Annual Council Packet

Annual City Council Meeting Agenda May 11, 2020 - 7:30 p.m. This meeting will be held electronically. Public participation information is as follows: Dial: 1-408-418-9388 Link: https://cityofdoverde.webex.com/cityofdoverde/onstage/g.php?MTID=e9699dde0875a94 3e525bc5cf4d2d7831 Event number/Access code: 711 539 610 Event password: DOVER (if needed) Call to Order Invocation by Mayor Christiansen Pledge of Allegiance Led by Mayor Christiansen and Members of City Council Adoption of Agenda * 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. Council Workshop of December 2, 2019 (CPSM Study) B. Regular Council Meeting of April 27, 2020 2. Nominations for Council President/Vice-Mayor 3. Recess for Voting 4. Reporting of Election Results by City Solicitor Rodriguez 5. Proclamations A. Community Action Month B. Public Works Week 6. State of the City Message - Mayor Robin R. Christiansen 7. Presentation - 2019 Comprehensive Annual Financial Report (CAFR) (Remi Omisore)

Annual City Council Agenda - May 11, 2020 Page 2 * 8. Community Development Block Grant (CDBG) Application Review (Staff recommendation: Approval of the recommended funding amounts) 9. Staff Substitute - Proposed Ordinance #2020-05 Amending Chapter 22 - Buildings and Building Regulations, Article IX - Lodginghouses and Article X - Rental Dwellings (During its meeting of February 25, 2020 the Legislative, Finance, and Administration Committee referred the Ordinance back to Staff) (Staff recommendation: Adoption of Staff Substitute #1 for Ordinance #2020-05) 10. Interim Replacement for Retiring 911 Supervisor * 11. Monthly Reports - March 2020 A. City Assessor’s Report B. City Council’s Community Enhancement Fund Report C. City Manager’s Report (February and March) D. City Planner’s Report E. Controller/Treasurer’s Budget Report (February and March) F. Fire Chief’s Report G. Police Chief’s Report * 12. Quarterly Review - Capital Investment Plan (January, February, and March) 13. Setting of Public Hearing - Electric Fund Budget (Staff Recommendation: That a Public Hearing be set for June 8, 2020 at 7:30 p.m.) 14. Revisiting Emergency Ordinance #2020-06 Waiving Certain Charter, Code, Policy and Procedure Requirements During the COVID-19 Virus State of Emergency (The Ordinance was adopted April 13, 2020 (effective March 23, 2020), with the understanding that it would be revisited in 30 days) * 15. 2020/21 City Council Annual Staff Appointments A. City Assessor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cheryl A. Bundek B. Building Inspector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . David S. Hugg III C. City Clerk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Traci A. McDowell D. Assistant City Clerk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Janella M. Tauchus E. Controller/Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lori Peddicord F. Assistant Controller/Treasurer. . . . . . . . . . . . . . . . . . . . Kimberly A. Cruz G. Assistant Treasurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . Traci A. McDowell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Janella M. Tauchus H. Fire Marshal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jason A. Osika I. City Solicitor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nicholas H. Rodriguez J. Deputy City Solicitor . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gary E. Junge

Annual City Council Agenda - May 11, 2020 Page 3 16. 2020/21 Annual Committee Appointments A. City/County Committee (Liaison to Kent County) - Recommended by the Council President B. Council Committee of the Whole Subcommittees - Recommended by the Council President and Committee Chairs C. Dover Fourth of July Celebration Committee - Recommended by the Mayor D. Dover Public Library Advisory Commission - Recommended by the Mayor E. Downtown Dover Partnership Board of Directors - Recommended by City Council F. Economic Development Committee - Recommended by City Council G. Election Board - Recommended by the Mayor H. General Employee Pension Plan Board - Recommended by the Council President I. Kent County Tourism Board of Directors (Voting Liaison) - Recommended by the Council President J. Kent Economic Partnership Board of Directors (Voting Liaison Member) - Recommended by the Council President K. Other Post-Employment Benefits (OPEB) Board - Recommended by the Council President L. Police Pension Plan - Retirement Committee - Recommended by the Council President M. Silver Lake Commission - Recommended by the Mayor * 17. Resolutions A. Resolution No. 2020-03 Approval of the FY 2020-2024 Five Year Community Development Block Grant (CDBG) Consolidated Plan, Application for Federal Assistance, Certifications, and Policies B. Resolution No. 2020-04 Authorizing Signatures for Banking Services on Behalf of the City of Dover, Delaware - Controller/Treasurer, Assistant Finance Director, and Assistant Treasurers 18. City Manager’s Announcements 19. Council Members’ Announcements 20. Adjournment /tm S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Council-Agendas\2020\05-11-2020 Annual Council Agenda.wpd Executive Session Pursuant to: 29 Del. C. §10004(b)(2) - Preliminary discussions on site acquisitions for any publicly funded capital improvements, or sales or leases of real property; 29 Del. C. §10004(b)(4) - Strategy sessions, including those involving legal advice or opinion from an attorney-at-law, with respect to collective bargaining or pending or potential litigation, but only when an open meeting would have an adverse effect on the bargaining or litigation position of the public body; 29 Del. C. §10004(b)(6) - Discussion of the content of documents, excluded from the definition of "public record" in §10002 of this title where such discussion may disclose the contents of such documents; 29 Del. C. §10004(b)(9) - Personnel matters in which the names, competency and abilities of individual employees are discussed, unless the employee requests that such a meeting be open THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. PURSUANT TO 29 DEL. C. §10004(e)(2), THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS, WHICH ARISE AT THE TIME OF THE MEETING.

COUNCIL WORKSHOP A Council Workshop was held on December 2, 2019 at 6:00 p.m. with Council President Hare presiding. Council members present were Mr. Neil, Mr. Slavin, Mr. Cole, Mr. Polce, Mr. Taylor, and Mr. Lindell. Mr. Anderson and Mr. Sudler were absent. Staff members present were Acting Police Chief Stump, Mrs. Mitchell, and Mrs. McDowell. Mayor Christiansen was also present (departed at 6:45 p.m.). ADOPTION OF AGENDA Mr. Neil moved for adoption of the agenda, seconded by Mr. Taylor and unanimously carried. OVERVIEW OF CENTER FOR PUBLIC SAFETY MANAGEMENT, LLC (CPSM) OPERATIONS AND DATA ANALYSIS REPORT - DOVER POLICE DEPARTMENT Mrs. Donna Mitchell, City Manager, read the following into the record: “In July 2015, the Center for Public Safety Management, LLC (CPSM) was commissioned to perform a comprehensive analysis of Police, Fire and EMS Services as approved by City Council in June 2015 with an estimated cost of $96,300 +. The Fire and EMS report was presented to City Council in 2016 upon its completion. The Police Report was completed in June 2016, however not presented. Although, the report is dated, it provided a blueprint for the future of the City and the Dover Police Department that is worthy of discussion. While the analysis covered all aspects of the department's operations, particular areas of focus of this study included: identifying appropriate staffing of the department given the workload, community demographics, and crime levels; the effectiveness of the organization structure; and the efficiency of division/unit processes. CPSM analyzed the department workload using operations research methodology and compared that workload to staffing and deployment levels. They reviewed other performance indicators that enabled them to understand the implications of service demand on current staffing. The study involved data collection, interviews with key police and administration personnel, focus groups with department personnel and volunteers/community members, on-site observations of the job environment, data analysis, comparative analysis, SWOT analysis, and the development of alternatives and recommendations. All support data and information were provided by the Dover Police Department staff. Major recommendations are discussed in detail throughout the report. Included below are some areas that require clarification or update.” Mrs. Mitchell advised that the following were being provided to clarify the items where misinformation was provided to CPSM on some of the data: “Comparisons/Benchmarks Participating Departments 2014 - 2015 budgets averaged 28.5 percent of their cities total budget. Dover Police Department Budget of $15,603,100 inclusive of capital outlay was 35 percent of the total city budget of $44,597,300. (Correction to CPSM

CITY COUNCIL WORKSHOP OF DECEMBER 2, 2019 PAGE 2 Report 11.4% - the consultant was provided the total city budget including utility funds). The budgeted cost per citizen equated to $417.69 per citizen, as compared to $233.10 per citizen (79.19 percent higher) in the benchmark study. Staffing - Benchmark City Survey indicates an average of 718.4 citizens per officer, or 1.45 officers per 1,000 citizens. In 2015, the Dover Police Department had an authorized strength of 101 sworn officers, which equates to 369.85 citizens per officer and 2.7 officers per 1,000 citizens (Clarification - During FY15 the City approved 10 additional sworn officers that took the total personnel from 124 persons to 134 persons. These officers are included in the 101 sworn officers above as well as the calculation for the per citizen cost.)” Mrs. Mitchell noted that the officers are included in CPSM's number when they did their calculation; however, those officers were not in the 2015 budget and were added during the year outside the budget. “Department's Financial Stability Incremental Yearly Increases demonstrates the City has provided consistent financial support to the department during a time period in which many police departments experienced a decrease in funding. • A 14.11% budget increase from FY12 through FY15 (An average of 3.5% per year). • Over the same period a 10.25% increase in total staffing Update - • FY16 the City increased total staffing to 134 positions. • The FY16 Budget increase over FY15 was 7% • The FY20 Budget staffing includes 101 sworn officers and 42 Civilians (including 9 part-time Cadets) • Budget at the time of the report FY15 $15,603,100 as compared to FY20 $18,602,900 or 19% (An average of 3% per year) • Budgeted cost per citizen equated to $461.84 Training Budgets CPSM was advised, that for several years, the department has utilized forfeiture funds to support the ongoing training of its personnel. This has proven quiet cost effective and resulted in relatively low training budget over the past several years (approximately $28,000 to $35,000 per year). Forfeiture funding has recently "dried up". This is a common experience for police departments across the county. The department will therefore need to immediately make provisions for maintaining both the quantity and quality of training that is provided to its employees.

CITY COUNCIL WORKSHOP OF DECEMBER 2, 2019 PAGE 3 Mrs. Mitchell provided a history of training budgets as follows: Police Department Training Expenditures General Fund Grant Total Budget Actual Variance Expenditures Actual 2009 $21,200 $14,966 $6,234 Not Avail. 2010 $14,050 $9,878 $4,172 Not Avail. 2011 $19,450 $23,908 ($4,458) Not Avail. 2012 $12,000 $16,970 ($4,970) $21,120 $38,090 2013 $23,300 $19,493 $3,807 $21,045 $40,538 2014 $25,500 $30,404 ($4,904) $2,832 $33,236 2015 $27,700 $38,903 ($11,203) $22,018 $60,921 2016 $44,900 $49,769 ($4,869) $74,203 $123,972 2017 $7,100 $47,456 $23,544 $35,229 $82,685 2018 $50,000 $51,358 ($1,358) $1,550 $66,858 2019 $58,500 $49,480 $9,020 $19,516 $68,996 2020 $55,000 $5,643 $49,357 - $5,643 Mrs. Mitchell advised that the study talked about having a strategic plan and having it integrated with the City's strategic plan. Noting that the City does not have a strategic plan, she stated that one of her challenges will be to work with all departments to get a fully integrated strategic plan. Mrs. Mitchell cautioned that a strategic plan is not just a list of the items you want to do or things you want to accomplish, it is how you are going to get there, how you review it, how are you going to measure it and take action if it is not working out the way you thought it would be. She noted that it is something the City needs and there are areas of improvement that can be made throughout the City. Mayor Christiansen stated that the CPSM study that was done on the Fire Department and EMS contained a lot of flaws and misrepresentations. He also noted that he thought it was very important that the Police Department take advantage of all the training that they can get because they carry guns and the ultimate liability to the Mayor and Council, as well as the citizens. Mayor Christiansen stated that, ultimately, it will be a cost savings, as well as a lifesaving thing for the citizens. Mayor Christiansen stated that he thought the population numbers that the study used were a nighttime population of 38,500. The Chamber of Commerce provided information two years ago that indicated that, at any given time during the workday, the population plus the drive-through

CITY COUNCIL WORKSHOP OF DECEMBER 2, 2019 PAGE 4 population swells to anywhere between 70,000 and 75,000. Although he disagreed with the formula that CPSM used, he thought that they were close on the number of authorized officers. Mrs. Mitchell clarified that the population numbers that they used would have been the same methods that they would have used for the benchmark. If the population swelled, those benchmarks may have reflected that. She noted that, while a lot of people did not agree with it, the fire and EMS study had a lot of good points. Mrs. Mitchell stated that she felt that the things that were perceived as inaccurate were the result of inaccurate information being provided. She agreed that training is very critical and noted that they went from an average of 70 hours per officer in training to 145 hours per officer in 2018. Mrs. Mitchell stated that the budget analyst compiled all of the training hours and the number of officers that are in training on a daily basis month after month could be a public safety issue and a managerial issue. She reiterated that she thinks that all the officers should be trained and noted that the City has very qualified officers. Mayor Christiansen stated that he respected the job that Mrs. Mitchell is doing; however, 145 hours worth of training in any given situation would be well worth the lives that it saves and the dollars that have been expended on it. Major Tim Stump, Acting Police Chief, reiterated the importance of training, for the safety of the officers and the citizens, and noted that both the training and the department would be looked at if something goes wrong. He also stated that training is one of the five pillars of a great police agency, which he believes they have. Major Stump advised members that the SORT team handles the highest risk complaints in the City and because they have to work together, they have to train together. He agreed that training has increased over the years and he believes that is a positive for the City of Dover and a positive for the department. Major Stump advised that he was the Administrative Division Commander during the study and he gathered the majority of the data for CPSM. He noted that it is extremely dated. Major Stump advised that they have already implemented a majority of the 100 recommendations from the study. Responding to Mr. Neil, Major Stump advised that the department purchased two Benelli semiautomatic shotguns, as recommended. With regard to the recommendation to "Consider purchasing software for internal affairs’ use, which is more user friendly and would have greater capabilities of analysis than Microsoft Word and Excel.", Major Stump advised that they have a grant currently for $19,000 and $18,000, some of which is going to a software system called IA Pro, which is exactly that. Mr. Neil, noting that the report compliments the Police Department’s response to all citizen calls and then recommends a Calls For Service (CFS) Committee to evaluate service demands in an attempt to reduce or eliminate non-emergency responses, stated that he felt that the Police Department’s response to citizens was the strength of that department. He stated that the several recommendations calling for non-sworn personnel, civilian employees, to take over duties held by officers had merit as it would free up an officer to concentrate on policing in the field at a cost savings to the taxpayers. Mr. Neil stated that he disagreed with the recommendation that the department should strongly consider the use of civilian volunteers to support the current record division staff, believing that it would best be served to have higher part-time employees if the record-keeping is overwhelming to

