date established by City Council. 4) Order the City Manager, with the assistance of the City Solicitor, to cause the cost of repairs or demolition to be charged against the land on which the building exists as a municipal lien, or cause such cost to be added to the tax duplicate as an assessment, or to be levied as a special tax, or to be recovered in a suit at law against the owner. Responding to Mrs. Russell, Mrs. Townshend stated that the property owner was given an extension in 2010; however, the situation was currently worse than it was then. She indicated that she would make the property owner aware of the new requirements to move forward. Mrs. Russell asked if the people working on the property were required to be licensed contractors. Mrs. Townshend stated that if a contractor does the work, a license is required. In some cases, people are employed by the property owner to perform the work, and if the property owner represents to the City that the work is being done by their employees, a contractor’s license is not required. Mr. Bonar moved for approval of staff’s recommendation to: 1) declare this building and all accessory structures on this property dangerous; 2) order the property repaired or demolished by July 11, 2012 by the owner or equity owner at their own risk; 3) order the Building Inspector to cause the repair or demolition of the structures if not completed by the owner within 10 days of the date established by City Council and; 4) order the City Manager, with the assistance of the City Solicitor, to cause the cost of repairs or demolition to be charged against the land on which the building exists as a municipal lien, or cause such cost to be added to the tax duplicate as an assessment, or to be levied as a special tax, or to be recovered in a suit at law against the owner. The motion was seconded by Mr. Perza and carried by a unanimous roll call vote (Mrs. Williams absent). PUBLIC HEARING/VIOLATION OF DANGEROUS BUILDING ORDINANCE - PROPERTY LOCATED AT 118 NORTH ANN AVENUE, OWNED BY MARY H. SHOCKLEY AND OTHERS A public hearing was duly advertised for this time and place to consider a violation of the Dangerous Building Ordinance at 118 North Ann Avenue, owned by Mary H. Shockley and Others. Mrs. Ann MarieTownshend, Director of Planning and Community Development, stated that the property consists of a one-story, wood-framed, single-family home. The dwelling was condemned as unfit for human habitation on April 3, 2012 due to the degree of damage to the structure from a fire that occurred on the night of April 2, 2012. The cause of the fire has been determined as arson.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 8 Prior to the fire, the house was vacant. She stated that, currently the structure was still vacant, with no utilities and in a serious state of disrepair. Mrs. Townshend provided a chronological history and presentation on the conditions of the house located at 118 North Ann Avenue (Exhibit #2). Staff recommended that City Council: 1) Declare this building and all accessory structures on this property dangerous. 2) Order the property repaired or demolished by July 11, 2012 by the owner or equity owner at their own risk. 3) Order the Building Inspector to cause the repair or demolition of the structures if not completed by the owner within 10 days of the date established by City Council. 4) Order the City Manager, with the assistance of the City Solicitor, to cause the cost of repairs or demolition to be charged against the land on which the building exists as a municipal lien, or cause such cost to be added to the tax duplicate as an assessment, or to be levied as a special tax, or to be recovered in a suit at law against the owner. Mrs. Russell stated that she had received calls from five (5) or six (6) residents on Ann Avenue indicating that the property was an eyesore. She noted that otherwise the neighborhood was well kept. Council President Leary declared the public hearing open. There being no one present to speak either in favor or opposition of to declaring the property dangerous, the public hearing was closed. Mrs. Russell moved for approval of staff’s recommendation to: 1) declare this building and all accessory structures on this property dangerous; 2) order the property repaired or demolished by July 11, 2012 by the owner or equity owner at their own risk; 3) order the Building Inspector to cause the repair or demolition of the structures if not completed by the owner within 10 days of the date established by City Council and; 4) order the City Manager, with the assistance of the City Solicitor, to cause the cost of repairs or demolition to be charged against the land on which the building exists as a municipal lien or cause such cost to be added to the tax duplicate as an assessment, or to be levied as a special tax, or to be recovered in a suit at law against the owner. The motion was seconded by Mr. Bonar and carried by a unanimous roll call vote (Mrs. Williams absent). PUBLIC HEARING - ELECTRIC REVENUE FUND BUDGET A public hearing on the Electric Revenue Fund Budget is required for compliance with Section 505 of the 1993 Electric Revenue Refunding Bond Issue (Refunding 1985 Electric Revenue Bond) prior to adoption of the budget. Notice of the public hearing was properly advertised for this time and place.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 9 Mrs. Donna Mitchell, Controller/Treasurer, advised membersthat the proposed Electric Fund budget for the Fiscal Year beginning July 1, 2012 through June 30, 2013 was included in the draft budget presented to City Council during the Special Council Meeting (Budget Review) held on May 22, May 23, May 30, and June 4, 2012. Council President Leary declared the public hearing open. There being no one present wishing to speak during the public hearing, Council President Leary declared the public hearing closed. No further action was taken. Council President Leary noted that the First Reading of the Budget Ordinances would take place during the latter part of the meeting and that the Final Reading and adoption of the Ordinances are scheduled for the Regular Council Meeting of June 25, 2012. PUBLIC HEARING/FINAL READING - ORDINANCE #2012-11 - PROPOSED ZONING MAP AMENDMENT A public hearing was duly advertised for this time and place to consider approval of proposed zoning map amendments to the Source Water Protection Overlay Zone - Tier 3 Excellent Recharge Area in the vicinity of North Dupont Highway and Leipsic Road. Mr. Hutchison moved that the Final Reading of proposed Ordinance #2012-11 be acknowledged by title only, seconded by Mr. Bonar and unanimously carried. (The First Reading of the ordinance was accomplished during the Council Meeting of April 9, 2012.) Mrs. Ann Marie Townshend, Director of Planning and Community Development, advised members that the proposed amendment would change the boundary of the SWPOZ (Source Water Protection Overlay Zone) – Tier 3 Excellent Recharge areas in the vicinity of North DuPont Highway (U.S. Route 13) and Leipsic Road. The change in the boundary was done following the provisions of Appendix B, Article 3, Section 29, which sets out the procedure for contesting the delineation of the source water protection overlay zone. Mrs. Townshend advised members that geotechnical reports were completed by the owner of 741 N. DuPont Highway and reviewed by the Department of Natural Resources and Environmental Control (DNREC). Following this review, DNREC provided an updated contour for the SWPOZ Tier 3: Excellent Recharge Area in this general vicinity. The Planning Office contacted all affected property owners to inform them of the map amendment. She noted that the Planning Commission unanimously recommended adoption of the ordinance. Council President Leary declared the public hearing open. Mr. John Paradee of Prickett, Jones, and Elliot, 11 N. State Street, Dover, representing the property owner of the former Berry Van Lines site, stated that the current Source Water Protection ordinance makes use of the property completely unfeasible. He noted that the delineation was reviewed and onsite surveys of the property revealed that the delineation was inaccurate based on the DNREC maps. He encouraged favorable consideration of the ordinance. There being no one else present wishing to speak during the public hearing, Council President Leary declared the hearing closed.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 10 Mr. Hare moved for adoption of the ordinance, as recommended by the Planning Commission. The motion was seconded by Mr. Hutchison and, by a unanimous roll call vote (Mrs. Williams absent), Council adopted Ordinance #2012-11, as follows: AN ORDINANCE AMENDING THE ZONING MAP, SOURCE WATER PROTECTION OVERLAY ZONE - TIER 3 EXCELLENT RECHARGE AREA IN THE VICINITY OF NORTH DUPONT HIGHWAY AND LEIPSIC ROAD WHEREAS, the Delaware Code, Title 7 - Conservation, Chapter 60 - Environmental Control, Subchapter VI - Source Water Protection requires that municipalities adopt regulations to protect areas around public wells and areas identified as "excellent recharge areas;" and WHEREAS, on November 26, 2007, City Council adopted the Source Water Protection Overlay Zone (SWPOZ) and on March 24, 2008, City Council amended this zone by adding protections for "excellent recharge areas;" and WHEREAS, Appendix B - Zoning, Article 3 - District Regulations, Section 29 - Source Water Protection Overlay Zone (SWPOZ) includes a procedure for contesting the delineation of the source water protection overlay zone; and WHEREAS, the Dover Planning Office received a geotechnical evaluation for the site known as Dover Crossroads at the southeast corner of North DuPont Highway (U.S. 13) and Leipsic Road; and WHEREAS, the Department of Natural Resources and Environmental Control has reviewed the evaluation and provided an updated contour of the "excellent recharge area" in this vicinity. NOW, THEREFORE, BE IT ORDAINED THAT the Mayor and Council of the City of Dover hereby amend the Zoning Map as it relates to the SWPOZ - Tier 3 Excellent Recharge Areas in the area including and adjacent to the Dover Crossroads site in accordance with the exhibit entitled "Amendment to the SWPOZ - Tier 3 Excellent Recharge Area," dated June 11, 2012. ADOPTED: JUNE 11, 2012 BOARD OF ASSESSMENT APPEALS EXEMPTION REPORT - MAY 22, 2012 The Board of Assessment Appeals Committee met on May 22, 2012 with Chairman Garfinkel presiding. EXEMPTIONS Union Missionary Baptist Church (Location: Lot 8 Forest St. - ED05-076.11-01-09.00) Background and Analysis An appeal form was submitted to the Assessor's Office. This property was purchased in January 2006. This is a vacant "grassy" area located next to another taxable property owned by the Church. The application states that this property is being used for overflow parking as needed.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 11 Per code for zoning & chapter 106, parking on the grass is not permitted. Since this parcel is not "legally" being utilized for its intended use, we recommend denial of the request. Exemption Request - $30,600 Recommended Action: Staff recommends that the request for exemption be denied. Ms. Russell explained to the board that the Assessor's recommendation was to deny the application, because the lot is used as overflow parking as per the application. She told the board that she contacted the City Planning Office and was told that per zoning code Section 106-130, parking on grass is not permitted. Mr. Moore, who represented the Union Missionary Baptist Church, told the board that the properties next to the lot were exempt and are being used for parking as well. Ms. Russell explained that one of her goals was to look at all of the exempt properties to make sure that they are in compliance. Mr. Moore explained that he was under the impression that there was no problem parking on these lots, and explained to the board that there was not a lot of room for parking on the road. Mr. Burns asked Mr. Moore to explain the GIS Map provided, he asked about the alley and 922 Forest St., which is not exempt. He also told Mr. Moore that he does not feel comfortable to grant the exemption because the 922 Forest St. was not tax exempt. Mr. Burns suggested that Mr. Moore have the alley abandoned, which runs between the properties, this would give him a better chance to get the exemption for the Lot in the future. Mr. Moore explained that he had tried to do just that, but one of the property owners would not agree to the alley abandonment. Chairman Garfield closed the hearing and opened up for deliberation. Mr. Burns made the motion to deny the application. Mr. Galvin seconded the motion. Chairman Garfinkel stated for the record that he too feels the exemption should not be granted based on the information provided. The motion carried 4-0. Ms. Russell explained to the applicant, that the City Council was the final decision and that a letter with the date of the Council Hearing would be mailed to them. Second Baptist Church (Location: 136 S. Queen St. - ED05-076.12-02-71.00) Background and Analysis An appeal form was submitted to the Assessor's Office. This property is being used for storage.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 12 The assessor's office noticed that the utilities on this property were low. We checked with Inspections and Planning to make sure the property was not vacant. The inspector was told that the property was being used for storage. Per the City Planner, this is NOT permitted. Exemption Request (2011 & future years) - $120,000 Recommended Action: Staff recommends that the request for exemption be denied. Mr. Bagley was present to represent Second Baptist Church and explained to the board that the building was used for functions as bible school, warming food to be served out of the church and other church projects. The Assessor recommended that the application be denied because the house had been on the city's vacant list. She was told by an inspector that the house was used for storage, which is not allowed under the current zoning. Mr. Galvin pointed to the check list on the application and asked if the organization had the 501(c)3, which they did not. Mr. Galvin asked if the organization would qualify for the exemption without the 501(c) 3. Mr. Townsend told the board that the exemption can be obtained without the 501(c) 3. Mr. Burns asked what the building was used for. Mr. Bagley acknowledged that the building is used for storage but is also used for the programs mentioned earlier, if money is available. He told the board that organs are stored in the building and are there for the purpose of teaching the children. Mr. Burns asked if the property was deed as an exempt property, which it was but the property has been taxed because nobody had ever filed for the exemption. He also asked if the building meets the required code which would allow children to be taught. In Mr. Burns' opinion, should the church decide to bring the building up to code to where it can be used to teach children how to play the organ, they would probably not have any problems getting the exemption. Mr. Bagley agreed and told the board that if the church planned to use the property to teach the children, he would make sure that the building would be up to code. Mr. Burns told the board that he would not feel comfortable granting the exemption based on the use and condition of the building. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Welsh made the motion, based on the information provided, to deny the request for exemption, which was seconded by Mr. Burns, who also explained that due to the current use and testimony he would not recommend an exempt status. Mr. Galvin and Chairman Garfinkel concurred with the other two members. Motion carried 4-0.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 13 Mr. Bagley wanted to state for the record, that he is going to speak to the city's planning department to find out what is required to meet the requirements. Ms. Russell explained to the applicant, that the City Council was the final decision and that a letter with the date of the Council Hearing would be mailed to them. Chapter 850 Vietnam Veterans of America (Location: 1549 Rear Forrest Ave. - ED05-076.05-01-10.00) Background and Analysis An appeal form was submitted to the Assessor's Office. This property is a wooded lot owned by the appellant and does not seem to be utilized by its intended use for exemption qualification. Exemption Request (2011 & future years) - $43,400 Recommended Action: Recommend that the request for exemption be denied. Mr. Davis, Vice President and Mr. Schilling, Treasurer were present for the hearing. Mr. Davis explained that the property was a piece of vacant land and was donated to the organization by one of its members. The purpose of the land was to keep it in case the organization needed money for a memorial, it could be used as collateral. Mr. Davis explained that the property used to be open space for a development and cannot be built on. He went on to say that if he was not granted the exemption he would like the value of the property to be dropped. The Assessor recommended that the applications for exemption be denied, because the property does not seem to be utilized for its intended use for exemption qualifications. Ms. Russell also explained that the value could not be appealed at this time, because the timeline to appeal the value has passed. Mr. Townsend explained that the Board of Assessments will be looking at 2 criteria's, one would be what the property would be used for in the future and if this will be consistent with the mission of the organization, this being a charitable mission. Mr. Townsend asked if the property is generating income and what the property is or will be used for. Mr. Davis explained to the board that the city has limited the organizations ability to use the property by zoning it as a R20. He told the board that they will not build on the property but if the City would like for them to use the property as a picnic area, that they could do so. Mr. Townsend asked if this is a property being held by way of investment, which would disqualify the property from the exempt request. Mr. Galvin asked if the property was accessible from the road, which Mr. Davis concurred that it was.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 14 Mr. Galvin explained that if the property was larger than 20,000 square feet, which it would have to be according to the zoning it would be large enough to build a house on and could therefore be sold as a buildable lot. Mr. Davis wanted to state for the record that the property was a piece of land which the City had sold by accident. Once the city realized that the sold it back to the original owner. Mr. Davis explained that the lot used to be open space for the Marshcreek Development and could therefore not be built on. In Mr. Burns' opinion this piece of open space was probably sold because the Home Owners Association failed to pay the taxes for the parcel at which time it probably was sold in a tax sale. Being the fact that it is a piece of open space, it cannot be built on. Mr. Galvin asked how the Home Owners Association could get tax exemption for the open spaces. Ms. Russell explained that the Association would have to file an application for the exemption and proof that the open space is used only by the Home Owners of the neighborhood. Mr. Galvin wanted to know what the purpose of the organization is. Mr. Davis went into the history of the organization and told the board that the purpose of the organization is to help and assist other Vietnam Veterans as well as all veterans. Mr. Galvin asked how this piece of property would help to further their mission. Mr. Davis told the board that they have not had the property for long and the organization does not know what to do with the property. Mr. Garfinkel pointed out that nothing has been done with the property and by the appellant stating that the property is being used as collateral would suggest the property is being held as an investment property. Mr. Galvin pointed out that according the state code the parcel could fall under investment property and would therefore not be able to be tax exempt. Mr. Davis pointed out that the lot is open space and that there will be no gains in utilizing the property, the organization could take children out there and teach them about the Vietnam War. Mr. Burns pointed out that in his opinion the land was given to the organization by the owner to further the mission and asked if this would not qualify the property to be tax exempt. Mr. Townsend pointed out that there are two items one must look at to make sure that a tax emption would be appropriate, one of which would be if the properties use is consistent with the chartable purpose of the organization and then whether the property is held by way of investment. Mr. Townsend pointed out that it would be up to the organization to link the use for that property with the mission of the organization. Mr. Burns pointed out that the property does not fully qualify for the tax exempt status, but should be looked at from the valuation standpoint; he believes the assessed value for the piece of land to be too high.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 15 Mr. Galvin asked to look at the record plan to find out if that piece of land was dedicated for open space. Mr. Garfinkel made the suggestion to grant the exemption for one year and then go back to look at the property, he agrees that this seems to be a valuation question rather than a question for exemption. In Mr. Townsend opinion the board has come to the conclusion that the property is not being held by way of investment and that the organization has not settled on the use of the property yet. He also pointed out that the city could look at the use of the property year by year and could therefore withdraw the exempt status, should the property not be used to further the mission of the organization. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Burns summarized that the organization has recently been given this property but has not come up with a purpose for the land which could help their organization. He also pointed out that the property cannot be held as an investment because it cannot be built on. Mr. Burns went on to make the motion to accept the applicant request for one year. He pointed out that this will be a temporary exemption, because all exemptions are looked at yearly. Mr. Galvin seconded the motion, he also made the recommendation the organization find the record plan which shows that the parcel is in fact open space. Ms. Russell pointed out that the exemption had been filed in the fall of 2011 and that the exemption would have to be granted for 2011 and 2012. Mr. Burns suggested to Mr. Davis that in one year he should have a better understanding of what the property will be used for. Chairman Garfinkel clarified that the organization would have to apply for the exemption for the tax year 2013. Mr. Townsend pointed out that in 2013 the organization should receive a tax bill which should trigger the refilling for the exemption. Ms. Russell explained that there is not deadline for charitable organizations to file an application for exemption; this can be done any time during the year, but that she would prefer the exemption be filed during the month of April, 2013. That way they can be heard during the Board of Assessment Appeal hearing for that year. Motion carried 4-0.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 16 EJB Inc. (Location: 327 Martin Street - ED05-077.10-01-48.00) Background and Analysis An appeal form was submitted to the Assessor's Office. There was a fire at this property last summer. The property owner is requesting an exempt status for this past July and in the future. At this time, the property is vacant and is going through the process of rebuilding. My recommendation is that the property be given exempt status for the billing cycle after the improvements receive the certificate of occupancy. Exemption Request 2011 - $420,800 Exemption Request 2012 - $114,700 Exemption Request (future) undetermined (114,700 + improvement value) Recommended Action: Recommend that the request for exemption be denied until improvements are complete. Mr. Boyles was present for the hearing. Mr. Boyles told the board that they filed for the exemption in 2011 after a fire destroyed the building. He told the board that they have been at this location for 20 years and are a licensed drug and alcohol abuse treatment facility with 10 beds. He mentioned that they are hoping to build the new facility with 18 beds. Ms. Russell explained that it was the City's recommendation that the exemption would be denied until improvements have been completed. Chairman Garfinkel asked Mr. Boyles to explain what EJB Inc. is. Mr. Boyles explained that EJB Inc. is a subsidiary of Serenity Place, where Serenity Place leases from EJB Inc. and the proceeds go back into the organization. Mr. Burns wanted to clarify the City's recommendation that the city would accept the application once the building would be complete. He asked if the application would be denied this year, would they owe back taxes. Mr. Townsend asked how close the building was to completion. Mr. Boyles explained the lengthy process and went on to say that the estimated date of completion would be September of 2013. Chairman Garfinkel closed the hearing and opened for deliberation.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 17 Mr. Burns asked that based on the fact that the organization is charitable and the property is not held by way of investment, would the property, assuming there would be a structure, meet the qualifications for the exemption. Mr. Galvin made the motion to grant the exemption for 2011 and 2012 despite the unfortunate fire. Mr. Welsh seconded the motion. Mr. Burns wanted it to be known that he understands the lengthy approval period and agrees. Motion carried 4-0. Ms. Russell explained to the appellant the council has the final say and that a letter would be mailed with the date and time of that meeting. House of Pride Inc. (Location: 16 N New Street - ED05-076.08-05-22.00) Background and Analysis An appeal form was submitted to the Assessor's Office. This property was listed as an exempt property from July 2002 until July 2012. The exemption was revoked because the Conditional Use permits were revoked; therefore the property did not meet the qualifications for an exempt status with the City of Dover. Since the properties did not have the proper permits, they were no longer being used for the intended purpose of the exemption. Exemption Request (2011 & future years) - $75,800 Recommended Action: Recommend that the request for exemption be denied. Mr. Harris and Mrs. Dean, legal counsel, to House of Pride, were present for the hearing. Mrs. Dean explained to the board that all three properties up for exemption were owned and rented by the House of Pride and that all of the income goes to the House of Pride program to be used for the benefit of the organization. Ms. Russell told the board that it is the Assessor's recommendation to deny the request for exemption. She told the board that the property had been receiving the exemption in the past, but the exemption had been revoked because it had no longer been used for the intended purpose. She also pointed to correspondence in the packet given to the board, from Mr. Rodriguez, city solicitor and a letter from Mrs. Dean regarding the revocation of the exemption. Mr. Townsend asked if Mrs. Dean was at the meeting to represent the organization, at which time Mrs. Dean explained that she also sits on the board of directors. Mr. Burns asked why the exemption was revoked. Ms. Russell explained that the planning director as well as the city manager and solicitor met with the Assessor to discuss the revocation of the exemption because the House of Pride did not have the proper rental permits for 16 S New Street as well as 102 S New Street.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 18 Mrs. Dean explained that the conditional use was for the participants of the House of Pride to be able to live there; the other properties were used as regular rentals, where the income is used for the program. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Burns stated that because the use of the properties did not meet the legal requirement and based on the letter from Mr. Rodriguez that he would make the motion to deny the application for exemption. Chairman Garfinkel seconded the motion based on the information provided. In Mr. Galvin's opinion the properties are not used for their intended purpose and the organization was not able to disclose how much of the income goes to the House of Pride. Motion passed 4-0. Chairman Garfinkel explained to the appellant the council has the final say and that a letter would be mailed with the date and time of that meeting. Mrs. Dean pointed out that the other two upcoming properties fall und the same scenario. House of Pride (Location: 115 S New Street - ED05-077.09-01-43.00) Background and Analysis An appeal form was submitted to the Assessor's Office. This property was purchased in November 2008. To our knowledge, this property has always been a market rental. The Assessor's Office does not have any official documentation to confirm or deny this information. Exemption Request - $186,900 Recommended Action: Recommend that the Board of Assessment Appeals Review Information Chairman Garfinkel asked Mrs. Dean to explain the purpose of the property. Mrs. Dean explained that this property is used for rental property and that the renters have no connection to the organization. Chairman Garfield closed the hearing and opened for deliberation. Mr. Burns made the motion to deny the request for exemption based on the testimony and information provided by the city and from the city solicitor that this property does not meet the requirements. Motion carried 4-0.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 19 House of Pride (Location: 102 S New Street - ED05-077.09-01-35.00) Background and Analysis An appeal form was submitted to the Assessor's Office. This property was listed as an exempt property from July 2002 until July 2012. The exemption was revoked because the Conditional Use permits were revoked; therefore the property did not meet the qualifications for an exempt status with the City of Dover. Since the properties did not have the proper permits, they were no longer being used for the intended purpose of the exemption. Exemption Request (2011 & future years) - $137,600 The Assessor recommended the application be denied. Mrs. Dean explained that this property is used for rental property and that the renters have no connection to the organization. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Galvin made the motion to deny the exemption based on the testimony provided. Mr. Burns seconded the motion based on the information provided. Motion carried 4-0. Ms. Cheryl Russell, City Assessor, stated that legal counsel was present during all of the Board of Assessment appeal hearings and determined the exemption status of all properties being appealed. Responding to Mr. Anderson, Ms. Russell stated that the appeal for Union Missionary Baptist Church was denied because the vacant "grassy" area located next to another taxable property owned by the church was being used for overflow parking and, per the Code for Zoning and Chapter 106, parking on the grass is not permitted and this parcel was not "legally" being utilized for its intended use. She noted that the applicant was advised that they could pave the property as a parking lot, which would make it a legal use eligible for exemption. With reference to the Second Baptist Church, Ms. Russell explained that the property was listed as being vacant but was being used for storage, which is not permitted under the zoning. She stated that the property was not exempted because it was not being used for its intended purpose (as a church). Responding to Mr. Lynn, Ms. Russell stated that the property owner was directed to Planning Department staff to determine the actions necessary to bring the property into compliance with Code for use for functions such as bible school, warming food to be served out of the church, and other church projects. Responding to Mr. Anderson, Ms. Russell explained that the residents at the House of Pride properties are not participants in their programs. The House of Pride is engaging in commerce with commercial leases for these properties; therefore, the exemption request was denied.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 20 Mr. Bonar moved for acceptance of the Board of Assessment Appeals Exemption Report of May 22, 2012, seconded by Mr. Hutchison. Mr. Anderson moved for Division of the Question to vote on each item separately, seconded by Mr. Perza. The motion failed by a roll call vote of four (4) yes and four (4) no (Mr. Bonar, Mr. Hare, Mr. Hutchison, and Mr. Leary) (Mrs. Williams absent). The motion for acceptance of the Board of Assessment Appeals Exemption Report of May 22, 2012 failed by a roll call vote of four (4) yes and four (4) no (Mr. Anderson, Mrs. Russell, Mr. Lynn, and Mr. Perza) (Mrs. Williams absent). COUNCIL COMMITTEE OF THE WHOLE REPORT - MAY 29, 2012 The Council Committee of the Whole Meeting was held on May 29, 2012 at 5:30 p.m. with Council President Leary presiding. Council President Leary requested those present wishing to speak regarding Agenda Items #5 and #6 to limit remarks to three (3) minutes due to the lengthy agenda and time constraints. Downtown Dover Business Improvement District (BID) Mrs. Donna Mitchell, Controller/Treasurer, reviewed the Business Improvement District (BID) Assessment (Tax) Rates for Fiscal Year 2012-2013 and advised members that staff proposed a BID tax rate based on an estimated revenue calculation of $51,600 for FY 2012-2013. She explained that this revenue would pay for personnel and administrative expenses used to support economic development. Staff requested approval of the BID tax assessment rate in accordance with the Business Improvement District Tax Calculation Worksheet - July 1, 2012 - June 30, 2013. Responding to Mr. Lynn, Mr. Scott Koenig, City Manager, stated that projected BID tax revenues in the amount of approximately $51,600 would be part of the City’s annual appropriation to the Downtown Dover Partnership (DDP) under the proposed draft FY 2012-2013budget if the City’s Economic Development Office were eliminated, as previously proposed. He noted that the funds generated by the BID tax have traditionally been utilized to offset the funding of the DDP (or formerly the Main Street Dover Program). Mr. Lynn moved to table the matter until the future of the City’s relationship with the DDP as well as the future of the Economic Development Office could be finalized through the budget process or further action of Council. The motion failed due to the lack of a second. Mrs. Mitchell explained that City Code requires that the BID tax rate be established in May in order for the City to be able to assess the BID tax for Fiscal Year 2012-2013. Mr. Hare stated that the purpose of the discussion was to set the BID tax rate and that Council’s budget discussions would determine where resulting funds would be directed. Mr. Anderson moved to recommend approval of the Business Improvement District (BID) tax assessment rate according to the Business Improvement District Tax Calculation Worksheet - July 1, 2012 - June 30, 2013, as recommended by staff. The motion was seconded by Mrs. Russell.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 21 Mr. Lynn expressed concerns regarding the Business Improvement District Cash Receipts and Budget for 2012-13 which specified BID tax revenue of $51,600 and projected personnel and administration expenses in the same amount. He questioned if the provisions of the City’s Code require earmarking these revenues for personnel and the DDP and if the rate could be set without addressing this underlying issue. Mr. Bonar felt that in order to have Mr. Lynn’s question fully answered, an interpretation of the ordinance and an opinion of the City Solicitor were needed; therefore, he moved to table the matter. The motion failed due to the lack of a second. Mr. Leary advised members that time constraints required that a first reading of the ordinance be scheduled for June 11, 2012 and a final reading for June 25, 2012 in order to adopt the tax rate for Fiscal Year 2012-2013 for billing purposes. Mr. Anderson stated that the question would not affect the motion that was made to set the annual rate as required by Code and that related budget considerations were a separate item which could be discussed at the City Council meeting held subsequently in the evening after consulting with the City Solicitor. The Committee recommended approval of the Business Improvement District (BID) tax assessment rate according to the Business Improvement District Tax Calculation Worksheet - July 1, 2012 - June 30, 2013, as recommended by staff. By consent agenda, Mr. Bonar moved for approval of the Committee's recommendation, seconded by Mr. Hutchison and carried by a unanimous roll call vote (Mrs. Williams absent). Evaluation of Proposals - Fiscal Year 2012-2016 Audit Services Mrs. Donna Mitchell, Controller/Treasurer, reviewed the results of a Request for Proposals (RFP) issued for professional audit services, noting that the City’s current contract with Faw Casson & Company, LLC, expired last year. She explained that five (5) proposals were received and evaluated (one (1) from Maryland, two (2) from Wilmington, and one (1) from Dover; one was minority owned and one female owned). Mrs. Mitchell indicated that the proposals were comparable in quality and staff’s recommendation was based on price. She advised members that SB & Company, LLC, in Huntsville, Maryland was given a 3% discount preference as a minority-owned business and was the lowest bidder. She stated that, if approved, SB & Company would perform fieldwork and testing of internal controls since many files are sent through security portals. She noted that staff did not see a problem with the distance of the firm from the City of Dover and recommended approval of SB & Company, LLC for the City’s audit services provider. Responding to Mr. Anderson, Mrs. Mitchell explained that references were checked for all firms and all were favorable, and that testing for internal controls, including statistical sampling, was a standard practice. In response to Mr. Perza, Mrs. Mitchell stated that SB & Company had adequate support staff, including an audit manager and two (2) support staff, and did not appear to have a problem with staff turnover. In addition, SB & Company stated they would plan to begin testing of Accounts Payable vouchers in-house as early as the month of April each year (beginning in 2013).

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 22 Responding to Mr. Bonar, Mrs. Mitchell stated that she believed that SB & Company had clients in Delaware and offered to verify this. In addition, she confirmed that SB & Company was licensed to operate in the State of Delaware and had included their Delaware Minority Business Certificate in the proposal. In response to Mr. Leary, Mrs. Mitchell advised members that Faw Casson had been the City’s auditor since at least the 1970s and that she felt it was a good idea to change auditors periodically. The Committee recommended that staff be authorized to execute an agreement with SB & Company, LLC, to perform audit services for the City of Dover for an amount not to exceed the fixed prices provided in the Audit Services RFP 12-0032FN Cost Comparisons, as recommended by staff. Mrs. Mitchell advised members that, prior to the FY 2012-2013 budget hearings, she deducted $28,000 from the budget in anticipation that one of the lower-priced firms would be selected. By consent agenda, Mr. Bonar moved for approval of the Committee's recommendation, seconded by Mr. Hutchison and carried by a unanimous roll call vote (Mrs. Williams absent). Health Benefits Committee Report of April 18, 2012 Mr. Scott Koenig, City Manager, advised members that the Health Benefits Committee was created by Council in 2010 to evaluate possible options for long-term health care and to consider how the City could control the cost of long-term health care liabilities. He explained that members of the Committee included Council President Leary; Councilwoman Williams; the City Manager; the Human Resources Director; the Controller/Treasurer; representatives from the IUE-CWA, IBEW, and FOP; a representative for non-bargaining employees; and a retiree representative. As of November 29, 2011, the Committee had developed a number of alternatives, and members were requested to narrow those options to four (4) possibilities that could be sent to the actuary for cost evaluation. The options chosen were as follows: 1) Option #1 - City Contribution for a Preferred Provider Organization (PPO) Will Equal the Amount City Contributes for a Blue Cross/Blue Shield (BCBS) Health Maintenance Organization (HMO); 2) Alternative #1 - State Plan With Changes to Mirror State of Delaware - House Bill 81 Effective July 1, 2012; 3) Alternative #2 - City of Dover with Flat Percentage @ 15% for Under 65 and 10% for Over 65 of Total Premium; and 4) Alternative #3 - City of Dover with Flat Percentage @ 10% for Under 65 and 10% for Over 65 of Total Premium. Mr. Koenig stated that these options were sent to Mr. Scott Porter of Milliman, Inc., to perform an actuarial study, and Mr. Porter attended the April 18, 2012 Committee meeting and reviewed the potential financial impact of each of the options on long-term health care. During this discussion, a motion was made in Committee that the cost-sharing provisions and the medical plan in effect at the time of retirement remain in effect with no changes for all current retirees, and this passed by a roll call vote of eight (8) yes and one (1) no. This was the only formal motion that came from the Committee and the Committee has not met since. Mr. Koenig requested that the minutes of this

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 23 meeting be placed in the record as they outline the options that were discussed by the Committee. He stated his feeling that the Committee had no further work at this point. He advised members that he planned to make related recommendations regarding this matter during consideration of the following agenda item. Responding to Mr. Lynn, Mr. Koenig agreed that it would be prudent to retain the Health Care Committee regardless of the recommendations made on this matter during the budget hearings. He noted that health care is a changing issue and felt that Council might find it advantageous for the Committee to be available to consider health care issues in the future. Mr. Anderson requested that the results of the actuarial study performed by Milliman, Inc., be provided to members for their review. (Clerk’s Office Note: This information was subsequently provided to members by Mrs. Mitchell and was previously provided Health Benefits Committee members in the packet materials for the Committee meeting held on April 18, 2012.) In response to Mrs. Russell regarding the third option that was evaluated by the actuary, Mr. Koenig explained that the difference in percentages for individuals under and over age 65 related to the fact that those over 65 reverted to Medicare coverage. In addition, Mrs. Mitchell noted that the 10% figure was arrived at in an attempt to keep the cost neutral for individuals over age 65. Mr. Lester Blakeman, 206 Falmouth Way, stated that he was not a member of the Health Benefits Committee but attended all the Committee’s meetings. He advised members that individuals who are not represented by a union have no opportunity to negotiate a benefit that they might receive in exchange for increased health care payments. He expressed concern regarding the legality of retroactively changing benefits that were promised to employees upon hire. Mr. Blakeman provided members information containing excerpts from the minutes of the Health Benefits Committee Meeting held on April 18, 2012. Referring to Mrs. Hawkins’ statement in those minutes that a change in benefits in 2009 that increased benefits was not “fought” by employees, he noted that an automatic cost-of-living increase was eliminated for new hires in 1980 and in 1981 the City issued checks to employees who gave up their cost-of-living increases. Mr. Blakeman felt that this action established that benefits cannot be simply removed without the agreement of the employees and concurred with this approach from a moral standpoint. Mr. Blakeman believed that these concerns must be addressed before action on this matter is taken. He stated that he worked for the City from 1971 until 2004, believing that he would get 100% paid health care in retirement and, although he felt it was “fine” to tell new hires that they would not receive full health care coverage, he deemed it unfair to tell this to employees who have been working for years under the assumption that this was a benefit that they would receive. The Committee recommended acceptance of the Health Benefits Committee report dated April 18, 2012. By consent agenda, Mr. Bonar moved for approval of the Committee's recommendation, seconded by Mr. Hutchison and carried by a unanimous roll call vote (Mrs. Williams absent). Proposed 15% Healthcare Premium Cost Sharing Arrangement - Non-Bargaining Only Mr. Leary noted the receipt of correspondence from Mrs. Pattee Luppino, Electric Department, dated May 25, 2012 regarding the Proposed 15% Healthcare Premium Cost Sharing Arrangement.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 24 Mr. Scott Koenig, City Manager, stated that the Fiscal Year 2012-2013 budget expense for health care coverage for all active City employees is $3,195,200. In an attempt to offset and manage the rising cost of health care coverage, the City Manager’s proposed Fiscal Year 2012-2013 Operating Budget includes a 15% across-the-board cost sharing proposal for all employees. The budget proposal states that, beginning July 1, 2012, all employees would contribute 15% of the health care premium for the specific plan and tier which they select. The employees who are covered by collective bargaining agreements would fall under the terms of those negotiated contracts once the negotiations are concluded. City Council has direct responsibility for the non-bargaining employees; therefore, the City Manager put forth this proposal for Council’s consideration. Currently, individual coverage is provided at no cost to employees and 25% of dependent coverage is paid by the employee and 75% by the City. Based upon the health coverage rates for Fiscal Year 2012-2013 and the health care enrollment schedule as of January 2012, the projected annual savings resulting from the implementation of a 15% across-the-board cost sharing arrangement for all non-bargaining employees was estimated at approximately $66,500. Once implemented, the 15% cost sharing contribution would follow the non-bargaining employee into retirement. To clarify, Mr. Koenig provided the example of a non-bargaining employee who begins contributing 15% of the total monthly health insurance coverage premium on July 1, 2012 and elects to retire on December 1, 2012. The employee would continue to pay 15% of the total monthly health insurance premium throughout retirement. This recommendation would not affect anyone who is considered a non-bargaining retiree as of June 30, 2012. Mr. Koenig stated that the maximum impact of the proposal would be $92.93 for employees who select the employee only tier of the Preferred Provider Option (PPO) plan and that employees who have selected the family tier of any of the plans would see a slight decrease in monthly premiums. Mr. Koenig reviewed the Non-Bargaining Health Insurance Analysis and noted that the Draft 2012-2013 Budget was prepared based on this recommendation. During the City Council Meeting held on January 12, 2009, Council considered benefit parity between non-bargaining and union employees. At that time, Council approved certain enhanced benefits for non-bargaining employees while retaining current practices for other employee groups. Mr. Anderson questioned the effect that the current proposal would have on the doctrine of benefit parity between all City employees that was previously adopted by Council. Responding, Mr. Koenig indicated that this proposal would offset the doctrine of parity; however, he did not feel that true parity existed across all City units. He felt that the parity proposal that was brought forth previously had specific provisions. He noted that the current proposal could change parity going forward; however, the parity clause was previously changed at the discretion of Council. Responding to Mr. Anderson, Mr. Koenig was unsure if the proposal would save more money than capping the City’s 100% contribution at the level required to provide health coverage through a Health Maintenance Organization (HMO) and allowing employees to choose to obtain additional coverage at their own expense; however, he stated his desire to develop a recommendation that was easy to communicate to Council and, in his opinion, treated all tiers equally. He indicated his expectation that, over an approximately 25-year career, many employees would progress through the various tiers as they move through their careers, and under this proposal each tier would be treated equally. Although he felt that this was not a perfect solution, he explained that time was granted to discuss other options at the Committee level; however, no recommendation of this type came out of the Health Benefits Committee because all the bargaining units and groups were interested in trying

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 25 to maintain the status quo. Mr. Koenig stated that the City has a major financial issue and this was not an easy recommendation to make; however, it was his desire to get everyone involved in the health care discussion and decision because he believed that health care coverage would no longer be a benefit covered 100% by the City of Dover. He acknowledged that he expected many individuals to disagree with his position. In response to Mr. Anderson, Mr. Koenig stated that, although he had not performed specific research, he felt that coverage such as that currently provided by the City would be an exception to coverage available in the market. He felt that the 15% cost-sharing proposal was a fair solution, given the economic constraints of the City and funds required to maintain a very good health care plan. Mr. Anderson noted that he had requested a copy of the actuarial report that provided financial information regarding various health care options and was reviewed by the Health Benefits Committee. He questioned if a decision on the proposal could be postponed until the report could be reviewed by members to determine which options would save more money in the future. Mrs. Mitchell advised members that a summary of the actuarial results could be viewed in the “Future Retirees Only” column of the letter dated March 27, 2012 from Milliman, Inc., regarding the Cost Sharing Options Model for Retiree Health Benefits – Update for Future Retirees. Responding to Mrs. Russell, Mr. Koenig stated that when City employees are hired, they typically receive a City of Dover Employee Handbook that reflects information regarding health care coverage; however, it was his opinion that the Handbook was not a “contract for life.” He stated that he believed that the current Handbook states that the cost-sharing arrangement for dependent coverage is shared by the City (75%) and the employee (25%). He stated that the Handbook has undergone various changes throughout the years. In response to Mrs. Russell, Mr. Koenig stated that his recommendation for cost sharing was based on the best information available and he had no knowledge of any pre-existing document that would present a challenge to the proposal. Mr. Lynn stated he was opposed to this proposal and requested that he be “walked through the decision-making matrix” as to how this option was chosen compared to the other options presented by the actuary. Mr. Koenig stated that discussions on the matter as it related to retirees was fairly unanimous. He explained his perception that when Council considers health care, the entire dynamic of the discussion alters when retirees are considered because there are retirees who retired more than 20 years ago who may not be able to afford changes to their health care. Mr. Koenig personally agreed with excluding retirees from the discussion for that reason; however, he indicated that excluding retirees would place a greater financial burden on active employees. Mr. Koenig advised members that he felt he had to draw “a line in the sand” to prepare the budget when considering three (3) bargaining units and non-bargaining employees. He noted that the draft proposed budget includes a potential tax increase, potential layoffs, and potential fee increases. He stated that the recommendation was made in order to gain control over certain parts of the expenses. He did not feel that 15% was extravagant and that it seemed justifiable “across the board.”

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 26 Mr. Lynn stated that he opposed the proposal for a number of reasons. He stated he was unsure that this was the most advantageous option and also felt it would leave non-bargaining employees with no representation or bargaining position to enable them to come forward and express their points of view. He was concerned that it would open the floodgates for retirees who would want to leave before the June 30, 2012 deadline, and the next set of municipal meetings would be occupied with filling critical positions, leaving the City with an inexperienced workforce. Mr. Lynn was unsure of the City’s ability to recruit new talent, especially single people who would be most affected financially by the proposal. He expressed his concern about the estoppel detrimental reliance argument, noting that employees who have been with the City for many years relied on the statement in the Employee Handbook that their health care would always be paid for, especially those approaching the end of their careers who are not yet eligible for retirement. Mr. Lynn felt there was a fundamental fairness issue that “smacks of inequity” and that this proposal would have a negative impact on morale that is “already bad throughout the City.” Mr. Koenig stated that a number of those employees who select single coverage are married and have spouses who have their own health care coverage, with children carried on the spouse’ plan. Responding to Mr. Perza, Mrs. Mitchell stated that the State of Delaware has recently changed their coverage and that all employees will contribute to health care costs beginning on July 1, 2012, with specific contributions for coverage depending on options selected. She noted that coverage similar to the State’s was the second option costed out by the City’s actuary. Mr. Hare indicated that, as a State pensioner, he contributes to his health care coverage and that recent increases have been implemented by the State, with more to occur in July 2012. He felt that perhaps different levels of health care coverage payments should be required for retirees depending upon date of retirement. He also suggested that if the City participates in the State health care plan, employee contributions should follow that model; if State retirees receive a pension increase, City of Dover pensioners should get an increase; if active State employees receive a salary increase, City of Dover employees should get an increase (noting that, under this scenario, City employees would have received no increase in 2007, 2008, 2009, and 2010). He stated that action must be taken since costs are increasing. In addition, he believed that former employees who have been retired for many years and have not had pension increases for the last three (3) to five (5) years should receive an increase. Mr. Leary invited those present who wished to speak on this topic to come forward to present their comments in order of their signature placement on the Speaker Sign-In Sheet. He cautioned members that, due to the number of signatures on the list, time constraints would likely prohibit all those present from speaking. Ms. Christina Kober, 343 Orchard Grove Drive, (Dover Police Department), read the following statement into the record: “My name is Christina Kober and I reside at 343 Orchard Grove Drive in Camden, Delaware. Good evening. Thank you for allowing me this opportunity to speak regarding health insurance cost sharing for non-bargaining employees. I am a part of a group of the non-bargaining employees. I accepted employment with the City of Dover for several reasons, one of which was the health benefits. I have been a dedicated and loyal City of Dover employee for 23

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 27 years. I would have never imagined at this point of my career, that I would continuously be in front of City Council asking for my voice to be heard. Once again, I choose to take this opportunity to speak in hopes that you will listen and value my opinion. The city budget for 2013 will soon be discussed and voted on; once again all non bargaining employees will receive no pay increase. Although, I understand that the City of Dover has tough challenges to meet, the constraints put on non-bargaining employees over the past three years is equally as hard. On May 10th, 2012, City Manager Koenig conducted a meeting to inform non-bargaining members of his decision to recommend to City Council a 15% employee cost share for health insurance. The timing of this meeting left non-bargaining members with no time to financially prepare for the decrease in salary. This decision not only affects the employees but their families are impacted on a financial and emotional level as well. The employee cost sharing is neither equal nor balanced. For example: On the proposed plan, an employee with no dependents on the Blue Cross Blue Shield PPO coverage would now pay $ 92.92, while at the same time, an employee on the family coverage would actually save $ 5.42. Again, this is neither equal nor balanced. Let me read the critical success factors from the City of Dover Vision, Mission and Success Factors statement. The following factors are determined to be critical in meeting the overall goals and mission of the City of Dover. Without them, the success of the program would be in jeopardy. And I quote “without them”. Customer satisfaction: Regardless of what is done, if at the end of the day our customers are not satisfied, then the mission and goals have failed. Customer satisfaction was determined to be the overall base strategy. Employee satisfaction: It is through our employees that our services are provided to our customers. Only if our employees are satisfied with being a part of the organization will they provide services in a manner that accomplishes the vision, mission and goals. You may not be aware but morale is indeed at an all time low. At this point, a 23 year veteran, I feel devalued. Thank you for your time and consideration in this important matter.” Ms. Kober indicated that she also wished to submit a letter dated May 29, 2012 into the record on behalf of a group of non-bargaining employees in regard to the health care cost-sharing proposal. Mr. Lester Blakeman, 209 Falmouth Way, (City of Dover retiree from the Electric Department) provided members information containing excerpts from a variety of City documents related to health care coverage. He stated that Employee Handbooks from 1984 and 2004 indicate that the City paid 100% of healthcare coverage expenses for the employee and 50% for families; however, he noted that in 2004 the City’s contribution for family coverage increased to 75% by action of Council. He felt that Employee Handbooks have been consistent on this matter over time, stating that he also had a 1976 Employee Handbook that contains provisions for 100% coverage for employees and 50% for family coverage.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 28 Mr. Blakeman circulated a City of Dover Employee Handbook which he stated was in effect in 1976 to members for their review, and Mr. Lynn requested that copies of the pertinent section of this Handbook be provided to members. (Clerk’s Office Note: This information was provided to members subsequent to the meeting.) Mr. Blakeman stated that the minutes from the Legislative, Finance, and Administration Committee Meeting held on December 12, 2005 reflect adoption of a resolution to establish a special fund for post-retirement benefits in accordance with new requirements of the General Accounting Standards Board (GASB). Mr. Blakeman felt it was unfair to resolve the problem of meeting GASB requirements by reducing employee benefits. Mr. Steve Enss, 244 Enss Road (Electric Department), read the following statement into the record: “My Name is Steve Enss. I have worked for the City of Dover Electric department for 23 years. I know you have received some letters from my co-workers in reference to the Healthcare cost sharing; however I chose to speak to you directly. I chose to invest my career with the city of Dover in order to receive the benefits in which they offered along with a fair salary. I began my career with the city of Dover making less than I was making with my original job. My original job did not offer the benefits equal to Dover. After getting 15 years' experience in several positions with the electric department I was offered jobs multiple times with neighboring electric utilities for substantial greater salaries. The so called "Golden Handcuffs" was the best thing the city could have had. I chose to stay in order to keep the benefits that I had earned. The city benefitted by keeping an experienced employee. I have been part of a team rebuilding an aging electric system to one of the most reliable electric companies in the Mid Atlantic. I would put our system up against any other electric company for reliability at any time. I do understand how the current economy is affecting the City. It has affected everyone the same. Increased cost for gasoline, food and other services. My county taxes have increased, my school taxes have increased. I have not been able to reduce the cost for services that are provided to me such as Phone, Electric, TV and trash. I have had to find alternatives to reduce my budget strains; such as not going to the movies, dinner and traveling. Just as I can't reduce the cost of services I'm provided, I don't believe the city should reduce the cost for services the employees provide to the citizens of Dover and I ask that the city look at other alternatives such as I have.” Noting that there was insufficient time to hear from all those who had expressed a desire to speak on this matter by signing the Speaker Sign-In Sheet, Council President Leary inquired if any of these individuals wished to present information that was different in nature from that already presented. Mr. David Giglio, 165 Merion Road (Dover Public Library), stated that he had worked for the City since 1995 and had reviewed the structure of the proposed cost-sharing proposal in light of other movements around the country where other public employees have been asked to contribute. He indicated that he believed the time had passed to ask employees to contribute something, acknowledging the City’s financial constraints, lack of salary increases for several years, and short

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 29 staffing at the Library and other City departments. Mr. Giglio felt that the City’s current plan, which offers 100% employee coverage and 75% dependent coverage, was very generous compared to other places where he had worked and that an employee contribution should be considered, noting that sacrifices must be made. Mr. Giglio did not object to the idea that non-bargaining employees were being asked to “lead the way;” however, he objected to the current plan. As a taxpayer, he stated his lack of understanding that some employees with individual coverage were being asked to contribute an additional $92 contribution, whereas some others with family coverage would pay approximately $5 less for coverage. He stated that, as a taxpayer, he was unable to understand that the City had the money to decrease the payment for those with dependents. (Clerk’s Office Note: Due to time constraints, Mr. Richard Gardner, 233 Squawigm Road (Electric Department) was unable to provide comment; however, subsequent to the meeting, members were provided a statement related to proposed healthcare cost sharing. Mr. Lynn moved to reject the proposed 15% healthcare premium cost-sharing arrangement for non-bargaining employees. The motion failed due to the lack of a second. The Committee recommended that the proposed 15% healthcare premium cost-sharing arrangement for non-bargaining employees be referred back to staff for further evaluation. By consent agenda, Mr. Bonar moved for approval of the Committee's recommendation, seconded by Mr. Hutchison and carried by a unanimous roll call vote (Mrs. Williams absent). Proposed Ordinance #2012-10 - Amending Chapter 1 - General Provisions, Section 1-13 - Denial of Permits for Failure to Comply with Requirements for Payment, Actions, or Filings (Clean Hands) Due to time constraints, by unanimous consent this item was deferred for consideration at a subsequent meeting. By consent agenda, Mr. Bonar moved for acceptance of the Committee's report, seconded by Mr. Hutchison and carried by a unanimous roll call vote (Mrs. Williams absent). MONTHLY REPORTS - APRIL 2012 By motion of Mr. Bonar, seconded by Mr. Hutchison, the following monthly reports were accepted by consent agenda: Budget Chief of Police City Assessor City Manager City Planner Dover Fire Department Capital Investment Plan (CIP) EVALUATION OF BIDS - LEPORE ROAD PUMP STATION REPLACEMENT The FY 2011 Capital Investment Plan (CIP) for the Public Utilities Wastewater Management Division included a project to replace the existing wet well/dry well submersible pump station with a vacuum primed capsular Smith and Loveless station on Lepore Road. The station was originally installed in 1970 and is located along Lepore Road, approximately 350 feet east of State Street. The existing pump station is equipped with two (2), seven and one-half (7.5) HP pumps and has an

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 30 existing pump rate of 400 gallons per minute (GPM). The new package pump station will be mounted on top of the existing wet well and will be equipped with two (2), seven and one-half (7.5) HP pumps capable of a discharge rate of 400 GPM The new Lepore Road Pump Station will improve the City's wastewater system by replacing an older antiquated station at the location. The new station will also be more reliable and energy efficient. The bid package was advertised to the public as an Invitation to Bid in accordance with the City's purchasing policy by the City's Purchasing Agent under Bid #12-0033WW. The sealed bids were opened on Wednesday, May 22, 2012. Brandywine Construction Company, Inc., of New Castle, Delaware submitted a bid in the amount of $340,000 for the project. The Brandywine Construction Company, Inc., bid package was reviewed by staff and found to be free of math errors and/or irregularities. In addition, the contractor's qualification information, which included a list of recently completed projects similar in scope, as well as a financial statement, were all found to be adequate. It is staff's opinion that the bid represents fair market value and their qualifications are in accordance with the requirements of this project. Staff recommended awarding a construction contract to Brandywine Construction Company, Inc. in the amount of $340,000 for the Lepore Road Pump Station Replacement Project. Responding to Mr. Perza, Mr. Scott Koenig, City Manager, stated that it was unusual to receive only one (1) bid; however, several of the local contractors were currently busy with other projects. Mrs. Mitchell, Controller/Treasurer, advised that rebidding would cause a delay that could jeopardize the funding for the project. Mr. Bonar moved for approval of staff’s recommendation, seconded by Mr. Anderson and carried by a roll call vote of seven (7) yes and one (1) no (Mr. Perza) (Mrs. Williams absent). REAPPOINTMENT - RECOMMENDED BY MAYOR CAREY - DOVER PUBLIC LIBRARY COMMISSION - EDWARD J. HYNES - FIVE (5) YEAR TERM TO EXPIRE JUNE 16, 2017 Mayor Carey recommended the reappointment of Edward J. Hynes to serve on the Dover Public Library Commission for a five (5) year term to expire June 16, 2017. By consent agenda, Mr. Bonar moved for approval of the reappointment of Edward J. Hynes to the Dover Public Library Commission, as recommended by Mayor Carey, seconded by Mr. Hutchison and carried by a unanimous roll call vote (Mrs. Williams absent). FIRST READING - PROPOSED ORDINANCE #2012-18 - 2012/2013 CITY OF DOVER BUDGET Council President Leary reminded the public that copies of the proposed ordinance were available at the entrance of the Council Chambers or could be obtained from the City Clerk's Office. Final action by Council on the proposed ordinances was scheduled for the Council Meeting of June 25, 2012.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 31 Mr. Scott Koenig, City Manager, advised members that the draft budget required a transfer from the Future Capacity Reserve in the amount of $633,300 to balance the budget. The budget also included the reinstallation of the Economic Development Office, full funding for both the African American Festival and the Fourth of July Celebration, and a payment to the Downtown Dover Partnership of $180,000. He noted that no tax or fee increases were proposed and a reduction in the electric rates, as presented by Mr. Ted Kelly, Burns & McDonnell, at the last meeting, was included. Mrs. Mitchell advised members that Section 510 of the Electric Bond Resolution dated August 24, 2004 states the following: Section 510. Application of Moneys in the Improvement and Extension Fund. Except as hereinafter provided in this Section and in Section 706 of this Resolution, or except in case of an emergency caused by some extraordinary occurrence, so characterized in a certificate signed by the City Manager and filed with the City Treasurer, and an insufficiency of moneys to the credit of the Revenue Fund to meet such emergency, moneys held for the credit of the Improvement and Extension Fund shall be disbursed only for paying all or a part of (i) the cost of unusual or extraordinary maintenance or repairs, renewals or replacements, (ii) the cost of acquiring, installing or replacing equipment, (iii) the cost of constructing extensions, additions or improvements to the Electric System, or (iv) the cost of engineering expenses relating to the foregoing. Payments from the Improvement and Extension Fund, except the withdrawals which the City is authorized to make as hereinafter provided in this Section, shall be made in the same manner as payments from the Revenue Fund under the provisions of Section 506 of this Article in so far as such provisions shall be applicable. If at any time the moneys held for the credit of the Bond Service Account and the Reserve Account shall be insufficient for the purpose of paying the interest on and the principal of the bonds as such interest and principal shall become due, then the City shall withdraw from the Improvement and Extension Fund and deposit to the credit of the Bond Service Account an amount sufficient to make up any such deficiency. Any moneys so withdrawn from the Improvement and Extension Fund and deposited to the credit of the Bond Service Account shall be restored from the first available moneys in the Revenue Fund. Mrs. Mitchell stated that she was unsure if the $633,300 could be taken from the Improvement and Extension Fund. She noted that she had requested an opinion from Bond Counsel. Mrs. Mitchell suggested, as an alternative, utilizing the economic hardship provision in the current policy for the General Fund to allow the reserve percentage to fall below 8% (to 6.3%) with the understanding that it would be replenished within three (3) years. Mr. Lynn stated that he was concerned with the alternative because it was “kicking the can” and incurring debt. He requested Mrs. Mitchell to pursue the idea of establishing a surcharge on the electric bill to fund the street lights out of the electric fund. Mr. Lynn stated that the proposal would put $985,000 back into the General Fund each year. Mrs. Mitchell stated that she was still waiting for an opinion from Bond Counsel regarding this proposal.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 32 Responding to Mr. Hare, Mrs. Mitchell stated that the Electric Fund transfer could be increased by $633,300; however, it could affect the proposed rate decrease for the customers. Mr. Anderson asked if setting the maximum of the reserve funds to a level that transferred the excess money back to the operating fundwould be a possibility. Mrs. Mitchell indicated that she would need an opinion from Bond Counsel on the uses of the Improvement and Extension Fund. Mr. Anderson stated that it is set based on future needs. Mr. Bonar stated that any action this year would add to the shortfall for next year and the year after. He noted that the shortfall for this year had been significantly reduced to a manageable level and it could be managed by being bold and taking bold steps. Mr. Anderson stated that the reduction in the electric rates would lend itself to making the sanitation department partially pay for itself. He felt that residents would still come out ahead on their bills with an increase in trash fees and a reduction in the electric rate. Mr. Hutchison stated that the City provides excellent trash service “at the cheapest rates anywhere.” The City Manager has recommended an increase in the fee from $11.70 to $17 per month which would generate $487,000. Mr. Bonar stated that a one (1) cent tax increase would raise $314,000 for this year and a two (2) cent tax increase would raise $628,000, which would address the budget shortfall. He noted that the trash fee could not be written off on residents’ taxes. Mr. Hare stated that the City Manager also recommended eliminating the Economic Development Office, giving the Downtown Dover Partnership $80,000 instead of $180,000, and cutting the funding for the African American Festival and the Fourth of July Celebration by 50%. Mr. Hutchison moved to increase the trash fee from $11.70 per month to $17.00 per month, seconded by Mr. Anderson. Mr. Leary suggested waiting for the response from Bond Counsel before amending the First Reading of the Budget Ordinance. Mr. Lynn suggested giving Bond Counsel a deadline for the response. Mr. Anderson moved to lay the motion on the table, seconded by Mr. Hare and carried, with Mr. Bonar voting no. In accordance with Section 1-9 of the Dover Code, Council acknowledged the First Reading of the Ordinance Amendment as read by the City Clerk, by title only, as follows: Ordinance #2012-18 - 2012/2013 City of Dover Budget COUNCIL MEMBERS ANNOUNCEMENTS Mr. Anderson announced that the First Southern Baptist Church would be providing a free meal and concert on the Fourth of July. Mrs. Russell reminded everyone that the African American Festival would be held on Saturday, June 23, 2012.

CITY COUNCIL MEETING OF JUNE 11, 2012 PAGE 33 Mr. Hare moved for adjournment into the Special Council Meeting, seconded by Mr. Lynn and unanimously carried. Meeting Adjourned at 8:52 P.M. TRACI A. McDOWELL CITY CLERK All orders, ordinances, and resolutions adopted by City Council during their Regular Meeting of June 11, 2012 are hereby approved. CARLETON E. CAREY, SR. MAYOR /TM S:\AGENDAS-MINUTES-PACKETS\Council-Minutes\2012\06-11-2012.wpd Exhibits Attached to Original Minutes Exhibit #1 - Presentation - Violation of Dangerous Building Ordinance - 14 South Queen Street Exhibit #2 - Presentation - Violation of Dangerous Building Ordinance - 118 North Ann Avenue

ACTION FORM PROCEEDING: City Council DEPARTMENT OF ORIGIN: Planning & Inspections DATE SUBMITTED: June 13, 2012 PREPARED BY: Tim Taraila, Code Enforcement Supervisor; Ann Marie Townshend, AICP, Director of Planning and Community Development SUBJECT: 171 Orchard Ave, Dover, Delaware – Violation of Dangerous Building Ordinance REFERENCE: Chapter 22, Article XI – Dangerous Buildings, Sec. 22-385 - Hearing before Council and Chapter 22, Article XI - Dangerous Buildings Case # 10-2434 RELATED PROJECT: N/A APPROVALS: N/A EXHIBITS: PowerPoint Presentation and File Photos to be presented at the Council meeting. EXPENDITURE REQUIRED: Preliminary estimate is $10,000-15,000. AMOUNT BUDGETED: $150,000 Budgeted for all demolitions Citywide in the DRAFT FY-2013 Budget FUNDING SOURCE (Dept./Page in CIP & Budget): 110-1600-534-30-33. TIMETABLE: As soon as possible. RECOMMENDED ACTION: 1. Declare this building and all accessory structures on this property dangerous. 2. Order the property repaired or demolished by July 25, 2012 by the owner or equity owner at their own risk. 3. Order the Building Inspector to cause the repair or demolition of the structures if not completed by the owner within 10 days of the date established by City Council. 4. Order the City Manager with the assistance of the City Solicitor to cause the cost of repairs or demolition to be charged against the land on which the building exists as a municipal lien or cause such cost to be added to the tax duplicate as an assessment, or to be levied as a special tax, or to be recovered in a suit at law against the owner. BACKGROUND AND ANALYSIS The property is owned by William W. Jarman. The property is a one story wood framed single family home. The dwelling was condemned as unfit for human habitation on 6/25/2010 due to the degree of damage to the structure from a fire that occurred on the night of 6/24/2010. Currently the structure is still vacant, with no utilities and in a serious state of disrepair.

ACTION FORM PROCEEDING: City Council DEPARTMENT OF ORIGIN: Planning & Inspections DATE SUBMITTED: June 13, 2012 PREPARED BY: Tim Taraila, Code Enforcement Supervisor; Ann Marie Townshend, AICP, Director of Planning and Community Development SUBJECT: 488 N East Ave, Dover, Delaware – Violation of Dangerous Building Ordinance REFERENCE: Chapter 22, Article XI – Dangerous Buildings, Sec. 22-385 - Hearing before Council and Chapter 22, Article XI - Dangerous Buildings Case # 09-2944 RELATED PROJECT: N/A APPROVALS: N/A EXHIBITS: PowerPoint Presentation and File Photos to be presented at the Council meeting. EXPENDITURE REQUIRED: Preliminary estimate is $10,000-15,000. AMOUNT BUDGETED: $150,000 Budgeted for all demolitions Citywide in the DRAFT FY-2013 Budget FUNDING SOURCE (Dept./Page in CIP & Budget): 110-1600-534-30-33. TIMETABLE: As soon as possible. RECOMMENDED ACTION: 1. Declare this building and all accessory structures on this property dangerous. 2. Order the property repaired or demolished by July 25, 2012 by the owner or equity owner at their own risk. 3. Order the Building Inspector to cause the repair or demolition of the structures if not completed by the owner within 10 days of the date established by City Council. 4. Order the City Manager with the assistance of the City Solicitor to cause the cost of repairs or demolition to be charged against the land on which the building exists as a municipal lien or cause such cost to be added to the tax duplicate as an assessment, or to be levied as a special tax, or to be recovered in a suit at law against the owner. BACKGROUND AND ANALYSIS The property is owned by Jeffery E. Garrison. The property is a one story wood framed single family home. The dwelling was condemned as unfit for human habitation due to no electrical service and to the amount of interior water damage caused from numerous roof leaks. The dwelling was vacated in March of 2010 and is full mold and mildew. Currently the structure is still vacant, with no utilities and in a serious state of disrepair.

ACTION FORM PROCEEDING: City Council DEPARTMENT OF ORIGIN: Planning & Inspections DATE SUBMITTED: June 13, 2012 PREPARED BY: Tim Taraila, Code Enforcement Supervisor; Ann Marie Townshend, AICP, Director of Planning and Community Development SUBJECT: 827 Townsend Blvd, Dover, Delaware – Violation of Dangerous Building Ordinance REFERENCE: Chapter 22, Article XI – Dangerous Buildings, Sec. 22-385 - Hearing before Council and Chapter 22, Article XI - Dangerous Buildings Case # 11-2627 RELATED PROJECT: N/A APPROVALS: N/A EXHIBITS: PowerPoint Presentation and File Photos to be presented at the Council meeting. EXPENDITURE REQUIRED: Preliminary estimate is $10,000-15,000. AMOUNT BUDGETED: $150,000 Budgeted for all demolitions Citywide in the DRAFT FY-2013 Budget FUNDING SOURCE (Dept./Page in CIP & Budget): 110-1600-534-30-33. TIMETABLE: As soon as possible. RECOMMENDED ACTION: 1. Declare the pool on this property dangerous. 2. Order the pool repaired or demolished by July 25, 2012 by the owner or equity owner at their own risk. 3. Order the Building Inspector to cause the repair or demolition of the pool if not completed by the owner within 10 days of the date established by City Council. 4. Order the City Manager with the assistance of the City Solicitor to cause the cost of repairs or demolition to be charged against the land on which the pool exists as a municipal lien or cause such cost to be added to the tax duplicate as an assessment, or to be levied as a special tax, or to be recovered in a suit at law against the owner. BACKGROUND AND ANALYSIS The property is owned by Jennifer E. Brown. The pool is an in-ground oval concrete pool. Currently the pool is not being maintained, is not covered and has stagnant water within the pool causing insanitary conditions. The pool has no operational pump or filtration system.