CITY COUNCIL WORKSHOP OF DECEMBER 2, 2019 PAGE 5 the department. Major Stump stated that they have used volunteers in the past and, due to the sensitive material, he would prefer having a City employee. Major Stump advised that he was not in favor of the recommendation to have a civilian at the front desk given their situation at the Police Department. He noted that the desk officer is usually a supervisor who both deals with people that come in and make visual and physical checks on the prisoners in the cell block every 30 minutes. Major Stump advised that civilians are not permitted in the cell block. Mr. Taylor, noting that he is a huge supporter of training, stated that there has to be a fine line. For example, when the entire SORT team is away for training and then officers are on vacation or sick, a 10 or 12-man shift is reduced to a 7 or 8-man shift, which is not safe for the officer, nor is it safe for our citizens. Mr. Taylor asked where the balance was. Responding, Major Stump advised that they rely on the sergeants to make the decision to let their people off, noting that there is a mandatory staffing that they need to have to run their shifts. Major Stump stated that they have special units that are decimated, specifically for the fact that former Chief Mailey made a decision to keep patrol beefed up no matter what. He advised that years ago they had a seven man motorcycle unit that is down to two men. Major Stump advised that the only real revenue from the police department is traffic enforcement, and the motorcycle division does a large portion of that. He also noted that if there are seven officers writing tickets constantly, you can create an atmosphere of voluntary compliance by the citizens because they know the areas that are being enforced on a regular basis and they will eventually learn to do the speed limit or a safe speed. Major Stump advised that the street crimes unit has also been decimated by being reduced from six officers to one officer. He noted that those unit officers are all back in patrol. He noted that they have been playing catchup with manpower for his entire 29-year career. Mr. Taylor, noting the need to ease the pressure off of the taxpayer, stated that there has to be an avenue or matrix that can be used to collect these funds. He asked if Major Stump had any strategies or solutions in place, or pending, to assist in collecting money because the percentage of collection is going down each and every year. Responding, Major Stump stated that for several years they have had an outside vendor collect those funds. Mr. Taylor stated that he joined the Dover Police Department in 1990 and he was one of five African American officers. He noted that the department does not mirror the community and asked where they were with regard to diversity. Responding, Major Stump advised that they have made great strides over the past three to five years, noting that of the last 22 employees hired, 12 have been minorities. Mr. Polce, noting that they are losing officers, asked Major Stump to talk about the climate in the department and how they could foster retention. Responding, Major Stump stated that it used to be unheard of for an officer to work four or five years and them move on from the Dover Police Department unless there was a problem and they were forced to leave. Major Stump stated that recently officers have left to get into another line of work or because their spouse got a job in a different state. Another officer is in the process of moving to New Castle County where the salary is considerably higher. He stated that he believes there is good morale in the department and that people are generally happy.

CITY COUNCIL WORKSHOP OF DECEMBER 2, 2019 PAGE 6 Mr. Polce asked Major Stump if the initial starting salary in New Castle County was higher and if he thought that as officers move up the rank the pay scale was equitable compared to other municipalities and other jurisdictions. Responding, Major Stump said that they do not typically compare themselves with New Castle County, which is more comparable to the Delaware State Police. Responding to Mr. Polce, Major Stump advised that the community policing division is down to a supervisor and two officers; however, he thought that one of them just went out with a shoulder surgery. He stated that he did not think they would ever reduce the numbers in the detective division, which handles the major crimes within the City, or the drugs, vice, and organized crime unit. Major Stump noted that the street crimes unit works hand in hand with the drug unit and, over the past three or four years, they have taken more stolen, illegal firearms off the street than in any three-year period in the history of the police department. He advised that they try to keep those units staffed at 11 or 12 with four 12-hour shifts. Major Stump stated that he went over personnel issues with the City Manager and he has requested five additional police officers because he did not want to handcuff the incoming Chief with staffing issues. He noted that the department was increased by ten officers in 2014 or 2015, which was the largest increase since the department went from 70 to 85 over a period of three years in the 1990's. Major Stump advised that 20 or 25 officer would make a real impact on the police department and be a tremendous boost for the citizens of Dover. He also noted that hiring 25 additional officers would mean and additional four or five civilian staff, more dispatchers, and 15 to 20 additional police cars. Mr. Slavin recalled that when 10 new officers were added in the middle of a budget year five years ago due to retirements, Council was told that was all the officers that they would need. He advised that the salaries, training, and vehicles for 10 new officers would cost $2 million. Responding to Mr. Slavin, Mrs. Mitchell stated that a tax increase of 6 to 7 cents would be necessary to cover those expenses, noting that each 1 cent increase would raise $300,000. She also advised that the four officers that the police department asked for the previous year were going to cost approximately $2 million over a five-year period. Mrs. Mitchell stated that adding vehicles raises the cost from $38,000 a year to $50,000 a year. Responding to Mr. Hare, Major Stump stated that he thought there were 19 officers, or 20% of the department, that were eligible to retire. Mr. Hare stated that he did not think 5 new officers was unreasonable due to the time it takes to get them on the street. Responding to Mr. Lindell, Major Stump reiterated that they hire the best candidates regardless of race or gender. Mr. Lindell stated that he thought reaching out and looking for other ways to increase that diverse pool of applicants should be a priority as well. Mr. Lindell, noting that he appreciates that training is important, especially for law enforcement officers, asked how much training the Chief or top line officers received in managing the workforce and the budgets as they progressed through the ranks. Responding, Major Stump advised that there is very little budget training until they reach the staff level, at which point they are sent to a leadership school at either the FBI National Academy or Northwestern where they are trained in budgeting. Noting that Major Stump had been acting chief for a few months and was dealing with both the police side and the non-police side, such as budget and manpower issues, Mr. Lindell asked if he

CITY COUNCIL WORKSHOP OF DECEMBER 2, 2019 PAGE 7 thought one distracted from the other and if he though it would be helpful to have someone, perhaps a civilian, that might have that experience work in concert with the incoming Chief to deal with those issues and to utilize the officers efficiently. Responding, Major Stump stated that being able to deal with grants and budgets and to get money for your agency is an absolute benefit. He noted that the department currently has a civilian police administrator position that handles the majority of the budget. Mr. Lindell asked if that position would be aware of manpower issues and voluntary extra duty to advise the Chief that the officers are doing a lot of extra work and it might be straining their time or impacting their normal duties. Responding, Major Stump advised that they periodically look at that to see if anything needs to be addressed. He also noted that they have rules and policies in place regarding the maximum amount of hours that they are allowed to work over a certain period. Major Stump stated that occasionally they will find violations and they keep an eye on it. Mr. Neil suggested that installing LED lighting in the downtown area would be beneficial to the police department. Mr. Polce advised that Project Safe Neighborhoods is a nationwide initiative that demonstrates how to maximize community opportunities creatively by using community navigators who are culturally competent individuals from the neighborhood rolling up their sleeves and trying to really detract drug use, misuse, and then they might stumble on a individual in active addiction and get them to recovery and they are doing a lot of great work in tandem with the patrolmen. He stated that he thought that the program has demonstrated efficacy because it shows that they are able to work collaboratively with nonprofits and other providers. Major Stump stated that they are participating in Project Safe Neighborhoods and that the problem solvers have been attending every quarterly meeting and they are extremely effective and they have a lot of respect from the people in the neighborhoods they are working with. Responding to Mr. Polce, Major Stump stated that he felt that they were distributing officers appropriately and that the solution to maintaining both 11 or 12 officers per shift for patrol and the special units was manpower. He stated that the five officers that are currently being requested would alleviate some of that deficit in those critical divisions. Responding to Mr. Hare, Major Stump stated that the police department is utilizing social media by tracking, making arrests, and seizing weapons as a result of people posting things. Mr. Slavin moved for adjournment, seconded by Mr. Neil and unanimously carried. Meeting adjourned at 7:27 p.m. TRACI A. McDOWELL CITY CLERK

CITY COUNCIL WORKSHOP OF DECEMBER 2, 2019 PAGE 8 All ordinances, resolutions, motions, and orders adopted by City Council during their Regular Meeting of December 2, 2019 are hereby approved. ROBIN R. CHRISTIANSEN MAYOR /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Council-Minutes\2019\12-02-2019 Council Workshop Minutes.wpd

REGULAR CITY COUNCIL MEETING The Regular City Council Meeting was held by video conference on April 27, 2020 at 7:30 p.m. with Council President Hare presiding. Council members present via video or telephone were Mr. Anderson, Mr. Sudler, Mr. Neil (arrived at 7:40 p.m.), Mr. Slavin, Mr. Cole, Mr. Polce, Mr. Taylor, and Mr. Lindell. Staff members present via video or telephone were Police Chief Johnson, Ms. Peddicord, Mrs. Mitchell, Mr. Hugg, and Mrs. McDowell. Mayor Christiansen was absent. The invocation was given by Councilman Taylor, followed by the Pledge of Allegiance. ADOPTION OF AGENDA Mr. Anderson moved for adoption of the agenda, seconded by Mr. Slavin and unanimously carried. Mr. Anderson requested that item #3 - Quarterly Revenue Report, be removed from the consent agenda. Mr. Slavin moved for adoption of the consent agenda, as amended, seconded by Mr. Anderson and carried by a unanimous roll call vote (Neil absent). ADOPTION OF MINUTES - SPECIAL COUNCIL MEETING OF JANUARY 22, 2020 - VIOLATIONS OF THE DANGEROUS BUILDING ORDINANCE The Minutes of the Special Council Meeting of January 22, 2020, Violations of the Dangerous Building Ordinance, were unanimously approved by motion of Mr. Slavin, seconded by Mr. Anderson and bore the written approval of Mayor Christiansen. ADOPTION OF MINUTES - SPECIAL COUNCIL MEETING OF FEBRUARY 10, 2020 The Minutes of the Special Council Meeting of February 10, 2020 were unanimously approved by motion of Mr. Slavin, seconded by Mr. Anderson and bore the written approval of Mayor Christiansen. ADOPTION OF MINUTES - REGULAR COUNCIL MEETING OF APRIL 13, 2020 The Minutes of the Regular Council Meeting of April 13, 2020 were unanimously approved by motion of Mr. Slavin, seconded by Mr. Anderson and bore the written approval of Mayor Christiansen. QUARTERLY REVENUE REPORT Members were provided the Quarterly Revenue Report as of March 31, 2020. Responding to Mr. Anderson, Mrs. Donna Mitchell, City Manager, stated that collections were down $1.8 million over last year. She advised that Staff would be looking at the FY-21 projected numbers once they receive the DEFAC report. Mr. Anderson moved for acceptance of the Quarterly Revenue Report as of March 31, 2020, seconded by Mr. Slavin and unanimously carried.

CITY COUNCIL MEETING OF APRIL 27, 2020 PAGE 2 ANNEXATION REQUEST - 679 HORSEPOND ROAD, OWNED BY JACJIM, LLC Mr. David Hugg III, Director of Planning and Community Development, reviewed the Petition to Annex and Rezone Property located at 679 Horsepond Road, owned by JACJIM, LLC. He noted that this property is identified as a Category 1: High Priority Annexation Area in the City’s Comprehensive Plan, and annexation would continue the desire to eliminate enclaves and create sound complete neighborhoods and boundaries for the City. Mr. Hugg advised that this property was currently being used for wholesale activities and was primarily being annexed to allow the owner to expand his business and build an additional building, which he cannot do on his existing site with onsite water and sewer systems. He noted that services which would be provided by the owner at his expense. Mr. Hugg noted that Mr. Steve Davies of Apex Engineering was available to answer any questions relating to this property or its use. Staff recommended proceeding with annexation of the subject property. Mr. Cole moved to recommend proceeding with annexation of the subject property, as recommended by Staff. The motion was seconded by Mr. Anderson and unanimously carried. DISCUSSION - STRATEGY TO REOPEN THE CITY Mr. Taylor, noting that Governor Carney has a three-phased plan for lifting the COVID-19 stay-at-home order, suggested the following for consideration: • Create an Ordinance Committee to develop ordinances for the new rules that may be required as a result of the pandemic. Mr. Taylor cited panhandling as a violation of the social distancing rules as an example. • Installation of handwashing stations. • Entering into or modifying existing Memorandums of Understanding with the Delaware State Police, the Capitol Police, Delaware State University’s Police Department, and Capitol school district’s constables to assist with the safety aspect of lifting the stay-at-home order, particularly in the downtown area. • Offering Driftwood Spirits another location and streamlining the process to move them from their downtown location. PRESENTATION - 2019 DOWNTOWN DOVER PARTNERSHIP ANNUAL REPORT Mrs. Diane Laird, Executive Director of the Downtown Dover Partnership, reviewed the 2019 Downtown Dover Partnership’s Annual Report. By unanimous consent the 2019 Downtown Dover Partnership Annual Report was accepted. CITY MANAGER'S ANNOUNCEMENTS None.

CITY COUNCIL MEETING OF APRIL 27, 2020 PAGE 3 COUNCIL MEMBERS' ANNOUNCEMENTS Council President Hare announced that there would be a Special Council meeting on Monday, May 4, 2020 for presentations and questions and answers by candidates for Council President. He suggested that any member that wished to be considered should submit their names to the City Clerk. Mr. Anderson thanked everyone for the great work that is being done by the City employees during trying times and offered words of encouragement. He also encouraged people, at this particular time, to avoid the playground equipment which could have areas that are not disinfected and, instead, use the parks to play ball, throw frisbees, exercise, or play with their children while maintaining social distancing. Mr. Anderson stated that he hoped everyone had a happy Holy week and wished his Muslim friends a blessed and reflective Ramadan. Mr. Taylor invited anyone interested in participating in a shift for the downtown neighborhood watch to contact him. Mr. Neil moved for adjournment, seconded by Mr. Anderson and unanimously carried. Meeting adjourned at 8:49 p.m. TRACI A. McDOWELL CITY CLERK All ordinances, resolutions, motions, and orders adopted by City Council during their Regular Meeting of April 27, 2020 are hereby approved. ROBIN R. CHRISTIANSEN MAYOR /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Council-Minutes\2020\04-27-2020 REGULAR CITY COUNCIL MINUTES.wpd

PROCLAMATION WHEREAS, for the past 54 years, First State Community Action Agency has improved the lives of scores of individuals and families throughout the City of Dover by promoting solutions to a broad range of challenges. The Agency strives to ignite economic growth and promote economic stability, which builds stronger communities, fosters self- sufficiency, and helps to ensure that all citizens are able to live in dignity; and WHEREAS, First State Community Action Agency has provided greater opportunities for those in need of assistance by creating pathways to prosperity through programs that offer benefits such as job training, affordable housing, and utility assistance for seniors; and WHEREAS, First State Community Action Agency offers innovative solutions that create a greater chance of success for everyone and continues to be a voice for the disenfranchised in our community. NOW, THEREFORE, I, ROBIN R. CHRISTIANSEN, MAYOR OF THE CITY OF DOVER, DELAWARE, do hereby proclaim May 2020 as COMMUNITY ACTION MONTH in the City of Dover in recognition of the hard work and dedication of First State Community Action Agency. Mayor

PROCLAMATION WHEREAS, our public works professionals focus on infrastructure and services that are ofvital importance to sustainable and resilient cormnunities and to the public health, high quality of life and well-being of the people of the City of Dover; and WHEREAS, these infrastructure and services could not be provided without the dedicated efforts of public works professionals of the City of Dover Department of Public Works' Grounds, Sanitation, Streets, Stormwater, Water, Wastewater, Water Treatment and Production, Engineering and Inspections, and Administration Divisions, ·who are responsible for operating, maintaining, improving and protecting our Citi/s properties and local environment, solid waste systems, rights-of-way, water supply, and water and wastewater systems which are essential for our citizens; and WHEREAS, it is in the public interest for the citizens, civic leaders and children of the City of Dover to gain and maintain knowledge and progressive interest regarding the importance of public works and public works programs in the community; and WHEREAS, the American Public Works Association 2020 Nation.al Public Works Week theme, "The Rhythm of Public Works," embraces the City of Dover communihJ as a symphony of essential services, working in concert to create a great place to live. NOW, THEREFORE, I, ROBIN R. CHRISTIANSEN, MAYOR OF THE CITY OF DOVER, DELAWARE, do hereby proclaim May 17-23, 2020 as PUBLIC WORKS WEEK in the City of Dover and urge all citizens and organizations to learn more about the topics involved in providing public works, and to recognize the contributions that the dedicated Department of Public Works' employees make every day to our health, safehJ, comfort, and qualihJ of life. Robin R. Christiansen Mayor

©2019 CliftonLarsonAllen LLP City of Dover, Delaware Audit Results Year Ended June 30, 2019 Remi Omisore, Principal Bill Early, Principal WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor

©2019 CliftonLarsonAllen LLP Contents Topic Page Scope and Deliverables Scope and Deliverables 3 Required Communications Industry and Firm Required Communications 4 Uniform Guidance Audit Results 6 Industry Trends and Developments Recent GASB Pronouncements 7 Create Opportunities 2

©2019 CliftonLarsonAllen LLP Scope and Deliverables Our Responsibility Related to What and Why Audit Scope and Deliverables Fraud: • Article IV, Section 46 of the City • As independent auditors, • Audit Opinion on the Financial Charter our responsibility is to Statements for the Year Ended • Audit of the June 30th financial statements conduct an audit in June 30, 2019 • Single Audit - Audit of the Schedule accordance with • Report on internal control and of Expenditures of Federal Awards professional standards to compliance and certification of the Data obtain reasonable • Report on the Schedule of Collection Form Expenditures of Federal assurance that the financial statements as a whole are Awards free from material • Required communications - misstatement, whether Communications to those caused by error or fraud. charged with governance on key components of the audit Create Opportunities 3

©2019 CliftonLarsonAllen LLP Auditors Required Communications • We have performed an audit of the financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and Government Auditing Standards (GAS) . • Purpose of an audit is to: – Obtain reasonable (not absolute) assurance about whether the financial statements are free from material misstatement Accounting Principles – Assess accounting principles used and significant estimates made by management Other Accounting – Evaluate the overall financial statement presentation Auditors Estimates • Unmodified Opinion Required Communications • Significant Accounting Policies – City’s significant accounting policies are described in Note 2 to the financial Audit Difficulties Key Disclosures statements and are in accordance with generally accepted accounting principles and consistent with industry practices and standards Audit Adjustments • 2019 Changes – Implementation of GASB Statement No. 83, Certain Asset Retirement Obligations resulted in restatement of beginning balances and a liability of $11.9 million as of June 30, 2019 Create Opportunities 4

©2019 CliftonLarsonAllen LLP Auditors’ Required Communication • Significant Disclosures – Deposits and Investments (Page 72-77) – Capital Assets (Page 78-80) – Long Term Liabilities (page 81-86) – Fund Balance (Page 87) • Significant Management Judgments & Estimates – Allowance for uncollectible receivables – Useful lives of capital assets – Incurred but not reported claims – Pension and other post-employment benefits (OPEB) liabilities – Asset Retirement for Mckee Run Station • Uncorrected misstatements included in governance communication – Deferred gain/loss on refunding transactions, variance related to accumulated depreciation • Corrected misstatements identified – Record Liabilities related to invoices and retainages • No disagreements with management • Management was very cooperative and professional during the audit process • Management did not consult with other accountants on the application of GAAP or GASB • No major issues were discussed with management prior to us being selected as the auditors Create Opportunities 5

©2019 CliftonLarsonAllen LLP Uniform Grant Audit Results • Programs Tested CFDA#66.468 { • Drinking Water State Revolving Funds • Coverage of 78% of Federal Awards • Single Audit Reports Issued – Report on Compliance with Requirements Applicable That Could Have a Direct and Material Effect on Each Major Federal Program, and on Internal Control Over Compliance in Accordance with the Uniform Guidance –Unmodified Create Opportunities 6

Governmental Accounting Standards Board Update ©2019 CliftonLarsonAllen LLP Effective Dates • 2019 • Statement 83—Asset Retirement Obligations • Statement 88—Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements • 2020 • Statement 84—Fiduciary Activities • Statement 90—Majority Equity Interests NOW [2] 2021 • • Statement 87—Leases LATER ~ • Statement 89—Accounting for Interest Cost Incurred before the End of a Construction Period • 2022 • Statement 91—Conduit Debt Obligations G~6B ,,it' °I ~ GOVERNMENTAL ACCOUNTING STANDARDS BOARD Create Opportunities 7

©2019 CliftonLarsonAllen LLP CLAconnect.com Remi Omisore, CPA, MBA, CISA Principal Remi.Omisore@CLAConnect.com (410)308-8157 Bill Early, CPA Principal Bill.Early@CLAConnect.com (410) 453-5586

ANNUAL FINANCIAl REPORT fOR THE YEAR ENJDED JUNE

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COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 . Prepared by the Finance I Department trn . . LoriI Peddicord, I I Controller/Treasurer ntr II

ACKNOWLEDGEMENTS THE CITY OF DOVER’S COMPREHENSIVE ANNUAL FINANCIAL REPORT WAS PREPARED BY THE FINANCE DEPARTMENT TRACEY LISIECKI FINANCIAL REPORTING & ACCOUNTING MANAGER DEBBIE O’BRIEN ADMINISTRATIVE ASSISTANT KIMBERLY CRUZ ASSISTANT CONTROLLER/TREASURER JENNIFER HELMS ACCOUNTANT II SHARON DANIEL ACCOUNT CLERK II JENNIFER GUZMAN-PEREZ PAYROLL SPECIALIST SPECIAL APPRECIATION IS EXTENDED TO MRS. DONNA S. MITCHELL, CITY MANAGER, AND ALL PERSONNEL THROUGHOUT THE CITY FOR THEIR CONTINUED SUPPORT OF THE FINANCE DEPARTMENT.

CITY CITY OF OF DOVER, DOVER, DELAWARE DELAWARE COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR 2019 TABLE TABLE OF OF CONTENTS CONTENTS PAGE INTRODUCTORY SECTION 1 Letter of Transmittal ......................................................................................................................3 Certificate of Achievement for Excellence in Financial Reporting ..................................... 11 Mayor and City Council Members........................................................................................... 12 List of Elected Officials .............................................................................................................. 13 List of Appointed Officials ......................................................................................................... 14 List of Committees, Commissions, and Boards ...................................................................... 15 Organization Chart .................................................................................................................... 18 Vision ............................................................................................................................................ 19 FINANCIAL SECTION 21 PART A - Report of Independent Public Accountants ........................................................... 23 PART B - Management’s Discussion and Analysis ................................................................. 29 PART C - Basic Financial Statements........................................................................................ 47 Government-wide Financial Statements Statement of Net Position .................................................................................................... 49 Statement of Activities ........................................................................................................ 50 Fund Financial Statements Governmental Funds Balance Sheet ................................................................................ 51 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................................................................................................... 52 Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds ........................................................................................................... 53 i

CITY OF C 'I DOVER, OF DOVEI DELAWARE R DIELAWARE COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR 2019 TABLE TAIBLIE OF CONTENTS OF ,c ,ONTIEIN PAGE FINANCIAL SECTION – CONTINUED Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................ 54 Statement of Net Position – Proprietary Funds ................................................................. 55 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ...................................................................................................................................... 56 Statement of Cash Flows – Proprietary Funds................................................................... 57 Statement of Net Position – Fiduciary Funds ..................................................................... 58 Statement of Changes in Net Position – Fiduciary Funds................................................ 59 Notes to Financial Statements Index to Notes to Financial Statements............................................................................. 61 Notes to Financial Statements ............................................................................................ 63 Part D - Required Supplementary Information ................................................................. 123 General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) ........................................................................ 125 Police Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios .................................... 127 Schedule of Employer Contributions .............................................................................. 127 Schedule of Investment Returns ...................................................................................... 128 Net Pension Liability ........................................................................................................... 128 General Employee Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios .................................... 129 Schedule of Employer Contributions .............................................................................. 129 Schedule of Investment Returns ...................................................................................... 130 Net Pension Liability ........................................................................................................... 130 Delaware Public Employee Retirement System – County and Municipal Police and Firefighter’s Pension Plan Schedule of the City of Dover’s Proportionate Share of the Net Pension Liability ... 131 Schedule of the City of Dover’s Contributions .............................................................. 131 ii

CITY OF C 'I DOVER, OF DOVEI DELAWARE R DIELAWARE COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR 2019 TABLE TAIBLIE OF CONTENTS OF ,c ,ONTIEIN PAGE FINANCIAL SECTION – CONTINUED Other Post-Employment Benefits Trust Fund Schedule of Changes in Net OPEB Liability, Related Ratios ........................................ 132 Schedule of City’s Contributions ..................................................................................... 132 Schedule of Investment Returns ...................................................................................... 133 Notes to Required Supplementary Information Governmental Budgets .................................................................................................... 134 Part E - Supplementary Information ...................................................................................... 137 General Fund Combining Schedules .......................................................................... 139 Combining General Fund Balance Sheet...................................................................... 140 Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund (Non-GAAP Basis) .............................................................................. 141 Governmental Capital Projects Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) ........................ 142 Financial Statements Special Revenue Funds ............................................................ 143 Special Revenue Funds – Combining Balance Sheet .................................................. 145 Special Revenue Funds – Combining Statement of Revenues, Expenditures and Changes in Fund Balances .............................................................................................. 146 Police Grants – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ........................................................................... 147 Library Grants – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ........................................................................... 148 Municipal Street Aid Fund – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual......................................................... 149 Housing Programs – CDBG & NSP – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ........................................... 150 State of Delaware Department of Transportation Grants – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual .............................................................................................................................................. 151 iii

CITY CITY OF OF DOVER, DOVER, DELAWARE DELAWARE COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR 2019 TABLE TABLE OF OF CONTENTS CONTENTS PAGE FINANCIAL SECTION – CONTINUED Substance Abuse Prevention Program – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual.......................... 151 Proprietary Fund Types - Enterprise Funds................................................................... 152 Water/Wastewater Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ............................................................................................................... 153 Water/Wastewater Improvement & Extension Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ....................................................... 154 Electric Revenue Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ............................................................................................................... 155 Electric Improvement & Extension Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ........................................................................... 156 Proprietary Fund Types - Internal Service Funds ......................................................... 157 Internal Service Fund – Worker’s Compensation – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ........................................................................ 158 Fiduciary Fund Types - Agencies................................................................................. 159 Combining Statement of Changes in Assets and Liabilities – All Agency Funds ...... 160 STATISTICAL SECTION 161 Net Position by Component............................................................................................. 164 Changes in Net Position.................................................................................................... 165 Fund Balances of Governmental Funds ......................................................................... 167 Changes in Fund Balances of Governmental Funds.................................................... 168 Governmental Activities Tax Revenues by Source ...................................................... 170 Assessed and Estimated Actual Value of Taxable Property ...................................... 171 Property Tax Rates – All Direct and Overlapping Governments with the Capital School District .................................................................................................................................. 172 Principal Tax Payers ........................................................................................................... 173 Property Tax Levies and Collections ............................................................................... 174 iv