Office of City Assessor June 2012

City Council’s Board of Assessment Appeals May 22, 2012 The Board of Assessment Appeals was brought to order by Chairman Garfinkel. Board Members present were: Chairman William Garfinkel, James Welsh, James Galvin and Tom Burns. Staff present was City Assessor Cheryl Russell, Fred Townsend, Legal Counsel to the Assessor and Administrative Assistant Annette Hart. Exemptions 2. A. 1. Union Missionary Baptist Church Location: Lot 8 Forest St. – ED05-076.11-01-09.00 BACKGROUND AND ANALYSIS An appeal form was submitted to the Assessor’s Office. This property was purchased in January 2006 This is a vacant “grassy” area located next to another taxable property owned by the Church. The application states that this property is being used for overflow parking as needed. Per code for zoning & chapter 106, parking on the grass is not permitted. Since this parcel is not “legally” being utilized for its intended use, we recommend denial of the request. Exemption Request $30,600 Recommended Action: Staff recommends that the request for exemption be denied Ms. Russell explained to the board that the Assessor’s recommendation was to deny the application, because the lot is used as overflow parking as per the application. She told the board that she contacted the City Planning Office and was told that per zoning code Section 106-130, parking on grass is not permitted. Mr. Moore, who represented the Union Missionary Baptist Church, told the board that the properties next to the lot, where exempt and are being used for parking as well. Ms. Russell explained that one of her goals was to look at all of the exempt properties to make sure that they are in compliance. 1

Mr. Moore explained that he was under the impression, that there was no problem parking on these lots, and explained to the board that there was not a lot of room for parking on the road. Mr. Burns asked Mr. Moore to explain the GIS Map provided, he asked about the alley and 922 Forest St., which is not exempt. He also told Mr. Moore that he does not feel comfortable to grant the exemption because the 922 Forest St. was not tax exempt. Mr. Burns suggested that Mr. Moore have the alley abandoned, which runs between the properties, this would give him a better chance to get the exemption for the Lot in the future. Mr. Moore explained that he had tried to do just that, but one of the property owners would not agree to the alley abandonment. Chairman Garfield closed the hearing and opened up for deliberation. Mr. Burns made the motion to deny the application. Mr. Galvin seconded the motion. Chairman Garfinkel stated for the record that he two feels the exemption should not be granted based on the information provided. The motion carried 4-0 Ms. Russell explained to the applicant, that the City Council was the final decision and that a letter with the date of the Council Hearing would be mailed to them. 2. B.1. Second Baptist Church Location: 136 S. Queen St. – ED05-076.12-02-71.00 BACKGROUND AND ANALYSIS An appeal form was submitted to the Assessor’s Office. This property is being used for storage. The assessor’s office noticed that the utilities on this property were low. We checked with Inspections and Planning to make sure the property was not vacant. The inspector was told that the property was being used for storage. Per the City Planner, this is NOT permitted. Exemption Request (2011 & future years) $120,000 2

Recommended Action: Staff recommends that the request for exemption be denied. Mr. Bagley was present to represent Second Baptist Church and explained to the board that the building was used for functions as bible school, warming food to be served out of the church and other church projects. The Assessor recommended that the application be denied because the house had been on the city’s vacant list. She was told by an inspector that the house was used for storage, which is not allowed under the current zoning. Mr. Galvin pointed to the check list on the application and asked if the organization had the 501(c) 3, which they did not. Mr. Galvin asked if the organization would qualify for the exemption without the 501(c) 3. Mr. Townsend told the board that the exemption can be obtained without the 501(c) 3. Mr. Burns asked what the building was used for. Mr. Bagley acknowledged that the building is used for storage but is also used for the programs mentioned earlier, if money is available. He told the board that organs are stored in the building and are there for the purpose of teaching the children. Mr. Burns asked if the property was deed as an exempt property, which it was but the property has been taxed because nobody had ever filed for the exemption. He also asked if the building meets the required code which would allow children to be taught. In Mr. Burns’ opinion, should the church decide to bring the building up to code to where it can be used to teach children how to play the organ, they would probably not have any problems getting the exemption. Mr. Bagley agreed and told the board that if the church planned to use the property to teach the children, he would make sure that the building would be up to code. Mr. Burns told the board that he would not feel comfortable granting the exemption based on the use and condition of the building. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Welsh made the motion, based on the information provided, to deny the request for exemption, which was seconded by Mr. Burns, who also explained that due to the current use and testimony he would not recommend an exempt status. Mr. Galvin and Chairman Garfinkel concurred with the other two members. Motion carried 4-0. 3

Mr. Bagley wanted to state for the record, that he is going to speak to the city’s planning department to find out what is required to meet the requirements. Ms. Russell explained to the applicant, that the City Council was the final decision and that a letter with the date of the Council Hearing would be mailed to them. 2. C. 1. Chapter 850 Vietnam Veterans of America Location: 1549 Rear Forrest Ave. – ED05-076.05-01-10.00 BACKGROUND AND ANALYSIS An appeal form was submitted to the Assessor’s Office. This property is a wooded lot owned by the appellant and does not seem to be utilized by its intended use for exemption qualification. Exemption Request (2011 & future years) $43,400 Recommended Action: Recommend that the request for exemption be denied. Mr. Davis, Vice President and Mr. Schilling, Treasurer were present for the hearing. Mr. Davis explained that the property was a piece of vacant land and was donated to the organization by one of its members. The purpose of the land was to keep it in case the organization needed money for a memorial, it could be used as collateral. Mr. Davis explained that the property used to be open space for a development and cannot be built on. He went on to say that if he was not granted the exemption he would like the value of the property to be dropped. The Assessor recommended that the applications for exemption be denied, because the property does not seem to be utilized for its intended use for exemption qualifications. Ms. Russell also explained that the value could not be appealed at this time, because the timeline to appeal the value has passed. Mr. Townsend explained that the Board of Assessments will be looking at 2 criteria’s, one would be what the property would be used for in the future and if this will be consistent with the mission of the organization, this being a charitable mission. Mr. Townsend asked if the property is generating income and what the property is or will be used for. Mr. Davis explained to the board that the city has limited the organizations ability to use the 4

property by zoning it as a R20. He told the board that they will not build on the property but if the City would like for them to use the property as a picnic area, that they could do so. Mr. Townsend asked if this is a property being held by way of investment, which would disqualify the property from the exempt request. Mr. Galvin asked if the property was accessible from the road, which Mr. Davis concurred that it was. Mr. Galvin explained that if the property was larger than 20,000 square feet, which it would have to be according to the zoning it would be large enough to build a house on and could therefore be sold as a buildable lot. Mr. Davis wanted to state for the record that the property was a piece of land which the City had sold by accident. Once the city realized that the sold it back to the original owner. Mr. Davis explained that the lot used to be open space for the Marshcreek Development and could therefore not be built on. In Mr. Burns’ opinion this piece of open space was probably sold because the Home Owners Association failed to pay the taxes for the parcel at which time it probably was sold in a tax sale. Being the fact that it is a piece of open space, it cannot be built on. Mr. Galvin asked how the Home Owners Association could get tax exemption for the open spaces. Ms. Russell explained that the Association would have to file an application for the exemption and proof that the open space is used only by the Home Owners of the neighborhood. Mr. Galvin wanted to know what the purpose of the organization is. Mr. Davis went into the history of the organization and told the board that the purpose of the organization is to help and assist other Vietnam Veterans as well as all veterans. Mr. Galvin asked how this piece of property would help to further their mission. Mr. Davis told the board that they have not had the property for long and the organization does not know what to do with the property. Mr. Garfinkel pointed out that nothing has been done with the property and by the appellant stating that the property is being used as collateral would suggest the property is being held as an investment property. Mr. Galvin pointed out that according the state code the parcel could fall under investment property and would therefore not be able to be tax exempt. Mr. Davis pointed out that the lot is open space and that there will be no gains in utilizing the property, the organization could take children out there and teach them about the Vietnam War. 5

Mr. Burns pointed out that in his opinion the land was given to the organization by the owner to further the mission and asked if this would not qualify the property to be tax exempt. Mr. Townsend pointed out that there are two items one must look at to make sure that a tax emption would be appropriate, one of which would be if the properties use is consistent with the chartable purpose of the organization and then whether the property is held by way of investment. Mr. Townsend pointed out that it would be up to the organization to link the use for that property with the mission of the organization. Mr. Burns pointed out that the property does not fully qualify for the tax exempt status, but should be looked at from the valuation standpoint; he believes the assessed value for the piece of land to be too high. Mr. Galvin asked to look at the record plan to find out if that piece of land was dedicated for open space. Mr. Garfinkel made the suggestion to grant the exemption for one year and then go back to look at the property, he agrees that this seems to be a valuation question rather than a question for exemption. In Mr. Townsend opinion the board has come to the conclusion that the property is not being held by way of investment and that the organization has not settled on the use of the property yet. He also pointed out that the city could look at the use of the property year by year and could therefore withdraw the exempt status, should the property not be used to further the mission of the organization. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Burns summarized that the organization has recently been given this property but has not come up with a purpose for the land which could help their organization. He also pointed out that the property cannot be held as an investment because it cannot be built on. Mr. Burns went on to make the motion to accept the applicant request for one year. He pointed out that this will not be a temporary exemption, because all exemptions are looked at yearly. Mr. Galvin seconded the motion, he also made the recommendation the organization find the record plan which shows that the parcel is in fact open space. Ms. Russell pointed out that the exemption had been filed in the fall of 2011 and that the exemption would have to be granted for 2011 and 2012. Mr. Burns suggested to Mr. Davis that in one year he should have a better understanding of what the property will be used for. Chairman Garfinkel clarified that the organization would have to apply for the exemption for the tax year 2013. 6

Mr. Townsend pointed out that in 2013 the organization should receive a tax bill which should trigger the refilling for the exemption. Ms. Russell explained that there is not deadline for charitable organizations to file an application for exemption; this can be done any time during the year, but that she would prefer the exemption be filed during the month of April, 2013. That way they can be heard during the Board of Assessment Appeal hearing for that year. Motion carried 4-0 2. D.1. EJB Inc. Location: 327 Martin Street – ED05-077.10-01-48.00 BACKGROUND AND ANALYSIS An appeal form was submitted to the Assessor’s Office. There was a fire at this property last summer. The property owner is requesting an exempt status for this past July and in the future. At this time, the property is vacant and is going through the process of rebuilding. My recommendation is that the property be given exempt status for the billing cycle after the improvements receive the certificate of occupancy. Exemption Request 2011 Exemption Request 2012 Exemption Request (future) $420,800 $114,700 undetermined (114,700 + improvement value) Recommended Action: Recommend that the request for exemption be denied until improvements are complete. Mr. Boyles was present for the hearing. Mr. Boyles told the board that they filed for the exemption in 2011 after a fire destroyed the building. He told the board that they have been at this location for 20 years and are a licensed drug and alcohol abuse treatment facility with 10 beds. He mentioned that they are hoping to build the new facility with 18 beds. Ms. Russell explained that it was the City’s recommendation that the exemption would be denied until improvements have been completed. 7

Chairman Garfinkel asked Mr. Boyles to explain what EJB Inc. is. Mr. Boyles explained that EJB Inc. is a subsidiary of Serenity Place, where Serenity Place leases from EJB Inc. and the proceeds go back into the organization. Mr. Burns wanted to clarify the City’s recommendation that the city would accept the application once the building would be complete. He asked if the application would be denied this year, would they owe back taxes. Mr. Townsend asked how close the building was to completion. Mr. Boyles explained the lengthy process and went on to say that the estimated date of completion would be September of 2013. Chairman Garfinkel closed the hearing and opened for deliberation. Mr. Burns asked that based on the fact that the organization is charitable and the property is not held by way of investment, would the property, assuming there would be a structure, meet the qualifications for the exemption. Mr. Galvin made the motion to grant the exemption for 2011 and 2012 despite the unfortunate fire. Mr. Welsh seconded the motion. Mr. Burns wanted it to be known that he understands the lengthy approval period and agrees. Motion carried 4-0 Ms. Russell explained to the appellant the council has the final say and that a letter would be mailed with the date and time of that meeting. 2. E.1 House of Pride Inc. Location: 16 N New Street – ED05-076.08-05-22.00 BACKGROUND AND ANALYSIS An appeal form was submitted to the Assessor’s Office. This property was listed as an exempt property from July 2002 until July 2012. The exemption was revoked because the Conditional Use permits were revoked; therefore the property did not meet the qualifications for an exempt status with the City of Dover. Since the properties did not have the proper permits, they were no longer being used for the intended purpose of the exemption. 8

Exemption Request (2011 & future years) $75,800 Recommended Action: Recommend that the request for exemption be denied. Mr. Harris and Mrs. Dean, legal counsel, to House of Pride, were present for the hearing. Mrs. Dean explained to the board that all three properties up for exemption were owned and rented by the House of Pride and that all of the income goes to the House of Pride program to be used for the benefit of the organization. Ms. Russell told the board that it is the Assessor’s recommendation to deny the request for exemption. She told the board that the property had been receiving the exemption in the past, but the exemption had been revoked because it had no longer been used for the intended purpose. She also pointed to correspondence in the packet given to the board, from Mr. Rodriguez, city solicitor and a letter from Mrs. Dean regarding the revocation of the exemption. Mr. Townsend asked if Mrs. Dean was at the meeting to represent the organization, at which time Mrs. Dean explained that she also sits on the board of directors. Mr. Burns asked why the exemption was revoked. Ms. Russell explained that the planning director as well as the city manager and solicitor met with the Assessor to discuss the revocation of the exemption because the House of Pride did not have the proper rental permits for 16 S New Street as well as 102 S New Street. Mrs. Dean explained that the conditional use was for the participants of the House of Pride to be able to live there; the other properties were used as regular rentals, where the income is used for the program. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Burns stated that because the use of the properties did not meet the legal requirement and based on the letter from Mr. Rodriguez that he would make the motion to deny the application for exemption. Chairman Garfinkel seconded the motion based on the information provided. In Mr. Galvin’s opinion the properties are not used for their intended purpose and the organization was not able to disclose how much of the income goes to the House of Pride. Motion passed 4-0 Chairman Garfinkel explained to the appellant the council has the final say and that a letter would be mailed with the date and time of that meeting. Mrs. Dean pointed out that the other two upcoming properties fall und the same scenario. 9

2. E.3 House of Pride Location: 115 S New Street – ED05-077.09-01-43.00 BACKGROUND AND ANALYSIS An appeal form was submitted to the Assessor’s Office. This property was purchased in November 2008. To our knowledge, this property has always been a market rental. The Assessor’s Office does not have any official documentation to confirm or deny this information. Exemption Request $186,900 Recommended Action: Recommend that the Board of Assessment Appeals Review Information Chairman Garfinkel asked Mrs. Dean to explain the purpose of the property. Mrs. Dean explained that this property is used for rental property and that the renters have no connection to the organization. Chairman Garfield closed the hearing and opened for deliberation. Mr. Burns made the motion to deny the request for exemption based on the testimony and information provided by the city and from the city solicitor that this property does not meet the requirements. Motion carried 4-0 2. E.2. House of Pride Location: 102 S New Street – ED05-077.09-01-35.00 BACKGROUND AND ANALYSIS An appeal form was submitted to the Assessor’s Office. This property was listed as an exempt property from July 2002 until July 2012. The exemption was revoked because the Conditional Use permits were revoked; therefore the property did not meet the qualifications for an exempt status with the City of Dover. Since the properties did not 10

have the proper permits, they were no longer being used for the intended purpose of the exemption. Exemption Request (2011 & future years) $137,600 The Assessor recommended the application be denied. Mrs. Dean explained that this property is used for rental property and that the renters have no connection to the organization. Chairman Garfinkel closed the hearing and opened for deliberations. Mr. Galvin made the motion to deny the exemption based on the testimony provided. Mr. Burns seconded the motion based on the information provided. Motion carried 4-0 11

PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE The Parks, Recreation, and Community Enhancement Committee Meeting was held on June 11, 2012, at 12:00 noon, with Chairwoman Russell presiding. Members present were Mr. Anderson (arrived at 12:08 p.m.), Mr. Bonar, Mrs. Horsey, and Mr. Lewis (departed at 12:40 p.m.). Mr. Perza was also present. AGENDA ADDITIONS/DELETIONS Mrs. Horsey moved for approval of the agenda, as presented, seconded by Mr. Bonar and unanimously carried. Proposed Amendment to 2011 Community Development Block Grant Action Plan Mrs. Tracey Harvey, Planner I, reminded members that the 2011 CDBG Action Plan included an allocation in the amount of $60,081 for the City of Dover Streets Program to repave South New Street. She noted that the funds had not been expended during the program year because of the need to replace a water line before the repaving of the street. Since Department of Housing and Urban Development (HUD) regulations require expenditure of funds in a timely manner, she stated that it would be feasible to reallocate the funding to other CDBG projects in order to ensure timely expenditure. Mrs. Harvey advised members that the Housing Rehabilitation Program incurred unexpected expenses during the program year and additional environmental testing must be completed to bring a home into compliance with HUD guidelines, at a projected cost of $2,500. In addition, a budget request for a chair lift to be installed in Council Chambers would make Council Chambers compliant with the American Disabilities Act (ADA) and satisfy the HUD requirement for all City buildings to be handicapped accessible. The cost estimate to install the chair lift in Council Chambers was $19,214, with an existing balance of $3,931.76 in the ADA line item account. Staff recommended that $20,000 be allocated to cover any additional expenses that might be required to complete this project. Mrs. Harvey explained that the remaining balance of $37,581 would be divided among the FY 2012 CDBG projects, excluding public service projects which are capped at 15%, bringing the remainder of projects close to their requested amounts, as follows: CDBG FY2012 funded amounts Increase Serenity Place $27,983 $ 2,017 Homeownership Assistance Program $30,000 $10,000 MHDC Homeowner Rehabilitation Program $40,000 $12,782 Elizabeth W. Murphey School $20,000 $12,782 Total $37,581 Staff recommended authorization to reallocate $60,081 in FY11 CDBG funding from the City of Dover Streets Program to provide funding for the aforementioned projects.

PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING OF JUNE 11, 2012 PAGE 2 Mr. Bonar moved to recommend that staff be authorized to reallocate $60,081 in FY11 CDBG funding from the City of Dover Streets Program to provide funding for the FY11 Housing Rehabilitation Program, American Disabilities Act (ADA) improvements to Council Chambers, and FY12 Community Development Block Grant (CDBG) projects, as presented, seconded by Mrs. Horsey and unanimously carried. Proposed Ordinance - #2012-13 - Amendment to Appendix B - Zoning, Article 5 - Supplementary Regulations, Section 4 - Supplementary Sign Regulations Mrs. Ann Marie Townsend, Director of Planning and Community Development, advised members that in January 2012, staff began meeting with members of the business community to discuss changes to the Zoning Ordinance. She stated that this group identified a number of areas where the Zoning Ordinance created impediments to business. The top priority identified was the Sign Regulations. She explained that since that time, monthly meetings have been held to work through proposed revisions to the Sign Regulations. As a result of these efforts, a draft ordinance has been developed that includes a combination of clarifications, simplification of the requirements, and significant relaxation of the regulations currently in place. Mrs. Townshend provided a brief summary of the proposed changes to the substance of the regulation. She noted that the proposed ordinance was the result of detailed discussion about how the regulations could be more business friendly, while still protecting the character of Dover and avoiding sign clutter that could contribute to driver safety concerns. She assured members that there were a number of concessions made by the Planning Office and the business representatives to ensure that the product achieved this delicate balance. In response to Mr. Lewis, Mrs. Townshend explained that the regulations would be applicable for any new sign permit and would not affect existing signs that may be non-compliant. Staff recommended that Proposed Ordinance #2012-13 - Amendment to Appendix B - Zoning, Article 5 - Supplementary Regulations, Section 4 - Supplementary Sign Regulations be forwarded to City Council for First Reading on June 25, 2012, that a Public Hearing be set before the Planning Commission on July 16, 2012, and that a Public Hearing and Final Reading be set before City Council on August 13, 2012. Mrs. Horsey moved for approval of staff’s recommendation, seconded by Mr. Anderson and unanimously carried. Proposed Ordinance - #2012-14 - Amendment to Appendix B - Zoning, Article 3 - District Regulations, Section 23 - Agricultural Zone (A) Mrs. Ann Marie Townsend, Director of Planning and Community Development, presented members with a proposed ordinance that would permit the sale of agricultural supplies and products, accessory to the agricultural use, within the A Zone (Agricultural) in Dover.

PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING OF JUNE 11, 2012 PAGE 3 Mr. Bonar advised members that the proposed ordinance was the result of a request of a constituent who desired to open a farm pole building with existing office and warehouse space available for the sales of agricultural products. The property was located on a farm that was currently within the farmland preservation zone. It was anticipated that the business would generate no more than six (6) to seven (7) vehicles per day. Staff recommended that Proposed Ordinance #2012-14 - Amendment to Appendix B - Zoning, Article 3 - District Regulations, Section 23 - Agricultural Zone (A) be forwarded to City Council for First Reading on June 25, 2012, that a Public Hearing be set before the Planning Commission on July 16, 2012, and that a Public Hearing and Final Reading be set before City Council on August 13, 2012. Mrs. Horsey moved for approval of staff’s recommendation, seconded by Mr. Bonar and unanimously carried. Proposed Ordinance #2012-15 - Amendment to Appendix B - Zoning, Article 3 - District Regulations, Section 9 - General Residence and Office Zone (RGO) Mrs. Ann Marie Townsend, Director of Planning and Community Development, presented members with a proposed ordinance that would remove the prohibition of alcohol sale in restaurants within the RGO Zone (General Residence and Office). She explained that restaurants are a conditional use in the RGO zone, subject to approval by the Planning Commission. Mr. Bonar advised members that the proposed ordinance was developed at the request of a constituent who owns property known as the “Governors Club”, who would like to be permitted to have alcohol sales in the establishment. He explained that the establishment was currently licensed as a restaurant and was requesting to provide limited alcohol beverage sales on the premises only. Responding to Mrs. Horsey, Mrs. Townshend explained that restaurants are permitted as a conditional use in the RGO zone subject to a public hearing; however, alcoholic beverages are currently prohibited. Other restaurants in the area that serve alcohol are within a different zoning classification. She advised members that a public hearing would also be required in order to obtain a liquor license; therefore, there would be ample opportunity for public comment. Staff recommended that the Proposed Ordinance #2012-15 - Amendment to Appendix B - Zoning, Article 3 - District Regulations, Section 9 - General Residence and Office Zone (RGO) be forwarded to City Council for First Reading on June 25, 2012, that a Public Hearing be set before the Planning Commission on July 16, 2012, and that a Public Hearing and Final Reading be set before City Council on August 13, 2012. Mr. Anderson moved for approval of staff’s recommendation, seconded by Mr. Bonar and unanimously carried.

PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING OF JUNE 11, 2012 PAGE 4 Proposed Ordinance #2012-16 - Amendment to Chapter 114 - Vegetation, to Create a New Article III - Bamboo Mrs. Ann Marie Townsend, Director of Planning and Community Development, reviewed a proposed ordinance that would prohibit the planting or growing of bamboo in the City of Dover. She indicated that it would also authorize the City to abate bamboo that has encroached onto adjacent properties and public ways and charge the cost of this abatement to the property owner. She advised members that bamboo is a highly invasive plant that spreads underground. Treating overgrowth of bamboo under the current code requirements does not prevent the plant from invading adjacent properties and the right-of-way. She noted that the only way to effectively control bamboo was to remove it and that the proposed ordinance would allow the City to require removal of bamboo on private property when it has spread. In addition, it would prohibit the planting of bamboo on private property except under certain conditions and in accordance with practices that would prevent the spreading thereof. Mrs. Townshend advised members that the proposed ordinance would prohibit the planting of bamboo unless planted within a planter or if a steel barrier were installed that would prevent the spreading of the bamboo underground. It would not affect bamboo that is currently in place unless there is expansion and overgrowth of the bamboo that causes it to intrude into other properties. Staff recommended that the proposed ordinance be forwarded to City Council for a First Reading on June 25, 2012, and a Final Reading and action by City Council on July 9, 2012. Mr. Bonar moved to recommend adoption of Proposed Ordinance #2012-16 - Amendment to Chapter 114 - Vegetation, to Create a New Article III - Bamboo, as recommended by staff. The motion was seconded by Mrs. Horsey and unanimously carried. FY2013 - Five-Year Capital Investment Plan (CIP) Mr. Scott Koenig, City Manager, reviewed the Fiscal Year 2013 draft Capital Investment Plan for Fiscal Year 2013 through Fiscal Year 2017. Referring to the Dover Park - Roof Replacement Project for FY2013 in the amount of $30,000, Mr. Koenig explained that staff has been contemplating whether or not the facility would continue in the future. He stated that staff planned to issue a Request for Proposals (RFP) after June 1, 2012 to determine if a third party, non-profit organization would be interested in renting and/or using the facility. If there was such interest, staff would present a lease and allow Council to determine whether they wished to keep the facility in operation through a third party. Should Council wish to keep the facility in operation by the City, roof repairs would be necessary. If no interest was expressed by a third party and the City had no interest in maintaining the facility, Mr. Koenig stated that the $30,000 could be utilized to demolish the building and create open space for future redevelopment. Mrs. Russell stated her desire to maintain the Dover Park facility, explaining that there is a need for the children who reside in this area and are not able to travel across town to use other facilities. She indicated no objections to a third party using the facility as long as it is utilized for youth and/or senior citizens.

PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING OF JUNE 11, 2012 PAGE 5 In response to Mr. Anderson, Mr. Koenig stated that the $10,000 to be budgeted in FY2016 for Skate Parks would be used to begin designs. Referring to the need for the Splash Pad, which is proposed for FY2015 and FY2016, Mr. Anderson suggested the possibility moving the project forward to begin prior to FY2015. Responding, Mr. Koenig stated that the project was delayed due to lack of funding in the General Fund. Mr. Bonar suggested that staff investigate the possibility of obtaining grant monies and other opportunities to help fund the Splash Pad project. In addition, he felt that the City should take steps to clean Silver Lake and felt that there were funds available through the Federal Government. He noted that such a project would include draining, excavation, capping, and allowing the Lake to refill. Noting that Mr. Zachery Carter, Parks and Recreation Director would be retiring, Mrs. Russell relayed appreciation for his work and dedication to the youth in the community and wished him well in his future endeavors. Mr. Bonar moved to recommend acceptance of the FY2013 Five-Year Capital Investment Plan (CIP), seconded by Mr. Anderson and unanimously carried. UPDATES The following updates were provided to members: Planning and Funding for New Library Mr. Zachery Carter, Parks and Recreation Director, stated that construction on the new Dover Public Library remained on time and within budget. He reminded members that a $100,000 matching challenge pledge donation was received and that, to date, the City needs to raise an additional $44,000. Within the next month, Mr. Carter stated that the parking lot should be paved and the Reading Garden should be completed. He noted that the “green” roof is currently being installed and most of the exterior and interior work has been completed. Mr. Bonar moved to recommend acceptance of the Update on Planning and Funding for the New Library, seconded by Mr. Anderson and unanimously carried. CDBG Program Mrs. Tracey Harvey, Planner I, reported on the Status of FY2011 CDBG Projects as of June 2012. She assured members that staff has met the requirement for the expenditure of funds in a timely manner and that grantees are continuing to draw down funds. Housing and Recovery Act of 2008 Funds (Neighborhood Stabilization Fund) Mrs. Tracey Harvey, Planner I, reviewed the Update on the Housing and Recovery Act of 2008 Funds (Neighborhood Stabilization Program) for Fiscal Year July 1, 2011 through June 30, 2012.

PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING OF JUNE 11, 2012 PAGE 6 Dover Youth Advisory Committee Mrs. Russell advised members that the Committee members have now graduated from high school and are moving on to college. As a result, she noted that it would be necessary to appoint new members; however, the president would continue to serve since she will be attending Delaware Technical and Community College and had a desire to continue to serve. Mrs. Horsey moved for adjournment, seconded by Mr. Bonar and unanimously carried. Meeting Adjourned at 12:45 P.M. Sophia R. Russell Chairwoman SRR/jg/dd S:\AGENDAS-MINUTES-PACKETS\Committee-Minutes\2012\06-11-2012 PR&CE.wpd

UTILITY COMMITTEE The Utility Committee Meeting was held on June 11, 2012 at 5:00 p.m. with Chairman Bonar presiding. Members present were Mr. Perza, Mr. Blakeman, and Mr. Snaman. Mrs. Williams was absent. Members of Council present were Council President Leary and Mr. Hutchison. Mayor Carey was also present. AGENDA ADDITIONS/DELETIONS Mr. Bonar noted that staff had requested the deletion of Agenda Item #2 - Proposed Resolution No. 2012-11 - Adoption of the American Public Power Association Safety Manual. By unanimous consent, the agenda was approved as amended. McKee Run Generating Station Industrial Wastewater Discharge System Mr. Vince Scire, Manager of the McKee Run Generating Station, submitted a new Capital Improvement Project - Industrial Waste Water Discharge System at McKee Run Generating Station and Exceptions in Capital Outlay. He advised members that the project has been developed to address a change in wastewater discharge requirements identified during an internal program audit and that there are three (3) main items being addressed simultaneously, as follows: 1) In the Fall of 2011, during a program assessment, it was identified that the McKee Run facility did not have metering in place for its sanitary wastewater discharge. Additionally, it was identified that, due to changes in the Kent County code, the facility needed to apply for an Industrial Wastewater Discharge Permit (IWDP). Based on both these requirements, the facility needs to segregate its industrial and sanitary sewer flows, meter both discharges, and sample the industrial flows per Kent County requirements. 2) This project facilitates the diversion of the current National Pollutant Discharge Elimination System (NPDES) wastewater discharges at outfalls 004 and 005 to the Kent County Wastewater Treatment Plant (WWTP). During the same wastewater assessment, and based on operational data supporting the decision to divert the flows, the cooling tower blowdowns will be re-routed from the McKee Run stream, to the Kent County sewer. Minimal additional work in the project scope has been required to make this change which will provide regulatory and operational flexibility to the facility during run times. The facility is at risk of not meeting the discharge parameters set forth by the Delaware River Basin Commission (DRBC) in Docket No. D-2009-014 CP-1. After evaluating various methods to comply, it was determined that the Kent County WWTP would be both willing and able to treat the cooling water discharge and this could be added into the already required IWDP application. This would also alleviate the need for the facility to conduct a thermal study of the discharge as required by the DRBC in the above Docket, a study which would likely provide no value and cost in the tens of thousands of dollars to conduct. In the past, due to the infrequent running of the cooling towers, bacterial growth (enterococci) has been a NPDES permit limit of concern and great care must be taken to both disinfect and circulate the cooling tower water prior to discharge. Diverting this discharge to the sanitary sewer alleviates this risk. 3) As the wastewater discharge is currently routed, a large amount of dilution water must be sent to the cooling towers to maintain the discharge concentrations of Total Dissolved Solids (TDS) to remain below permit limits as set by the DRBC. Based on current data and calculations, and depending on the operating conditions, it is projected that water consumption will increase between three (3) and 10 times to foster compliance. Additionally, it has been projected that if Unit 3 was to be called to run for an extended period of time, such as longer than one (1) week,

UTILITY COMMITTEE MEETING OF JUNE 11, 2012 PAGE 2 the TDS parameter would eventually rise to a level exceeding the permit limit, due to restrictions on how much dilution water could be added. Permit non-compliance would be simply a matter of when, not if, under an extended operating scenario. This increased water usage also directly contradicts the efforts the facility has made to conserve water, especially in times of drought, when the extended operating scenario would be most likely to occur. Mr. Scire reviewed a Presentation - McKee Run Industrial Wastewater System, Tie-In of the McKee Run Industrial Wastewater Flow to the Kent County Sewer System and Elimination of the NPDES Industrial Discharge Points, as well as the benefits to implementing this project. He advised members that in the time since these needs were identified, an official application for an IWDP had been submitted to Kent County and the permit was ready to finalize. The permit included an exception, granted by Kent County Levy Court, to discharge the cooling water to the sanitary sewer. The proposed permit also included language specific to the McKee Run site which would allow for the operational flexibility needed to run the facility as required by the current demands placed on it. Preliminary engineering had been completed for the overall industrial wastewater system changes, and the site had been developing estimated project costs based on the best available information. Mr. Scire reviewed the next steps to be taken involving this project. He noted that this was a new project that was not identified or funded in the original 2012 Capital Budget. In order to support the funding of the new project, he advised members that exceptions in the capital outlay for various original projects had been identified which will provide the needed offset in funding, as follows:

UTILITY COMMITTEE MEETING OF JUNE 11, 2012 PAGE 3 Mr. Bonar noted that there was a notoriously long backorder time for parts for projects such as this and questioned if the parts required were readily accessible and could be obtained in a timely fashion. Responding, Mr. Scire stated that he anticipated the longest lead item would be approximately four (4) to six (6) months. In response to Mr. Blakeman, Mr. Scire indicated that stormwater discharges at the other outfalls were related to wastewater discharge to the cooling towers at the station and that the limits associated with these cooling towers were the concern. Clarifying, Mr. Brian Hoyt, Compliance Specialist, explained that the cooling tower portion of those outfalls would be taken out of service and they would be converted to general stormwater outfalls that are governed under the general permit in the State of Delaware. This would result in four (4) outfalls with much less stringent stormwater guidelines. Responding to Mr. Bonar, Mr. Scire felt assured that the requested changes to the Power Plant Capital budget should not have an impact on any long-term CIPs. Mr. Blakeman moved to recommend approval of the new Capital Investment Plan (CIP) for the Industrial Waste Water Discharge System at the McKee Run Generating Station and the transfer of funding from existing CIPs, as recommended by staff. The motion was seconded by Mr. Snaman and unanimously carried. Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System - Fiscal Year 2011 Members were provided the Annual Engineering Consultants’s Report on the Operation and Maintenance of the Electric System for Fiscal Year 2011, as prepared by Burns and McDonnell Engineering Company, Inc. Mrs. Donna Mitchell, Controller/Treasurer, advised members that the report was required to fulfill the City’s bond covenants. She reviewed the conclusion of the report (Page ES-6) which indicated that the City’s power generation facilities were being operated and maintained in a manner consistent with accepted electric utility practices in the United States. Responding to Mr. Blakeman, Mrs. Mitchell stated that, to her knowledge, this is the only inspection conducted. Elaborating, Mr. Vince Scire, Manager of the McKee Run Generating Station, indicated that insurance representatives conduct inspections at least once per year and these inspections are accomplished during the general overhaul period so that internal components can be inspected and internal procedures and processes can be reviewed. Mr. Blakeman noted that the report indicated that “the Electric Division has nine line crews to work on the system. Four crews are responsible for overhead lines, four crews are responsible for underground lines, and one crew is responsible for maintenance” and questioned if one (1) crew was sufficient to maintain the system. Responding, Mr. Jeremy Johnson, Interim Electric Director, stated that although there was only one (1) maintenance crew, the four (4) overhead crews were also utilized for maintenance when necessary. Noting that the report indicated that the majority of the four (4) overhead crews’ time was spent on new construction, Mr. Blakeman questioned how much time is spent on maintenance. Responding, Mr. Richard Gardner, Line Crew Superintendent, stated that the underground crews generally work on new construction

UTILITY COMMITTEE MEETING OF JUNE 11, 2012 PAGE 4 building infrastructure, since most new construction is underground. He advised members that the overhead crews work on new distribution upgrade projects; however, there are times when they are needed and utilized for maintenance. Mr. Blakeman moved to recommend acceptance of the Annual Engineering Consultant's Report on the Operation and Maintenance of the Electric System for Fiscal Year 2011, seconded by Mr. Snaman and unanimously carried. FY 2013 FIVE-YEAR CAPITAL INVESTMENT PLAN (CIP) Mr. Scott Koenig, City Manager, provided members with the draft FY2013 Five-Year Capital Investment Plan (CIP) for the Public Utilities. He noted that these were the same projects that have been presented and discussed by the Committee and Council during the past several months. In addition to Fiscal Year 2012- 2013, the Plan included Fiscal Years 2013-2017 In response to Mr. Blakeman, Mr. Vince Scire, Manager of the McKee Run Generating Station, confirmed that the photo provided for project EG1202 was incorrect, as it reflected the package boiler and not the main boiler. No further action was taken by the Committee. Review of Utility Related Capital Investment Plan (CIP) (Electric and Water/Wastewater) Members were provided a Project Tracking Report, as of April 30, 2012, for the Utility (Electric and Water/Wastewater) Related Capital Investment Plan (CIP). No further action was taken by the Committee. Update - Garrison Oak Technical Park Project Mr. Scott Koenig, City Manager, stated that the Garrison Oak Technical Park had been platted and approved. The City was continuing to work with the Garrison Energy Center on finalizing amendments to their lease, which is expected to be presented to the Legislative, Finance, and Administration Committee for their review and recommendation. He stated that the organization was working on the preliminary authorization from the Planning Commission, noting that there were several issues that needed to be addressed, such as performance standards, compliance with stormwater management, etc. He stated that the Garrison Energy Center was also working through air permitting with the State of Delaware. Mr. Koenig indicated that the project was on track and the organization had apprised staff that they were anticipating building permits to be obtained during the first part of 2013, with capacity into the PJM grid in the summer of 2015. In response to Mr. Hutchison, Mr. Koenig stated his understanding that Calpine and LS Power were meeting last week to resolve their issues. He stated that if these concerns were not resolved, the City would become involved with the matter; however, he advised members that they have committed to work out their differences.