CITY OF C 'I DOVER, OF DOVEI DELAWARE R DIELAWARE COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR 2019 TABLE TAIBLIE OF CONTENTS OF ,c ,ONTIEIN PAGE STATISTICAL SECTION – CONTINUED Ratios of Outstanding Debt by Type............................................................................... 175 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net Bonded Debt Per Capita................................................................................................................. 176 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures ....................................................................................................................... 177 Computation of Direct and Overlapping Debt with the Capital School District ..... 178 Computation of Legal Debt Margin ............................................................................... 179 Revenue Bond Coverage – Electric Revenue Bonds ................................................... 180 Revenue Bond Coverage – Water/Wastewater Bonds ............................................... 181 Top Ten Water/Wastewater Utility Customers ............................................................... 182 Top Ten Electric Utility Customers .................................................................................... 183 Demographic and Economic Statistics .......................................................................... 184 Major Employers – Current Year and Nine Years Ago .................................................. 185 Full-time Equivalent City Government Employees by Function – Budgeted ........... 186 Operating Indicators and Capital Assets Used in Operations .................................... 187 Summary of Insurance ...................................................................................................... 189 v

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware INTRODUCTORY INTRODUCTORY SECTION SECTION LETTER OF TRANSMITTAL CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING MAYOR AND MEMBERS OF COUNCIL LIST OF ELECTED OFFICIALS LIST OF APPOINTED OFFICIALS LIST OF COMMITTEES, COMMISSIONS AND BOARDS ORGANIZATION CHART VISION 1

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section April 17, 2020 The Honorable Mayor, Honorable Council President, Members of the City Council and Citizens of the City of Dover Dover, Delaware 19901 Ladies and Gentlemen: I am pleased to submit the Comprehensive Annual Financial Report of the City of Dover for the fiscal year ended June 30, 2019. This report is published to comply with the provisions of Article IV, Section 46 of the City Charter. It is also intended to provide financial data to the tax and ratepayers, bondholders, trustees, banks, federal and state agencies and the financial community at large. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The financial statements in this report have been audited by CliftonLarsonAllen LLP, an independent firm of certified public accountants as required by Section 46 of the City Charter. CliftonLarsonAllen LLP has provided an unmodified opinion on the City of Dover financial statements for the year ended June 30, 2019. The report of independent public accountants is located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Our MD&A can be found immediately following the report of our independent auditors. 3

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section THE REPORTING ENTITY AND ITS SERVICES The City of Dover was incorporated in 1829 under a Charter granted by the General Assembly. Dover is the Capital of the State of Delaware and is located in the central part of the State. It is home to the State Governor’s office, legislative offices, and is the County seat for Kent County. The City currently occupies a land area of 23.74 square miles and serves a population of approximately 38,422. Dover’s governing body is composed of a Mayor and nine Council Members, with one Council Member elected by Council to serve as Council President. Two members of City Council are elected from each of the four districts; the ninth Council member of Council and the Mayor are elected at-large. The Council is responsible for all matters of policy and is the authority for levying taxes, securing revenues, authorizing expenditures of City funds and incurring City debts. The City of Dover operates under a Council – Manager form of government. The City provides a full range of services as mandated by the Charter or adopted by the City Council. They include police protection, street and sanitation maintenance, recreation, library, community development, economic development, public improvements, planning and zoning, safety inspections, electric power generation and distribution, water and wastewater services, legislative services and general administration. Within the City is a volunteer fire company that is autonomous. Under established criteria, the operations of the Robbins Hose Fire Company are not a part of this report. However, the City provides financing for dispatching, personnel costs, most of the building and equipment maintenance, supplies, and contractual services. The City also provides funding to Robbins Hose for payments on several pieces of firefighting apparatus. These payments are grouped under the Fire Department and are included in the General Fund. The Fire Chief is elected by the volunteer members of the Fire Company. The City Council traditionally adopts the election and officially appoints the Fire Chief for a one-year term. Therefore, the position of Fire Chief is included in the City organization chart. The Capital School District does not meet the established criteria for inclusion in the reporting entity and, accordingly, is excluded from this report. The City Council shall, on or before the second Monday of June in each year, adopt a budget for the succeeding fiscal year. This annual budget serves as the foundation for the City of Dover’s financial planning and control. The budget is prepared by fund and department. With approval of the City Manager and Controller/Treasurer, Department Heads may transfer resources within or between 4

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section departments, with the exception of capital project budgets. Transfers between funds and transfers of capital project budgets, however, need special approval from the City Council. ECONOMIC CONDITION AND FUTURE GROWTH Dover is the dominant center of population, employment, commerce, education and culture in Central Delaware. Economic growth continues in all sectors, with significant construction and permit activity occurring during the most recent year. Population and employment growth remains steady, typically running ahead of the County growth rates. Growth in the health care and commercial/retail sectors is especially strong, with significant new projects occurring throughout the City. Revitalization of the historic Downtown commercial core continues, along with increasingly successful efforts to revitalize older nearby residential neighborhoods. Total value of commercial construction in FY 19 was approximately $28.0 million, down significantly from the prior year, reflecting a large number of projects still under construction and fewer very large project proposals. Almost 2,000 building permits of all types were issued along with 3,900 business and related licenses and almost 4,200 rental licenses. Year to year comparisons are not necessarily indicative of the health of Dover’s economy, due to the timing of activity and the variability of general economic factors. Growth and development trends during fiscal year 2019 are discussed below. Population Growth The last decennial census was conducted in 2010 and set Dover’s population at 36,047. The Delaware Population Consortium estimates that Dover’s July 1, 2019 population is 38,058, or a 5.6% increase since the 2010 count. Dover’s population is projected to reach 38,304 by 2020 and grow to 41,769 by 2035, with a sustained growth rate of about 3% during each of the next five-year periods. Statistically, Dover’s population is younger than that of the County or the State, with a slightly lower proportion of the population of senior citizens as well. Working-aged adults (23-64) are projected to remain fairly stable as a percentage of the City’s population, making up slightly less than half of the City’s population through 2030. Residential Development Dover’s residential market is slowly emerging from the prior recession 12 years ago, but older developments are seeing increased build-out, and the market for apartment units has been strong. Significant activity has occurred in the Village of Cannon Mills, Clearview Meadow TND, Village of 5

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section Westover PND, the Arbors, Blue Hen Apartments, and Leander Lakes; many of which are nearing final completion. These projects, and general residential construction, are expected to have a positive impact on Dover’s rate of population growth. Downtown Dover Redevelopment Revitalization of the historic Downtown core is continuing in both commercial and residential sectors. Building plans are moving forward for a two-building office and retail center on Loockerman Street, along with potential new businesses locating in existing spaces. Through the efforts of National Council on Agricultural Life and Labor (NCALL) Research and others, a number of deteriorated and blighted residential properties have been demolished, and are being replaced by new owner-occupied dwellings, transforming entire block-fronts adjacent to the commercial core. During 2019, nineteen residential units and three commercial units qualified for Downtown Dover Development incentives. Over $18,600 in City Downtown Development District incentives were awarded in 2019. Retail/Commercial Development This sector is showing significant growth with new and expanded locations along the major highway corridors and throughout the City. Construction of Capital Station (replacing a long vacant industrial building on US13) continues to add tenants, including Aldi, Starbucks, Supercuts, Red Robin and Village Optical, with others underway. Lidl is building a new grocery facility nearby. Century Engineering and Chesapeake Utilities completed new headquarters buildings along the Bay Road Corridor, with plans for a new facility for the Solid Waste Authority, an office for Delaware State Police, and other commercial renovations in progress in that portion of the City. Plans are also underway for a number of new restaurants and other businesses along US 13, and along the Route 8 corridor. Other projects included new and proposed office buildings on W. North Street, remodeling of the WAWAs on N. DuPont Highway and Route 8, remodeling/renovations at Victoria’s Secret in the Mall and Wendy’s on US 13, construction of new offices for Advantech in the Garrison Oak Business and Technology Center, renovations at Fordham Brewery, planning for the renovations of the former Acme to house Hobby Lobby, and many others. Health Care, Institutional and Other Sectors Development Dover’s economy is well balanced across a range of sectors including health care, government and military, education and industrial categories. Health care, especially in 2019, saw significant projects underway or completed, including medical offices at Eden Hill and the Post-Acute Medical Rehabilitation Hospital on McKee Road. In education, Delaware State University approached completion of their 620 bed dormitory complex, replacing outdated existing facilities, while Wesley College renovated a central dining lounge. NCALL is building a new office building on W. Division 6

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section Street. On the government side, three projects were in preliminary development: a new office building for the State Police; planning for a future Family Court facility, and site selection for relocation and eventual construction of a new U.S. Post Office for Dover. Infrastructure During the period of July 1, 2018 to June 30, 2019, the City has undertaken several large water and sewer projects to upgrade pump stations, as well as distribution and transmission mains. These projects improved water quality, increased system efficiency and reduced the inflow/infiltration in our sewer system. The City continues work on upgrading our Water Treatment Plant to increase production and efficiency. The City has also repaved several streets and upgraded the associated sidewalks during this period. Summary Fiscal Year 2019 saw a continuation of strong growth in the state capital. Dover remains the geographic and economic center of the County, and is well posed for future growth, development and reinvestment. LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES The City Council continues its focus on replacing or upgrading aging infrastructure in order to improve the quality and reliability of our utility systems. In FY19, the City recorded $1.8 million in street improvements which included the acceptance of the Energy Lane & Stover Blvd Street Infrastructure dedication, and there were improvements made to New Street, Hope Street, Mockingbird Avenue and numerous other street projects within the City. Purchases of vehicles and other related equipment totaled $1.5 million. The water and wastewater fund had capital improvements totaling $1.1 million completed. These improvements included the Inflow and Infiltration projects at College Road, Fox Hall, Wesley College and Rodney Village areas. There were significant improvements made to the Dover Downs Pump Station and numerous water-related projects to include the North State Street Water Main Replacement and Wellhead Redevelopment at Well#3. The electric utility completed capital improvements of $1.4 million in fiscal year 2019. Many projects were completed by our Transmission and Distribution crews to include Advantech Garrison Oak, Leander Lakes Phase 2, MRMS Wellness Plaza, Arbor Senior Condominiums and several others. There were switchgear replacements, distribution upgrades and lighting projects and a solar meter installation project at the Dover Air Force Base. 7

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section The City maintains a five-year Capital Investment Plan which serves as its planning and budgeting tool to program upgrades and replacements to its equipment, facilities, and infrastructure. As part of this process, operating expenses are identified, and funding sources are determined. Managers are required to rank capital expenditures by criticality based on the impacts on customer services and revenue losses. The fiscal year 2019/2020 Capital Investment Plan includes $2.3 million for vehicles and equipment and $13.3 million of infrastructure and utility improvement projects. The Capital Investment Plan is presented to City Council each year during the budget workshops, and the final plan is approved by City Council along with the annual budget. In fiscal year 2020, the General Fund capital improvements budget includes $3.3 million. The City Hall is expected to have improvements to the exterior of the building of approximately $0.8 million. The Parks and Recreation department has earmarked funding of $0.5 million for park improvements at numerous locations throughout the City and some related to the FY18 Master Plans that were completed. The Police department has budgeted for numerous building improvements/upgrades totaling $0.4 million. The Public Works department has an approved capital project budget of $0.2 million for Stormwater related projects and $0.9 million for Street and Alley projects. The Water and Wastewater Fund budgets include capital improvements of approximately $3.5 million. Approximately $0.8 million is earmarked this year as the City is continuing the inflow/infiltration improvement program for our sewer system. The Water Treatment Plan Improvements will continue totaling approximately $0.5 million and number of other Water Quality Improvement projects are identified as well. The Electric Fund is projecting $6.4 million in capital improvements for FY20. The budget includes numerous upgrades in various developments within the City encompassing $2.2 million in project improvements. The overhaul of the HVAC system at Reed Street/Weyandt Hall which was in the FY19 budget but didn’t get completed is budgeted at $1.2 million. The new development budget totals $0.9 million. The City is still heavily involved in the Citywide enterprise resource planning (ERP) implementation project with a budget for FY20 of $0.5 million. $2.3 million is budgeted for the Roadway light LED conversion project allowing the City to move forward with the upgrade from the non-LED street light to LED lighting changeover with the completion of the inventory survey of existing lights. FINANCIAL POLICIES AND FINANCIAL PLANNING Unassigned fund balances in the General Fund of 16.3% exceeded the policy guidelines of a minimum of 8% and maximum of 12% of current year operating revenues as approved by City Council in the City of Dover financial policies. This overage was attributed to lower than budgeted expenditures along all functions of the government due to attrition and vacancies, and as a result, the fiscal year 2021 budget will be adjusted to address the overage. 8

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section The water and wastewater utility guidelines are to maintain a minimum budget balance of at least 8% and no greater than 17% (two months) of the current year operating revenues. The water and wastewater utility ended the year with a combined budget balance of 13.7%. The current budget balances as of June 30, 2019 for the utilities are water at 27.0% of the actual water revenues and wastewater at 3.8% of the actual wastewater revenues. The Wastewater budget balance deficiency will be addressed in the fiscal year 2021 budget. The electric utility is to maintain a minimum budget balance of at least 12% (45 days) of the current year operating revenues less the Distribution of Earnings – PCA Credit. If the balances fall below the established percentages, the City Manager is required to submit budgets to bring the balances up to minimum within three years. The electric utility ended the year with a budget balance greater than the 12% at 22.1%. This was attributed to lower than projected power supply and generation cost and higher than anticipated direct base sales. The fiscal year 2021 budget will include a distribution of prior year earnings to the electric customers in the form of a negative power cost adjustment. The City policies also require non-recurring revenues to be set aside for capital improvements as designated by City Council (reserve accounts) and a $700,000 contingency reserve in the General Fund, $250,000 each for the Water/Wastewater Fund contingency reserves and $750,000 contingency in the Electric Revenue Fund to address unforeseeable natural disasters and insurance losses. All major funds meet the contingency reserve requirements. The water and wastewater utilities impose impact fees, which are reserved by ordinance, on new developments or facilities to assist with financing future expansion projects. The electric utility maintains depreciation and future capacity reserves to assist with asset replacements and system expansions. Financial policies require the electric utility to maintain a minimum of $10.0 million in each of these reserves, with replenishment over seven years when used to finance projects. The City’s financial policies also include an Electric Rate Stabilization Reserve account. The purpose of this reserve is to level off the fluctuations in the wholesale power supply market and in turn provide stable rates to the City’s customers. The reserve balance shall be maintained at a minimum of 10% not to exceed 20% of the purchase power cost in any given year. If the reserve balance exceeds the 20% maximum, a credit will be applied to the power cost adjustment. 9

2019 Comprehensive Annual Financial Report for the City ofDover, Delaware Introductory Section AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Dover, Delaware for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2018. This was the thirty-fourth (34) consecutive year that the City of Dover has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report. The report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The Finance Department extends our thanks to you for your continued interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. I also express my appreciation for the many City employees for their assistance and cooperation during the year in preparation of this report. My appreciation is extended to Mr. David S. Hugg III, City Planner for his assistance with the preparation of the local economy section, Mrs. Tracey Lisiecki for her continued years of knowledge and support this year being a bit more challenging with the implementation of a new software and the departmental vacancies. I am also extending a sincere thank you to Mr. Louis Vitola in providing his assistance when the Finance team needed it most, his willingness to work in a temporary capacity providing the additional support in compiling data for the year end close and assisting with the annual report preparation is truly appreciated. The employees of the Finance Department should be commended for their true pride and dedication as they continue to make this report and each year a success. Controller/Treasurer 10

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section Govemment Finance Officers Association Certificate of Achieve1nent for Excellence in Financial Reporting Presented to City of Dover Delaware For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018 Executive Directo r/CEO 11

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section MAYOR MAYOR AND A MEMBERS MEMBERS OF OF COUNCIL COU Tanner Wm. Polce, William F. Hare, Scott W. Cole, David L. Anderson, 1st District 2nd District 3rd District 4th District Matthew J. Lindell, Ralph L. Taylor, Jr., Fred A. Neil, Roy Sudler, Jr., 1st District 2nd District 3rd District 4th District Timothy A. Slavin, Robin R. At-Large Christiansen, Mayor 12

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section ELECTED ELECTED OFFICIALS OFFICIALS Length of Term Service Expires Mayor Robin R. Christiansen 5 Years May 2023 City Council At-Large Timothy A. Slavin 6 Years May 2021 First District Matthew J. Lindell 2 Years May 2023 Tanner Wm. Polce 2 Years May 2021 Second District * William F. Hare 8 Years May 2021 Ralph L. Taylor, Jr. 1 Month May 2023 Third District Scott W. Cole 4 Years May 2023 Fred A. Neil 4 Years May 2021 Fourth District David L. Anderson 8 Years May 2021 Roy Sudler, Jr. 4 Years May 2023 * Council President Note: length of service does not reflect previous, non-consecutive service, or interim appointment prior to permanent appointment 13

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section APPOINTED APPOINTED OFFICIALS OFFICIALS Length Length of of Time Time in with the Position City City Clerk/Assistant Treasurer – Traci A. McDowell 13 Years 31 Years City Manager/Civil Defense Director – Donna S. Mitchell 1 Year 18 Years City Solicitor – Nicholas H. Rodriquez 51 Years 51 Years Deputy City Solicitor – William W. Pepper, Sr. 29 Years 29 Years Council President – William F. Hare 1 Month 8 Years City Assessor – Cheryl A. Bundek 10 Years 27 Years City Building Inspector – David S. Hugg III 1 Year 1 Year City Planner – David S. Hugg III 1 Year 1 Year Controller/Treasurer – Lori Peddicord 1 Year 4 Years Fire Chief – Ronald W. Rhodes, Sr. 6 Months - Fire Marshal – Jason A. Osika 3 Years 17 Years Acting Police Chief – Major Tim Stump 1 month 29 Years Note: length of service does not reflect previous, non-consecutive service, or interim appointment prior to permanent appointment 14

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section LIST LIST OF OF COMMITTEES, COMMITTEES, COMMISSIONS, COMMISSIONS, AND AND BOARDS BOARDS Awards Committee Construction and Property Maintenance Code Peggy Angel Board of Appeals Ronald R. Gough Councilman David L. Anderson, Chair Georgia Van Sant Councilman Fred A. Neil Charles Martin Bicycle and Pedestrian Subcommittee Vacancy Gerry Pennington, Chair Vacancy Chris Asay, Vice Chair Jayce Lesniewski Dover Fourth of July Celebration Committee Dave Moses Mayor Robin R. Christiansen, Chair Fran Riddle Greg Patterson, President/Vice Chair Andy Seigel Andrea Maucher, Vice-President Vacancy Jeffrey C. Dill, Treasurer/Secretary Susan Betts Board of Adjustment Carolyn D. Courtney K.C. Sheth, Chair Gail Nemcic Arthur G. Ericson, Vice Chair Vacancy William A. Hufnal Sarah Zimmerman James N. Keller Richard D. Senato Dover Housing Authority Mark Harmon Board of Assessment Appeals Enrico LePore William Garfinkel, Undesignated, Chair Robert F. Merritt Thomas Burns, Real Estate Brokerage of Sales Audrey Daniels James Galvin, Undesignated Phillip McGinnis John Kelly, Accounting Sandra Taylor Todd Stonesifer, Real Estate Brokerage of Sales Rufus Mincey, Interim Executive Vacancy, Property Appraisal/Assessments Director/Secretary Compensation Commission Dover Public Library Advisory Commission Controller/Treasurer, Lori Peddicord Councilman Scott W. Cole Human Resources Director, Kimberly Hawkins Zachery C. Carter Vacancy Gertrude Jackson Vacancy Beth Petit De Mange Vacancy Jill B. Street Vacancy Robert S. Wetherall Vacancy 15

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section LIST LIST OF OF COMMITTEES, COMMITTEES, COMMISSIONS, COMMISSIONS, AND AND BOARDS BOARDS (CONT’D) (CONT'D) Dover/Kent County MPO Council General Employee Pension Plan Board of Mayor Robin R. Christiansen Trustees Councilman David L. Anderson Downtown Dover Partnership Board of Directors Councilman Ralph L. Taylor, Jr. City Manager, Donna S. Mitchell City Manager, Donna S. Mitchell City Planner, David S. Hugg III Controller/Treasurer, Lori Peddicord Mayor Robin R. Christiansen Robert Gedney Councilman Fred A. Neil Samuel C. "Carter" Knotts Councilman Tanner Wm. Polce Vacancy Economic Development Committee Greater Dover Arts Council Mayor Robin R. Christiansen, Chair Chevis Anderson, Chair Councilman Matthew J. Lindell Sydney Arntz Councilman Scott W. Cole N. Taylor Collins Kim I. Adams Caroline Greene Clayton E. Hammond II Charles Guerin City Manager, Donna S. Mitchell Paul Janiga City Planner, David S. Hugg III Tracey Miller Diane Laird Cheryl Scheir Cynthia Witt Election Board Sarah Zimmerman At Large: Juanita F. Walker First District: Anita L. McDowell Boyer Historic District Commission Second District: Cherritta L. Matthews Joseph McDaniel (Chair) Business Rep./Resident Third District: James W. Brockton Ann Baker Horsey, (Vice-Chair) Fourth District: M. Milford Caldwell Professional/Resident Traci A. McDowell, City Clerk (Liaison Member) Eric S. Czerwinski, Professional Mary Terry Mason, Resident Ethics Commission Jonathan N.H. Street, Professional Thomas C. Jackson, Chair Robin F. Case Human Relations Commission Gary Coy At-Large: Sara Herbert Lisa M. Enright First District: Paul Fleming Vacancy First District: Gerald Rocha, Sr. Second District: Vacancy Second District: Vacancy Third District: Alan Gaddis, Chair Third District: Wanda Mullen Fourth District: Rita Mishoe Paige Fourth District: Vacancy 16

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section LIST LIST OF OF COMMITTEES, COMMITTEES, COMMISSIONS, COMMISSIONS, AND AND BOARDS BOARDS (CONT’D (CONT'D Kent County Tourism Board of Directors Police Pension Plan - Retirement Committee Councilman Fred A. Neil Councilman David L. Anderson Councilman Ralph L. Taylor, Jr. Kent Economic Partnership Board of Directors City Manager, Donna S. Mitchell Councilman David L. Anderson Major Timothy Stump (Ret. Lt.) Timothy Mullaney, Sr., Chair Legislative, Finance, and Administration Committee (Ret. Captain) Larry Gray Councilman Matthew J. Lindell, Chair (Ret. Sgt.) Steve Rogers Jonathan D. Contant Daniel T. Shevock Public Advisory Committee of the Dover/Kent County MPO Other Post-Employment Benefits (OPEB) Board Dr. Carlton L. Cannon, Jr. Councilman David L. Anderson Jonathan Contant Councilman Ralph L.Taylor, Jr. Karen McGloughlin City Manager, Donna S. Mitchell Albert W. Holmes, Jr. (At-Large Alternate) Controller/Treasurer, Lori Peddicord Human Resources Director, Kimberly Hawkins Safety Advisory and Transportation Committee Councilman Ralph L. Taylor, Jr., Chair Parks, Recreation and Community Enhancement William T. Garfinkel Councilman David L. Anderson, Chair Dana Shelton M. Milford Caldwell, Jr. Thomas J. Dix Silver Lake Commission Tricia K. Arndt, Chair Planning Commission Vacancy At-Large: Dr. Bobby Jones Zachery C. Carter First District: Kathleen Welsh, Vice Chair Vacancy First District: Deborah L. Edwards Lyle Allen Jones Second District: Thomas Holt Marie E. Kozel Second District: Andrea Maucher Michael W. Lewis Third District: Nicholas A. Adams Third District: Frederick Tolbert, Chair St. Jones Greenway Commission Fourth District: John H. Baldwin, Sr. Vacancy Fourth District: Kenneth Roach Michael P. Mercer City Parks and Recreation Director, Kirby Hudson Utility Committee Councilman Scott W. Cole, Chair Kathleen Doyle Margaret A. Haass 17

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section FYl 9 ORGANIZATION CHART Citizens of Dover City Co«ncil Mayor City Solicitor Police City Manager City Clerk Finance Fire Tax Assessor Planning & Community Enhancement Services Assistant C entral Human Public Works Code Enforcement City Manager Services Resources Community Customer Procurement Development Services & Inventory Engineering & Engineering System Ops Inspections & Facilities Permitting Operations Technology Management Transmission Life Safety Public Fleet Maintenance Grounds Water Management Planning Sanitation Parks & Recreation Wastewater Streets Management Water Treatment Plant 18

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Introductory Section VISION VISIO The City of Dover is a place where people want to live! Through the team effort of its elected officials, employees, h and citizens, Dover is a clean and safe community, with a future of balanced growth and opportunity where all .h quality of life, and citizens are heard, enjoy a high diversity is valued. 19

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section FINANCIAL SECTION J:I SECTION THIS SECTION INCLUDES THE FOLLOWING: PART A – REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS PART B – MANAGEMENT’S DISCUSSION AND ANALYSIS PART C – BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Fund Financial Statements Notes to Financial Statements PART D – REQUIRED SUPPLEMENTARY INFORMATION PART E – SUPPLEMENTARY INFORMATION Combined Fund Statements Budgetary Schedules 21

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part A – Report of Independent Public Accountants PART A PART A REPORT REPORT OF OF INDEPENDENT INDEPENDENT PUBLIC PUBLIC ACCOUNTANTS ACCOUNTANTS 23

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Cliftonl arsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of the City Council of Dover, Delaware Dover, Delaware Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Dover, Delaware (the City), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

The Honorable Mayor and Members of the City Council of Dover, Delaware Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter Change in Accounting Principle During the fiscal year ended June 30, 2019, the City adopted GASB Statement No. 83, Certain Asset Retirement Obligations. As a result of the implementation of this standard, the City reported a restatement for the change in accounting principle as disclosed in Note 18. Our auditors’ opinion was not modified with respect to the restatement. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the General fund-schedule of revenues, expenditures, and changes in fund balance-budget and actual; the schedules of changes in net pension liability, related ratios for the police pension plan and the general employee pension plan; the schedule of employer contributions for the police pension plan and the general employee pension plan, the schedule of the City of Dover’s proportionate share of the net pension liability for the county and municipal police and firefighters pension plan; the schedule of the City of Dover’s contributions for the county and municipal police and firefighters pension plan; and the schedule of changes in net OPEB liability, related ratios for the OPEB plan and schedule of City Contributions for the other post-employment plan be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual fund schedules, budgetary comparison schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The Honorable Mayor and Members of the City Council of Dover, Delaware The combining and individual fund schedules and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund schedules and budgetary comparison schedules is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 17, 2020, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. a CliftonLarsonAllen LLP Baltimore, Maryland April 17, 2020

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section PART PART BB MANAGEMENT’S MANAGEMENTS DISCUSSION DISCUSSION AND AND ANALYSIS ANALYSIS 29

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis The City of Dover Management’s Discussion and Analysis For the Year Ended June 30, 2019 The following is a discussion and analysis of the City of Dover’s (the City’s) financial activities for the fiscal year ended June 30, 2019. Readers are encouraged to consider the information presented here in conjunction with additional information provided in our letter of transmittal, which can be found on pages 3-10 of this report, and the City’s financial statements which follow this section. Financial Highlights The City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $207.0 million (net position). Included in this amount is a negative $11.5 million balance in “unrestricted net position”. The total Net Position represents the funds available to meet the City’s ongoing obligations to citizens and creditors. The general government reported an unrestricted deficit of $29.3 million and the business-type activities, Water/Wastewater and Electric funds, reported a positive $17.8 million unrestricted net position. The difference between the unrestricted amounts and the total net position is $218.5 million, of which $54.7 million is restricted primarily for debt and capital construction purposes, and $163.8 million is net investment in capital assets. Total Assets increased for both the governmental and business-type activities in the amounts of $1.0 million and $12.5 million respectively. Deferred Outflows for the governmental activities increased $1.8 million and for the business-type activities it increased $0.2 million. Deferred Inflows increased for both the governmental and Business-type activities by $0.9 million and $0.1 million respectively. Liabilities for the governmental activities decreased by $6.0 million and increased by 12.2 million for the business-type activities. • For governmental activities, the City reported: an increase of $1.1 million invested in capital assets, a decrease in restricted net assets of $0.7 million, and an increase of $7.5 million in unrestricted net position. As a result of its operations, the City recognized a positive change in net position of governmental activities of $7.9 million. The current year’s change in net position is $1.1 million higher than the previous years’ change in net position and is primarily due to decreases in expenses across most functions of government totaling $1.7 million with an offsetting $0.5 million decrease in revenues from the prior year. • For business-type activities the City reported: a decrease of $2.4 million invested in capital assets, an increase in restricted net position of $7.7 million and a decrease of $4.9 million in unrestricted net position. As a result of its operations, the City recognized a positive change in net position of business-type activities of $11.6 million; however, combined with the prior year Asset Retirement Obligation adjustment related to GASB 83 31