UTILITY COMMITTEE MEETING OF JUNE 11, 2012 PAGE 5 Update - Green Energy Funding and Programming Mr. Scott Koenig, City Manager, noted that members had received an update on Green Energy Funding and Programming and offered to respond to any questions. Update - National Pollution Discharge Elimination System (NPDES) Municipal Separate Storm Sewer Systems (MS4) Permit Referring to the National Pollution Discharge Elimination System (NPDES) Municipal Separate Storm Sewer Systems (MS4) Permit, Mrs. Ann Marie Townshend, Director of Planning and Community Development, relayed appreciation to the generosity of the Wesley College Environmental Sciences Program, which provided an intern during the school year who, she stated, has been working for the City for 10 hours per week, at no charge, to help keep the City permit compliant. Mrs. Townshend noted that the City held two (2) Compost Workshops and that Drip Irrigation Workshops would be held at the Public Assembly Room at the Dover Police Department on June 28 and June 30, 2012. She stated that the City was working on incorporating environmental programming into the City’s Summer Day Camp Program. She stated that the progress the City has made in this regard was due to the assistance provided by Wesley College. By unanimous consent, the meeting adjourned at 5:27 P.M. David L. Bonar Chairman DLB/TM/jg/js/dd S:\AGENDAS-MINUTES-PACKETS\Committee-Minutes\2012\06-11-2012 UTILITY.wpd

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE The Legislative, Finance, and Administration Committee meeting was held on June 11, 2012 at 5:30 p.m. with Chairman Lynn presiding. Members present were Mr. Anderson, Mr. Hare, Mr. Rushe, and Mr. Shevock. Members of Council present were Mrs. Russell, Mr. Perza, Mr. Bonar, Mr. Hutchison, and Council President Leary. Mayor Carey was also present. AGENDA ADDITIONS/DELETIONS Mr. Lynn requested that Items #1 and #2 be reversed in order of sequence as well as Items #4 and #5. Mr. Anderson moved for approval of the agenda, as amended, seconded by Mr. Shevock and unanimously carried. Review and Recommendation - Filling Critical Positions - Library Clerk II - Dover Public Library Mr. Scott Koenig, City Manager, reviewed a request to fill a Library Clerk II position in the Dover Public Library. He stated that it was anticipated that the individual selected would begin employment on or about August 1, 2012. He reminded members that, as the opening of the new Library approaches, it will be imperative that the City return to the previous staffing level of the Library in order to maintain the current level of service. This position was previously budgeted and has remained unfilled. Although it was not included in the FY12 budget, it has been included in the FY13 budget. He estimated the budgetary impact for wages and benefits at $40,245. Mr. Anderson moved to recommend approval of the request to fill the position of Library Clerk II, as recommended by staff, seconded by Mr. Shevock and unanimously carried. Proposed 15% Healthcare Premium Cost Sharing Arrangement - Non-Bargaining Only (Referred Back to Staff by City Council on May 29, 2012 for Further Evaluation) During the Council Committee of the Whole Meeting on May 29, 2012, members considered a proposal submitted by the City Manager for a 15% healthcare premium cost sharing arrangement for non-bargaining employees. After much discussion, the Committee recommended that the proposal be referred back to staff for further evaluation. Mr. Scott Koenig, City Manager, read a memorandum dated June 7, 2012, from the City Manager to Members of the Legislative, Finance, and Administration Committee regarding Health Insurance Premiums for Non-Bargaining Employees, as follows: During the Council Committee of the Whole meeting on Tuesday, May 29, 2012, a motion was made to refer the issue of a 15% cost sharing contribution for all non-bargaining employees back to the City Manager for further consideration. Attached are eight (8) different cost sharing scenarios as described, as well as, the estimated annualized savings to the City if the scenario were to be implemented for non-bargaining employees: 1) HB81 $ 44,973 2) Premiums Based Upon First State Basic $ 46,547 3) Stepped Percentage (10, 15, 18 & 20) $ 58,057

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 2 4) Stepped Percentage (10, 15, 20 & 20) $ 60,170 5) 15% Across the Board (City Manager's Preferred Option) $ 66,559 6) Stepped Percentage (12, 15, 18 & 21) $ 66,724 7) Stepped Percentage (10, 15, 20 & 25) $ 66,835 8) Additional 15% to All Current Percentages $ 114,554 I also held a meeting on Monday, June 4, 2012 with a group of approximately thirteen (13) non-bargaining employees to receive their ideas and feedback on the City Manager's original 15% Across the Board proposal. Several revenue generating proposals were put forth by staff that could be implemented to generate additional revenue for the city. The employees also expressed a number of concerns that I would like the opportunity to relay to the committee during a brief verbal update to the committee on Monday night. I am therefore requesting a few minutes at the podium to further express their concerns to the committee. Mr. Koenig noted that members had received spreadsheets with details regarding the eight (8) scenarios as well as the “Other Postemployment Benefit GASB 45 Actuarial Valuation,” which indicated an unfunded Other Post-Employment Benefit (OPEB) liability for the City of Dover in the amount of $76,393,013, as of June 30, 2012. Mr. Koenig advised members that the ideas that employees had suggested as revenue-generating proposals related to itinerant merchant licenses, rental and lodging fees, business license fees, open gym fees, downtown banner fees, etc. Several of these fees, such as business licenses, had been brought before City Council in previous years and were not supported. As a result, it was his feeling that staff could not present such revenue ideas to offset the unfunded liability costs. He reiterated that the unfunded liability was a long-term issue that he was attempting to address through the cost sharing proposal and that each employee has a vested interest in ensuring that the benefit will be available in retirement. Mr. Koenig stated that non-bargaining employees also relayed concerns about representation, since they were not unionized. He explained his difficulty in representing both sides of the issue. He indicated that the non-bargaining employees were concerned that they would become an isolated group in this matter, and that the 15% cost-sharing would be implemented for them and not be carried through to the unions. Mr. Koenig indicated that he could make no guarantees in this regard, since his role was to make proposals rather than to act on them. Although his intent was to bring forward proposals that would achieve the same scenario for union employees, he could not guarantee their approval. Mr. Koenig stated that concerns were also relayed by employees who were eligible or nearly eligible for retirement that the City was “changing the game” near the end of their careers, and they questioned if implementation of the proposal could be delayed for employees with significant years of service. He explained the difficulty of implementing the proposal “fairly” since others would feel that such a proposal was unfair. In addition, he stated that employees have brought up the possibility of providing a phase-in for the proposal. He noted that when the State proposed HB81,

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 3 approximately 18 months prior notice was provided to employees that they would begin to pay for health insurance. Mr. Koenig stated that, because of the timing of the budget and the expiration of union contracts, he was unable to work with that type of horizon and reminded members that the draft budget included a “tag line” for 15% healthcare cost sharing across the board, with a credit of approximately $250,000 to the budget if approved. The credit for non-bargaining employees would only be approximately $66,750. Therefore, he stated that the budget submitted to Council included an assumption that on July 1, 2012, 15% healthcare sharing across the board would be implemented for all four (4) of the employee groups (non-bargaining employees and all three (3) union groups). As previously indicated, he explained he could not disclose the nature of collective bargaining discussions or agreements. He also could not guarantee that all three (3) union contracts would be signed by July 1, 2012. Mr. Koenig stated that the non-bargaining employees also reminded him and wanted members of Council to be aware that they received no step or Pay-for-Performance increases in FY12 and that the current draft budget for FY13 did not allow for any non-bargaining increases. At the request of Mrs. Mitchell, Controller/Treasurer, Mr. Koenig advised members that, of the eight (8) scenarios, only two (2) had been studied and analyzed by the City’s Actuary - Scenarios #1 (HB81) and #5 - 15% across the board. As such, he stated that these were the only two (2) options that provided certainty regarding the City’s long-term liabilities. He noted that, over the past two (2) years, the City had spent approximately $57,000 for the Actuary’s work for the Health Benefits Committee to assist in determining which options would benefit the City’s long-term liabilities. He reminded members that this was not a one-time budget concern but a long-term issue for the City. Mr. Koenig noted the receipt of several letters and other correspondence from various employees which were submitted for consideration (Attachment #1). He reminded members that, as the City Manager, he represented employees, Council, rate payers, and taxpayers to the best of his ability, and as such, he recommended the 15% across-the-board proposal. Mr. Koenig stated that this recommendation was based on all information provided, including the independent administrative evaluation. He considered this the option that would cause the least harm to the organization. He acknowledged that employees receiving individual healthcare would be the most affected; however, he felt that this was a fair proposal when viewed over the span of an employee’s career. In response to Mr. Shevock, Mrs. Donna Mitchell, Controller/Treasurer, stated that the City follows State guidelines, including the requirement of an affidavit regarding spousal coverage, and the coverage that the City’s employees have is predicated on those forms being completed; therefore, any change in coverage as a result of these forms was built into the budget. She was not aware of the savings that this provided, if there were a savings, since this was already included in the budget. Noting that the City pays 75% for dependent coverage and that dependent coverage for State employees is paid 100% by the employee, Mr. Shevock questioned if the City had considered this option. Responding, Mr. Koenig stated that staff had considered this option; however, due to the costs and the employees who would be affected (primarily those below mid-level management), it was determined that some of the City’s lower paid employees would not be able to afford this insurance.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 4 Mr. Anderson relayed appreciation for the work staff had conducted on this matter and supported the efforts to contain costs for the City. He questioned if the City should take a position before the provisions of the union contracts were known, explaining his concerns regarding parity and fairness. Responding, Mr. Koenig stated his desire to be fair and estimated that signed contracts with the unions should be obtained by August or September, and possibly sooner. He indicated concern that if the Committee were to recommend approval of staff’s recommendation, this matter would be considered by City Council on June 25, 2012, with a possible implementation date of July 1, 2012. This would create an administrative problem for employees wishing to retire. Should members wish to delay implementation until September 1, 2012 for current employees, he felt that this could be handled administratively and would not affect the proposed budget. However, he suggested that there be a caveat included that any new non-bargaining employees hired would be responsible for the 15% cost sharing for healthcare costs. Responding to Mr. Lynn, Mr. Koenig advised members that in discussions with other managers throughout the State, it appeared that almost every municipality was unique, noting that some were completely non-unionized, others did not offer any post-employment benefits, and others intermingle health insurance with Workman’s Compensation insurance. As a result, it was difficult to obtain an “apples to apples” comparison. He advised members that employees who were hired in recent years from the private sector had indicated to him that even if required to pay the 15%, they would still be paying less than they paid previously. Mr. Koenig noted that the Controller/Treasurer indicated that if HB81 were applied to all City employees and retirees, this would be the best option for the City and would actually reduce healthcare costs for some employees; however, staff has had a difficult time discussing this issue as it pertains to retirees. He reminded members that one of the recommendations of the Health Benefits Committee was for the City not to take action regarding retirees’ healthcare. At the request of Mr. Lynn, Mr. Perza stated that the report of the Salary and Benefits Compensation Comparison Committee, which includes information comparing healthcare and retirement benefits of various jurisdictions, had not yet been released. To his recollection, the comparison included larger towns such as Newark, Wilmington, Middletown, Dover, Harrington, Smyrna, Lewes, etc., as well as the three (3) Delaware counties and the State of Delaware. He confirmed that there was some form of cost sharing across the board; however, this varied by degree depending on the size of the municipality. There was no consistent percentage or unified factor for cost sharing. In response to Mr. Hutchison, Mr. Koenig confirmed that one year ago, the City’s budget reflected a $3.4M shortfall. Over the past year, that deficit had been reduced to approximately $630,000 and there has been a reduction of 12 employees. He advised members that the five (5) year projection for the General Fund budget reflected a $2M deficit in FY14, which must be addressed by adjusting the budget, gaining an increase in economic activity, cutting costs, or a combination of these approaches.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 5 Responding to Mr. Anderson, Mr. Koenig stated that the scenario recommended by staff would have no impact on current retirees. If the recommendation were approved for implementation on July 1, 2012, employees who retired after that date would carry the 15% cost sharing into retirement. Referring to Scenario #7, Mr. Bonar requested that the City Manager provide more detail and an explanation of the stepped percentages which he stated varied between a financial contribution of $58,057 and $66,835. Mr. Koenig explained that the steps were based on the percentage of contribution; for example, on Spreadsheet #3, an employee with only “employee” coverage would pay 10% of the premium for the plan selected, an employee with “child” coverage would pay 15% of the premium for the plan selected, an employee with “spouse” coverage would pay 18% of the premium for the plan selected, and an employee with “family” coverage would pay 20% of the premium for the plan selected. Mr. Bonar questioned if an analysis had been performed for a stepped cost sharing based on years of service. Responding, Mr. Koenig stated that such an analysis was not conducted, since he personally had multiple years of service and he did not want his recommendation to be considered self-serving. He advised members that there were 78 non-bargaining employees and, although staff had the data to conduct such an analysis, they would have to bring the information forward at a later time. Although he understood the position of the City Manager, Mr. Bonar indicated that it was the role of staff to present recommendations and it was ultimately Council’s decision as to the final action taken on matters. He felt that a stepped cost sharing based on years of service would be more palatable. In response to Mr. Bonar’s suggestion, Mrs. Donna Mitchell, Controller/Treasurer, reminded members that entry-level employees, who are paid at a lower rate, would be hit hardest under such a proposal. Although in most instances higher paid employees have been employed by the City the longest, she noted this was not always the case, such as newly employed department heads. Mr. Lynn opened the floor for public comment and reminded all that each individual was provided three (3) minutes or less to speak. He requested that individuals refrain from duplicating comments and suggested that, since some individuals would also be speaking later in the evening before City Council, it might be appropriate to select a representative to speak. Mrs. Patricia Virdin, 70 Peach Blossom Lane, Camden, (Police Department) stated that she had been an employee of the City for over 20 years and read the following statement into the record: My name is Patricia Virdin, I live at 70 Peach Blossom Lane in Camden. I have been an employee of the city for over 20 years and I have the honor of working at the Police Department. At a prior council meeting, the city manager made the comment that he felt 92 dollars was not a significant amount. I beg to differ. At the current rate, nearly 6% of my pension will go toward this new expense. And that is at TODAY’s rate of 92 dollars per month. We all know that the cost will go up. Combined with the lack of

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 6 pay increases for the past two years, I fully expect this new expense to wipe out more than 10% of my pension. I hardly call that insignificant. As I am coming towards the end of my career, I have had no time to adequately plan for this expense. My husband is also a city employee, so this measure hits my family doubly hard. However, if this proposal is implemented on my husband’s salary, it will be because the FOP negotiated, voted, and agreed to it. As a non-bargaining employee, I have not been afforded that opportunity. All I have – the only thing I have – is a city handbook that was issued to me upon my hire in 1992. This handbook has 11 chapters that cover both my responsibility to the city and the city’s responsibility to me. Clearly stated in Article 9 is the fact that the city will pay 100% of an employee’s healthcare and will continue to do so for retirees. If, as the city manager believes, the handbook is simply a “guideline” and the city is not required to abide by the statements therein, it seems to follow that the employees who are not otherwise governed by a union contract cannot be required to adhere to the policies in the handbook. Policies governing such things as absences, use of city equipment, outside employment, personal conduct, disciplinary actions, and so on, would be useless. Although morale among employees is at a record low, the non-bargaining employees are united and more organized than I have ever known. I stand with my 77 non- bargaining co-workers to ask that you abide by the city handbook and implement this policy on new hires only. We have honored and abided by the terms of this handbook for our entire careers; we ask that you do the same. Mr. Dave Truax, 35 Upland Avenue, Dover, (Fire Marshal’s Office) stated his frustration that previous action by Council approved additional monies to be given to organizations and for providing cameras downtown, etc., and Council transferred funds to accommodate these expenses; however, never addressed the $630,000 budget deficit. He requested that members consider the possibility of funding the $66,000 that would be acquired by implementing the City Manager’s recommendation, in a way similar to what has been done for others. This would provide everyone an additional year to consider and prepare for such a change and to know the results of contract negotiations. He expressed confidence that the City Manager and Council would take the appropriate action. He indicated that he had been an employee for 22 years and stated his hope that there would be no change to his healthcare benefits. Mr. Paul Bernat, 185 Captain Davis Drive, Camden, (Police Department) read the following statement into the record: Good evening, my name is Paul Bernat and I reside at 185 Captain Davis Dr., Camden, Delaware. I am the Deputy Chief of Police for the Dover Police Department. I have been a loyal City employee for the past 23 years. I am standing before you this evening asking you not to lessen my health benefits.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 7 I was promoted to the rank of Major in April of 2010. With my promotion I left the FOP Union and became part of the non-bargaining group of the City, which is predominately management. In fiscal year 2012 all of the Unions received raises. The non-bargaining group did not receive a raise and are not receiving raises again this year. The three City Unions are currently in contract negotiations and are in the bargaining process. The Unions will receive “something” in exchange for the 15% healthcare cost sharing. Last year around this time I contacted the Public Employment Relations Board (PERB) and began the process to join the FOP. I later withdrew my application, after Chief Hosfelt requested I do so. Chief Hosfelt felt confident that the City Council will do the right thing and take care of the non-bargaining employees. Little did I know that ten months later the City Manager would propose in the City budget that the non-bargaining group pay 15% towards their healthcare. I also need to mention that I attended all of the Salary and Benefits Compensation Comparison Committee meetings and was disappointed when my salary was called out as “above the maximum for the pay grade”. I looked into it further and discovered that the pay information that was provided to the committee from the City was the “2008 MAG” study. It is not reasonable to compare 2008 wages to 2012 wages. In my 23 year career I have never felt as unappreciated as I do now. I feel that Council has the mind set that city employees are merely an expense and do not contribute to the excellent service that is provided to your constituents. I do understand that the growing trend is to reduce government employees’ benefits. However, I believe any lessening of benefits should apply to new hires or take effect in ten years for tenured employees. Currently the City has several employees that are at the 20 year mark and will retire within the next ten years. It is imperative that the City not lose all of the knowledge and expertise from tenured employees. Lessening current employees benefits are causing good employees to retire early. This is causing the City to pay retirement benefits and new employee benefits as well. In conclusion, I would like to reiterate that the non-bargaining employees did not receive a raise last year, when Union employees did. The proposed 15% healthcare cost share would only save the City a nominal amount but will continue to affect employees in their retirement for the rest of their lives. Thank you for your time and much needed support. Mrs. Nancy Swaggard, 2629 Farm Lane, Camden Wyoming, (Customer Service Department) stated she was an 18 year employee who had taken a non-bargaining position approximately six (6) years ago. She advised members that when she first took the position, she had five (5) employees and now has two (2), with the same amount of normal work to perform and additional responsibilities

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 8 transferred from other departments that have also been shorted employees. She assured members that staff was doing the best they could and that having benefits taken away only hurts. Mrs. Swaggard noted that, taking her salary into consideration and the 15% healthcare costs, her employees would actually be making more money than she would receive as their supervisor. She indicated that there were others in the same situation and relayed concern that this could affect their hard work and will to do a good job. She requested that all non-bargaining employees in attendance stand united and be recognized (City Clerk’s Office Note: There were approximately 18 individuals who stood.) Ms. Carolyn Courtney, 24 Lamplighter Lane, Dover (Parks and Recreation Department) advised members that she was born and raised in the City of Dover and had worked for the Parks and Recreation Department for over 11½ years. As a taxpayer, she felt that the City provides excellent services, parks, facilities, flowers, clean streets, etc., and stated that residents are able to put out almost anything for the trash to be picked up by the City. She noted that other jurisdictions do not have such services; however, their residents pay much higher taxes. She relayed no objections to a slight tax increase to continue to pay for the services and noted the benefit of “writing off” taxes on income tax returns. As an employee, Ms. Courtney relayed concerns regarding the lack of pay raises and reminded members that the last time a raise was provided, the City instituted furlough days; therefore, there was no pay raise realized. She noted that members of Council have continued to fund events, festivals, and downtown economic development; however, they are unable to fund the City’s obligation to employees as reflected in the Employee Handbook. She explained that employees were hired with the understanding that the Employee Handbook reflected the employee’s benefit package. She stated that although she has had opportunities to work in the private sector at a much higher salary since being employed with the City, she declined and remained employed by the City due to the benefit package. She requested that members consider the effect their decision would have on those employees who are and have been dedicated. Mr. Paul Cookson, 233 Hibiscus Terrace, Magnolia, (Police Department) read the following statement into the record: My name is Paul Cookson. I reside at 233 Hibiscus Terrace, in Magnolia. I have been a loyal and dedicated employee, working in the Police Department, for over 20 years. My employment with the City had a unique start, and I feel that I had a part in starting something meaningful. In 1991, while finishing my Bachelors Degree in Law Enforcement Administration at Western Illinois University, I was required to complete an internship with an agency of my choice for a full semester. I contacted several police departments here in Delaware to see if they would take me. One of those agencies was Dover PD. The chief at the time, Chief Hutchison, explained to me that Dover had never received any prior intern requests. Nevertheless, I must have done something right since he offered to work with me. I don’t know if Chief Hutchison knew at the time that I had contacted several other agencies: Rehoboth Beach PD, and the Department of Natural Resources. Both of those agencies had

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 9 offered me a paid internship in an enforcement officer capacity. Dover’s internship was offered with no pay; only for the experience. In considering the possibility that my internship could lead to future employment, I took into consideration the organizations and what they had to offer. The paid positions would most likely lead to permanent police officer positions. However, I saw a good thing with Dover and its excellent benefits and that is what I chose. My 16 weeks of experience working with the various units paid off, as I was hired the following year in the communications center. The rest is history. Dover still takes on interns to this day. My point here is not about my internship, only that I had a choice of where to conduct it. The benefits offered by prospective future employment played a big part in my decision. When I picked Dover I felt that I made the right choice and would be working for an organization I could trust, and retire securely with the benefits outlined for me. I am sure there are many similar stories from those behind me that will not have the chance to be heard tonight. Every employee regardless of position is an important part of this organization. Your non-bargaining employees, from middle-management right up to department heads, are what hold everything together. They are your longest serving and most experienced employees. They are your foundation. If they cannot trust their employer, that foundation is undermined. When a foundation is not sound, neither is what is above it. You MUST honor what was offered to your employees when they came on board, and stop putting the burden of financial woes on their shoulders. If you do not, you will be setting a precedence that will surely be weighed by your future foundation. Ms. Diane Glenn, 218 Northdown Drive, Dover, (Police Department) noted that at a recent Council meeting, members approved, with little to no resistence, an amended budget that included transferring $600,000 from the Electric Department’s Reserve to offset the deficit. She was excited that money was found at a time when employees were advised that cuts and extreme measures would need to be taken. All the while, she thought the $600,000 eliminated the need for a healthcare cost share with non-bargaining employees. Although these funds did not offset the $66,000 necessary to eliminate the need for a healthcare cost share, the necessary funds were found for the continuation of two (2) City festivals for the next fiscal year. At this point, she felt that members of Council must feel that these two (2) festivals are more important to them than the non-bargaining employees. She felt that Council had the opportunity to transfer the necessary $66,000 but chose to fund the festivals only. Mrs. Glenn indicated her understanding for the need to “tighten the purse strings” and forego a pay raise and have furlough days; however, the healthcare cost share would result in a decrease in salary. She advised members that she is a single mother and moved to Dover 19 years ago to take the job with the City and has no family in the area. She explained that the benefits offered by the City lured her to make the move. She requested that City Council and the City Manager work together to develop a proposal that would not include an attempt to “balance the budget on the backs of the employees.”

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 10 Ms. Christina Kober, 343 Orchard Grove Drive, Camden, (Police Department) advised members that she has been a loyal and dedicated employee for 23 years and would be eligible for retirement in only two (2) years. She reminded members that non-bargaining employees did not receive a pay increase last year or this year. She stated that non-bargaining employees have no rights to negotiate benefits, which were promised during employment and into retirement. It was her understanding that the Employee Handbook, approved by City Council, was equivalent to a contract. She trusted and hoped that members of Council would honor those written agreements. She felt it was clear and evident that the financial impact for non-bargaining employees was a genuine hardship and a severe blow to employee morale that may not be reversible. Ms. Kober requested that members honor the written promise (or agreement), as stated in the Employee Handbook, that the City would pay 100% of each full-time, regular employee’s individual coverage and eliminate healthcare premium cost sharing for non-bargaining employees. Ms. Robin Adkins, 27 Waterwheel Circle, (Police Department) indicated that she had been employed with the City of Dover Police Department for almost 13 years. In addition to the issues previously discussed, she stated her concern that non-bargaining employees do not have the ability to negotiate for any benefit changes, salaries, etc. She reminded members that bargaining employees receive step increases as well as promotions and that there are no step increases or automatic increases built into the non-bargaining employees’ pay scale. She indicated that there was no set schedule after retirement; therefore, as healthcare costs increase, the retirement pay for retired non-bargaining employees would continue to decrease. Ms. Adkins advised members that one (1) of the main reasons for selecting the City’s employment was the benefit package. She encouraged members to consider the concerns relayed in making their decision regarding this matter. Mr. Anderson felt that it was essential for members of Council to be provided with information regarding long-term healthcare costs; however, he noted that it was necessary for immediate action to be taken at this time. He explained that Scenario #2 would provide the employee the choice to maintain a 100% premium for basic coverage and if additional coverage were desired, the employee could pay more. This would address the concerns of those who could not afford cost sharing and, at the same time, save the City a substantial amount of money. Mr. Anderson moved to recommend approval of employee cost sharing of health insurance premiums for non-bargaining employees based upon Scenario #2 - Premiums Based Upon First State Basic, to be effective July 1, 2012, seconded by Mr. Hare and carried, with Mr. Lynn voting no. Mr. Bonar advised members and those in attendance that he departed the meeting during the public comment period to make some telephone calls regarding healthcare premiums. Based on these three (3) calls, he discovered that monthly premiums for health insurance ranged from a $96 contribution to a $274 contribution. He noted that the $274 monthly contribution in the private sector also included a $10,000 deductible on health insurance premiums. He suggested that this information provided an indication of how the City compared to the private sector.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 11 Proposed Ordinance #2012-10 - Amending Chapter 1 - General Provisions, Section 1-13 - Denial of Permits or Approvals for Failure to Comply with Requirements for Payment, Actions, or Filings (Clean Hands) with CA-#1 through #4 (Referred to Committee by City Council on May 14, 2012; Deferred by Council Committee of the Whole on May 29, 2012) During the Annual Council Meeting of May 14, 2012, members referred CA-#1 through CA-#4 to Proposed Ordinance #2012-10 to the Legislative, Finance, and Administration Committee for their review and recommendation. During the Council Committee of the Whole Meeting of May 29, 2012, consideration of Proposed Ordinance #2012-10 amending Chapter 1 - General Provisions, Section 1-13 - Denial of Permits or Approvals for Failure to Comply with Requirements for Payment, Actions, or Filings (Clean Hands) was deferred due to time constraints. Mr. Anderson stated that, after speaking with Mrs. Ann Marie Townshend, Director of Planning and Community Development, regarding CA-#1, he no longer wished to make these changes at this time and provided an overview, including a narrative, of CA-#2 through CA-#4, as follows: CA-#2 - The proposed language would ensure that the inclusion of owners and/or members of corporations would apply to owners of a one-half or greater interest in the said corporation. It would ensure that members of non-profit boards and other minority owners in corporations would not be denied services or permits due to the delinquencies of that corporation. Mr. Anderson moved to recommend adoption of CA-#2, seconded by Mr. Lynn. Mr. Perza questioned how the City would be able to determine owners of a one-half or greater interest since LLC’s and corporations are private entities and the percentages of ownership would not be known. Responding, Mrs. Townshend explained that it was staff’s intent that if a corporation applied for a permit or site plan, a disclosure form would be required listing the owners above the specified threshold as of the date of application. In response to Mr. Hare, Mrs. Townshend confirmed that homeowners wishing to rent properties were required to obtain a permit; however, owners of commercial buildings were not required to obtain a permit to rent to another business or entity. The motion recommending adoption of CA-#2 to proposed Ordinance #2012-10 (Attachment #2) was unanimously carried. CA-#3 - The proposed language would allow for persons to serve on city committees, commissions, or boards, even if they are responsible for delinquencies or code violations; however, it requires that the city clerk inform the city council president of such delinquencies or violations and that an executive session of council be held to discuss such delinquencies or violations.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 12 Mr. Anderson moved to recommend adoption of CA-#3 to proposed Ordinance #2012-10 (Attachment #3), seconded by Mr. Hare and unanimously carried. CA-#4 - The proposed language would add an appeal to city council for applicants aggrieved by the decision of the city manager. Mr. Anderson moved to recommend adoption of CA-#4 to proposed Ordinance #2012-10 (Attachment #4), seconded by Mr. Hare and carried, with Mr. Lynn voting no. Mr. Anderson moved to recommend adoption of proposed Ordinance #2012-10, as amended to include CA#2, CA#3, and CA#4, seconded by Mr. Hare and unanimously carried. Proposed Ordinance #2012-17 - Amending Chapter 26 - Businesses, Article I - In General, Section 26-1 - Sale of Dangerous Substances Members reviewed proposed Ordinance #2012-17 - Chapter 26 - Businesses, Article I - In General, Section 26-1 - Sale of Dangerous Substances. Mrs. Ann Marie Townshend, Director of Planning and Community Development, explained that the proposed ordinance was developed in response to the chemical industry moving faster than staff’s ability to present code amendments. As a result, she stated that the proposed ordinance would amend the City Code regarding sale of Bath Salts to refer to Delaware Code, Title 16, Chapter 47, as it relates to Schedule 1 Controlled Substances, rather than listing the prohibited substances by name. It would also amend the penalties to declare any businesses that sells such substances a public nuisance and refers to license revocation through summary action. Mr. Lynn commended staff for taking immediate action to address the epidemic occurring with bath salts. Mr. Hare moved to recommend adoption of proposed Ordinance #2012-17, seconded by Mr. Shevock. Mr. Anderson relayed concern that the proposed ordinance could affect potential legislation dealing with medicinal marijuana, the use of which he felt would be appropriate. The motion recommending adoption of proposed Ordinance #2012-17 (Attachment #5) was carried, with Mr. Anderson voting no. Elimination of Pay for Performance Mr. Hutchison questioned if the Pay for Performance policy identified the value of each and every job and a recommendation for entry-level, midpoint, and maximum salary for every employee. Responding, Mr. Scott Koenig, City Manager, stated that the Pay for Performance policy currently includes a salary table that states a minimum, midpoint, and maximum. This was the salary scale that was in place for Fiscal Year 2008. He stated that there is a scale that considers every position in the City, puts it on a grade, and provides a pay “band.” This was the table that was presented to the Salary and Benefits Committee.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 13 Mr. Hutchison questioned how the salaries for certain employees could become inconsistent with the policy. Mr. Koenig explained his understanding that, under the previous City Manager, the annual budget included a section called Pay for Performance, which included a matrix that provided a score. In addition, there was a page that included the existing salary scale and a proposed salary scale. For several years, he stated that City Council adopted the matrix but never adopted the new salary scale (which included a cost of living increase for the entire scale). He explained that this was the reason several positions that were identified in the Salary and Benefits Committee were beyond the scale, because the scale itself did not move forward as the raises were earned. Based on this information, Mr. Hutchison noted the need for fairness and the need to identify each employee’s value and to develop a salary scale. He suggested that staff consider the use of bonuses rather than salary increases. He felt that Council, along with the help of the City Manager, must “get a handle” on this matter for the future. In addition to concurring with Mr. Hutchison, Mr. Anderson relayed concern that there were employees who received raises based upon factors that had very little to do with the core performance of their jobs. He noted that job descriptions did not match the actual job responsibilities and the Pay for Performance system seemed to slide based on the favor of the evaluator more than job performance. As such, he felt that the City should rework the Pay for Performance system. He indicated that he was not opposed to the concept of pay for performance, but that the current system was irrevocably broken, should be discarded, and a totally new system developed. Mr. Hutchison requested, if members decide to move forward with the development of a new system, that this be accomplished by City staff (a management team). Mrs. Russell advised members that she served as a president and chief shop steward for over 25 years and had never believed in pay for performance, feeling that it generates unfairness. Mr. Anderson moved to recommend that the current Pay for Performance system to be eliminated effective July 1, 2012, seconded by Mr. Hare. Mr. Shevock relayed concern with eliminating a system if there were no system to replace it, explaining that this could potentially cause chaos for the City Manager. Mr. Hutchison requested that the motion be amended to request the City Manager to develop a recommendation and allow for the Pay for Performance System to remain in place until such time as a new system is in place. Mr. Anderson moved to recommend that the Pay for Performance be eliminated effective upon the approval of a new system brought forth by the City Manager and staff, seconded by Mr. Hare.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF JUNE 11, 2012 PAGE 14 Mr. Bonar suggested that the City Manager be provided a specific date, such as August 1, 2012, as a set date to submit a recommendation in order to ensure a timely response, and that members of Council be included in the discussion with the City Manager, as well as the Human Resources staff. Disagreeing, Mrs. Russell requested that staff be provided ample time to develop a recommendation due to the importance of the issue and its effect on employee salaries, noting that this would not affect the current budget. The motion recommending that the Pay for Performance be eliminated effective upon the approval of a new system to be brought forth by the City Manager and staff was carried, with Mr. Lynn voting no. Reduced Rates for All-Electric Homes in December, January, and February (Requested by Ted George During Open Forum at City Council) Due to time constraints, this item was deferred until the next meeting. Mr. Shevock moved for adjournment, seconded by Mr. Hare and unanimously carried. Meeting Adjourned at 7:08 P.M. Sean M. Lynn Chairman SML/jg/js/dd S:\AGENDAS-MINUTES-PACKETS\Committee-Minutes\2012\06-11-2012 LF&A.wpd Attachments to Original and File Copy Attachment #1 - Letters and Other Correspondence from Various Employees Attachment #2 - CA-#2 to proposed Ordinance #2012-10 Attachment #3 - CA-#3 to proposed Ordinance #2012-10 Attachment #4 - CA-#4 to proposed Ordinance #2012-10 Attachment #5 - Proposed Ordinance #2012-17

ACTION FORM PROCEEDING: City Council AGENDA ITEM NO.: DEPARTMENT OF ORIGIN: Mayor’s Office / City Manager’s Office DATE SUBMITTED: 6/15/12 PREPARED BY: Carleton E. Carey, Sr. - Mayor SUBJECT: Evaluation of Bids – City Hall Generator (DEMA Grant) REFERENCE: N/A RELATED PROJECT: N/A APPROVALS: City Manager, Controller EXHIBITS: Generator Tabulation EXPENDITURE REQUIRED: $84,400 AMOUNT BUDGETED: $93,000 FUNDING SOURCE (Dept./Page in CIP & Budget): DEMA Grant TIMETABLE: Complete installation by September 15th. RECOMMENDED ACTION: Staff recommends that the City purchase the 200KW generator from Cahill Contracting Inc. for $84,400 to include installation and a five year warranty. BACKGROUND AND ANALYSIS Proposals were solicited and advertised according to City Policy by the City’s Contract and Procurement Manager, under Bid Number 12-0039EL and nine (9) bids were received. The bids were evaluated based on specifications, lead time and installation. The lowest bid had a 12-16 week lead time, which results in the completion date falling outside the DEMA grant requirement. Any portion of the project completed after the DEMA deadline, are not reimbursed by the grant. Staff contacted the lowest bidder to confirm that the delivery dates were firm. The response was that the dates were the best that they could do. In addition to the timeline issue, the lowest bidder proposed a generator that is physically larger than the generator specified. This results in reduced clearance, which decreases maintenance and operational safety. The second lowest bidder proposed the generator specified by staff and meets the DEMA deadline requirements. Additionally, this proposal is within the DEMA grant award amount of $93,000. Staff recommends the second lowest bid, Cahill Contracting Inc. (See included Generator Tabulation for bid information)

City of Dover Bid Tabulation Bid Number: 12-0039EL Bid Opening: June 6, 2012, 2:00 pm Bid Title: Generator for City Hall Vendor Name Price Bid Comments Cahill Contracting, Inc. Kevin Cahill Lead time: 7 Weeks 104 Sleepy Hollow Dr. Ste 201 $82,600.00 Local vendor: Rule 3 Middletown, DE 19709 5 year warranty: 302-378-9650 $1,800.00 Kohler Generator / meets mech Fax 302-378-9653 specs a little larger than specified. cahillelectricco@verizon.net Mid-Atlantic Electrical Services, Inc. Victor Rolli Lead time: 8-10 Weeks 24556 Betts Pond Rd $96,000.00 Local vendor: Rule 3 Millsboro, DE 19966 5 year warranty: 302-934-7171 $550.00 Kohler Generator / Meets mech Fax 302-934-7170 specs a little larger than specified vrolli@maes1.com Roy’s Electrical Service, Inc. James Roy Lead time: 45-60 Days 543 Main St $97,000.00 Local vendor: Rule 2 Cheswold, DE 19936 5 year warranty: 302-674-3199 $3,000.00 Meets all specs Fax 302-674-3062 royselectricalservice@gmail.com Triton Construction Co. Inc. Charlie Coxe Lead time: 7 Weeks 101 Pigeon Point Rd $89,900.00 Local vendor: Rule 3 New Castle, DE 19720 5 year warranty: Minority vendor 302-224-5457 $3,000.00 Fax 302-224-5460 Meets all specs ccoxe@tccico.com Tudor Electric Inc. Bobby Tudor Lead time: 8-10 Weeks 801 Otis Dr $91,700.00 Local vendor: Rule 1 Dover, DE 19901 5 year warranty: 302-736-1444 $346.50 Kohler Generator / Meets mech Fax 302-736-1483 specs a little larger than specified tudorelectric@verizon.net H&A Electric Company Joe/Rich Lead time: 8-10 Weeks 59 Roosevelt Ave $88,400.00 Local vendor: Rule 1 Dover, DE 19901 5 year warranty: 302-678-8252 $398.00 Kohler generator / Meets mech Fax 302-678-5610 specs a little larger than specified Joew.handa@comcast.net Central Services 6/15/2012

City of Dover Bid Tabulation Diamond Electric, Inc. Lead time: 8 Weeks Jerry Craig $99,580.00 Local vendor: Rule 2 3566 Peachtree Run Optional 5 year Dover, DE 19901 warranty Assumption that bid meets specs. No 302-697-3296 $2,300.00 other specs were provided Fax 302-697-1328 Lead time: 12-16 Weeks Nickle Electrical Companies Local vendor: Rule 3 Scott Frieze $68,425.00 540 S. Bedford St 5 year warranty: Generac generator / Specs not clear Georgetown, DE 19947 $1,500.00 in packet. Phone conversation with 302-856-1006 Scott – Unit physically too big for Fax 302-856-6119 location. Carey’s Diesel Lead time: 7 Weeks Stephen Morin $96,577.00 Local vendor: Rule 2 168 Denny Rd 5 year warranty: Dover, DE 19901 $2,500.00 Meets spec. 302-678-3797 Central Services 6/15/2012

ACTION FORM PROCEEDING: City Council AGENDA: 06/25/2012 DEPARTMENT OF ORIGIN: Finance DATE SUBMITTED: 6/18/12 PREPARED BY: Donna Mitchell, Controller/Treasurer SUBJECT: Electric Rates & Tariffs RELATED PROJECT: Cost of Service Study – Burns & McDonnell dated May 29, 2012 APPROVALS: City Council EXHIBITS: Exhibit 1 – Current & Proposed Rates (Burns & McDonnell); TIMETABLE: To be implemented July 1, 2012 RECOMMENDED ACTION: Staff recommends Council approval of the proposed electric rates and tariffs as presented by Mr. Ted Kelly of Burns & McDonnell on May 29, 2012. As approved by City Council on February 13, 2012, Burns and McDonnell updated the 2008 Cost of Service Study for the Electric Revenue Fund. The study was completed in light of the City’s reduced cost of current and forecasted power supply and presented to City Council on May 29, 2012. The revised rates and tariffs are attached for implementation on July 1, 2012. It is important to note, that these rates were forecasted to cover the years FY13, FY14 and FY15. In doing so, the City will be required to use forecasted budget balances over the 8% policy in addition to funds in the rate stabilization reserve as a means of balancing the budget for the Electric Operating Fund. The financial forecast puts the Electric Revenue Fund back to the policy requirement at the end of the third year.

Electric Rates & Tariffs City of Dover July 1, 2012 RESIDENTIAL SERVICE CLASSIFICATION “R” This rate is available throughout the City of Dover electric service area for household related services in a single private dwelling and incidental service outside of the home through the same meter, provided such incidental service does not exceed 20 KW of connected load. Service size cannot exceed 600 amps. CHARACTER OF SERVICE Secondary voltage, 60 cycle, alternating current, single phase service Customer Charge Per bill 5.00 Energy Charge All kwh - per kwh 0.13160 MINIMUM MONTHLY BILL The minimum monthly bill shall be the Customer Charge. PURCHASE POWER ADJUSTMENT All kilowatt-hours billed under this rate shall be subject to the Purchase Power Clause included in this schedule. PUBLIC UTILITY TAX In addition to the charges provided in this service classification a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RENEWABLE ENERGY CHARGE All kilowatt hours billed under this rate shall be subject to the “GEF” Rider. RULES AND REGULATIONS The General Rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. Effective Date: July 1, 2012 2

Electric Rates & Tariffs City of Dover July 1, 2012 SMALL COMMERCIAL SERVICE CLASSIFICATION “C and C1" AVAILABILITY This rate is available throughout the City of Dover electric service area for small commercial and industrial purposes through a single meter. The maximum monthly usage must not exceed 3,500 KWH per month or have instrument rated metering. If there is a major change in the character of service or if the KWH usage exceeds 3,500 KWH for two (2) consecutive billing months, the account will be automatically transferred to the Medium Commercial Service Classification. If the customer’s usage does not exceed 3,500 KWH after a period of one (1) year, the customer may be returned to the Small Commercial Service Classification. CHARACTER OF SERVICE Secondary voltage, 60 cycle, alternating current, single or three phase service. Other voltages may be applicable where available and at the option of the City. Customer Charge Per bill - Single Phase Service 5.00 Per bill - Three Phase Service 15.00 Energy Charge Per KWH 0.11760 MINIMUM MONTHLY BILLING The minimum monthly billing shall be the Customer Charge. PURCHASE POWER ADJUSTMENT All kilowatt-hours billed under this rate shall be subject to the Purchase Power Clause included in this schedule. PUBLIC UTILITY TAX In addition to the charges provided for in this service classification, a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RENEWABLE ENERGY CHARGE All kilowatt hours billed under this rate shall be subject to the “GEF” Rider. RULES AND REGULATIONS The General Rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. Effective Date: July 1, 2012 3

Electric Rates & Tariffs City of Dover July 1, 2012 MEDIUM COMMERCIAL SERVICE CLASSIFICATION “C2 and C3" AVAILABILITY This rate is available throughout the City of Dover electric service area for commercial and industrial purposes through a single meter having monthly usages of more than 3,500 KWH for two (2) consecutive months. If the customer has a major change in the character of service and falls below the above criteria, the customer may be returned to the Small Commercial Service Classification. CHARACTER OF SERVICE Secondary voltage, 60 cycle, alternating current, single or three phase service. Other voltages may be applicable and at the option of the City. Customer Charge Per Bill - Single Phase Service 5.00 Per Bill - Three Phase Service 15.00 Demand Charge All KW, per KW 15.70 Energy Charge All KWH, per KWH 0.07580 DETERMINATION OF DEMAND The Billing Demand will be the maximum fifteen (15) minute demand during the month, determined by a block demand meter. MINIMUM MONTHLY BILLING The minimum monthly bill shall be the Customer Charge and a Demand Charge based on sixty percent (60%) of the greatest Billing Demand established during any month of the 12-month period ending with the current billing month. PURCHASE POWER ADJUSTMENT All kilowatt-hours billed under this rate shall be subject to the Purchase Power Clause included in this schedule. PUBLIC UTILITY TAX In addition to the charges provided for in this service classification, a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RENEWABLE ENERGY CHARGE All kilowatt hours billed under this rate shall be subject to the “GEF” Rider. RULES AND REGULATIONS The General Rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. Effective Date: July 1, 2012 4

Electric Rates & Tariffs City of Dover July 1, 2012 LARGE COMMERCIAL SERVICE CLASSIFICATION “C5" AVAILABILITY This rate is available throughout the City of Dover electric service area for commercial and industrial purposes having instrument rated metering. If there is a significant change in the character of service, the City will, at its option on a case by case basis, temporarily transfer the account to another tariff. CHARACTER OF SERVICE Secondary voltage, 60 cycle alternating current, single or three phase service. Other voltages may be applicable when available and at the option of the City. Customer Charge Per bill - single or three phase service 15.00 Demand Charge All kW - per kW 15.70 Energy Charge All kwh - per kwh 0.07580 DETERMINATION OF DEMAND The Billing Demand will be the maximum fifteen (15) minute demand during the month, determined by a block demand meter. In any month in which the average power factor at the delivery point is greater or less than ninety-five percent (95%) the measured demand shall be corrected in accordance with the following formula: Billing Demand = Measured demand X .95 Average Power Factor The city measures both leading and lagging power factor, treating both as non-unity power factors, and the customer is billed accordingly. MINIMUM MONTHLY BILLING The minimum monthly bill shall be the Customer Charge and a Demand Charge based on sixty percent (60%) of the greatest Billing Demand established during any month of the 12-month period ending with the current billing month. PURCHASE POWER ADJUSTMENT All kilowatt-hours billed under this rate shall be subject to the Purchase Power Clause included in this schedule. PUBLIC UTILITY TAX In addition to the charges provided for in this service classification, a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RENEWABLE ENERGY CHARGE All kilowatt hours billed under this rate shall be subject to the “GEF” Rider. RULES AND REGULATIONS The General Rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. Effective Date: July 1, 2012 5

Electric Rates & Tariffs City of Dover July 1, 2012 PRIMARY SERVICE CLASSIFICATION “P” AVAILABILITY This rate is available throughout the City of Dover electric service area for commercial and industrial customers taking delivery at the primary voltage available, and where the transforming and protective apparatus is furnished, owned and maintained by the customer. CHARACTER OF SERVICE Primary voltage, 60 cycle, alternating current, single phase or three phase service. Customer Charge Per bill - single or three phase 10.00 Demand Charge All KW - per KW 11.25 Energy Charge All kwh - per kwh 0.07540 DETERMINATION OF DEMAND The Billing Demand will be the maximum sixty (60) minute demand during the month, determined by a block demand meter. In any month in which the average power factor at the delivery point is greater or less than ninety-five (95%), the measured demand shall be corrected in accordance with the following formula: Billing Demand = Measured demand x .95 Average Power Factor The City measures both leading and lagging power factor, treating both as non-unity power factors and the customers are billed accordingly. MINIMUM MONTHLY BILL The minimum monthly bill shall be the Customer Charge and a Demand Charge which shall be based on the greater of three hundred kilowatts (300 KW) or 60% of the greatest Billing Demand established during any month of the 12 month period ending with the current billing month. PURCHASE POWER ADJUSTMENT All kilowatt hours billed under this rate shall be subject to the Purchase Power Clause approved by the Council of the City of Dover. PUBLIC UTILITY TAX In addition to the charges provided for in this service classification, a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RENEWABLE ENERGY CHARGE All kilowatt hours billed under this rate shall be subject to the “GEF” Rider. RULES AND REGULATIONS The General Rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. If a customer who is on the Primary Service Classification wishes to switch to the Large Commercial Service Classification, the customer may do so at the customer's choice. If such a change occurs, the City will determine on a case- by-case basis which portion, if any, of the customer-owned electrical equipment will be maintained by the City provided, however, that any equipment transferred to City ownership will be so transferred at no cost to the City. Effective Date: July 1, 2012 6

Electric Rates & Tariffs City of Dover July 1, 2012 TRANSMISSION VOLTAGE “T” AVAILABILITY This rate is available by special contract throughout the City of Dover electric service area to customers located where Dover's existing facilities are adequate to supply the character of service as specified below. CHARACTER OF SERVICE The electric power delivered hereunder shall be three phase, 60 cycle, alternating current at a nominal potential of sixty-nine thousand (69,000) volts. Demand, energy and power factor will be metered at the point of delivery of service. All transformation, circuiting and protective apparatus beyond the point of delivery shall be installed, owned and maintained by the customer. Service shall be supplied and metered at 69,000 volts, and the customer is required to own and maintain all transforming, switching and protective equipment. Demand Charge All KW - per KW 10.50 Energy Charge All KWH, per KWH 0.07270 DETERMINATION OF DEMAND The measured demand shall be the average of the four (4) greatest sixty (60) minute demands measured on separate days of each month. In any month in which the average power factor at the delivery point is greater or less than ninety-eight and one half percent (98.5%), the measured demand shall be corrected in accordance with the following formula: Billing Demand = Measured demand x . 985 Average Power Factor The City measures both leading and lagging power factor, treating both as non-unity power factors and the customers are billed accordingly. MINIMUM MONTHLY BILL The minimum monthly charge shall be seventy-five percent (75%) of the greatest Billing Demand during the preceding 11 months and energy equal to three hundred (300) hours' use of that demand. PURCHASE POWER ADJUSTMENT All kilowatt hours billed under this rate shall be subject to the Purchase Power Clause included in this schedule. PUBLIC UTILITY TAX In addition to the charges provided for in this service classification, a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RENEWABLE ENERGY CHARGE All kilowatt hours billed under this rate shall be subject to the “GEF” Rider. RULES AND REGULATIONS The General Rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. Effective Date: July 1, 2012 7

Electric Rates & Tariffs City of Dover July 1, 2012 OUTDOOR DEVELOPMENT LIGHTING RATE (Residential Area Lighting Only) “OL” AVAILABILITY This rate is available throughout the City of Dover service area for residential developments/mobile home park lighting. CHARACTER OF SERVICE Secondary voltage, 60 cycle alternating current, single phase. TERMS OF SERVICE The association and/or owner shall install and maintain all lighting and associated equipment. This rate applies to one metering point. If multiple metering points are required to reduce voltage drop, a totalized bill will be rendered. The metering point(s) will be governed by the City of Dover. The initial term for lighting service shall be for one (1) year with automatic month to month extension until either party terminated this agreement via letter. Billing will be monthly. If this contract is terminated prior to the one year agreement, the customer shall reimburse the City of Dover for all expenses incurred. Customer Charge Per Bill 9.00 Energy Charge All kwh - per kwh 0.1225 MINIMUM MONTHLY CHARGE The minimum monthly bill shall be the Customer Charge. PURCHASE POWER ADJUSTMENT All kilowatt-hours billed under this rate shall be subject to the Purchase Power Clause included in this schedule. PUBLIC UTILITY TAX In addition to the charges provided for in this service classification, a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RENEWABLE ENERGY CHARGE All kilowatt hours billed under this rate shall be subject to the “GEF” Rider. RULES AND REGULATIONS The General rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. Effective Date: July 1, 2012 8

Electric Rates & Tariffs City of Dover July 1, 2012 PRIVATE OUTDOOR LIGHTING SERVICE CLASSIFICATION AVAILABILITY This rate is available throughout the City of Dover electric service area for all-night outdoor lighting service for lighting of outdoor areas on private property. CHARACTER OF SERVICE UNMETERED - This will be the standard installation practice. The lights under this classification shall be fed directly from the City of Dover’s energy source. METERED - This classification will be available at the City of Dover’s discretion and only when it is not feasible to install the lighting service from an unmetered source. These lights will have the energy supplied through the customers meter and the monthly rental fee shall be reduced to reflect this customer expense. TERMS OF SERVICE The equipment supplied will be the type of fixture currently being furnished by the City at the time of installation as described below in the Classifications of Security Lights, Decorative Lighting, and Roadway/Area Lighting. Lighting shall be from dusk to dawn each day. The initial term for lighting service shall be for two (2) years. The City may require a fee if the installation is removed prior to the two (2) year term. Where service is not associated with a metered service, a Customer Charge of $5.00 for residential lights and $10.00 for commercial lights will be added to cover the associated costs of billing and related consumer costs not reflected in the lighting schedule. Unmetered - The City shall maintain, relamp, and supply the energy to the lighting equipment that it owns. Metered - The City shall also maintain and relamp the lighting equipment it owns where energy is not supplied. The City will perform relamping, repair, and/or maintenance during normal working hours within a reasonable period following notification by the Customer. Customers requiring unique or unusual lighting service different than outlined below may obtain such service under a mutually agreeable contractual arrangement. SECURITY LIGHTS Includes a 2' (+/-) arm, pole not included. If a pole needs to be installed, the location shall be accessible to truck traffic via driveway, roadway, alleyway, or other public accessible parking areas. If a pole must be installed and the location is not truck accessible, a decorative lighting fixture may be installed at the applicable rated. Unmetered Est. Monthly Metered Monthly Monthly Charge KWH Rental Charge 100 watt HPS 8.40 47 2.97 175 watt MV 9.91 68 2.53 The following style is not available after February 28, 1997. 70 watt HPS 7.30 33 9

Electric Rates & Tariffs City of Dover July 1, 2012 DECORATIVE LIGHTING Includes a 18' fiberglass pole (15' above ground). The electrical service to these poles shall be underground; therefore, the installation location shall be accessible to trencher traffic. Unmetered Est. Monthly Metered Monthly Monthly Charge KWH Rental Charge 70 watt HPS w/o ladder rest 12.71 33 6.99 150 watt HPS w/o ladder rest 15.83 62 7.18 250 watt HPS w/o ladder rest 22.16 101 9.19 The following styles are not available after February 28, 1997: Est. Monthly Monthly Charge KWH 175 watt MV w/o ladder rest 15.46 68 175 watt MV contemporary 16.16 68 ROADWAY/AREA LIGHTING Includes choice of bracket from 8' to 16' if the fixture is accessible to truck traffic via driveway, roadway, alleyway, or other public accessible parking areas. If not accessible to trucks a 2' (+/-) arm shall be used. Pole not included. Unmetered Est. Monthly Metered Monthly Monthly Charge KWH Rental Charge 100 watt HPS 10.04 47 4.08 175 watt MV 11.24 68 3.50 250 watt HPS 15.58 101 4.39 250 watt MV 15.58 101 4.39 400 watt MV 20.90 154 4.60 400 watt HPS 21.00 155 4.66 POLE CHARGES PER MONTH For each wood pole required exclusively for the support of lighting fixtures or lighting circuits under this service classification a per pole charge will be assessed as follows: Monthly Charge Poles installed through February 28, 1997 2.28 Poles installed or changed out after February 28, 1997 3.52 PURCHASE POWER ADJUSTMENT This rate will not be subject to the Purchase Power Clause. PUBLIC UTILITY TAX In addition to the charges provided for in this service classification, a surcharge will apply in accordance with any tax imposed by governmental authority upon sales of electricity. RULES AND REGULATIONS The General Rules and Regulations of the City of Dover for electric service shall apply to service rendered under this service classification. Effective Date: July 1, 2012 10

FIRST READING CITY OF DOVER ORDINANCE #2012-13 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL 2 MET: 3 4 That Appendix B – Zoning, Article 5 – Supplementary Regulations, Section 4 – Supplementary Sign 5 Regulations be amended by deleting the text in red, bold, strikethrough and inserting the text in blue, bold, 6 italics as follows: 7 8 Section 4. Supplementary sign regulations. 9 10 4.1 Purpose statement. The purpose of this ordinance [section] is to create a legal framework for 11 a comprehensive and balanced system of signs and other street graphics to facilitate an easy and 12 pleasant communication between people and their environment. This ordinance [The ordinance from 13 which this section is derived] is enacted to avoid the visual clutter that is potentially harmful to 14 vehicular and pedestrian safety, property values, business environment and opportunities, and 15 community appearance. With these purposes in mind, it is the intent of this ordinance [section] to 16 authorize the use of signs which are compatible with their surroundings, appropriate to the activity that 17 displays them, expressive of the identity of individual activities and the community as a whole, and 18 legible in the circumstances in which they are seen, understanding that it is important for the economic 19 vitality of the community as well as individual businesses and institutions that they are clearly 20 identified and their services are understood by the traveling public. 21 22 All signs, which are regulated by this ordinance section, shall conform to the following general 23 guidelines: 24 25 A. The legibility of signs. Signs shall be legible under the circumstances in which they are 26 primarily seen. Signs shall legibly convey their messages without being distracting or unsafe to 27 motorists reading them. The legibility of signs is related to the speeds at which they are viewed; 28 the context and surroundings in which they are seen; [and] the design, colors, and contrasts of the 29 sign copy and sign face. 30 31 B. The relationship of signs to the buildings and sites they identify. Signs shall be an integral 32 architectural element of the buildings and sites that they identify and their design shall be 33 consistent with, and not detract from, the overall architectural concept of the site. Signs should be 34 of an appropriate size and scale in relation to the buildings on the lot. 35 36 4.2 General provisions. 37 38 A. Permitting. No sign, advertising display or structure, poster or device shall be erected, 39 moved, enlarged or reconstructed except in accordance with this ordinance. All signs, 40 except exempt signs, shall require a permit and fee as prescribed in Appendix F, Chapter 41 22-Buildings and Building Regulations. 42 43 Page 1 of 26

44 B. Administration. Administration, interpretation, and enforcement of the provisions of this 45 section shall be under the authority of the city planner or their authorized designee. In 46 administering the provisions of this ordinance section, the city planner shall evaluate signs 47 and applications for sign permits for conformity with the design guidelines, standards, and 48 specifications contained herein. Appeals from the application or interpretation of any provision of 49 this ordinance section may be processed in accordance with the provisions of article 9 (board 50 of adjustment) of this ordinance section. 51 52 C. Unsafe, dilapidated and illegal signs. If it is determined by the city planner or his 53 authorized designee that any sign is unsafe, presents a hazard to the safe operation and movement 54 of motorized or nonmotorized vehicular traffic, or to pedestrians, or is in a dilapidated condition, 55 or is in a state of disrepair, or is otherwise in violation of any provision of this ordinance 56 section, the owner of such sign shall be responsible for removal of such sign and supporting 57 structure within 14 days of receipt of written notification by the city planner. In cases where 58 signs are determined to be unsafe or present a hazard, the city planner may order their removal 59 in a shorter period of time. Responsibility for removal shall be in accordance with subsection 60 4.10 - Nonconforming signs, B., and subsection 4.11 - Abandoned and Damaged signs, of this 61 section. 62 63 D. Setback. All signs, including those which do not require a permit, shall be setback from 64 the right-of-way in accordance with the provisions of Article 5, Section 4.7, unless otherwise 65 specified, and shall not interfere with aboveground or underground utilities. 66 67 E. Administrative Waiver. For existing developed properties where placement of the sign in 68 accordance with the required setback would interfere with existing required parking, fire 69 lane, or other site improvements, the city planner shall have the authority to waive the 70 setback requirement. 71 72 4.3 Sign definitions. 73 74 Abandoned sign: A sign relating to or identifying a business or activity which has not been conducted 75 on the premises for 60 90 days, or seven days after an election or event that the sign is advertising. 76 77 Adjacent to residential: Property lines which are situated within 200 feet and which front on the same 78 street as a parcel, or group of parcels containing residential uses, or that are zoned for residential uses, 79 excluding residential uses and districts fronting on principal arterial roads. 80 81 Architectural feature: An exterior component of the architecture of a building, which has a structural, 82 functional or decorative purpose. This term shall apply to elements such as windows, doors, entry 83 porticos, porte-cocheres, colonnades, cornices, porch columns, railings and balusters, band courses, 84 coins quoins, water tables, exterior vents and louvers, moldings and other trim. 85 86 Awning sign: A wall sign that is a part of a fabric or other non-structural awning. 87 88 Banner: A light-weight fabric or similar non-rigid material which is mounted to a pole or structure, 89 either enclosed in a frame or mounted to allow movement caused by the atmosphere. 90 91 Canopy sign: A type of wall sign attached to a permanent, decorative porch or walkway cover, other 92 than an awning, which is attached to a building or supported by columns, extending to the ground. Page 2 of 26

93 94 Changeable copy sign: Any sign involving mechanical or electronic systems which enable such 95 signs, letters, numbers, or graphics to be changed periodically to display different text messages 96 or graphics. A sign with the capability of content change by means of manual or remote input, 97 includes the following types: 98 99 (1) Manually activated – Changeable sign whose messages, copy or content can be changed 100 manually on a display surface. 101 102 (2) Electrically activated – Changeable sign whose message copy or content can be changed by 103 means of remote electrically energized on-off switching combinations of alphabetic or 104 pictographic components arranged on a display surface. Illumination may be integral to the 105 components, such as characterized by lamps or other light-emitting devices; or it may be 106 from an external light source designed to reflect off the changeable component display. See 107 also Electronic Message Center. 108 109 Clear Height: The distance from the ground to the bottom of the sign. The minimum clear height shall 110 be eight feet for pylon sign, projecting sign, and any other sign that may impact pedestrian traffic. 111 112 Comprehensive signage plan: A plan for all signs associated with a unified campus or complex. 113 114 Conforming sign: Any sign that conforms to the provisions of this ordinance section. 115 116 Construction sign: A sign which identifies architects, engineers, contractors and other individuals or 117 firms involved with construction on the premises, the name of the building or development, the intended 118 purpose of the building, and/or the expected completion date. 119 120 Directional sign: A freestanding sign whose primary function is to give aid to motorists or pedestrians 121 in locating buildings or roads. 122 123 Electronic Message Center or Sign (EMC): An electrically activated changeable sign whose 124 variable message and/or graphic presentation capability can be electronically programmed by 125 computer from a remote location. Also known as an EMC. EMC’s typically use light emitting 126 diodes (LEDs) as a lighting source. 127 128 Exclusion zone: The area adjacent to an existing or proposed freestanding sign within which no other 129 freestanding sign of a similar sign type shall exist or be placed. The exclusion zone shall be measured 130 outward in all directions from the extreme limits of the sign structure a prescribed distance. 131 132 Flag: A rectangular or pennant shaped piece of fabric or flexible material of distinctive design that 133 is used as a symbol (as of a nation or state), as a signaling device, or as a decoration and is 134 attached to a flag pole. 135 136 Freestanding sign: A sign that is not attached to a building and is permanently attached to the ground 137 by one or more supports. Freestanding signs include monument, pylon, post and panel, and post signs. 138 139 Frontage: For the purposes of this section, the term "frontage" refers to a lot's frontage parcel’s 140 property line along a right-of- way, be it public or private, excluding alleys and service drives that are 141 abutting residential properties. The parcel must be directly adjacent to the right-of-way for it to be Page 3 of 26

142 considered to have frontage. 143 144 Historical or memorial sign: A sign or tablet attached to a building indicating the date of construction 145 and/or the names of the building, the principals involved in its construction, or the history of the building 146 or the site. 147 148 Illuminance: The amount of light falling upon a real or imaginary surface, commonly called “light 149 level” or “illumination”. Measured in foot candles (lumens/square foot) in the English system and 150 lux (lumens/square meter) in the SI (metric) system. 151 152 Illuminated Sign: A sign characterized by the use of artificial light, either projecting through its 153 surface (s) internally or trans-illuminated; or reflecting off its surface(s). 154 155 Inflatable sign: A sign that is designed to be filled with air to form a three-dimensional shape which is 156 designed to be anchored to the ground. 157 158 Luminance: The light that is emitted by or reflected from a surface. Measured in units of luminous 159 intensity (candelas) per unit area (square meters in SI measurement units or square feet in English 160 measurements units). Expressed in SI units as cd/m2, and in English units as foot lamberts. 161 Sometimes also expressed as “nits”, a colloquial reference to SI Units. Can be measured by means 162 of a luminance meter. 163 164 Lux: The SI (metric) unit for illuminance. One lux equals 0.093 foot candles. 165 166 Monument sign: A low freestanding sign that is affixed to a base that is equal to or wider than the sign 167 itself. The height of the sign is to be measured from the finished grade to the top of the sign. (See figure 168 5-3.) Such signs shall be situated so as to have the longer dimension oriented horizontal, and to 169 have the shorter dimension oriented vertical. 170 171 172 173 174 Mountable wall area: The area of a wall where a wall sign is to be physically mounted. The area 175 of the wall must be a regular geometric shape (square, rectangle, triangle, or circle), and be 176 uninterrupted by windows, doors, or other architectural features. (See figure 5-4.) Page 4 of 26

177 178 FIGURE 5.4 TO BE REMOVED 179 180 Nit: A photometric unit of measurement referring to luminance. One nit is equal to one cdm2. 181 182 Nonconforming sign: Any sign which does not conform to the regulations of this ordinance, including 183 any signs granted by variance where it can be demonstrated that the original hardship on which the 184 variance was based no longer exists. This definition also includes the structure upon which the sign is 185 erected, or the mounting hardware in the case of wall mounted signs. 186 187 Off-premises sign (billboard, etc.): A sign, other than a shared freestanding sign as defined by 188 this section, which directs attention to a business, commodity, service or entertainment not 189 conducted, sold or offered on the premises where the sign is located, or which business, 190 commodity, service or entertainment forms only minor or incidental activity upon the premises 191 where the sign is displayed. The sale of a commodity is considered a minor activity if the 192 commodity advertised is a specific brand or if the operator of the on-premises business does not 193 directly control the advertising content. These product- oriented signs shall be considered on- 194 premises signs if they comply with on-premises sign requirements. A permanent or temporary sign 195 erected, maintained, or used in the outdoor environment for the purpose of the display of 196 commercial or noncommercial messages not appurtenant to the use of, products sold on, or the 197 sale or lease of the property on which it is displaced. Also referenced as billboard or commercial 198 outdoor advertising sign. 199 200 On-premises sign: A sign which advertises or directs attention to a business, commodity, or service 201 conducted, offered, or sold on the premises, or directs attention to the business or activity conducted on 202 the premises. 203 204 Political Sign: A temporary sign intended to advance a political statement, cause, or candidate for 205 office. 206 207 Portable sign: Any sign not permanently attached to the ground or other permanent structure, including 208 but not limited to signs with attached wheels;, A- or T-frame signs;, [and] menu and sandwich board 209 signs. 210 211 Post sign: A freestanding sign that is attached to the underside of a horizontal plane or arm and is 212 supported by the horizontal plane. (See figure 5-5 5-4.) 213 Page 5 of 26

214 215 216 Post and Panel sign: A freestanding sign that has a noninternally illuminated panel, not more than 217 six inches in depth that is affixed to two posts and is not more than seven feet in total height. The sign 218 shall not be higher than the supporting posts. (See figure 5-6 5-5.) 219 220 221 Post and 222 Panel Sign 223 224 225 226 FIGURE 5-6 227 5-5 228 229 230 Projecting sign: A wall sign attached to a building with a bracket or other support projecting at a right 231 angle from the building face. (See figure 5-7 5-6.) 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 Public sign: A sign erected by or on behalf of a governmental body to post a legal notice, identify public 250 property or public buildings, convey public information, and direct or regulate pedestrian or vehicular 251 traffic. 252 253 Pylon sign: A tall freestanding sign that is held up by a pole or poles. The supporting structure must be 254 equal to or narrower than the sign itself. (See figure 5-8 5-7.) 255 Page 6 of 26

256 257 258 Race weekend sign: Any sign erected seven days prior to or after a sanctioned automobile race for the 259 purpose of advertising products and services to race fans. 260 261 Real estate sign: A sign advertising the premises for sale, rent or lease. 262 263 Roof sign: A sign that is attached or painted on the roof, including porch roofs, dormer roofs, overhang 264 roofs, canopy roofs or roofs of another architectural feature. Signs on the lower portion of a mansard or 265 canopy are considered wall signs. 266 267 SI (International System of Units): The modern metric system of measurement. 268 269 Shared freestanding sign: A sign structure which is shared among not more than two multiple 270 nonresidential properties or business interests for the purpose of displaying the name, logo type or 271 other commercial message of not more than two multiple nonresidential occupants of said adjoining 272 properties. 273 274 Sign: Any letter, word, model, banner, pennant, insignia, trade flag, device or representation 275 used as, or which is in the nature of, an advertisement, attraction, or directive. Any device 276 visible from a public place whose essential purpose and design is to convey either commercial or 277 noncommercial messages by means of graphic presentation of alphabetic or pictorial symbols or 278 representations. 279 280 Sign area: Sign area is determined by calculating the area of an imaginary rectangle, circle or 281 triangle which fully encloses the sign face, including background and logos, but not including 282 supports or braces. For sign structures limited to two sign faces of identical dimensions oriented 283 parallel to one another and not more than 24 inches apart; or not more than 36 inches apart for 284 freestanding signs on an Urban Principal Arterial, sign area shall be determined by calculating 285 the area of one of the sign faces. For all other multi-faced signs, the sign area shall be 286 determined by calculating the sum of all sign faces in aggregate. The area of the smallest 287 geometric figure, or the sum of the combination of regular geometric figures, which comprise the 288 sign face. The area of any double-sided or “V” shaped sign shall be the area of the largest single 289 face only. The area of a sphere shall be computed as the area of a circle. The area of all other 290 multiple-sided signs shall be computed as fifty (50) percent of the sum of the area of all faces of 291 the sign. 292 293 Page 7 of 26