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis of negative $11.2 million, the overall change in net position was a positive $0.4 million. The current years’ change in net position is $6.3 million higher than the previous years’ change in net position and is primarily due to a $2.4 million increase in Water/Wastewater charges for services and $4.1 million in electric fund expense reductions, driven primarily by reductions of $1.9 million in energy costs and $1.9 million in net capacity costs. Overview of the Financial Statements This discussion and analysis section is intended to serve as an introduction to the City’s Comprehensive Annual Financial Report (CAFR). The CAFR consists primarily of three required components: 1) management’s discussion and analysis (this section), 2) the basic financial statements; and 3) required supplementary information. The CAFR also includes optional supplementary information that provides summary and detail level information, and a statistical section. The basic financial statements are presented in two categories that present different views of the City’s financial condition: • The two government-wide financial statements (pages 49-50) provide both long-term and short-term information about the City’s overall financial position and operations. • The remaining (pages 5 1 - 5 9 ) fund financial statements focus on specific activities of City government, reporting the City’s operations in more detail than the government- wide statements. The City financial statements can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. - The governmental fund statements (pages 51-54) tell how general government services, like community services, planning, public safety, and public works, were financed in the short term as well as what remains for future spending. - Proprietary fund statements (pages 55-57) offer short and long-term financial information about the activities the government operates like businesses, which for the City of Dover are the Electric and Water/Wastewater Funds. - The Fiduciary fund statements (pages 58-59) provide information about the financial relationships in which the City acts solely as a trustee or agent for the benefit of others, to whom the resources belong. The City is the trustee, or fiduciary, for its Employee and Police Pension plans and Other Post-Employment Benefits plan and acts in an agency capacity for the Dover Downtown Partnership and Fourth of July Celebration Committee, none of which are considered to be component units of the City. All of the City’s Fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Fiduciary Net Position. We exclude these activities from the City’s other financial statements because the City may not use these assets to finance its operations. The City is responsible for insuring that the 32

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis assets reported in these funds are used for their intended purposes. The financial statements also include notes (pages 63-121) that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information (pages 123-136) that further explains and supports the information in the financial statements. Other supplementary information includes details on non-major funds and other information that can be found on pages 137 through 160. The following page summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and content of each of the statements: Major Features of City’s Government-wide and Fund Financial Statements Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Scope Entire City The activities of the Activities the City Instances in which government City that are not operates similar to the City is the (except fiduciary proprietary or private businesses, trustee or agent for funds) fiduciary, such as such as electric, water someone else’s public safety and and wastewater resources public works funds Required financial • Statement of • Balance sheet • Statement of net • Statement of statements net position • Statement of position fiduciary net • Statement of revenues, • Statement of position activities expenditures, and revenues, • Statement of changes in fund expenses and changes in balances changes in net fiduciary net position position • Statement of cash flows Accounting basis Accrual accounting Modified accrual Accrual accounting Accrual accounting and measurement and economic accounting and and economic and economic focus resources focus current financial resources focus resources focus resources focus Continued 33

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Continued Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Type of All assets deferred Generally, assets and All assets deferred All assets and asset/deferred outflows of deferred outflows of outflows of resources, liabilities, both outflows of resources, resources expected to liabilities, and short-term and resources/liability/ liabilities, and be used up and deferred inflows of long-term deferred inflows of deferred inflows of liabilities and deferred resources both resources resources both inflows of resources financial and capital, information financial and that come due or and short-term and capital, and short- available during the long-term term and long- year or soon term thereafter, no capital assets, or long-term liabilities included Type of All revenues and Revenues for which All revenues and All revenues and inflow/outflow expenses during cash is received expenses during the expenses during the information the year, regardless during or soon after year, regardless of year, regardless of of when cash is the end of the year; when cash is received when cash is received or paid expenditures when or paid received or paid goods or services have been received and payment is due during the year or soon thereafter Government-wide Statements The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the City of Dover’s assets, liabilities, and deferred inflows and outflows of resources with the difference reported as net position. Net position is one way to measure the City’s financial health or position. Over time, increases or decreases in the City’s net position is an indicator of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the City, one needs to consider additional non-financial factors such as changes in the City’s property tax base and the condition of the City’s physical assets and infrastructure. The government-wide financial statements of the City are divided into two categories: 34

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis • Governmental activities—Most of the City’s basic services are included here, such as general government, public safety, planning and code enforcement, public works, library and recreation, community and economic development, central services and financial administration. Property taxes, business licenses, permits, sanitation fees, fines, utility transfers and state and federal grants finance most of these activities. • Business-type activities—The City charges fees to customers to help it cover the costs of certain services it provides. The City’s electric, water, and wastewater services are included here. Fund Financial Statements The fund financial statements provide more detailed information about the City’s most significant funds—not the City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law and by covenants. The City Council may also establish other funds to control and manage spending for other purposes. The City has three kinds of funds: • Governmental Funds - Most of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out, and (2) the balances left at year end that are available for spending. Consequently, the governmental funds statements provide a detailed short- term view that helps one determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information on a separate schedule, which explains the relationship (or differences) between them. - Governmental Fund Balance classifications are reported to the extent to which they are constrained as promulgated by Governmental Accounting Standards Board Statement No. 54. - The City’s General Fund is the only governmental fund considered to be a major fund under the requirements of Governmental Accounting Standards Board Statement No. 34. • Proprietary Funds – Services, for which the City charges customers a fee, are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long- and short-term financial information. - The City’s enterprise funds (one type of proprietary fund) are the same as its business- type activities, but provide more detail and additional information, such as cash flows. 35

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis - The City’s two enterprise funds are both considered major funds under the requirements of GASB Statement No. 34. • Fiduciary Funds – The City is responsible for certain assets which, because of a trust arrangement, can be used only for the trust beneficiaries. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All the City’s fiduciary activities are reported separately in a statement of fiduciary net position and a statement of changes in fiduciary net position. We exclude these activities from the City’s government-wide financial statements because the City cannot use these assets to finance its operations. Financial Analysis of the City as a Whole The City produces government-wide financial statements using the full accrual basis of accounting and economic resource management focus. As year-to-year financial information is accumulated on a consistent basis, changes in net assets may be observed and used to discuss the changing financial position of the City as a whole. The Net Position of the City of Dover as of June 30, 2018 and 2019 are presented below (in millions of dollars): Governmental Business-Type Activities Activities Total 2018 2019 2018 2019 2018 2019 Assets Non-Capital Assets $ 17.8 $ 17.9 $ 99.9 $ 114.0 $ 117.7 $ 131.9 Capital Assets 59.1 60.0 139.5 137.9 198.6 197.9 Total Assets 76.9 77.9 239.4 251.9 316.3 329.8 Deferred Outflow of Resources 3.1 4.9 0.8 1.0 3.9 5.9 Liabilities Current Liabilities 7.5 4.5 11.4 12.6 18.9 17.1 Non-Current Liabilities 45.0 42.0 44.5 55.5 89.5 97.5 Total Liabilities 52.5 46.5 55.9 68.1 108.4 114.6 Deferred Inflow of Resources 10.1 11.0 3.0 3.1 13.1 14.1 Net Position Net investment in Capital Assets 53.2 54.3 111.9 109.5 165.1 163.8 Restricted 1.0 0.3 46.7 54.4 47.7 54.7 Unrestricted (36.8) (29.3) 22.7 17.8 (14.1) (11.5) Total Net Position $ 17.4 $ 25.3 $ 181.3 $ 181.7 $ 198.7 $ 207.0 36

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis The Changes in Net Position for the City of Dover as of June 30, 2018 and 2019 are presented below (in millions of dollars): Governmental Business-Type Activities Activities Total 2018 2019 2018 2019 2018 2019 Revenues: Program Revenues Charges for Services $ 12.2 $ 10.7 $ - $ - $ 12.2 $ 10.7 Water/Wastewater Charges for Services - - 16.3 16.0 16.3 16.0 Electric Charges for Services - - 83.9 83.7 83.9 83.7 Operating Grants and Contributions 2.2 2.4 - - 2.2 2.4 Capital Grants and Contributions 0.3 0.4 - - 0.3 0.4 General Revenues Property Taxes 13.1 13.5 - - 13.1 13.5 Transfer Taxes 2.0 1.6 - - 2.0 1.6 Earnings on Investments-Other 0.1 0.8 0.2 3.8 0.3 4.6 Total Revenues 29.9 29.4 100.4 103.5 130.3 132.9 Expenses General Government 4.6 4.4 - - 4.6 4.4 Public Safety 17.5 17.6 - - 17.5 17.6 Public Works 8.4 6.9 - - 8.4 6.9 Library and Recreation 3.1 3.2 - - 3.1 3.2 Community and Economic Development 0.5 0.5 - - 0.5 0.5 Central Services 1.6 1.4 - - 1.6 1.4 Financial Administration 3.4 3.3 - - 3.4 3.3 Interest Charges 0.1 0.2 - - 0.1 0.2 Plus (less) Indirect Expense Allocation (5.2) (5.2) 5.2 5.2 - - Water/Wastewater - - 10.0 10.9 10.0 10.9 Electric - - 69.0 65.0 69.0 65.0 Total Expenses 34.0 32.3 84.2 81.1 118.2 113.4 Change in Net Position before Transfers (4.1) (2.9) 16.2 22.4 12.1 19.5 Transfers 10.9 10.8 (10.9) (10.8) - - Change in Net Position 6.8 7.9 5.3 11.6 12.1 19.5 Net Position, beginning of year 10.6 17.4 176.0 181.3 186.6 198.7 Prior Period Adjustment - ARO - - - (11.2) - (11.2) Net Position, Beginning of Year restated 10.6 17.4 176.0 170.1 186.6 187.5 Net Position, End of Year $ 17.4 $ 25.3 $ 181.3 $ 181.7 $ 198.7 $ 207.0 Governmental Activities The preceding table shows changes in net position for the year ended June 30, 2019 compared to the year ended June 30, 2018. Governmental net position increased by $7.9 million; this is an increase of $1.1 million from the prior years’ positive change in net position of $6.8 million. Total revenues of $29.4 million were less than the prior year by $0.5 million. The decrease in revenues is primarily due to decreases in: license and permit revenue, transfer tax receipts and miscellaneous service revenue, which fell short of FY’18 revenues by $1.8 million. The decreases were partially offset by increases in property tax receipts and grant revenue totaling $0.7 million. 37

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Minor increases and decreases in other revenue categories were offsetting. Total expenses of $32.3 million reflects a decrease from the prior year of $1.7 million across all but two functions of government – Public Safety and Library and Recreation – each of which exceeded FY’18 spending by about $0.1 million. Public Works drove the spending decrease with a reduction of $1.5 million attributable to a decrease in street and sanitation expenses, reduced net pension liability among public works functions and lower depreciation expense recorded. The chart that follows allocates revenues to program costs as applicable. It shows that some City functions are in part self-supporting either through customer charges or inter-fund receipts through the utilities (presented in millions of dollars): Expenses, Program Revenue & Interfund Receipts - Governmental Activities $20 $18 $17.6 $16 $14 $12 Millions $10 $8 $6.9 $6 $5.5 $4.4 $4.1 $4 $3.2 $3.3 $2.5 $2.4 $2 $1.4 $1.1 $1.1 $0.9 $0.7 $0.2 $0.5 $0 General Public Safety Public Works Library & Community & Central Services Financial Government Recreation Economic Administration Development Interfund Receipts Revenues • Expenses The following chart shows the sources of funding for program costs for the last fiscal year. As can be seen, a substantial portion of funding for governmental operations is provided by property taxes, charges for services and transfers from the utilities. 38

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Revenues by Source - Governmental Activities Interfund Receipts 12% Charges for Services 24% Utility Transfer In 24% Operating Grants and Contributions 5% Capital Grants and Contributions 1% Transfer Taxes Property Taxes 4% 30% Business-Type Activities The business-type activities generated an increase in net position of $11.6 million, which exceeds the previous year’s $5.3 million change in net position by $6.3 million. The improvement was driven by the combination of $3.1 million in total revenue increases, expense reductions totaling $3.1 million, and a $0.1 million reduction in transfers out. Transfers included $1.3 million transferred out of the water/wastewater fund and net transfers of $9.5 million out of the electric fund, which included $10.0 million transferred to the general fund net of $0.5 million transferred in. The indirect expense allocation was stable at $5.2 million. The water/wastewater utility realized a positive change in net position in excess of $2.8 million. The utility experienced a decrease in operating revenues of $0.3 million over the previous year. Although there was a decrease in operating income, there was higher system-wide water consumption and billable wastewater usage by more than 30 million and 20 million total gallons, respectively. Consumption increases were primarily driven by customer growth; the 360 new water and wastewater connections in FY'19 represented the largest increase in the last ten years. The average billing rate in the water division was flat from the previous year, but the average wastewater billing rate increased by 1.3%. In addition to volume-driven increases, groundwater inflow adjustment fees and sewer treatment fees also increased. The offsetting decreases of $0.6 million to the operating revenues was to the water and wastewater impact fee collections resulting in the overall decrease in operating revenue by $0.3 million. Expenses in the 39