294 Sign face: The outwardly visible portion of the sign upon which a name or names, logo types or 295 other commercial message, or combination thereof, is displayed. The surface upon, against or 296 through which the sign copy is displayed or illustrated, not including structural supports, 297 architectural features of a building or sign structure, nonstructural thematic or decorative trim, or 298 any areas that are separated from the background surface upon which the sign copy is displayed 299 by a distinct delineation, such as a reveal or border. 300 301 Sign height: The height of a sign shall be the vertical distance from normal grade to the highest point 302 of the sign. Any berming, filling or excavating solely for the purpose of locating the sign shall be 303 computed as a part of the sign height. 304 305 Sign setback: The straight line distance measured in linear feet between the street right-of-way line and 306 the nearest element of a sign. 307 308 Temporary sign: Any sign which is intended for temporary use or which is not permanently 309 mounted and intended for a designated period in time not to exceed 30 days except as stated in 310 subsection 4.9 - Supplementary sign provisions, D., 1., of this section. A sign intended to display 311 either commercial or noncommercial messages of a transitory or temporary nature. Any sign not 312 permanently embedded in the ground, or not permanently affixed to a building or sign structure 313 that is permanently embedded in the ground, is considered a temporary sign. 314 315 Unified campuses and complexes: The term "unified campuses and complexes" means: 316 (1) Any "shopping center" as the term is defined in this ordinance section; 317 (2) Or, any group of three or more principal structures under common management and 318 operation, located on one or more contiguous properties; 319 320 (3) Or, any single commercial or institutional parcel which has more than 400 linear feet of 321 frontage on a principal arterial roadway which is occupied by a conforming commercial or 322 institutional use. Unified campuses and complexes include, but are not limited to, shopping 323 centers; entertainment, educational, medical, governmental, or religious campuses; office 324 complexes; and industrial parks. 325 326 Urban Collector and Local Streets: All streets or portion of streets within the corporate limits of the 327 City of Dover which are not specifically classified as urban principal arterials or urban minor arterials 328 under the provisions of this ordinance section. 329 330 Urban Minor Arterials: Delaware (DE) Route 8 (including all alternative names); McKee Road; 331 Saulsbury Road; College Road; North Street (from Saulsbury Road to the western city limits); Kenton 332 Road (from College Road to DE Route 8); State Street (from Walker Road north to US Route 13 and 333 Wyoming Avenue south to the southern city limits); Loockerman Street; Leipsic Road; Webbs Lane, 334 New Burton Road, Scarborough Road, Walker Road and Governors Avenue (from Division Street to 335 the southern city limits) are considered to be urban minor arterials under the provisions of this ordinance 336 section. 337 338 Urban Principal Arterial: US Route 13, Bay Road, and Court Street between 13 and Bay Road 339 are considered to be urban principal arterials under the provisions of this ordinance. Delaware State 340 Route 1 is not considered to be a road that will provide frontage for any parcel. Page 8 of 26

341 342 Vehicle sign: A sign displaying a name or names, logo types, graphics, commercial messages or any 343 combination thereof, which is attached to, painted on, or otherwise applied to a motor vehicle. 344 345 Wall area: For purposes of calculating wall area, the calculations shall include the height of the wall 346 from ground level to the roofline (mansard roofs also count as wall area), multiplied by the width of the 347 wall (including all architectural features). (See figure 5-4.) 348 349 Wall sign: Any sign, other than a projecting sign, which is attached to or painted on any wall of any 350 building and projects from the plane of the wall less than 12 18 inches. A sign attached to the lower 351 slope or face of a mansard roof, canopy, or awning shall be considered a wall sign for purposes 352 of this ordinance. For purposes of this section only, a "wall" shall include any permanent architectural 353 extension of a wall, including parapets, even if such extension projects beyond or above the enclosed 354 portions of the building. Canopy, marquee, and awning signs are all types of wall signs. (See figure 5- 355 9 5-8). 356 357 Window sign: A wall sign which is attached to, painted on or etched into a window or door, or 358 which is displayed within 12 inches of the window and is legible from outside the window. A 359 sign affixed to the surface of a window with its message intended to be visible to the exterior 360 environment. 361 362 4.4 Design requirements. 363 364 A. Freestanding signs. 365 366 1. Freestanding signs and attendant structures and bases shall be designed as an integral 367 part of the site development and shall be coordinated and compatible with site grading, utility 368 placements, landscaping and architectural elements. 369 370 2. Freestanding signs and associated landscaping shall be situated and maintained so as 371 not to impair or block visibility of motorists and/or pedestrians traveling within the public 372 street right-of-way or entering, exiting or crossing vehicular site entrances. No sign or 373 landscaping in excess of three (3) feet in height above the adjacent street grade, shall be 374 erected, placed or maintained on any corner within the triangular area formed by intersecting 375 right-of-way lines. Two sides of the triangular area shall be 20 feet in length and measured 376 from the point of intersection of the right-of-way lines. 377 Page 9 of 26

378 379 3. Freestanding signs shall be situated on the site and dimensioned so as not to 380 substantially impair or block the visibility of adjacent buildings and/or existing signs. 381 382 4. All freestanding signs shall respect the exclusion zone. When a sign is not permitted 383 within the exclusion zone, a second one (1) additional wall sign may be permitted in 384 accordance with the wall sign regulations. 385 386 5. When the presence of an existing freestanding sign on an adjoining property precludes 387 a property from placing a freestanding sign due to exclusion zone provisions, the two 388 adjoining property owners and/or business interests may share a single freestanding sign 389 structure in accordance with the provisions of subsection 4.9 - Supplementary sign 390 provisions, G F - Shared freestanding signs, of this section. 391 392 6. Location of monument signs and /post and panel signs may be approved by 393 the Planning Commission as part of a Site Development Plan Approval process. 394 395 B. Materials and craftsmanship of signs. Signs shall be carefully crafted, durable, and consistent 396 with the quality and permanence of the buildings and sites that they identify. Lettering shall be of 397 a professional quality. 398 399 C. Wall sign placement. 400 401 1. When wall signs are planned, such signs shall be designed as an integral component 402 of the building facade architectural composition. 403 404 2. Wall signs shall be limited in area and number in accordance with the provisions of 405 subsection 4.7 - Permitted signs, of this section, except that the aggregate area of a wall 406 sign on a building shall not exceed 50 percent of the mountable wall area of the 407 building. 408 409 410 3. Wall signs shall be situated so as not to cover or overlap decorative architectural 411 elements such as cornices, belt courses, and window and doorframe moldings. Wall signs 412 shall not project beyond the exterior wall corners of a building. 413 414 4. In cases where only one wall sign is permitted because the lot has one frontage, the 415 business may choose to locate the sign on any exterior wall of the building to afford the best 416 possible visibility for the traveling public. 417 418 5. In cases where more than one wall sign is permitted, the city planner or their 419 authorized designee may allow the business to locate the additional wall sign on a different 420 exterior wall of the building to afford the best possible visibility for the traveling public. 421 422 6. Wall sign height may be increased by the Planning Commission as a part of 423 the Architectural Review of a Site Development Plan Approval process; however, the 424 wall sign height may not exceed the building height. The proposed height shall 425 complement the architecture of the building as determined by the Planning 426 Commission. 427 Page 10 of 26

428 D. Illumination. Sign Illumination Standards Sign lighting is one of the greatest sources of 429 light in commercial districts. The glare and aesthetic impacts of signage depend strongly 430 on the design of the sign and its lighting. Proper illumination affects the legibility of signs. 431 This subsection discourages excessive lighting by favoring darker backgrounds for 432 internally illuminated signs, and the lighting of only the sign faces for externally 433 illuminated signs to reduce light pollution, while increasing legibility. 434 435 1. Signs that are equipped with illumination sources shall be designed to be 436 equally legible during the day and at night. A sign may be illuminated at night. Signs 437 that are illuminated at night may not exceed a maximum luminance level of seven 438 hundred fifty (750) cd/m2 or Nits, regardless of the method of illumination. 439 440 2. The intensity of illumination for the sign shall not be excessively bright and 441 shall be evenly illuminated over the face of the sign, with no bright spots, in order to 442 prevent direct glare. Signs that have external illumination, whether the lighting is 443 mounted above or below the sign face or panel, shall have lighting fixtures or 444 luminaries that are fully shielded. 445 446 3. Exterior illumination shall be shielded so that its direct light is confined to the 447 surface of the sign. All illuminated signs must comply with the maximum luminance 448 level of seven hundred fifty (750) cd/m2 or Nits at least one-half hour before Apparent 449 Sunset. All illuminated signs must comply with this maximum luminance level 450 throughout the night, if the sign is energized, until Apparent Sunrise. 451 452 4. Internally illuminated signs, except changeable copy signs, not in or not 453 adjacent to residential areas must conform to one of the following styles: 454 455 (a) Illuminated with an opaque background and translucent text or 456 symbols. 457 458 (b) Illuminated with a colored (not pure white, off-white, light gray, cream, or 459 yellow) background and lighter text or symbols. 460 461 (c) Illuminated with a background that is white, yellow, off-white, light gray, 462 [or] cream, consisting of no more than 40 percent of the sign area and not less 463 than 60 percent is text or symbols of a dark color. 464 465 5. Internally illuminated signs in or adjacent to a residential use must conform to 466 one of the following styles: 467 468 (a) Illuminated with an opaque background and translucent text or 469 symbols. 470 471 (b) Illuminated with a colored (not pure white, off-white, light gray, cream, or 472 yellow) background and lighter text or symbols. 473 474 475 476 Page 11 of 26

477 E. Changeable copy signs. 478 479 1. Changeable copy signs may be incorporated into a sign face when the changeable 480 component of the sign face occupies less than 70 percent of the total area of that sign face. 481 482 2. Changeable copy sign area shall be integrated into the sign face and shall be enclosed 483 by a border or similar enclosure so as to form one sign panel. 484 485 3. The changeable copy sign area text message and/or graphics shall not change any 486 more than one time in any given 15-second period, except for time and temperature 487 displays which may change more frequently than every 15 seconds. There shall be 488 no movement for any part of the sign including: flashing, animation, scrolling, etc. 489 When the sign changes it shall change in less than 1 second and it shall not flash or 490 have animation. 491 492 3. Electronic Message Centers (EMC) 493 494 (a) The following EMC display features and functions are permitted: 495 scrolling, fading and dissolving while transitioning between messages. 496 497 (b) EMC’s shall have a minimum display time of eight seconds. The 498 transition time between message and/or message frames is limited to one 499 second. 500 501 (c) The following EMC display features and functions are prohibited: 502 traveling, flashing, spinning, rotating, any other moving effects, and all 503 dynamic frame effects or patterns of illusionary movement or simulated 504 movement. 505 506 4. The colors, text styles, graphic patterns, and brightness of the changeable copy 507 sign area shall be compatible with and complimentary to the colors, text styles, 508 graphic patterns and brightness of other signs on the premises, and signs on other 509 properties in the immediate vicinity. 510 511 5. Changeable copy signs shall comply with the provisions of subsection 4.4 - 512 Design 513 Requirements, D - Illumination, of this section pertaining to sign 514 illumination. 515 516 F. Sign lettering size for freestanding signs. The lettering of numeric and 517 alphanumeric text messages on signs shall be sized to comply with the following minimum 518 specifications: 519 520 TABLE INSET: 521 Minimum Letter Height for Freestanding Signs Road Type Primary Message Secondary Message Page 12 of 26

Urban Principal Arterial 16 inches 8 inches Urban Minor Arterial 10 inches 5 inches 4 inches Urban Collector and Local 8 inches 522 523 4.5 Signs permitted in all districts and not requiring permits 524 525 A. Signs advertising the sale, lease, or rental of the premises upon which the sign is located, 526 which sign shall not exceed six and one-fourth square feet in residential districts and 32 square 527 feet in all other districts, and shall be located behind the property line comply with setback 528 regulations. One such sign shall be permitted for each 200 linear feet of street frontage for the 529 parcel. 530 531 B. Signs designating the name and address of the occupants, hours of operation, security notices, 532 and business policy statements, and may not exceed four square feet. 533 534 C. Signs denoting the architect, engineer, developer, or contractor placed on premises where 535 construction, repair, or renovation is in progress, which signs shall not exceed 32 square feet in 536 area. No more than two signs of any type are permitted for any one property or building project. 537 Signs shall be fifty feet from other signs on the site, except where it is not physically possible, 538 then the signs shall be as far away from the other sign as much as possible. 539 540 D. Directional signs limited in area to no more than three five square feet per sign, plus one 541 square foot for each additional tenant. A permit is required for directional signs identifying the 542 entrance or exit of a site if over three (3) five square feet in sign area. The sign area for these 543 larger directional signs shall not exceed five (5) eight square feet and shall not be over four 544 feet in height. 545 546 E. Public signs. 547 548 F. Historical and memorial signs. 549 550 G. Any sign located in an internal location on a site, campus, or complex and that cannot be seen 551 from any public right-of-way or adjacent property. 552 553 H. Window signs made of paper, cardboard, plastic or similar material, provided such 554 signs are in compliance with all provisions of subsection 4.9 - Supplementary Sign 555 Regulations, A., of this section. 556 557 I.H. People wearing costumes of the logo or character associated with the company as long 558 as they are located on the business location. 559 560 J I. Political signs shall not be over six square feet in sign area in all Residential Zones and 561 Districts and the signs shall not be over 32 SF in all other zoning districts and all other 562 zoning districts shall comply with the size regulations in subsection 4.7 Permitted Signs, of 563 this section. All election signs shall be removed no later than seven days after the election. 564 Page 13 of 26

565 K J. Signs noting a tenant, store, building, etc. is “coming soon”, which sign shall not exceed 566 32 square feet and only one sign is permitted on the site. The sign shall be 50 feet from other 567 signs. The sign shall not be placed on the site for more than six months. After six months the sign 568 shall be removed even if the tenant, store, building, etc. has not opened or been constructed. 569 570 [L K. Portable signs designed to be transported, including, but not limited to, A-frames, 571 sandwich boards, and umbrellas used for advertising, except those associated with cafés, 572 restaurants, or outdoor eating establishments throughout the city and retail and personal 573 service stores located within the Downtown Redevelopment Target Area (as defined in 574 Appendix C). These types of signs shall not obstruct pedestrian or vehicular access. and are 575 limited to No more than one sign is permitted per business, and shall not be over exceed four 576 feet in height.] 577 578 L. Signs required by federal or state law or by a municipal authority. 579 580 M. Signs carved into a building or raised in integral relief on a building. 581 582 N. Flags on flag poles. 583 584 O. Public Art. 585 586 P. “Open” signs for business not to exceed two per business. 587 588 4.6 Sign prohibited in all districts. 589 590 A. Any sign which emits a sound, odor or visible matter. Signs which emit audible sound, 591 vapor, smoke, odor, particles or gaseous matter. 592 593 B. Any sign which competes for attention with, or may be mistaken for, traffic signals. Also, 594 any sign that is determined by the city planner to constitute a traffic hazard by reason of size, 595 location, content, color, or type of illumination. 596 597 C. Off-premises signs of any type (billboards, temporary signs, directional signs for 598 developments, real estate signs, etc.), except for shared freestanding signs as provided in 599 subsection 4.4 - Design requirements, A.,5., and subsection 4.9 - Supplementary sign provisions, 600 G F., of this section. 601 602 D. Inflatable signs, except as specifically permitted in subsection 4.9 - Supplementary sign 603 provisions, D., 3., of this section. 604 605 E. Portable signs designed to be transported, including, but not limited to, signs designed 606 to be transported by means of wheels, signs converted to A-frames or T-frames, sandwich 607 boards, and umbrellas used for advertising, except those permitted in subsection 4.5 - 608 Signs permitted, L., of this section. 609 610 611 F E. V e h i c l e Signs, including changeable copy signs, attached to or painted on vehicles 612 parked so as to be visible from the public right-of-way, unless no other parking spaces out of 613 the public view are available on the lot. Vehicles shall not be located immediately adjacent to the 614 right-of-way unless there are no other parking spaces available. Page 14 of 26

615 616 G. Roof signs, except where it has been determined that the building's mountable wall 617 area would permit less than one-half of the permitted maximum wall signage, in which case, 618 a roof sign is permitted under the following conditions: 619 620 (1) The sign must be mounted within three feet of the eave. 621 622 (2) The sign cannot exceed one-half of the maximum permitted wall sign 623 area. (3) The sign may not be higher than it is wide. 624 (4) The sign may not be higher than the roof ridge. 625 626 (5) The sign must meet the same design standards as wall signs. 627 628 H F. Signs painted on or attached to trees, fence posts, natural features, or telephone or 629 utility poles. 630 631 I G. Signs that are flashing, rotating, or fluttering material or that give the appearance of 632 movement, or are illuminated by flashing or intermittent lights, or lights of changing degrees or 633 intensity, except as permitted under subsection 4.4 - Design requirements, of this section. 634 635 J H. People wearing sandwich boards or holding other types of signs. 636 637 K I. Temporary signs made of cardboard, paper, canvas or similar impermanent material, 638 except those permitted in subsection 4.9 - Supplementary sign provisions, of this section. 639 640 L J. Window signs covering more than 30 50 percent of a window or a door, or mounted 641 above the first floor, except those permitted in [subsection] 4.9 - Supplementary sign regulations, 642 A.5., and F.,1., of this section. 643 644 M. Window signs in or adjacent to residential properties or districts. 645 646 N K. Pennants, balloons, streamers, flags, etc. except when permitted in subsection 4.5 - Signs 647 permitted in all districts and not requiring permits and in subsection 4.9 - Supplementary sign regulations, 648 D.,1., of this section. 649 650 4.7 Permitted signs. Signs are permitted in all zones in accordance with the following table, which is 651 a list of permitted sign types by use, proximity to residential uses and road classification. 652 653 654 TABLE INSET: 655 SIGN TABLE Permitted Use Signs Road Max Max % of Setback Exclusion Specific Sign Type Type # Permitted Size Height Wall** (R.O.W) Zone Residential Single-Family All Signs permitted in § 4.5 only Uses and Detached/ Streets Page 15 of 26

Non- Semi- Residential detached Uses in Residential All Post or 1/ 5 S.F. 5' N/A 5' N/A Districts Professional Streets monument Office All Monument 1/entrance 12 S.F. 4' N/A % 5' 50' Streets Subdivisions Wall & 1/frontage 24 S.F. 20' <=15% N/A N/A Multi-family residential All uses Streets Monument 1/entrance 24 S.F. 5' N/A 5' 50' Manufactured home parks <= Wall & 1/frontage 32 S.F. 30' N/A N/A Urban 15% Places of Principal Monument # 1/entrance 32 S.F. 7’ N/A 10' 50' Worship Arterial Daycare Pylon* 1/frontage 32 S.F. 30' N/A 30' 200' Centers Non- <= 10 Approved Wall & 1/frontage 24 S.F. 30' N/A N/A Residential % Conditional uses adjacent Urban Uses to Minor Monument # Educational/ 1/entrance 24 S.F. 7' N/A 10' ’ 50' Residential Arterial or Institutional Districts or All other Post**** 1 6 S.F. 7’ N/A 5’ 50’ uses approved Non- Wall & 1 /frontage 16 S.F. 20' <= 5 % N/A N/A residential Urban Uses Local/ Monument # 1/entrance 16 S.F. 7’ N/A 10' 50' Collector or Post**** 1 6 S.F. 7’ N/A 5’ 50’ 1 No <= Wall & 30' *** N/A N/A /frontage max 15% 63 Urban Monument # 1/entrance 10' N/A 10’ 50' S.F. Principal Arterial 75 Pylon OR* 1/frontage 30' N/A 15' 150' S.F. Pylon* 1/frontage 100 S.F. 30' N/A 31' 150' Non- Residential <= Non- Wall & 1 frontage 32 S.F. 30' N/A N/A Uses in 15% Residential Non- Urban Uses Residential Minor Monument # Districts 1/entrance 32 S.F. 7' N/A 10' 50' Arterial or Post**** 1 8 S.F. 7” N/A 10’ 25’ <= Wall & 1/frontage 32 S.F. 30' N/A N/A 15% Urban Local/ Monument # 1/entrance 32 S.F. 7' N/A 10' 50' Collector or Post**** 1 8 S.F. 7” N/A 10’ 25 656 657 Page 16 of 26

658 SIGN TABLE U se Permitted Signs Road Type Percentage Number M ax M ax Setback Exclusion Specific Sign Type of Total Permitted Size Height (R.O.W) Zone Wall Area Single-Family All Detached Signs permitted in §4.5 only Streets Semi-detached All Post or Residential 1/entrance 12 S.F. 7 feet N/A 5 feet 20 feet Professional Streets Monument Uses and Office All Non - Wall 1/frontage 16 S.F. N/A <=15% N/A N/A Residential Streets Uses in Sub divisions Wall & 1/frontage 32 S.F. N/A <=15% N/A N/A Residential Districts Multi-family All Residential Uses Monument Streets or Post 2/entrance 32 S.F. 7 feet N/A 5 feet 20 feet Manufactured and Panel Home Parks Wall & 2/frontage 32 S.F. N/A <= 15% N/A N/A Monument or Urban 1/entrance 32 S.F. 7 feet N/A 10 feet 20 feet Post and Principal Panel OR Places of Arterial Worship Post** & 1/frontage 16 S.F. 7 feet N/A 5 feet 5 feet Daycare Centers Pylon* 1/frontage 32 S.F. 30 feet N/A 30 feet 50 feet Non- Residential Approved Wall & 2/frontage 32 S.F. N/A <=15% N/A N/A Uses Conditional Uses adjacent to Urban Monument Residential Minor or Post and 1/entrance 32 S.F. 7 feet N/A 5 feet 20 feet Educational/ Districts or Arterial Panel OR Institutional Uses Post** 1/frontage 16 S.F. 7 feet N/A 5 feet 10 feet All other approved Non-residential Wall & 2/frontage 32 S.F. N/A <=15% N/A N/A Uses Monument Urban or Post Local/ 1/entrance 32 S.F. 7 feet N/A 5 feet 20 feet and Panel Collector OR Post** 1/frontage 16 S.F. 7 feet N/A 5 feet 10 feet Wall & 2/frontage No max N/A <=15% N/A N/A Monument or Post Urban 1/entrance 100 S.F. 10 feet N/A 10 feet 20 feet and Panel Principal & Arterial Pylon OR* 1/frontage 100 S.F. 30 feet N/A 15 feet 50 feet Pylon* 1/frontage 150 S.F. 30 feet N/A 31 feet 50 feet Non- Residential Wall & 2/frontage 64 S.F. N/A <=15% N/A N/A Uses in Non-Residential Urban Non- Uses Monument or Minor Residential Post and 1/entrance 64 S.F. 7 feet N/A 5 feet 20 feet Arterial Districts Panel OR Post** 1/frontage 16 S.F. 7 feet N/A 5 feet 10 feet Wall & 2/frontage 32 S.F. N/A <=15% N/A N/A Urban Monument Local/ or Post and 1/entrance 32 S.F. 7 feet N/A 5 feet 20 feet Collector Panel OR Post** 1/frontage 16 S.F. 7 feet N/A 5 feet 10 feet 659 660 * Denotes that an additional wall sign may be permitted/added in lieu of a freestanding pylon sign. Page 17 of 26

661 662 ** No wall mounted sign shall exceed more than 50 percent of the mountable wall area as defined 663 in subsection 4.4 - Design requirements, C., 2., of this section. 664 665 ***Sign height may be increased by the Planning Commission as a part of the Architectural Review of 666 a Site Development Plan Approval process; however, the sign height may not exceed the building 667 height. The proposed height shall complement the architecture of the building as determined by 668 the Planning Commission. 669 670 **** **Post sign would be in lieu of a monument sign or post and panel sign. 671 672 # Location of monument/post and panel signs may be approved by the Planning Commission as a part of 673 a Site Development Plan Approval process. 674 675 4.8 Unified Comprehensive Signage Plan campuses and complexes. 676 677 A. Purpose statement. Recognizing that large campuses and complexes have signage needs 678 that may not be adequately addressed by traditional sign regulations, this subsection of the 679 ordinance is intended to allow a procedure for approval of a unified comprehensive signage 680 plan for these sites unified campuses and complexes. 681 682 1. Campuses and complexes are required to follow all standard signage requirements, as 683 embodied elsewhere in this ordinance [section], unless they choose to apply to the 684 planning commission for comprehensive signage plan approval. All such plans must 685 embody a thorough review of all existing signs. 686 687 2. Any proposed shopping center or group of three or more principal structures under 688 common management and operation located on one or more contiguous properties is required 689 to submit an application for comprehensive signage plan approval to the planning 690 commission. 691 692 3. Any business or institution which has more than 400 linear feet of frontage on a 693 principal arterial may submit an application for comprehensive signage plan approval. 694 695 B. Design guidelines for unified comprehensive signage plans. 696 697 1. Unified campuses and complexes applying for a unified comprehensive signage plan 698 may not be held to the height, size, number and area regulations for signs found in other 699 [sub]sections of this ordinance [section]. However, the number, type and size of signs 700 proposed may not be excessive, and must be in proportion to the scale of the buildings and 701 the uses on the site. 702 703 2. All unified comprehensive signage plans must comply with all design guidelines 704 found in subsection 4.4 - Design requirements of this section, as well as all specific design 705 guidelines found in this section. 706 707 3. Building signs shall be in harmony with the overall architectural concept for the site, 708 and be compatible with each other and the building facades. 709 710 Page 18 of 26

711 4. The freestanding signs identifying shopping centers and other unified campuses and 712 complexes shall identify the name of the campus or complex and no more than three separate 713 tenants within the campus or complex unless otherwise approved by the planning 714 commission. 715 716 5. There shall be architectural harmony and unity of signs within a united unified 717 campus or complex. Sign type, color scheme, size, and illumination within the site shall be 718 coordinated and shall be compatible with the architecture of the center and the 719 surrounding area. 720 721 C. Planning commission duties. In reviewing and approving comprehensive signage plans, the 722 planning commission shall take into consideration the public health, safety and welfare, the 723 comfort and convenience of the public in general and of the residents, businesses, and property 724 owners of the immediate neighborhood in particular, and shall ensure that unified campuses and 725 complexes have adequate, but not excessive, signage. Specifically, the following objectives shall 726 guide the commission when reviewing such plans: 727 728 1. That the size and complexity of the campus or complex warrants the need for extra 729 signage under the provisions of this ordinance [section]; 730 731 2. That, in respect to the number and type of entrances, the placement of signage at or near 732 those entrances provides superior visibility in order to ensure the safety of the driving public; 733 734 3. That the proposed signs are adequate in number to safely direct the public to the use 735 or uses on the site; 736 737 4. The proposed signs must not have an adverse impact on the visibility of adjacent signs, 738 and shall be consistent with, or an improvement over, the prevailing type and style of signage 739 in the general area; 740 741 5. That the proposed signs will be of a style and color which will complement the 742 architecture of the site, and the area in general. 743 744 745 D. Submission requirements. 746 747 1. A pre-application meeting is required. No application will be accepted without a pre- 748 application meeting. 749 750 2. Copies of a sign plan, which details the signage proposal, including relevant application 751 forms, will be due on the regularly scheduled submission deadline for planning commission 752 review. The sign plan shall illustrate the physical location of all existing and proposed signs 753 on the subject property and their relationship to existing and/or proposed buildings on the 754 site. The submission plan shall include color renderings of each proposed sign (drawn to 755 scale), along with architectural elevation drawings of the building depicting the placement 756 of all wall mounted signs existing and proposed. 757 758 3. Public notice is required, following the procedures set forth in article 10, section 759 sec. 2.47 2.43 (C). 760 Page 19 of 26

761 4. The application fee as provided for in Appendix F - Fees and Fines, is due at time of 762 application. 763 764 E. Amendments to approved comprehensive signage plans. Any new or revised signs to be 765 placed on a property with an approved comprehensive signage plan need not go back to the 766 planning commission for re-approval if the sign area is not increased more than five fifteen 767 percent, and the proposed signs conform to the overall design concept and colors as approved. The 768 five fifteen percent increase shall be calculated cumulatively over the life of the project, based 769 upon the originally approved sign area. 770 771 4.9 Supplementary sign provisions. 772 773 A. Window signs. 774 775 1. Three window signs shall be permitted as additional signage on walls fronting on the 776 public right-of-way. Text, including lettering and numbers, shall not exceed a height 777 of 12 inches. 778 779 2. Window signs shall not cover more than 30 50 percent of any window pane or glass 780 door panel, exclusive of window and/or door frame. 781 782 3. Windows principally viewed from drive aisles and parking lots and not prominently 783 visible from the public right-of-way shall be exempt from restrictions on the number of signs, 784 and may be approved by the city planner for a window coverage area greater than 30 50 785 percent, and/or lettering height taller than 12 inches, when the business elects to have 786 less window signage than permitted on the windows fronting on, or prominently visible 787 from, the public right-of-way. 788 789 4. Window signs shall be permitted on windows on the first floor of a building only. 790 791 5. The city planner may waive the provisions of this [sub]section when it has been 792 demonstrated that the proposed window signs are of a unique or superior quality and style, 793 and are intended to compliment the architectural design of the building, or when the business 794 elects to use less wall signs than permitted for the purpose of complimenting the architectural 795 design of the building. Signs granted this waiver are not exempt from the requirement to 796 obtain a sign permit. 797 798 B. Historic district signs. 799 800 1. All signs in the historic district must meet the standards laid out in the design standards 801 and guidelines for the City of Dover Historic District Zone. Any and all standards found 802 elsewhere in this ordinance [section] may be waived as part of the architectural review 803 approval when proposed signs are determined to contribute to or improve the historic 804 context of the building. 805 Page 20 of 26

806 C. Gas station signage. 807 808 1. Canopy signs. 809 810 (a) Canopy sign height shall not exceed 30 feet. 811 812 (b) Canopy sign copy shall be directed toward a public street. 813 814 (c) Canopy sign area shall be limited to no greater than ten twenty percent of the area 815 of the canopy face to which the sign is applied. 816 817 2. Exempt signs. 818 819 (a) State or federal required price per gallon signage shall not count towards overall 820 sign area for the site, unless they exceed 20 32 square feet in size. 821 822 (b) Price per gallon signs not exceeding two square feet, located on the pump itself. 823 D. Temporary signs 824 1. Temporary Signs. Temporary signs for special events not requiring a special 825 event permit, including inflatable signs with a surface area of less than 100 square feet 826 and not more than 25 feet tall, may be erected on the premises of any establishment 827 conducting a special event, provided that such signs do not exceed a total of two signs with 828 a total of 100 square feet in sign area., and provided that such temporary signs shall not 829 be displayed for either (a) a continuous period in excess of 30 days in any given three- 830 month period or (b) a continuous period in excess of 15 days in a given 45 day period. 831 Temporary signage shall be displayed no longer than 90 days per calendar year. For 832 grand openings, the maximum number, sign type, and allowable area may be waived by the 833 city planner. Permits for such signs are required and shall be accompanied by a fee as 834 provided for in Appendix F - Fees and Fines. The city planner may waive the time 835 period, not to exceed an additional 30 days, if they determine that there are extenuating 836 circumstances requiring further time for a temporary sign. 837 838 (a) Special Event Permit Temporary Signage. When signage is requested in 839 association with a Special Event Permit the signage shall be permitted and 840 limited to the timeframe of the proposed Special Event as identified on the 841 Special Event Permit. The number of signs shall be limited to a maximum of 842 three (3) signs with an overall sign area of 100 SF. Each sign shall require a 843 temporary sign permit and shall be accompanied by the associated fee for a 844 temporary sign as provided for in Appendix F - Fees and Fines. 845 846 i. The signage for the Special Event Permit Temporary sign shall not 847 impact the timeframe of Temporary signage. Signage associated with a 848 Special Event Permit shall be separate from the time period for temporary 849 signage in subsection 850 4.9 - Supplementary sign provisions, D.,1., of this 851 section. 852 Page 21 of 26

853 2. Race weekend signs. During any seven-day period prior to or seven-day 854 period following the Saturday or Sunday that auto racing is occurring, temporary signs 855 may be erected without a permit and with no restrictions on the number or size of the 856 signs. 857 858 3. Inflatable signs. Permits for such signs are required and shall be accompanied by 859 a fee as provided for in Appendix F - Fees and Fines. Inflatable signs with a surface 860 area greater than 100 square feet and not more than 25 feet tall are permitted only 861 during grand opening events, community festivals and during race weekends, and 862 must meet the following requirements: 863 864 (a) A permit is required to ensure that adequate anchoring will be provided 865 for the sign. Inflatable signs with a surface area equal to or less than 100 866 square feet and not more than 25 feet tall are permitted in subsection 4.9 - 867 Supplementary Sign provisions, D.1., of this section and shall meet the 868 following requirements: 869 i. The inflatable sign shall be setback from the edge of the right- 870 of-way a minimum of 25 feet. 871 ii. The inflatable sign shall be securely anchored to the building or 872 ground. 873 874 (b) A plot plan is required showing the placement of [the] inflatable in 875 respect to utility lines and traffic patterns. Inflatable signs with a surface 876 area over 100 square feet and not more than 25 feet tall are permitted only 877 during grand opening events, community festivals, and during race 878 weekends in accordance with subsection 4.9 Supplementary Sign 879 provisions, D.1. and D.2., of this section and shall meet the following 880 requirements: 881 i. The inflatable sign shall be setback from the edge of the right-of- 882 way a minimum of 25 feet. 883 ii. A plot plan/survey is required showing the placement of the 884 inflatable sign in respect to utility lines and traffic. 885 iii. The inflatable sign shall be securely anchored to the building or 886 ground. 887 888 (c) No inflatable shall be placed any closer to the right-of-way than the height 889 of the inflatable itself. 890 891 (d) Inflatable signs shall be securely anchored to the ground or securely 892 fastened to a building for the purpose of maintaining such devices in a 893 stationary location while on display. 894 895 E. Motor vehicle sales lots. This subsection allows motor vehicle sales lots to compensate for 896 their likelihood to be mistaken for ordinary parking lots unless additional signs or other attention 897 getting devices are placed in the sales area. It has also been demonstrated that these businesses tend 898 to have smaller buildings relative to their land area diminishing their ability to effectively use wall 899 signs. 900 901 Page 22 of 26

902 1. Banners are permitted on motor vehicle sales lots with a permit. Such banners may be 903 permitted at a rate not to exceed one banner for each ten motor vehicle parking/storage 904 spaces on the premises, and any such banner shall not be situated closer than 50 feet of any 905 other banner on the premises. Parking spaces required for employees, customers, and service 906 department uses shall not be counted to calculate the number of banners. The term "banner" 907 does not include pennants, streamers, balloons, or other temporary or permanent signs. 908 909 2. Banners shall not exceed a width of three feet. 910 911 3. All banners must be securely attached to light standards, poles, or other substantial 912 mounting hardware. Except for temporary signs permitted under the provisions of subsection 913 4.9. - Supplementary sign provisions, D., of this section, all banners must be constructed of 914 a permanent, weather resistant material. 915 916 F. Window and wall signs located 100 feet or more from the roadway. 917 918 1. Any window or wall sign associated with an approved nonresidential use, and 919 which is not adjacent to a residential use, is eligible for sign area bonuses when located 920 at least 100 feet from the public right-of-way. To qualify for the bonus, the sign must 921 be placed on an exterior building wall which is set back at least 100 feet from the right- 922 of-way line, and shall face the public right-of-way line from which the setback 923 distance is measured. Sign area bonuses are authorized according to the following 924 schedule: 925 926 TABLE INSET: Bonus Sign Area Mountable Wall Area Distance from Window Coverage Bonus (Allowable Area × Bonus (Mountable Wall Right-of-Way (Allowable Area × % Bonus) % Bonus) Area × % Bonus) 100 feet 17% 55% 35% 150 feet 18% 60% 40% 200 feet 19% 65% 50% 300 feet or more 21% 75% 60% 927 928 F. G. Shared freestanding signs. 929 930 1. For adjoining nonresidential properties, a freestanding sign structure may be shared 931 among adjoining property owners or businesses solely for the purpose of identification of the 932 adjoining premises or businesses. 933 934 2. Where two multiple property owners have agreed to share a freestanding sign as 935 referenced in subsection 4.4 - Design requirements, of this section, the shared 936 freestanding sign shall be entitled to a combined sign area bonus of not more than 50 percent 937 over the freestanding sign area otherwise permitted for the property on which the shared 938 freestanding sign would be placed. 939 940 3. The permit application for a shared freestanding sign shall be accompanied by a 941 binding legal agreement between the two multiple adjoining property owners and/or 942 businesses which describes the ownership and maintenance obligations for such shared 943 sign. Page 23 of 26

944 945 G. H. Single buildings with multiple commercial tenant spaces or facades. 946 947 1. Structures, such as shopping centers, which contain multiple commercial tenant spaces, 948 are permitted to have at least one wall sign on each unit. This provision shall only apply to 949 units on the first floor of the structure. 950 951 2. When a structure is designed so that there are distinctly different facades or sections 952 of the building along a single frontage, at least one wall sign is permitted on each facade or 953 section of the building. 954 955 3. Multi story office buildings with multiple tenants are permitted one wall sign per 956 tenant. The total sign area for all of the signs for all of the tenant spaces may be up 957 to but not exceed 50% more than the sign area permitted by subsection 4.7 - 958 Permitted Signs, of this section. The signs shall be located in the same area on the 959 building. Signs shall not be located above the second story. 960 961 4.10 Nonconforming signs. 962 963 A. Exclusions. Nonconforming signs which are within ten percent of compliance of any height, 964 area or location requirement and which conform to all other provisions of this ordinance shall be 965 considered legal signs for the purposes of these regulations, except as provided in subsection. 4.10 966 - Nonconforming signs, B.,5.4, below. 967 968 B. Removal or compliance required. Nonconforming signs shall be removed from the premises 969 or otherwise made to comply with these regulations in the following instances: 970 971 1. When there is renovation to more than 75 percent of the exterior of the principal 972 building measured in square feet of exterior wall surface area, or expansion of more than 20 973 percent of the floor area of the principal building measured in square feet of floor area on the 974 premises on which such nonconforming signs are present, except that freestanding signs that 975 are nonconforming with respect to front setback requirements shall not be made to be 976 set back further than the front of the principal structure as specified shall not be 977 required to conform; however, the degree of non-conformity shall not increase. When, 978 within any given two-year period, individual renovation projects involving less than 75 979 percent of the building exterior and/or individual building additions involving less than 20 980 percent of the floor area of the principal building on the premises would in aggregate 981 exceed the 75 percent renovation and/or 20 percent expansion thresholds set forth herein, 982 all such nonconforming signs shall be brought into conformity with these regulations or 983 shall be removed from the premises. 984 985 2. Prior to the issuance of any permit for the placement of any additional signage on the 986 property. No new signs of any type shall be added to the property until the nonconforming 987 sign is removed. 988 989 3. Nonconforming signs (including all supporting structures and mounting hardware) 990 which have been abandoned shall be removed from the premises or otherwise made to 991 conform within one year from the date of abandonment. Refacing the sign in accordance with 992 other requirements of this ordinance [section] does not absolve an owner from Page 24 of 26

993 complying with this subsection. In certain instances where it is evident that the 994 reoccupation or reuse of a premises which contains an abandoned nonconforming sign is 995 imminent, the city planner may grant an extension of time within which to reestablish the 996 use of such nonconforming sign. 997 998 4. When there is a change of use to a property where nonconforming signs exist, 999 such signs shall be brought into conformity with these regulations or shall be 1000 removed from the premises. 1001 1002 5. 4. Any nonconforming sign which has been removed from the premises shall be 1003 considered discarded, and replacement shall constitute a new sign, and require new permits. 1004 1005 C. Notification and responsibility. It shall be the responsibility of the owner of record of such 1006 property to cause the removal of such nonconforming signs in accordance with these provisions. 1007 When any of the above-listed conditions exist, the city planner is authorized to issue written notice 1008 to the owner of record of such property, stating that such signs shall be removed within two 1009 calendar weeks of the date of receipt of the written notice. In cases where signs are determined to 1010 be unsafe or present a hazard, the city planner may order their removal in a shorter period of time. 1011 Failure to comply with these regulations, after due notice, shall be deemed a violation of this 1012 ordinance and [is] punishable in accordance with the provisions of article 8, section 4 of this 1013 ordinance. In addition, in the event that compliance is not achieved within the stated period, the 1014 city planner may remove or cause to be removed from the premises any such signs in violation of 1015 this ordinance [section]. All expenses incidental to such removal shall be charged to the owner 1016 of record of such property and shall constitute a lien upon such property. 1017 1018 4.11 Abandoned and Damaged signs. 1019 1020 A. Abandoned Refacing. All signs that conform to the current regulations which are deemed 1021 abandoned shall either be refaced with a blank or blacked out face or removed totally 1022 (including the supporting structure and/or mounting hardware) within 60 90 days of 1023 abandonment. Covering sign copy with tarps, paper, tape, cardboard or other nonpermanent 1024 materials is not an acceptable method of refacing. 1025 1026 B. Removal. Any conforming sign, which has been removed from the premises, shall be 1027 considered discarded, and replacement shall constitute a new sign, and require new permits. 1028 1029 C. Repair. All signs that are damaged (no longer working, cracked, missing pieces, etc.) shall 1030 be repaired within 30 days. A permit is not required as long as the sign will look exactly the same 1031 as it did before the sign was damaged. If there are any changes (color, script, etc.) to the sign a 1032 new permit will be required. 1033 1034 4.12 Historic or Significant Signs. 1035 1036 A. Preservation of Historic or Significant Signs. Signs that are at least fifty years old and 1037 considered historic or to have cultural/aesthetic significance shall be protected and preserved. If 1038 these signs are legal[ly] nonconforming they shall maintain their nonconforming status 1039 indefinitely. The determination of the historic or cultural/aesthetic significance of the sign shall 1040 be determined by the historic district commission. 1041 Page 25 of 26

1042 1. The owner of the premises on which these signs reside shall maintain the signs to 1043 ensure they work and are in good condition. 1044 1045 SYNOPSIS 1046 The proposed ordinance is a comprehensive amendment to the City of Dover 1047 Sign Regulations and includes a combination of clarifications, simplification 1048 of the requirements, and significant relaxation of the regulations currently in 1049 place. Changes include an increase in allowable sign area, an increase in the 1050 number of signs permitted, incorporation of several definitions and other 1051 provisions from the United States Sign Council Model Sign Code, a 1052 reduction in the exclusion zone between sign structures, and increased 1053 flexibility in temporary signage. 1054 1055 Actions History: 1056 June 25, 2012 - Scheduled for First Reading/Referral to the Planning Commission and 1057 Setting of Public Hearing for August 13, 2012 1058 June 11, 2012 – Introduced in the Parks, Recreation and Community Enhancement 1059 Committee 1060 Page 26 of 26

FIRST READING CITY OF DOVER ORDINANCE #2012-14 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN 2 COUNCIL MET: 3 That Appendix B – Zoning, Article 3 – District Regulations, Section 23 – Agricultural Zone (A), 4 Subsection 23.1 – Uses Permitted, be amended by inserting the language indicated in bold, blue 5 italics as follows: 6 Section 23. - Agricultural zone (A). 7 23.1 Uses permitted. In an agricultural zone (A), no land or building shall be used and no 8 building or part of a building shall be erected or altered which is arranged, intended or designed 9 to be used, in whole or in part, for any uses except the following: 10 23.11 Agriculture including general farming, pasture, orchard, grazing, outdoor plant 11 nurseries, truck farming, forestry, and wild crop harvesting; 12 23.12 Kennels and stables as a conditional use under section 10.1 of this ordinance, 13 provided that any building or open pen for keeping of animals shall be located at least 14 100 feet from any lot lines; 15 23.13 Non-commercial recreational uses including parks, camps, picnic grounds, hiking 16 and riding trails, fishing areas, game farms, fish hatcheries, wildlife sanctuaries, nature 17 preserves, swimming areas and boat launching sites. No buildings or impervious ground 18 covers shall be permitted in connection with recreation uses, except as a conditional use 19 by permission of the planning commission under article 10, section 1 of this ordinance; 20 23.14 Public utility rights-of-way and structures, subject to such conditions as the 21 planning commission may impose in order to protect and promote health, safety and 22 general welfare; 23 23.15 Single-family detached residential dwellings on individual lots in the form of a 24 conventional subdivision, or single-family detached or attached housing in the form of 25 rural residential cluster development. The density and lot size requirements for 26 conventional residential development of agriculturally zoned land are set forth in article 27 3, section 23.2 of this ordinance. The conditions of eligibility, density limits and design 28 requirements for rural residential cluster development are set forth in article 3, section 29 23.3 of this ordinance. 30 23.16 Sales of agricultural supplies and products as an accessory use to the principal 31 agricultural use on a parcel.

32 SYNOPSIS 33 The proposed ordinance would allow the sale of 34 agricultural supplies and products, accessory to the 35 agricultural use of a parcel. 36 Actions History: 37 June 11, 2012 - Introduced in the Parks, Recreation & Community 38 Enhancement Committee on June 11, 2012

FIRST READING CITY OF DOVER ORDINANCE #2012-15 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 2 That Appendix B – Zoning, Article 3 – District Regulations, Section 9 – General Residence and Office Zoning (RGO), 3 Subsection 9.14 (b) be amended by deleting the text indicated in bold, red, strikethrough as follows: 4 5 (b) In order to stimulate limited commercial activity in this zone where the city's historic district overlay zone exists 6 and to make this portion of the city's historic district a greater attraction to tourists and residents, the following list 7 of preferred uses may be permitted as conditional uses, subject to the approval of the planning commission: 8 i. Antique shops, art galleries, gift and card shops, book stores, specialty hobby stores (i.e., miniatures, 9 models, needlecrafts), bakeries (including baking on premises), [and] restaurants with no alcoholic 10 beverages. 11 ii. Limitation of entrances from State Street only. 12 iii. Total floor area of any one retail use [is] not to exceed 2,000 square feet. 13 iv. Such uses will be subject to historic district requirements and will therefore require an architectural 14 review certificate. Architectural review certificates for retail uses described above shall not be granted 15 unless it has been demonstrated that the proposed use will result in either no material change to the 16 exterior of the structure visible from State Street or will result in a restoration of the structure to an 17 appearance which can be documented to more closely reflect the historical appearance of that structure. 18 Material change would include modifications to doors, windows and masonry, other than routine 19 maintenance. 20 v. No parking shall be required for the retail user. 21 vi. If new construction is proposed on State Street between Loockerman and Water Streets, the proposal 22 must not require demolition or extensive modifications of any existing structure which presently 23 contributes to the historic district because of its age or architectural appearance. In addition, the RG-O 24 zone bulk and parking requirements would be waived in certain respects. Lot width and depth will be as 25 appropriate to the site, subject to architectural review and site plan review. Setbacks will be discouraged. 26 Side yards will reflect the needs of adjacent structures by providing adequate light and air to reach 27 existing windows. The height limit of 35 feet or 2½ stories will be retained, as will the 85 percent lot 28 coverage limit. The floor area ratio limitation will be raised to 1.0. The parking requirements will be 29 waived. 30 SYNOPSIS 31 The proposed ordinance would eliminate the prohibition on sale of 32 alcohol in restaurants in the RGO zone. Restaurants in this zone 33 are subject to Conditional Use approval by the Planning 34 Commission. 35 Actions History: 36 June 25, 2012 – Scheduled for First Reading/Referral to the Planning Commission 37 June 11, 2012 - Introduced in the Parks, Recreation & Community Enhancement Committee

FIRST READING CITY OF DOVER ORDINANCE #2012-16 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL 2 MET: 3 That Chapter 114 – Vegetation, be amended by adding a new Article III – Bamboo, as follows: 4 Article III. Bamboo 5 Sec. 114-36. – Unlawful to plant or grow bamboo. It shall be unlawful to plant or grow bamboo on any 6 lot or parcel of ground within the city unless: 7 (a) The root system of such bamboo plant(s) is entirely contained within an above-ground-level 8 planter, barrel, or other vessel of such design, material, and location as to entirely prevent the 9 spread/growth of the bamboo plant'(s) root system beyond the container in which it is planted; or 10 (b) The root system is contained within a barrier, constructed in accordance with the following 11 specifications, and only after a compliance inspection is performed, and a building permit is 12 issued by the city of Dover: 13 1. The barrier itself shall be composed of high density polypropylene or polyethylene, 40 mil or 14 heavier; 15 2. Each portion or sheet of the barrier shall be secured or joined together by the use of stainless 16 steel clamps or stainless steel closure strips designed for such barriers; 17 3. The barrier shall be installed not less than 30 inches deep; 18 4. The barrier shall be circular or oblong shaped; 19 5. Not less than three inches of the barrier shall protrude above ground level around the entire 20 perimeter of the barrier; 21 6. When installed, the barrier shall slant outward from the bottom to the top. 22 (c) Whether planted or growing in a container (under subparagraph (a) above) or contained within a 23 barrier (under subparagraph (b) above), all bamboo plants shall be located, trimmed and 24 maintained so that no part of the plant (including stalks, branches, leaves, and/or roots) shall 25 extend nearer than ten feet from any property line. 26 Sec. 114-37. - Exemptions. 27 Section 114-36 shall not apply to any landowner or possessor who, prior to the effective date of this 28 article, has planted or caused to grow any bamboo on any property within the limits of the city unless a 29 city code enforcement official determines that any portion of such bamboo has been allowed to grow 30 upon, extend roots across, or extend branches, stalks or leaves over any public way or any private 31 property not owned by or in the possession of such landowner or possessor. 32 Sec. 114-38. - Complaint/order for removal, repair and compliance. 33 When it has been determined by the city that any bamboo plant or root is encroaching on the property of 34 an adjacent or abutting landowner, or public way, the city shall, prior to taking any other action to

35 enforce compliance with this article, give written notice to be delivered by certified mail, to the 36 person(s) or legal entity(s) causing such condition to exist, which notice shall: 37 (1) Specify the nature and location of the violation; 38 (2) Provide notice of the need to remove and/or correct such condition within 30 days from the 39 effective date of such notice; 40 (3) Require that the removal and/or correction of such condition includes: 41 a. The removal and eradication of any bamboo plant or root from any adjoining or nearby lot(s) 42 or public way to which it has spread from its original planting site, and the correction and 43 repair of any property damage sustained to said adjoining or nearby lot(s) or public way, in 44 removing such bamboo; and 45 b. The containment of the bamboo plant causing said encroachment, by mandatory and full 46 compliance with section 114-36 (a) or (b); 47 (4) State that upon failure to comply with the notice and order for removal and/or containment, the 48 city may remove and eradicate the bamboo upon the land of any nearby or abutting property 49 owner, public way and/or upon the property of the person(s) or entity(s) planting or causing such 50 bamboo to grow, as provided in section 114-33. 51 Sec. 114-39. – Abatement of bamboo. 52 (a) If the violation is not remedied within the time set forth in the notice and order as outlined above, 53 the city is hereby authorized to remove or have removed any encroaching bamboo and to take all 54 reasonable steps to eradicate its re-growth from said adjacent or nearby property or public way, 55 and to restore any such lands to its natural condition prior to such removal and eradication 56 (including fill, grading, and seeding). 57 (b) The city shall also be authorized to remove and eradicate the plant(s) causing the encroachment, 58 upon the responsible party(s)' failure to properly contain the plant after notice. 59 (c) The cost of corrective action taken by the city shall be billed to the property owner whose 60 property was the source of the encroachment. 61 (d) If the charges assessed by the city for removal or eradication of the bamboo are not paid, then the 62 city, after having corrected the deficiency and violation, shall place its charges and expenses as 63 specified in the municipal lien docket as a lien against said property, and the city solicitor shall 64 be directed to enforce said lien or to collect the charges imposed by the city by any other means 65 that he may deem desirable and most advantageous. 66

67 SYNOPSIS 68 The proposed ordinance would prohibit the planting or 69 growing of bamboo in the city of Dover and would 70 authorize the city to abate bamboo that has encroached onto 71 adjacent properties and public ways and charge the cost of 72 this abatement to the property owner. 73 Actions History: 74 June 25, 2012 – Scheduled for First Reading 75 June 11, 2012 - Introduced in the Parks, Recreation & Community Enhancement Committee

FIRST READING CITY OF DOVER PROPOSED ORDINANCE #2012-17 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL 2 MET: 3 That Chapter 26 - Businesses, Article I - In General, Section 26-1 - Sale of Dangerous Substances, be 4 amended by deleting the text indicated in bold, red, strikethrough and inserting the text indicated in bold, 5 blue, as follows: 6 Sec. 26-1. - Sale of dangerous substances. 7 (a) It shall be unlawful to sell or offer to sell any material, compound, mixture, or preparation which 8 contains any quantity of any substance categorized as Schedule I in accordance with 9 16 Del.C. ch. 47. the following substances, their salts, isomers, and salts of isomers, unless 10 specifically excepted, whenever the existence of such salts, isomers, and salts of isomers is 11 possible within the specific chemical designation: 12 (1) Methylone; 13 (2) MDPV; 14 (3) Methylenedioxypyrovalerone; 15 (4) Methylmethcathinone; 16 (5) Mephedrone; 17 (6) Methoxymethcathinone; 18 (7) Fluromethcathinone; 19 (b) Penalties. Violations of this section shall be subject to fines in accordance with Appendix 20 F—Fees and Fines, section 1-17 and revocation of business license under the provisions of 21 Chapter 26—Businesses, Article II—Licenses, sections 26-59 and 26-63 26-64. 22 (c) Enforcement. Any business that sells or offers for sale any of the prohibited items shall be 23 considered a public nuisance. The provisions of this section may be enforced by any city 24 inspector or officer of the police department. after any substance found for sale at a business 25 tests positive for a Schedule I controlled substance in a field test performed by the Police 26 Department. 27 ADOPTED: * 28 S:\ORDINANCES\2012\Draft\2012-17 - Ch 26 - Businesses, Art I - In General, Sec 26-1 - Sale of Dangerous Substances 1st Rdg.wpd 29 SYNOPSIS 30 The proposed ordinance would more closely align the City code with the State Uniform 31 Controlled Substances Act as it relates to the sale of Schedule I controlled substances, 32 including but not limited to bath salts. 33 (SPONSORS: LYNN , STAFF) 34 Actions History 35 06/25/2012 - Scheduled for First Reading 36 06/11/2012 - Introduced at Legislative, Finance, and Administration Committee Meeting

1 CITY OF DOVER 2 LF&A AMENDMENT #1 3 (Previously Council Amendment #2) 4 TO ORDINANCE #2012-10 5 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 6 That Ordinance 2012-10 be amended by striking lines 23-31 in their entirety and inserting in lieu thereof the 7 following: 8 Eligibility to receive city utilities or services. No person, artificial entity, or owner of a one-half or greater 9 interest in that artificial entity shall be eligible to receive any city services, utilities, permits, licenses, or 10 approvals if that person, artificial entity, or owner of a one-half or greater interest in that artificial entity 11 owes outstanding payments to the city; or if that person, artificial entity, or the owner of a one-half or 12 greater interest in that artificial entity is responsible for documented violations of the Dover Code of 13 Ordinances that have remained unresolved for more than 45 days. If the party, artificial entity, or owner 14 of a one-half or greater interest in that artificial entity requesting city approval is current on some but 15 not all obligations owed to the city, the request shall be denied until such time as the person, artificial 16 entity, or owner of a one-half or greater interest in that artificial entity is current and in compliance with 17 all city obligations. 18 BE IT FURTHER ORDAINED: 19 That Ordinance 2012-10 be amended by removing the words “corporation of which they are principal” on line 20 53 and replacing them with “artificial entity of which they own one-half or more interest.” 21 ADOPTED: * 22 SYNOPSIS 23 The proposed language would ensure that the inclusion of owners and/or members of corporations would 24 apply to owners of a one-half or greater interest in the said corporation. It would ensure that members 25 of non-profit boards and other minority owners in corporations would not be denied services or permits 26 due to the delinquencies of that corporation.

1 CITY OF DOVER 2 LF&A AMENDMENT #2 3 (Previously Council Amendment #3) 4 TO ORDINANCE #2012-10 5 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 6 That Ordinance 2012-10 be amended by striking lines 51-57 in their entirety and replacing them with the 7 following: 8 Appointment to committee, commission, or board. Prior to any person being appointed to a city 9 committee, commission, or board, the city clerk will determine if there are outstanding payments due 10 to the city in their name or the name of any artificial entity in which they own one-half or more 11 interest; or if they are responsible for outstanding, documented violations of the Dover Code of 12 Ordinances that have been unresolved for more than 45 days. If it is determined that such 13 delinquency or violation exists, this shall be reported to the council president and an executive session 14 shall be scheduled to discuss the nature of the delinquency prior to appointment. If an appointed 15 member of a city committee, commission, or board is determined to have such a delinquency or 16 outstanding violation during their appointment, the city clerk shall report such delinquency or 17 violation to the council president and an executive session shall be scheduled to discuss the violation 18 or delinquency. City council may reject an appointment or remove an appointee from a city 19 committee, commission, or board due to such delinquency or violation. 20 ADOPTED: * 21 SYNOPSIS 22 The proposed language would allow for persons to serve on city committees, commissions, 23 or boards, even if they are responsible for delinquencies or code violations; however, it 24 requires that the city clerk inform the city council president of such delinquencies or 25 violations and that an executive session of council be held to discuss such delinquencies or 26 violations.

1 CITY OF DOVER 2 LF&A AMENDMENT #3 3 (Previously Council Amendment #4) 4 TO ORDINANCE #2012-10 5 6 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 7 8 That Ordinance 2012-10 be amended by striking lines 76-82 in their entirety and replacing them with the 9 following: 10 11 (f) Appeal of denial of utilities, services or approvals. 12 13 (1) Appeal to city manager. Any applicant, person, corporation, or other entity or any 14 owner or member of that corporation or other entity requesting such city services, utilities, 15 permits, licenses, or approvals who receives the aforesaid written denial may appeal that 16 denial to the city manager within 20 calendar days of such denial. The city manager, or his/her 17 designee, shall thereafter hold a hearing at which said applicant shall be permitted to give 18 evidence that such payment has been made or that a required action has been carried out, or 19 otherwise show that such denial is based on incorrect information or is not lawful as to that 20 applicant. 21 22 (2) Appeal to city council. An applicant aggrieved by the decision of the city manager 23 regarding his/her appeal may appeal such decision to city council within 20 calendar days of 24 such decision. City council shall schedule a hearing at which said applicant shall be permitted 25 to give evidence that such payment has been made or that a required action has been carried 26 out, or otherwise show that such denial is based on incorrect information or is not lawful as 27 to that applicant. 28 29 ADOPTED: * 30 31 SYNOPSIS 32 The proposed language would add an appeal to city council for applicants aggrieved by the 33 decision of the city manager.

FINAL READING CITY OF DOVER PROPOSED ORDINANCE #2012-10 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL 2 MET: 3 That Chapter 1 - General Provisions, Section 1-13 - Denial of permits or approvals for failure to comply with 4 requirements for payment, actions, or filings be amended by inserting the text indicated in bold, blue, 5 underlined font and deleting the text indicated in bold, red, strikeout as follows: 6 Sec. 1-13. - Denial of permits or approvals for failure to comply with requirements for payment, 7 actions, or filings. Clean hands. 8 (a) Noncomplying actions or filings. Prior to any administrative agency or official of the city 9 charged with evaluation and approval of any permit required so that a legal or equitable 10 owner of real property located in the city may utilize city services or otherwise involve the city 11 officers, agents, or employees to permit any use of such real property, approving or issuing any 12 permit or other indication of approval, that administrative agency or official shall make 13 reasonable effort to determine that no payments, actions, or filings related to obligations due 14 to or requirements by the city for the use of that parcel or any other parcel of real property 15 remain incomplete or in violation of the city requirements. If any such noncomplying or 16 incomplete payments, actions, or filings are determined to exist, then the administrative agency 17 or official shall, in writing, deny the permit or other form of approval until such existing 18 requirement for payment, action, or filing has been fully complied with or completed as to that 19 parcel, identifying in that written denial the payment, action, or filing to be completed or 20 complied with. Failure by the appropriate administrative agency or official to issue such 21 written denial within five working days from receipt of application shall enable the applicant 22 to have the application reviewed without consideration of the requirements of this section. 23 Eligibility to receive city utilities or services. No person, corporation, or other entity shall be 24 eligible to receive any city services, utilities, permits, licenses, or approvals if that person, 25 corporation, or other entity, or any owner or member of that corporation or other entity, owes 26 outstanding payments to the city; or if that person, corporation, or other entity, or any owner 27 or member of that corporation or entity, is responsible for uncorrected, documented violations 28 of the Dover Code of Ordinances that have been unresolved for more than 45 days. If the 29 party requesting city approval is current on some but not all obligations owed to the city, the 30 request shall be denied until such time as all city obligations are current and fully complied 31 with. 32 (b) Obligations which must be current. Applicants for city services, utilities, permits, licenses, or 33 approvals shall be current on all of the following obligations to the city, including interest, 34 penalties, court costs, and/or attorney’s fees if applicable, prior to receiving such approvals: 35 (1) Property taxes. 36 (2) Applicable Delaware realty transfer taxes. 37 (3) Water, sewer, and electric connection/disconnection, front footage and/or usage charges. 38 (4) Trash fees. 39 (5) Application fees. 40 (6) Permit fees, including building permits, building code and inspection/reinspection fees. 41 (7) Vacant building fees.

Proposed Ordinance #2012-10 - Chapter 1 - General Provisions, Section 1-13 - Denial of Page 2 Permits or Approvals for Failure to Comply with Requirements for Payment, Actions, or Filings 42 (8) Inspection fees. 43 (9) Charges for the costs of razing or demolition of buildings done through public 44 expenditure. 45 (10) Charges for duly authorized improvements or maintenance to the exteriors of buildings 46 or property done through public expenditure. 47 (11) Assessments for the installation of sewer lines, water mains, sidewalks, and curbing. 48 (12) Charges for the costs of removing weeds, grasses, refuse, rubbish, trash, or other waste 49 material done through public expenditure. 50 (13) Miscellaneous charges. 51 (c) Appointment to committee, commission, or board. No person shall be appointed to any city 52 committee, commission, or board if there are outstanding payments due to the city in their 53 name or the name of any corporation of which they are principal; or if they are responsible 54 for outstanding documented violations of the Dover Code of Ordinances that have been 55 unresolved for more than 45 days. Any sitting committee, commission, or board member not 56 in compliance with this ordinance shall be current and fully compliant with all city obligations 57 within 30 days or shall be required to relinquish their appointment. 58 (d) Responsibility of city personnel. 59 (1) The administrative agency to which a request has been submitted shall have the 60 responsibility to make a reasonable effort to determine whether there are outstanding 61 payments or outstanding documented violations of the Dover Code of Ordinances. 62 (2) The appropriate administrative agency shall notify an applicant that the request cannot 63 be processed because of an outstanding payment or an outstanding documented violation. 64 Said notice shall be in writing and shall be sent within ten working days of receipt of the 65 request. 66 (e) Exception. Notwithstanding the provisions of this section, the building inspector, with the 67 concurrence of the city manager, may issue permits and approvals for work that is necessary 68 to correct violations associated with Chapter 22 - Buildings and Building Regulations, 69 Article XI - Dangerous Buildings. 70 (b) Appeal; hearing. Any applicant for a permit or other form of approval who receives the 71 aforesaid written denial of a permit or other form of approval by an administrative agency or 72 official of the city may appeal that denial to the city council within 20 calendar days of such 73 denial. The city council or its designee shall thereafter hold a hearing wherein said applicant 74 shall be permitted to give evidence that such payment, action or filing has been properly 75 carried out, or otherwise show that such denial is not lawful as to that applicant. 76 (f) Appeal; hearing. Any applicant, person, corporation, or other entity or any owner or member 77 of that corporation or other entity requesting such city services, utilities, permits, licenses, or 78 approvals who receives the aforesaid written denial may appeal that denial to the city manager 79 within 20 calendar days of such denial. The city manager, or his/her designee, shall thereafter 80 hold a hearing at which said applicant shall be permitted to give evidence that such payment 81 has been made or that a required action has been properly carried out, or otherwise show that 82 such denial is based on incorrect information or is not lawful as to that applicant. 83 ADOPTED: *

Proposed Ordinance #2012-10 - Chapter 1 - General Provisions, Section 1-13 - Denial of Page 3 Permits or Approvals for Failure to Comply with Requirements for Payment, Actions, or Filings 84 SYNOPSIS 85 The proposed ordinance clarifies the denial of services, permits, and approvals for 86 non-payment of charges due to the City or for documented and uncorrected code violations. 87 It specifies the financial obligations that must be current to receive services, permits, or 88 approvals. It authorizes the building inspector, with the concurrence of the city manager, to 89 issue permits to remedy violations associated with dangerous buildings. The proposal 90 prohibits the appointment of any person to a city committee, commission or board if that 91 person has outstanding charges due to the city or outstanding, documented, code violations. 92 The proposed ordinance would direct appeals of the denial of services, permits, or approvals 93 to the city manager, rather than City Council, as is the case under the current ordinance. 94 (SPONSORS: STAFF) 95 Actions History 96 May 14, 2012 - Scheduled for Final Reading by City Council 97 April 23, 2012 - First Reading by City Council 98 April 9, 2012 - Considered by the Legislative, Finance, and Administration Committee 99 S:\ORDINANCES\2012\Draft\2012-10 - Chpt 1 - General Provisions, Sec 1-13 - Denial of Permits (Clean Hands) Final Rdg.wpd

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 1 of 23 FINAL READING CITY OF DOVER ORDINANCE # 2012‐18 PROPOSED 2012‐2013 BUDGET ORDINANCES 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 2 The amount hereinafter named aggregating Thirty Eight Million Three Hundred Sixty Four Thousand dollars 3 ($38,364,000) or so much thereof as may be necessary are hereby appropriated from current revenues and other 4 funds for the use by several departments of the Municipal Government for the fiscal year beginning July 1, 2012 5 and ending June 30, 2013: 6 GENERAL FUND 7 REVENUES AND BUDGET FOR 2012‐2013 8 2011/12 2012/13 9 REVISED BUDGET 10 11 12 13 14 15 BEGINNING BALANCE REVENUES FINES AND POLICE REVENUE 911 FEE INVESTMENT INCOME LIBRARY REVENUES T $ 3,561,837 $ 579,000 60,000 80,000 64,200 2,666,600 605,000 63,000 75,000 66,200 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 BID REVENUE TRASH FEES AF KENT COUNTY BOOK REIMBURSEMENT BUSINESS LICENSES PERMITS AND OTHER LICENSES MISCELLANEOUS CHARGES POLICE EXTRA DUTY PROPERTY TAXES RECREATION REVENUE FRANCHISE FEE RENT REVENUE ‐ GARRISON FARM COURT OF CHANCERY FEES REVENUES SUBTOTAL INTERFUND SERVICE RECEIPTS INTRAFUND SERVICE RECEIPTS WATER/WASTEWATER 385,800 1,475,000 1,370,300 165,750 300,000 10,983,400 51,800 130,000 540,000 1,966,000 62,000 819,800 19,033,050 930,000 405,900 1,455,000 1,053,300 55,500 494,400 10,997,400 51,600 130,000 550,000 2,050,000 62,000 753,800 18,868,100 1,104,600 D 31 INTRAFUND SERVICE RECEIPTS ELECTRIC 3,270,800 3,224,500 32 INTERFUND SERVICE RECEIPTS SUBTOTAL 4,200,800 4,329,100 33 GRANTS 34 POLICE RELATED 60,000 85,000 R 35 CAPITAL SCHOOL DISTRICT REVENUE ‐ ‐ 36 POLICE PENSION GRANT 593,500 500,000 37 RECREATION GRANTS 35,383 ‐ 38 HOMELAND SECURITY GRANT 104,676 ‐ 39 UNIVERSAL RECYCLING GRANT 79,873 ‐ 40 GREEN ENERGY GRANT ‐ 98,500 41 MISCELLANEOUS GRANTS ‐ 25,000 42 GRANTS SUBTOTAL 873,432 708,500 43 TRANSFERS FROM 44 TRANSFER TAX 1,229,500 1,370,000 45 MUNICIPAL STREET AID 659,200 527,400 46 CIVIL TRAFFIC PENALTIES 720,000 750,000 47 WATER/WASTEWATER 424,508 500,000 48 FUTURE CAPACITY RESERVE ‐ 633,300 49 ELECTRIC 7,876,288 8,000,000 50 VERIZON AND CI RESERVES ‐ 11,000 51 TRANSFERS FROM SUBTOTAL 10,909,496 11,791,700 52 TOTAL REVENUES 35,016,778 35,697,400 53 TOTALS $ 38,578,615 $ 38,364,000