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis water/wastewater fund increased by less than $0.9 million, which were driven almost entirely by Kent County Wastewater Treatment fees that exceeded FY’18 by more than $0.8 million. The balance of the cost increases was spread relatively evenly over water and wastewater operations and almost completely offset by administrative cost reductions, lower depreciation expense and retiree pension cost reductions. Finally, transfers out increased by $0.4 million. The electric utility realized a positive change in net position of $8.7 million. Operating revenues decreased by $0.2 million attributed to a decrease in the average billing rate per kilowatt-hour partially offset by an increase in power usage by customers. The increase in power consumption is attributable to residential customer growth, which was partially offset by a reduction in commercial customers and lower system-wide average consumption per customer. The decrease in the average billing rate resulted from the lower cost of energy supply. Operating Expenses in the Electric Fund increased by about $0.7 million. A significant $1.9 million reduction in power supply and generation costs, coupled with a $1.1 million reduction in retiree health care expenses, were offset by an increase in non-cash depreciation expenses recorded in anticipation of the retirement of the City’s principal energy generation operations. As with the water/wastewater utility, nonoperating revenues in the electric utility increased by $2.8 million versus the previous year on higher interest earnings and investment gains. Finally, nonoperating expenses were $3.5 million lower than FY’18 due to normalized customer distributions and reduced interest expenses to round out the positive change in net position. Operating Revenues, Expenses and Transfers - Business-Type Activities $90.0 $84 $75 Operating $80.0 Revenues & $70.0 Millions Transfers $60.0 $50.0 • Operating 1 Expenses & $40.0 Transfers $30.0 $20.0 $16 $14 $10.0 $- Electric Revenue Fund Water/Wastewater Fund 40

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Financial Analysis of the City’s Funds Governmental Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Government funds focus on expendable resources and near-term inflows and outflows of those resources. As such, fund balance is generally a good indicator of net resources available for spending at the end of the fiscal year, subject to any stated restrictions on its use. The combined fund balance of the City’s governmental funds as of June 30, 2019, was nearly $13.1 million. This represented an increase of more than $0.1 million during the year. Approximately 55% of the combined fund balances, $7.1 million, constitutes unassigned fund balance, which is available to meet the City’s current and future needs. The remainder of fund balance is non-spendable, restricted, committed or assigned to indicate that it is not available for operational spending because it is constrained by legally enforceable contracts, other governmental agreements and legislation, City Council resolution, management, or it is not convertible to cash within a reasonable period of time. Further detail of fund balances is presented in the Notes to the Basic Financial Statements in Note 7. The General Fund is the primary operating fund of the City, accounting for such activities as general government, public safety, public works, library, recreation, planning, community and economic development, central services and financial administration. The General Fund balance as of June 30, 2019, was $12.7 million. Revenue increased by $0.2 million, due primarily to increases in property tax receipts, grant revenue, Court of Chancery fees, and investment income totaling $1.2 million. The increases were partially offset by decreases in license and permit revenue, sanitation fees and rebates and fines, which combined to fall short of FY’18 revenues by $1.0 million. Minor increases and decreases in other revenue categories were offsetting. Total expenses of $40.0 million reflect an increase from the prior year of $1.6 million, which was driven primarily by expense increases of $1.5 million in public safety and law enforcement, $0.9 million in public works, and $0.3 million in recreational services. The expense increases were offset by $0.6 million in reductions to employee pension expenses, $0.2 million in streets and sanitation services, $0.2 million in retiree health care, and almost $0.1 million in interest charges, while minor differences in all other functional areas round out the expense variance. Proprietary Funds The City’s proprietary funds provide the same type of information found in the government- wide financial statements, but in more detail. 41

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis As of June 30, 2019, the water/wastewater fund has a net position of $62.1 million, of which $3.7 million is unrestricted. The fund’s net position increased $2.8 million during the year as explained on page 39. As of June 30, 2019, the electric revenue fund has a net position of $119.6 million, of which $14.2 million is unrestricted. This fund experienced an increase in net position of $8.7 million during the year as explained on page 40. General Fund Budgetary Highlights During this fiscal year, the City Council amended the budget three times. The budget amendment ordinances were primarily for the following purposes: 1. To re-appropriate budget balances for ongoing capital projects. 2. To amend the grant budgets and reserve accounts for the actual results from the prior fiscal year and all carried forward budget balances for the major operating funds from the prior fiscal year, as well as program revenues and expenses based on changes in program revenues, expenses based on actual amounts. 3. To amend revenue and expense accounts based on actual experience during fiscal year 2019. The General Fund financials in the Governmental Funds Balance Sheet (page 51) and Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds (page 53) include both the General Fund operating activities and the Governmental Capital Project Fund activities. The General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget & Actual is included in Part D – Required Supplementary Information (pages 125-126). The Governmental Capital Projects Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual is included in Part E – Supplementary Information (page 142). The Combining Statements – Combining General Fund Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund and the Governmental Capital Projects Fund is included in Part E – Supplementary Information (pages 140-142). The Final General Fund Budget incorporated an increase in beginning budget balance of $2.8 million carried forward from the prior fiscal year. Budgeted expenditures were revised to reflect an aggregate increase of $0.5 million. The increases were reflective of appropriations to the capital project fund and to public safety operating expenditures of $0.4 million each, along with minor increases in appropriations to 42

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis support operating expenditures across nearly all other governmental functions totaling $0.2 million. Other budgeted employment expenditures totaling $0.5 million were de-funded to absorb half of the budget impact, while the other half resulted in a net increase of $0.5 million in the revised budget balance over the original budget balance (on a non-GAAP basis). Actual revenues and other financing sources received were below the final budgeted amounts in the General Fund by $0.3 million for the current fiscal year. The more significant negative variances were in permits and other licenses, interfund service receipts and fines & police revenue. These revenue decreases were partially offset by increases in property tax revenue, court of chancery fees, interest earnings and transfer taxes. The General Fund budget balance carry forward was $3.8 million higher than originally budgeted a result of the above variances. Capital Asset and Debt Administration At the end of the current fiscal year, the City’s governmental and proprietary funds had invested $60.0 million and $137.9 million, respectively, in a variety of capital assets and infrastructure, as reflected in the following schedule, which exhibits a net increase of $0.9 million for governmental activities and a net decrease of $1.6 million for the business-type activities. The increase in assets reported within Governmental Activities is attributable to equipment and vehicle acquisitions ($0.6 million), general infrastructure assets, ($0.4 million) and increases in the value of construction projects that remained open as of June 30, 2019 ($0.5 million), partially offset by a $0.6 million reduction in the net book value of building assets. The decrease in Business-Type Activities is due primarily to increased depreciation expenses recorded in the electric fund in anticipation of the retirement of the City’s principal energy generation operations. Additional detailed data for all capital assets of the City is presented in the Notes to the Basic Financial Statements in Note 4. The following schedule is presented in millions of dollars. Governmental Business-Type Activities Activities Total 2018 2019 2018 2019 2018 2019 Depreciable Assets, Net Buildings $ 23.0 $ 22.4 $ - $ - $ 23.0 $ 22.4 Equipment & Vehicles 4.0 4.6 7.4 6.5 11.4 11.1 General Infrastructure 26.3 26.7 - - 26.3 26.7 Utility, Plant, Buildings, and - - Infrastructure - - 124.9 118.9 124.9 118.9 Other 0.4 0.4 1.6 1.4 2.0 1.8 Non-depreciable Assets Land 4.7 4.7 1.7 1.6 6.4 6.3 Construction in Progress 0.7 1.2 3.9 9.5 4.6 10.7 $ 59.1 $ 60.0 $ 139.5 $ 137.9 $ 198.6 $ 197.9 The chart below shows that the City’s Total Net OPEB Liability decreased by $6.0 million, with the majority of $5.0 million attributable to the Governmental Activities and the balance 43

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis attributable Business-Type Activities. The City’s Total Net Pension Liability reduction of $1.3 million was divided nearly evenly between the Governmental Activities ($0.6 million) and Business-Type Activities ($0.7 million). Additional detailed information regarding the City’s Other Post-Employment Benefits and Retirement Plans is presented in the Notes to the Basic Financial Statements in Notes 15 and 17, respectively. The City Charter limits the amount of general obligation debt the City can issue in any one year to 25% of the taxable assessed value of real property within the City. The aggregate of amounts borrowed for which the full faith and credit of the City is pledged cannot exceed 5.0% of assessed value of real property within the City boundaries. The City has used 3.5% of its debt limit. The City of Dover’s non-current liabilities as of June 30, 2018 and 2019 are presented below (in millions of dollars): Governmental Business-Type Activities Activities Total 2018 2019 2018 2019 2018 2019 Non-current liabilities Police Officer Separation Agreement $ 0.2 $ 0.1 $ - $ - $ 0.2 $ 0.1 Liability for Compensated Absences 2.3 2.5 0.7 0.7 3.0 3.2 Bonds (Net of Discount/Issuance Cost) 5.9 5.7 29.2 28.9 35.1 34.6 Bond Premium - - - 1.2 - 1.2 Net OPEB Liability 26.2 21.2 5.5 4.5 31.7 25.7 Net Pension Liability 14.7 14.1 10.9 10.2 25.6 24.3 Asset Retirment Obligation - - - 11.9 - 11.9 $ 49.3 $ 43.6 $ 46.3 $ 57.4 $ 95.6 $ 101.0 Additional detailed data for all debt of the City is presented in the Notes to the Basic Financial Statements in Note 5. Economic Factors and Next Year’s Budgets and Rates The City developed the fiscal year 2019 budget in accordance with the City’s financial policies ensuring all budgets are balanced and reserve requirements were adhered to. The following changes over fiscal year 2019 were incorporated into the fiscal year 2020 budget. • Property taxes increase of $0.035 per $100 of assessed property value is expected to generate $1.1 million in additional general fund revenue. • The power cost adjustment credit will be maintained at the FY’19 level of $0.00382 in FY’20 for the electric utility, reflecting stable power supply costs. • The City’s headcount increased by 14 full-time positions, which was partially offset by a reduction of 5 part-time positions. The net increase is driven by the following departmental changes, which are intended to revitalize services levels in several functional areas. o General Fund personnel will increase by 13 net new full-time positions, the new stormwater division leading with 7 new positions, followed by 1 new position in 44

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis the Mayor’s office and each of the police, fleet maintenance, grounds, human resources, inspections, life safety, library, public works administration divisions, offset by reductions of 1 full-time position in each of the procurement, public works – engineering and streets divisions. In addition, 3 part-time police cadets and a part-time fire dispatcher will be added in FY’20, with offsetting reductions of 9 part-time positions across the library and customer service functions. o Water/wastewater operations will be staffed with 1 new full-time position in the water treatment plant, while 2 engineering positions and a maintenance position will shift in scope from water to wastewater operations. o Electric utility operations will be improved by refocusing 1 administrative position and 1 transmission/distribution position on system operations, though utility- wide staffing will remain at the FY’19 level of 46 full-time positions. • Increases in wages based on collective bargaining agreements were included. • A 3.0% wage increase was included for non-bargaining employees. • No changes in electric, water or wastewater rates • Funded the capital investment plan with a commitment to providing dollars for necessary infrastructure and utility improvements. The General Fund operating revenues are projected to increase by 2.5%, or $1.1 million, with expenditures increasing by 2.3%, or $1.0 million. The property tax increase is expected to generate $1.3 million in new revenue to drive the increase over FY’19 budgeted revenue, which is partially offset by anticipated reductions in fines and police revenues, permits and other fee revenue. The increased expenditures were attributed to the development of the new stormwater division, higher costs to support police operations, increased expenditures in the tax assessment and recreation functions, and a higher transfer to the capital project fund to support infrastructure improvements. Expense reductions in the streets, customer service, and life safety divisions, along with reductions to other budgeted employment-related expenditures, served to mitigate the total expense increase. The Water/Wastewater utility operations were separated into two stand-alone enterprise funds starting with the FY’20 budget. Water operating revenues are projected at $6.5 million, which is a decrease of $0.2 million, or about 3.5% below the prior year’s original budget of $6.8 million. Total expenses are projected to increase by 5.0% to $7.2 million, or about $0.3 million higher than FY’19. The revenue reduction is driven by reduced water services revenue billings impacting revenue by $0.4 million, partially offset by increases in water impact fees and water tank space leasing in excess of $0.1 million. The expense increases are related primarily to water treatment plant operations ($0.3 million), increased debt service requirements ($0.2 million), an increase in interfund service fees ($0.2 million) and higher engineering and inspection expenses ($0.1 million), offset by reduced maintenance requirements ($0.1 million) and reduced transfers to the Water Improvement & Extension Fund ($0.3 million). 45

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Wastewater operating revenues are expected to increase by nearly $0.6 million to $9.3 million in FY’20, representing an increase of 6.5%. Total expenses are projected to increase by 5.1%, or less than $0.5 million to $9.6 million. All major revenue categories are driving the revenue increase, but the $0.4 million increase in wastewater treatment services is leading the way, while the other revenues, including impact fees, wastewater services and the groundwater inflow adjustment, combine for the remaining $0.1 million increase. Kent County Treatment Charges are expected to exceed $5.1 million in FY’20, which represents a $1.4 million increase over FY’19 and the principal component of the budgeted expense increases, followed by higher maintenance expenses ($0.2 million) and higher debt service requirements ($0.1 million). A $0.9 million reduction in the transfer to the Wastewater Improvement & Extension Fund serves to limit the net increase in expenses to $0.5 million. Total Electric Fund revenues are projected to increase by $1.5 million to $85 million, which is about 1.8% stronger than FY’19 anticipated revenue. Total expenses are projected to increase by 2.7% or $2.2 million versus the prior budget year. Revenue increases are driven almost entirely by customer sales projections that exceed the prior year budget by $1.5 million, which is attributable to higher consumption expectations as FY’20 billing rates are unchanged from the prior year. Other revenue sources are flat or modestly higher than FY’19 budgeted revenue. The energy component of electric utility expense is almost $0.9 million lower in FY’20, driven by sharply offsetting movements in power supply expenses (decrease of $6.4 million) and generation/capacity costs (increase of $5.5 million). Direct expenditure categories combine for cost increases of $0.4 million, spread relatively evenly between transmission & distribution operations, electrical engineering and system operations. Reductions in debt service requirements ($0.2 million) and other employment costs ($0.2 million) help further reduce expenses versus FY’19. However, the planned decommissioning of the McKee Run generation facility resulted in a $2.5 million supplemental transfer to the depreciation reserve, which pushes the total expense variance from what otherwise would have been a modest cost reduction to a $2.2 million increase. The budgeted transfer to the general fund is $10 million in FY’20 and unchanged from the prior two fiscal years. The City also budgeted a distribution of earnings to customers of $2.9 million or 3.4% of revenue, resulting from lower cost of service than projected for fiscal year 2018. The City continues to closely monitor the local economy and its impact on growth and revenues. Revenue enhancements, rate increases, and potential cost reductions will continue to be reviewed in order to maintain the City’s financial policies. Contacting the City’s Financial Management This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Ms. Lori Peddicord, Controller/Treasurer at 302-736-4452 (TTY/TDD Operator 1-800-855-1155). 46