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 2 of 23 54 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 55 GENERAL FUND ‐ REVENUES AND BUDGET FOR 2012‐2013 56 2011/12 2012/13 57 DEPARTMENT EXPENSES REVISED BUDGET 58 CITY CLERK $ 296,393 $ 326,900 59 COUNCIL 120,699 114,200 60 TAX ASSESSOR 213,175 187,500 61 FIRE 684,725 688,300 62 GROUNDS MAINTENANCE 979,922 993,300 63 LIBRARY 1,159,087 1,250,200 64 RECREATION 823,144 713,400 65 LIFE SAFETY 473,096 469,900 66 CODE INFORCEMENT 284,489 293,100 67 PLANNING 422,781 410,300 68 INSPECTIONS 553,907 592,200 69 ECONOMIC DEVELOPMENT 223,717 231,100 70 71 72 73 74 75 76 77 POLICE POLICE EXTRA DUTY STREETS SANITATION CITY MANAGER INFORMATION TECHNOLOGY FINANCE PUBLIC SERVICES ‐ ADMINISTRATION T 12,955,807 430,600 914,055 2,410,849 622,127 685,871 852,283 472,692 13,195,200 579,400 756,700 2,140,700 420,000 642,700 879,500 468,600 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 MAYOR INSURANCE AF FACILITIES MANAGEMENT CENTRAL SERVICES FLEET MAINTENANCE CUSTOMER SERVICES HUMAN RESOURCES DEPARTMENT SUBTOTALS OTHER EXPENSES DEBT SERVICE CONTRIBUTION TO DDP MISCELLANEOUS GRANT RELATED EXPENSES OPEB UNFUNDED LIABILITY RETIREES HEALTH CARE OTHER EMPLOYMENT EXPENSES 952,693 693,339 695,422 928,112 384,758 81,154 29,314,897 327,270 ‐ ‐ 239,532 550,000 1,374,709 ‐ 678,800 576,900 712,700 901,200 319,700 82,400 28,624,900 624,200 180,000 25,000 ‐ 600,000 1,620,600 463,400 D93 94 95 96 97 R 98 99 100 101 102 PENSION UNFUNDED LIABILITY POLICE PENSION FUND POLICE PENSION UNFUNDED LIABILITY UNCOLLECTIBLES ‐ TRASH AND OTHER STREET LIGHTS OTHER EXPENSE SUBTOTAL TRANSFERS TRANSFER TO CAPITAL FUND ‐ PROJECTS TRANSFER TO CAPITAL FUND ‐ RESERVE TRANSFERS SUBTOTAL 103 TOTAL EXPENDITURES 104 CURRENT YEAR BALANCE 105 TOTALS $ 1,450,000 620,000 95,000 10,000 960,000 5,626,511 770,600 200,000 970,607 35,912,015 2,666,600 38,578,615 $ 1,310,500 500,000 95,000 10,000 869,700 6,298,400 613,400 ‐ 613,400 35,536,700 2,827,300 38,364,000 106 The City Manager is hereby authorized, without further approval of the City Council, to make 107 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 108 department with the exception of any transfers prohibited by City Procedure #F306. 109 ADOPTED: *

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 3 of 23 110 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 111 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 112 The amount hereinafter named aggregating Five Million Eight Hundred Sixty Four Thousand Six Hundred dollars 113 ($5,864,600) or so much thereof as may be necessary are hereby appropriated from current revenues and other 114 funds for the use by several departments of the Municipal Government for the fiscal year beginning July 2,2012 115 and ending June 30, 2013: 116 GOVERNMENTAL CAPITAL PROJECTS FUND 117 REVENUES AND BUDGET FOR 2012‐2013 118 REVENUES 119 2011/12 2012/13 120 REVISED BUDGET 121 BEGINNING BALANCE ‐ PROJECTS $ 256,392 $ 294,400 122 BEGINNING BALANCE ‐ LIBRARY $ 100,962 $ ‐ 123 REVENUES 124 125 126 127 128 129 130 131 STATE GRANTS ‐ OTHER INTEREST EARNINGS INCOME FROM SALE OF ASSETS LOAN PROCEEDS ‐ STREETS, CITY HALL FY12 LOAN PROCEEDS ‐ GARRISON FARM FY13 TRANSFER FROM GENERAL FUND FOR PROJECTS POLICE GRANTS SUBTOTAL PROJECT RECEIPTS T ‐ 10,900 41,700 ‐ ‐ 770,600 ‐ 823,200 108,000 ‐ ‐ 2,000,000 2,000,000 613,400 33,800 4,755,200 132 133 134 135 136 137 138 139 140 141 142 143 AF STATE GRANTS ‐ LIBRARY DEMEC GRANT ‐ LIBRARY BTOP & GREENHOUSE GAS REDUCTION GRANTS ‐ LIBRARY KENT COUNTY LIBRARY CONTRIBUTION TRANSFER FROM THE LIBRARY FOUNDATION LIBRARY GREEN ENERGY/BRIDGE LOAN ‐ LIBRARY INCOME FROM SALE OF ASSETS ‐ LIBRARY CONSTRUCTION LOAN FOR LIBRARY TRANSFER FROM COMMUNITY TRANSP FUND TRANSFER FROM LIBRARY RESERVE FRIENDS OF THE LIBRARY DONATION SUBTOTAL LIBRARY PROJECT RECEIPTS 144 TOTAL REVENUES 145 TOTAL BEGINNING BALANCE AND REVENUES $ 6,559,900 215,000 90,000 795,000 1,455,500 1,500,000 ‐ 275,000 68,000 2,590,800 210,000 13,759,200 14,582,400 14,939,754 $ 884,200 ‐ ‐ 250,000 67,500 ‐ 1,200,000 ‐ ‐ ‐ 2,401,700 7,156,900 7,451,300 DR 146 147 148 149 150 151 152 153 154 155 156 157 158 159 DEPARTMENT EXPENSES FIRE GROUNDS MAINTENANCE LIBRARY RECREATION POLICE STREETS SANITATION FACILITIES MAINTENANCE INFORMATION TECHNOLOGY MAYOR DEPARTMENT SUBTOTAL 160 LOAN ISSUANCE COSTS 161 TRANSFER TO CAPITAL ASSET RESERVE EXPENSE SUMMARY $ 2011/12 REVISED 244,820 $ ‐ 13,767,100 30,000 65,000 356,460 136,500 ‐ 6,400 ‐ 14,606,280 ‐ 39,100 2012/13 BUDGET 238,500 112,000 2,535,000 30,000 197,000 1,974,000 150,000 381,000 57,000 33,000 5,707,500 56,000 ‐ 162 TRANSFER TO COMMUNITY TRANSP FUND ‐ 1,606,700 163 CURRENT YEAR BALANCE 294,374 81,100 164 TOTALS $ 14,939,754 $ 7,451,300 165 The City Manager is hereby authorized, without further approval of the City Council, to make 166 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 167 department with the exception of any transfers prohibited by City Procedure #F306. 168 ADOPTED: *

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 4 of 23 169 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 170 GENERAL FUND CONTINGENCY 171 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 172 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 173 The amount hereinafter named aggregating Seven Hundred Thirty One Thousand One Hundred 174 dollars ($731,100) or so much thereof as may be necessary are hereby appropriated from current 175 revenues and other funds for the use by several departments of the Municipal Government for the 176 fiscal year beginning July 1, 2012 and ending June 30, 2013: 177 CASH RECEIPTS 178 2011/12 2012/13 179 REVISED BUDGET 180 BEGINNING BALANCE $ 711,747 $ 721,400 181 INTEREST EARNED 9,653 9,700 182 TOTALS 183 184 185 186 CARRY FORWARD TO NEXT YEAR EXPENSE SUMMARY T $ $ 721,400 $ 2011/12 REVISED 721,400 $ 731,100 2012/13 BUDGET 731,100 187 TOTALS AF $ 721,400 $ 731,100 188 The City Manager is hereby authorized, without further approval of the City Council, to make 189 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 190 department with the exception of any transfers prohibited by City Procedure #F306. 191 ADOPTED: * DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 5 of 23 192 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 193 GENERAL CAPITAL ASSET REPLACEMENT FUND 194 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 195 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 196 The amount hereinafter named aggregating Five Hundred Three Thousand dollars ($503,000) or 197 so much thereof as may be necessary are hereby appropriated from current revenues and 198 other funds for the use by several departments of the Municipal Government for the fiscal year 199 beginning July 1, 2012 and ending June 30, 2013: 200 CASH RECEIPTS 201 2011/12 2012/13 202 REVISED BUDGET 203 BEGINNING BALANCE $ 253,420 $ 500,000 204 RECEIPTS 205 206 207 208 INTEREST EARNINGS TRANSFER FROM GENERAL FUND TRANSFER FROM GOVERNMENTAL CAPITAL PROJ. FUND TOTAL RECEIPTS 209 TOTALS T $ 7,500 200,000 39,100 246,600 500,020 $ 3,000 ‐ ‐ 3,000 503,000 210 211 212 AF 213 CARRY FORWARD TO NEXT YEAR 214 TOTALS EXPENSE SUMMARY $ $ 2011/12 REVISED 500,020 $ 500,020 $ 2012/13 BUDGET 503,000 503,000 215 The City Manager is hereby authorized, without further approval of the City Council, to make 216 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 217 department with the exception of any transfers prohibited by City Procedure #F306. 218 ADOPTED: * DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 6 of 23 219 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 220 MUNICIPAL STREET AID FUND 221 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 222 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 223 The amount hereinafter named aggregating Five Hundred Twenty Seven Thousand Five Hundred 224 dollars ($527,500) or so much thereof as may be necessary are hereby appropriated from current 225 revenues and other funds for the use by several departments of the Municipal Government for the 226 fiscal year beginning July 1, 2012 and ending June 30, 2013: 227 CASH RECEIPTS 228 2011/12 2012/13 229 REVISED BUDGET 230 BEGINNING BALANCE $ 102 $ 100 231 STATE GRANT 526,814 527,400 232 TOTALS 233 234 235 236 TRANSFER TO GENERAL FUND T BUDGET SUMMARY $ $ 526,916 $ 2011/12 REVISED 526,816 $ 527,500 2012/13 BUDGET 527,400 AF 237 CURRENT YEAR BALANCE 238 TOTALS $ 100 526,916 $ 239 The City Manager is hereby authorized, without further approval of the City Council, to make 100 527,500 240 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 241 department with the exception of any transfers prohibited by City Procedure #F306. 242 ADOPTED: * DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 7 of 23 243 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 244 WATER/WASTEWATER FUND 245 REVENUES AND BUDGET FOR 2012‐2013 246 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 247 The amount hereinafter named aggregating Fifteen Million One Hundred Sixty One Thousand Six 248 dollars ($15,161,600) or so much thereof as may be necessary are hereby appropriated from current 249 revenues and other funds for the use by several departments of the Municipal Government for the 250 fiscal year beginning July 1, 2012 and ending June 30, 2013: 251 2011/12 2012/13 252 REVISED BUDGET 253 BEGINNING BALANCE ‐ WATER $ 2,567,172 $ 865,100 254 BEGINNING BALANCE ‐ WASTEWATER 1,929,346 853,000 255 BEGINNING BALANCE ‐ KCSA (1,243,243) (553,500) 256 TOTAL BEGINNING BALANCES 3,253,275 1,164,600 257 258 259 260 261 262 BASE REVENUE WATER FEES WASTEWATER FEES WASTEWATER ADJUSTMENT FEES GROUNDWATER INFLOW ADJUSTMENT WATER TANK SPACE LEASING T 4,700,000 3,756,700 3,050,700 1,239,000 307,600 4,730,700 3,834,600 3,090,800 1,257,600 313,500 263 264 265 266 267 268 AF SEWER IMPACT FEES WATER IMPACT FEES INTEREST ‐ WATER INTEREST ‐ WASTEWATER MISCELLANEOUS SERVICE FEE TOTAL REVENUES 269 TOTAL BEGINNING BALANCES AND REVENUES $ 323,000 357,000 10,600 17,200 58,000 13,819,800 17,073,075 $ 317,000 350,000 8,700 17,100 77,000 13,997,000 15,161,600 DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 8 of 23 270 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 271 2011/12 2012/13 272 DIRECT EXPENSES REVISED BUDGET 273 ENGINEERING & INSPECTION $ 622,230 $ 597,900 274 WATER CONSTRUCTION 409,988 345,700 275 WATER DEPARTMENT 382,655 408,200 276 WATER TREATMENT PLANT 1,543,114 1,522,600 277 WASTEWATER DEPARTMENT 959,735 993,000 278 DIRECT EXPENDITURE SUBTOTAL 3,917,722 3,867,400 279 OTHER EXPENSES 280 DEBT SERVICE ‐ WATER 320,853 532,100 281 DEBT SERVICE ‐ WASTEWATER 416,083 731,500 282 RETIREES HEALTH CARE 190,830 220,000 283 UNCOLLECTIBLES 5,000 5,000 284 OPEB UNFUNDED LIABILITY 372,417 ‐ 285 OTHER EMPLOYMENT EXPENSES ‐ 16,200 286 287 288 289 290 291 KENT COUNTY TREATMENT CHARGE PENSION UNFUNDED LIABILITY INTRAFUND SERVICE FEES INVENTORY/FIXED ASSET WRITEOFFS OTHER EXPENSES SUBTOTAL TRANSFER TO T 3,600,000 228,400 1,228,596 10,000 6,372,179 3,600,000 309,800 1,235,400 5,000 6,655,000 292 293 294 295 296 297 298 299 300 302 303 304 AF GENERAL FUND FROM WATER GENERAL FUND FROM WASTEWATER WATER IMP AND EXT WASTEWATER IMP AND EXT WATER IMPACT FEE RESERVE TRANSFER TO CONTINGENCY WASTEWATER CAPITAL ASSET RESERVE WATER CAPITAL ASSET RESERVE WASTEWATER TRANSFER TO SUBTOTAL 301 TOTAL EXPENSES CURRENT YEAR BALANCES CURRENT YEAR BALANCE WATER CURRENT YEAR BALANCE WASTEWATER 238,842 185,666 2,750,000 2,000,000 36,147 8,000 100,000 300,000 5,618,655 15,908,556 865,100 852,962 250,000 250,000 1,700,000 1,200,000 ‐ ‐ 70,000 22,000 3,492,000 14,014,400 482,700 664,500 DR 305 306 CURRENT YEAR BALANCE KCSA CURRENT YEAR BALANCE SUBTOTALS 307 TOTAL CURRENT YEAR BALANCES AND EXPENSES $ (553,543) 1,164,519 17,073,075 $ 308 The City Manager is hereby authorized, without further approval of the City Council, to make 309 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 310 department with the exception of any transfers prohibited by City Procedure #F306. 311 ADOPTED: * ‐ 1,147,200 15,161,600

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 9 of 23 312 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 313 WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND 314 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 315 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 316 The amount hereinafter named aggregating Eleven Million Five Hundred Sixty Thousand Four Hundred 317 dollars ($11,560,400) or so much thereof as may be necessary are hereby appropriated from current revenues 318 and other funds for the use by several departments of the Municipal Government for the fiscal year beginning 319 July 1, 2012 and ending June 30, 2013: 320 CASH RECEIPTS 321 2011/12 2012/13 322 REVISED BUDGET 323 PRIOR YEAR BALANCE ‐ WATER $ 1,537,774 $ 3,071,800 324 PRIOR YEAR BALANCE ‐ WASTEWATER 339,673 1,013,600 325 TOTAL BEGINNING BALANCES 326 327 328 329 RECEIPTS BOND PROCEEDS ‐ WATER ‐ 2013 ISSUE BOND PROCEEDS ‐ WASTEWATER ‐ 2013 ISSUE INTEREST INCOME T 1,877,447 ‐ ‐ ‐ 4,085,400 2,000,000 2,000,000 25,000 330 331 332 333 334 335 336 337 338 TOTALS 339 340 341 AF STATE LOAN‐WATER 2010 ISSUE STATE LOAN‐WASTEWATER 2009 ISSUE STATE LOAN‐WASTEWATER 2011 ISSUE TRANS FR WATER/WASTEWATER FOR WATER TRANS FR WATER/WASTEWATER FOR WASTEWATER TRANSFER FROM WATER IMPACT FEE RESERVE TRANSFER FROM WASTEWATER IMPACT FEE RESERVE TOTAL RECEIPTS EXPENSE SUMMARY $ 1,923,489 1,259,850 765,060 2,750,000 2,000,000 867,032 9,565,431 11,442,878 $ CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 2011/12 ‐ ‐ ‐ ‐ 1,700,000 1,200,000 250,000 300,000 7,475,000 11,560,400 2012/13 DR 342 343 344 345 346 347 348 349 EXPENSES WATER WASTEWATER WATER TREATMENT PLANT WATER CONSTRUCTION ENGINEERING & INSPECTION BOND ISSUANCE COST & DEBT SERVICE RESERVE TOTAL EXPENSES 350 CURRENT YEAR BALANCE ‐ WATER 351 CURRENT YEAR BALANCE ‐ WASTEWATER 352 CURRENT YEAR BALANCE SUBTOTALS 353 TOTALS $ $ REVISED 3,086,468 $ 4,217,976 22,900 30,100 ‐ ‐ 7,357,444 3,071,795 1,013,639 4,085,434 11,442,878 $ BUDGET 5,140,000 3,817,300 24,100 31,000 23,400 344,000 9,379,800 1,675,500 505,100 2,180,600 11,560,400 354 The City Manager is hereby authorized, without further approval of the City Council, to make 355 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 356 department with the exception of any transfers prohibited by City Procedure #F306. 357 ADOPTED: *

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 10 of 23 358 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 359 WATER/WASTEWATER CAPITAL ASSET RESERVE 360 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 361 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 362 The amount hereinafter named aggregating One Million Two Thousand One Hundred dollars 363 ($1,002,100) or so much thereof as may be necessary are hereby appropriated from current 364 revenues and other funds for the use by several departments of the Municipal Government for 365 the fiscal year beginning July 1, 2012 and ending June 30, 2013: 366 CASH RECEIPTS 367 2011/12 2012/13 368 REVISED BUDGET 369 BEGINNING BALANCE ‐ WATER $ 315,695 $ 425,800 370 BEGINNING BALANCE ‐ WASTEWATER 167,966 473,000 371 TOTAL BEGINNING BALANCES 372 373 374 375 376 RECEIPTS INTEREST EARNINGS ‐ WATER INTEREST EARNINGS ‐ WASTEWATER TRANSFER FROM WATER TRANSFER FROM WASTEWATER T 483,661 4,105 5,034 100,000 300,000 898,800 5,300 6,000 70,000 22,000 377 378 379 380 381 382 383 384 385 TOTAL RECEIPTS TOTALS 386 TOTALS AF TRANSFER FROM WATER/WASTEWATER CONTINGENCY CURRENT YEAR BALANCE ‐ WATER CURRENT YEAR BALANCE ‐ WASTEWATER CURRENT YEAR BALANCE SUBTOTALS EXPENSE SUMMARY $ $ $ 6,000 415,139 898,800 $ 2011/12 REVISED 425,800 $ 473,000 898,800 898,800 $ 387 The City Manager is hereby authorized, without further approval of the City Council, to make 103,300 1,002,100 2012/13 BUDGET ‐ 501,100 501,000 1,002,100 1,002,100 D388 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 389 department with the exception of any transfers prohibited by City Procedure #F306. 390 R ADOPTED: *

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 11 of 23 391 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 392 WATER/WASTEWATER CONTINGENCY RESERVE 393 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 394 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 395 The amount hereinafter named aggregating Two Hundred Ninety Two Thousand Nine Hundred dollars 396 ($292,900) or so much thereof as may be necessary are hereby appropriated from current revenues 397 and other funds for the use by several departments of the Municipal Government for the fiscal year 398 beginning July 1, 2012 and ending June 30, 2013: 399 CASH RECEIPTS 400 2011/12 2012/13 401 REVISED BUDGET 402 BEGINNING BALANCE ‐ WATER $ 108,540 $ 109,543 403 BEGINNING BALANCE ‐ WASTEWATER $ 178,973 $ 179,975 404 TOTAL BEGINNING BALANCES 405 RECEIPTS 406 INTEREST EARNINGS 407 TOTAL RECEIPTS 408 TOTALS T $ $ 287,513 $ 8,005 8,005 295,518 $ 289,518 3,382 3,382 292,900 409 410 411 EXPENSES AF BUDGET SUMMARY 412 TRANSFER TO CAPITAL ASSET RESERVE 413 TOTAL EXPENSES 414 CURRENT YEAR BALANCE ‐ WATER 415 CURRENT YEAR BALANCE ‐ WASTEWATER 416 CURRENT YEAR BALANCE SUBTOTALS 417 TOTAL EXPENSES AND CURRENT YEAR BALANCES $ $ 2011/12 REVISED 6,000 $ 6,000 109,543 179,975 289,518 295,518 $ 2012/13 BUDGET 418 The City Manager is hereby authorized, without further approval of the City Council, to make ‐ ‐ 110,900 182,000 292,900 292,900 D 419 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 420 department with the exception of any transfers prohibited by City Procedure #F306. 421 ADOPTED: * R

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 12 of 23 422 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 423 ELECTRIC REVENUE FUND 424 REVENUES AND BUDGET FOR 2012‐2013 425 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 426 The amount hereinafter named aggregating One Hundred Million Six Hundred Ninety Four Thousand 427 Two Hundred dollars ($100,694,200) or so much thereof as may be necessary are hereby 428 appropriated from current revenues and other funds for the use by several departments of the 429 Municipal Government for the fiscal year beginning July 1, 2012 and ending June 30, 2013: 430 2011/12 2012/13 431 REVISED BUDGET 432 BEGINNING BALANCE $ 12,292,573 $ 7,184,000 433 BASE REVENUE 434 DIRECT SALES TO CUSTOMER 95,674,800 85,071,400 435 PURCHASE POWER ADJUSTMENT (6,011,300) ‐ 436 437 438 439 440 441 442 443 UTILITY TAX MISCELLANEOUS REVENUE RENT REVENUE GREEN ENERGY INTEREST EARNINGS TRANSFER FROM RATE STABILIZATION INTRAFUND SERVICE RECEIPTS WATER/WASTEWATER TOTAL REVENUES T 1,700,000 850,700 225,000 129,000 150,000 1,000,000 240,200 93,958,400 1,595,200 850,700 225,000 129,000 107,800 5,400,000 130,800 93,509,900 AF 444 TOTALS $ 106,250,973 $ 100,693,900 DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 13 of 23 445 ELECTRIC REVENUE FUND ‐ CONTINUED 446 REVENUES AND BUDGET FOR 2012‐2013 447 2011/12 2012/13 448 EXPENSES REVISED BUDGET 449 POWER SUPPLY $ 42,047,430 $ 39,468,900 450 SOLAR ENERGY 1,618,924 1,414,500 451 POWER SUPPLY MANAGEMENT 1,170,000 996,000 452 PJM CHARGES ‐ LOAD 13,424,472 17,508,300 453 CAPACITY CHARGES 8,506,512 12,564,800 454 SUB‐TOTAL POWER SUPPLY 66,767,338 71,952,500 455 PLANT OPERATIONS 5,964,817 5,914,900 456 GENERATIONS FUELS 664,641 586,000 457 PJM SPOT MARKET ENERGY ‐ (772,700) 458 PJM CREDITS (1,285,675) (427,000) 459 CAPACITY CREDITS (7,388,283) (14,318,600) 460 GENERATION SUBTOTAL (2,044,500) (9,017,400) 461 POWER SUPPLY & GENERATION SUBTOTAL 64,722,838 62,935,100 462 463 464 465 466 467 468 DIRECT EXPENDITURES TRANSMISSION/DISTRIBUTION ELECTRICAL ENGINEERING ADMINISTRATION METER READING SYSTEMS OPERATIONS DIRECT EXPENDITURE SUBTOTALS T 3,162,026 1,177,060 602,715 215,208 473,895 5,630,904 3,223,600 1,163,900 501,200 212,500 517,600 5,618,800 469 470 471 472 473 474 475 476 477 478 479 480 481 482 AF OTHER EXPENSES: UTILITY TAX ALLOW FOR UNCOLLECTIBLES CONTRACTUAL SERVICES ‐ RFP'S RETIREES HEALTH CARE OTHER EMPLOYMENT EXPENSES TRANSFER TO PENSION UNFUNDED LIABILITY OPEB UNFUNDED LIABILITY GREEN ENERGY PAYMENT TO DEMEC INTRAFUND SERVICE FEES INTEREST ON DEPOSITS INVENTORY WRITE OFFS DEBT SERVICE OTHER EXPENSES SUBTOTAL 1,700,000 150,000 75,000 646,510 ‐ 1,110,500 1,688,847 129,000 3,270,800 54,500 175,000 3,336,800 12,336,957 1,595,200 150,000 190,000 696,500 157,900 1,074,200 ‐ 129,000 3,224,500 35,000 175,000 3,323,600 10,750,900 D 483 TRANSFER TO 484 IMPROVEMENT & EXTENSION 3,500,000 3,500,000 485 GENERAL FUND 7,876,288 8,000,000 486 RATE STABILIZATION RESERVE 5,000,000 ‐ 487 TRANSFER TO SUBTOTAL 16,376,288 11,500,000 R 488 TOTAL EXPENSES 489 CURRENT YEAR BALANCE 490 TOTALS $ 99,066,987 7,183,986 106,250,973 $ 90,804,800 9,889,100 100,693,900 491 The City Manager is hereby authorized, without further approval of the City Council, to make 492 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 493 department with the exception of any transfers prohibited by City Procedure #F306. 494 ADOPTED: *

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 14 of 23 495 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 496 ELECTRIC UTILITY IMPROVEMENT AND EXTENSION FUND 497 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 498 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 499 The amount hereinafter named aggregating Six Million Eight Hundred Five Thousand Three Hundred 500 dollars ($6,805,300) or so much thereof as may be necessary are hereby appropriated from current 501 revenues and other funds for the use by several departments of the Municipal Government for the 502 fiscal year beginning July 1, 2012 and ending June 30, 2013: 503 CASH RECEIPTS 504 2011/12 2012/13 505 REVISED BUDGET 506 BEGINNING BALANCE $ 3,175,375 $ 2,714,600 507 RECEIPTS 508 INTEREST EARNINGS 509 TRANSFER FROM DEPRECIATION RESERVE 510 TRANSFER FROM FUTURE CAPACITY RESERVE 511 TRANSFER FROM INSURANCE STABILIZATION 512 TRANSFER FROM ELECTRIC 513 TOTAL RECEIPTS T 25,000 300,000 ‐ 70,730 3,500,000 3,895,730 40,700 ‐ 550,000 ‐ 3,500,000 4,090,700 514 TOTALS 515 516 517 EXPENSES 518 ELECTRIC GENERATION 519 TRANSMISSION AND DISTRIBUTION 520 ELECTRICAL ENGINEERING 521 METER READING 522 TOTAL EXPENSES 523 CURRENT YEAR BALANCE 524 TOTALS AF EXPENSE SUMMARY $ $ $ 7,071,105 $ 2011/12 REVISED 1,897,455 $ 648,337 1,790,716 20,000 4,356,508 2,714,597 7,071,105 $ 6,805,300 2012/13 BUDGET 1,441,300 596,000 1,932,700 ‐ 3,970,000 2,835,300 6,805,300 D 525 The City Manager is hereby authorized, without further approval of the City Council, to make 526 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 527 department with the exception of any transfers prohibited by City Procedure #F306. 528 ADOPTED: * R

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 15 of 23 529 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 530 ELECTRIC UTILITY CONTINGENCY RESERVE 531 CASH RECEIPTS/REVENUES AND BUDGET FOR 2012‐2013 532 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 533 The amount hereinafter named aggregating One Million Eighty Eight Thousand Eight Hundred dollars 534 ($1,088,800) or so much thereof as may be necessary are hereby appropriated from current revenues 535 and other funds for the use by several departments of the Municipal Government for the fiscal year 536 beginning July 1, 2012 and ending June 30, 2013: 537 CASH RECEIPTS 538 2011/12 2012/13 539 REVISED BUDGET 540 BEGINNING BALANCE $ 1,056,789 $ 1,072,700 541 RECEIPTS 542 INTEREST EARNINGS 543 TOTAL RECEIPTS 544 TOTALS 545 EXPENSE SUMMARY T $ 15,911 15,911 1,072,700 $ 16,100 16,100 1,088,800 546 547 EXPENSES AF 548 TRANSFER TO INSURANCE STABILIZATION RESERVE 549 TOTAL EXPENSES 550 CURRENT YEAR BALANCE 551 TOTALS $ 2011/12 REVISED 1,072,700 ‐ ‐ 1,072,700 $ 552 The City Manager is hereby authorized, without further approval of the City Council, to make 553 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 554 department with the exception of any transfers prohibited by City Procedure #F306. 2012/13 BUDGET 272,600 272,600 816,200 1,088,800 D 555 ADOPTED: * R

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 16 of 23 556 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 557 ELECTRIC UTILITY DEPRECIATION RESERVE 558 SOURCES AND USE OF FUNDS FOR 2012‐2013 559 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 560 The amount hereinafter named aggregating Nine Million Nine Hundred Twenty Three Thousand 561 Three Hundred dollars ($9,923,300) or so much thereof as may be necessary are hereby 562 appropriated from current revenues and other funds for the use by several departments of the 563 Municipal Government for the fiscal year beginning July 1, 2012 and ending June 30, 2013: 564 CASH RECEIPTS 565 2011/12 2012/13 566 REVISED BUDGET 567 BEGINNING BALANCE $ 10,412,221 $ 9,772,300 568 INTEREST EARNINGS 160,079 151,000 569 570 571 572 573 574 TOTALS BUDGET SUMMARY TRANSFER TO IMPROVEMENT AND EXTENSION TRANSFER TO FUTURE CAPACITY T $ $ 10,572,300 $ 2011/12 REVISED 300,000 $ 500,000 9,923,300 2012/13 BUDGET ‐ ‐ 575 AF TRANSFER TO INSURANCE STABILIATION 576 CURRENT YEAR BALANCE 577 TOTALS $ ‐ 9,772,300 10,572,300 $ 58,500 9,864,800 9,923,300 578 The City Manager is hereby authorized, without further approval of the City Council, to make 579 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 580 department with the exception of any transfers prohibited by City Procedure #F306. 581 ADOPTED: * DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 17 of 23 582 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 583 ELECTRIC UTILITY FUTURE CAPACITY RESERVE 584 SOURCES AND USE OF FUNDS FOR 2012‐2013 585 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 586 The amount hereinafter named aggregating Nine Million Nine Hundred Sixty Six Thousand Five Hundred 587 dollars ($9,966,500) or so much thereof as may be necessary are hereby appropriated from current revenues 588 and other funds for the use by several departments of the Municipal Government for the fiscal year 589 beginning July 1, 2012 and ending June 30, 2013: 590 CASH RECEIPTS 591 2011/12 2012/13 592 REVISED BUDGET 593 BEGINNING BALANCE $ 9,178,771 $ 9,826,500 594 RECEIPT FROM DEPRECIATION RESERVE 500,000 ‐ 595 INTEREST EARNINGS 596 597 598 599 600 TOTALS TRANSFER TO ELECTRIC I & E FUND BUDGET SUMMARY T $ $ 147,729 9,826,500 $ 2011/12 REVISED ‐ $ 140,000 9,966,500 2012/13 BUDGET 550,000 601 602 AF TRANSFER TO GENERAL FUND TRANSFER TO INSURANCE STABILIZATION 603 CURRENT YEAR BALANCE 604 TOTALS $ 9,826,500 ‐ ‐ 9,826,500 $ 605 The City Manager is hereby authorized, without further approval of the City Council, to make 606 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 607 department with the exception of any transfers prohibited by City Procedure #F306. 608 ADOPTED: * 633,300 54,500 8,728,700 9,966,500 DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 18 of 23 609 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 610 ELECTRIC UTILITY INSURANCE STABLIZATION RESERVE 611 SOURCES AND USE OF FUNDS FOR 2012‐2013 612 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 613 The amount hereinafter named aggregating Seven Hundred Twenty Nine Thousand One Hundred dollars 614 ($729,100) or so much thereof as may be necessary are hereby appropriated from current revenues 615 and other funds for the use by several departments of the Municipal Government for the fiscal year 616 beginning July 1, 2012 and ending June 30, 2013: 617 CASH RECEIPTS 618 2011/12 2012/13 619 REVISED BUDGET 620 BEGINNING BALANCE $ 403,335 $ 339,400 621 INTEREST EARNINGS 6,795 25,000 622 TRANSFER FROM ELECTRIC CONTINGENCY ‐ 272,600 623 624 TRANSFER FROM DEPRECIATION RESERVE TRANSFER FROM FUTURE CAPACITY RESERVE 625 TOTALS 626 627 BUDGET SUMMARY T $ ‐ ‐ 410,130 $ 2011/12 58,500 54,500 750,000 2012/13 628 AF 629 TRANSFER TO ELECTRIC IMPROVEMENT & EXTENSION 630 CURRENT YEAR BALANCE 631 TOTALS $ $ REVISED 70,730 $ 339,400 410,130 $ 632 The City Manager is hereby authorized, without further approval of the City Council, to make 633 interdepartmental transfers of up to five percent of the amount hereinafter appropriated to any 634 department with the exception of any transfers prohibited by City Procedure #F306. 635 ADOPTED: * BUDGET 750,000 750,000 ‐ DR

Final Reading of Proposed FY 2012-2013 Budget Ordinance #2012-18 19 of 23 636 2012‐2013 BUDGET ORDINANCES ‐ CONTINUED 637 ELECTRIC UTILITY RATE STABLIZATION RESERVE 638 SOURCES AND USE OF FUNDS FOR 2012‐2013 639 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 640 The amount hereinafter named aggregating Ten Million Four Hundred Six Thousand Four Hundred 641 dollars ($10,406,400) or so much thereof as may be necessary are hereby appropriated from current 642 revenues and other funds for the use by several departments of the Municipal Government for 643 the fiscal year