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section PART PARTC FINANCIAL FINANCIAL STATEMENTS STATEMENTS 47

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Net Position June 30, 2019 Governmental Business-Type Activities Activities Total Assets: Cash and Cash Equivalents $ 1,797,981 $ 15,525,430 $ 17,323,411 Investments 20,211,857 26,855,698 47,067,555 Receivables, Net 455,168 5,523,622 5,978,790 Internal Balances (5,191,801) 5,191,801 - Due from Other Governments 35,696 - 35,696 Inventory 107,732 4,432,674 4,540,406 Prepaid Items 105,648 508,967 614,615 Restricted Cash and Cash Equivalents 407,941 7,405,120 7,813,061 Restricted Investments 18,793 48,583,723 48,602,516 Capital Assets, Not Being Depreciated 5,935,681 11,154,749 17,090,430 Capital Assets, Net of Depreciation 54,074,059 126,759,362 180,833,421 Total Assets 77,958,755 251,941,146 329,899,901 Deferred Outflows of Resources: Pension related Deferred Outflows 4,022,481 385,660 4,408,141 OPEB related Deferred Outflows 875,525 173,912 1,049,437 ARO related Deferred Outflows - 486,361 486,361 Total Deferred Outflows of Resources 4,898,006 1,045,933 5,943,939 Liabilities: Accounts Payable and Accrued Liabilities 2,579,255 7,504,317 10,083,572 Unearned Revenue 97,393 370,198 467,591 Customer Deposits - 2,496,129 2,496,129 Other 259,958 417,770 677,728 Liabilities Due within One Year 1,551,809 1,800,210 3,352,019 Non-Current Liabilities Due in more than One Year 6,755,506 28,932,074 35,687,580 Due in more than One Year - OPEB 21,227,234 4,552,451 25,779,685 Due in more than One Year - Pension 14,043,528 10,160,700 24,204,228 Due in more than One Year - ARO - 11,915,849 11,915,849 Total Liabilities 46,514,683 68,149,698 114,664,381 Deferred Inflows of Resources: Pension related deferred inflows 1,737,599 406,348 2,143,947 OPEB related Deferred Inflows 9,300,794 2,730,460 12,031,254 Total Deferred Inflows of Resources 11,038,393 3,136,808 14,175,201 Net Position: Net Investment in Capital Assets 54,309,740 109,497,296 163,807,036 Restricted for: Capital Projects 134,522 54,353,211 54,487,733 Public Safety Grants 172,141 - 172,141 Verizon Grant 24,871 - 24,871 Library Grant 9,769 - 9,769 Community Development Grants 882 - 882 Other State Grants 100 - 100 Unrestricted (29,348,340) 17,850,066 (11,498,274) Total Net Position $ 25,303,685 $ 181,700,573 $ 207,004,258 The notes to financial statements are an integral part of this statement. 49

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Activities For the Year Ended June 30, 2019 Net (Expense) Revenue and Program Revenues Changes in Net Position Indirect Operating Capital Grants Expenses Charges for Grants and and Governmental Business Type Expenses Allocation Services Contributions Contributions Activities Activities Total Functions/Programs Governmental Activities General Government $ 4,435,777 $ (1,139,446) $ 2,520,022 $ 16,355 $ - $ (759,954) $ - $ (759,954) Public Safety 17,597,828 - 4,510,464 1,037,690 - (12,049,674) - (12,049,674) Public Works 6,914,756 (731,427) 3,068,399 803,494 273,636 (2,037,800) - (2,037,800) Library and Recreation 3,211,586 - 612,737 339,771 98,500 (2,160,578) - (2,160,578) Community and Economic Development 461,983 - - 244,590 - (217,393) - (217,393) Central Services 1,460,276 (939,256) - - - (521,020) - (521,020) Financial Administration 3,317,749 (2,423,079) - - - (894,670) - (894,670) Interest Charges 178,514 - - - - (178,514) - (178,514) Total Governmental Activities 37,578,470 (5,233,208) 10,711,622 2,441,900 372,136 (18,819,604) - (18,819,604) Business Type Activities - Water/Wastewater 10,916,207 1,688,241 16,017,306 - - - 3,412,858 3,412,858 Electric 64,914,614 3,544,967 83,709,415 - - - 15,249,834 15,249,834 Total Business Type Activities 75,830,821 5,233,208 99,726,721 - - Total Primary Government $ 113,409,291 $ - $ 110,438,343 $ 2,441,900 $ 372,136 (18,819,604) 18,662,692 (156,912) General Revenues Taxes Property Taxes 13,448,025 - 13,448,025 Transfer Taxes 1,637,194 - 1,637,194 Earnings on Investments 809,345 3,752,939 4,562,284 Total General Revenues 15,894,564 3,752,939 19,647,503 Transfers 10,800,000 (10,800,000) - Total General Revenues and Transfers 26,694,564 (7,047,061) 19,647,503 Changes in Net Position 7,874,960 11,615,631 19,490,591 Net Position Beginning - as Previously Reported 17,428,725 181,271,249 198,699,974 Prior Period Adjustment - Certain Asset Retirement Obligation (see note 18) - (11,186,307) (11,186,307) Net Position Beginning 17,428,725 170,084,942 187,513,667 Net Position Ending $ 25,303,685 $ 181,700,573 $ 207,004,258 The notes to financial statements are an integral part of this statement. 50

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Governmental Funds Balance Sheet June 30, 2019 Total Total General Nonmajor Governmental Fund Funds Funds Assets: Cash and Cash Equivalents $ 998,637 $ - $ 998,637 Restricted Cash and Cash Equivalents - 407,941 407,941 Investments 18,716,676 - 18,716,676 Restricted Investments 18,793 - 18,793 Receivables, Net Accounts 375,335 51,766 427,101 Taxes 23,067 - 23,067 Due from Other Funds 328,543 - 328,543 Due from Other Governments - 35,696 35,696 Prepaid Items 105,648 - 105,648 Inventory 107,732 - 107,732 Total Assets $ 20,674,431 $ 495,403 $ 21,169,834 Liabilities: Accounts Payable $ 1,940,668 $ 140,293 $ 2,080,961 Unearned Revenue 95,227 2,166 97,393 Due to Other Funds 1,482,615 37,729 1,520,344 Temporary Advances 4,000,000 - 4,000,000 Other 259,958 - 259,958 Total Liabilities 7,778,468 180,188 7,958,656 Deferred Inflows of Resources: Unavailable Revenue 147,077 - 147,077 Total Deferred Inflows of Resources 147,077 - 147,077 Fund Balances: Non-Spendable 234,974 - 234,974 Restricted 27,070 315,215 342,285 Committed 1,047,987 - 1,047,987 Assigned 4,320,615 - 4,320,615 Unassigned 7,118,240 - 7,118,240 Total Fund Balances 12,748,886 315,215 13,064,101 Total Liabilities, Deferred Inflows and Fund Balances $ 20,674,431 $ 495,403 $ 21,169,834 The notes to financial statements are an integral part of this statement. 51

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2019 Amounts reported for governmental activities in the statement of net position (page 49) are different because: Total fund balances for governmental funds (Page 51) $ 13,064,101 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 60,009,740 Other assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the funds. Deferred inflows of resources $ 147,077 147,077 The Net Pension Liability & OPEB Liability is not due and payable in the current period; therefore, the liability and related deferred inflows/outflows are not reported in governmental funds: Deferred Outflows - Pension $ 4,022,481 Deferred Inflows - Pension (1,737,599) Deferred Outflows - OPEB 875,525 Deferred Inflows - OPEB (9,300,794) (6,140,387) An internal service fund (page 56) is used by the City to charge the cost of the workers' compensation fund. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. 1,801,810 Accrual basis of bond interest paid (579) Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities both current and long-term are reported in the statement of net position. Compensated absences represent amounts accrued for sick leave for those employees who are vested and accrued vacation for all employees. The Net Pension Liability and OPEB Liability are not a use of current financial resources, and therefore, are not reported in the governmental funds. Current- General Obligation Bonds $ (328,716) Compensated Absences (1,110,593) Police Officer separation agreement (112,500) (1,551,809) Long-Term- General Obligation Bonds $ (5,371,284) Compensated Absences (1,384,222) Net Pension Liability (14,043,528) Net OPEB Liability (21,227,234) (42,026,268) (43,578,077) Total net position of governmental activities (Page 49) $ 25,303,685 The notes to financial statements are an integral part of this statement. 52

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds For the Year Ended June 30, 2019 Total Total General Nonmajor Governmental Fund Funds Funds Revenues Fines $ 571,508 $ 449,412 $ 1,020,920 Library Revenue - General 136,141 - 136,141 Library Revenue County Reimbursement 274,013 - 274,013 Licenses and Permits 2,866,796 - 2,866,796 Sanitation Fees and Rebates 3,068,399 - 3,068,399 Recreation - 61,147 61,147 Miscellaneous Services 1,672,401 - 1,672,401 Property Taxes 13,466,255 - 13,466,255 Transfer Taxes - 1,637,194 1,637,194 Grants Received 671,006 2,143,030 2,814,036 Court of Chancery Fees 1,588,140 - 1,588,140 Investment Income 716,385 14,412 730,797 Total Revenues 25,031,044 4,305,195 29,336,239 Expenditures Current: General Government 1,760,851 - 1,760,851 Library Services 1,682,610 289,163 1,971,773 Public Safety and Law Enforcement 21,971,518 587,183 22,558,701 Public Works 2,046,593 808,789 2,855,382 Recreational Services 1,087,393 - 1,087,393 Streets and Sanitation Services 4,458,329 - 4,458,329 Engineering Services 266,332 - 266,332 Financial Administration 754,400 - 754,400 Garage and Stores 492,111 - 492,111 Insurance 276,689 - 276,689 Retiree Health Care 1,894,900 - 1,894,900 Community and Economic Development 150,000 311,983 461,983 Street Lights 805,185 - 805,185 Debt Service: Principal Retirement 322,745 - 322,745 Interest and Fiscal Charges 34,773 - 34,773 Total Expenditures 38,004,429 1,997,118 40,001,547 Excess (deficiency) of Revenues over Expenditures (12,973,385) 2,308,077 (10,665,308) Other Financing Sources (Uses) Bonds Issued 5,700,000 - 5,700,000 Payment to bond refunding agent (5,700,000) - (5,700,000) Transfers In 13,953,381 - 13,953,381 Transfers Out (200,000) (2,953,381) (3,153,381) Total other Financing Sources (Uses) 13,753,381 (2,953,381) 10,800,000 Net Change in Fund Balances 779,996 (645,304) 134,692 Fund Balances at Beginning of Year 11,968,890 960,519 12,929,409 Fund Balances at End of Year $ 12,748,886 $ 315,215 $ 13,064,101 The notes to financial statements are an integral part of this statement. 53

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2019 Amounts reported for governmental activities in the statement of activities (page 50) are different because: Net change in fund balances--total governmental funds (Page 53) $ 134,692 Governmental fund reports capital outlays as expenditures. However, in the statement of activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capitalization of net capital asset expenditures including CIP $ 3,993,940 Loss on assets disposed of during the year (4,994) Current year depreciation (3,096,125) 892,821 Governmental funds report the repayment of principal of general long-term debt as an expenditure but the repayment reduces the liability in the statement of net position. 177,013 Revenues that are not available to pay for current period expenditures are not reported as revenues in the funds. 5,435 Governmental funds report pension contributions as expenditures. However, in the Statement of Activities, the cost of pension benefits earned net of employer contributions is reported as pension expense 708,068 Except for amounts reported as deferred inflows/outflows, changes in the net pension liability are reported as pension expense in the statement of activities. 526,759 Decreases in operating expenses due to the decrease in OPEB expense for the amortization of deferred outflows and inflows of resources related to the net OPEB liability. 328,271 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for the transactions that are not normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, assets are not recognized in governmental funds unless they represent current financial resources but are recognized in the statement of activities as they accrue. The following differences, therefore, occur between the statement of activities and the governmental funds. Increase in compensated absences $ (217,470) Police separation agreement payout 35,700 Bond interest accrual 1,992 Decrease in OPEB Liability 4,988,823 4,809,045 An internal service fund is used by the City to charge the costs of workers' compensation insurance to individual funds. The change in net position of the internal service fund is transferred to the governmental funds and amounts attributable to internal charges are then allocated to functional expenditures. Net revenue is allocated back to respective functions and business type activities, as appropriate. 292,856 Change in net position of governmental activities (Page 50) $ 7,874,960 The notes to financial statements are an integral part of this statement. 54

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Net Position - Proprietary Funds Proprietary Funds June 30, 2019 Governmental Business-type Activities Activities Water/ Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Assets Current Assets: Cash and Cash Equivalents $ 5,171,600 $ 10,353,830 $ 15,525,430 $ 799,344 Investments 7,416,805 19,438,893 26,855,698 1,495,181 Receivables, Net 700,958 4,822,664 5,523,622 5,000 Due from Other Funds 1,146 1,817,322 1,818,468 - Due from other funds- temporary advances - 4,000,000 4,000,000 - Inventory 69,376 4,363,298 4,432,674 - Prepaid Items 797 508,170 508,967 - Total Current Assets 13,360,682 45,304,177 58,664,859 2,299,525 Non-Current Assets: Restricted Assets Cash 466,393 6,938,727 7,405,120 - Investments 7,943,159 40,640,564 48,583,723 - Capital Assets, Not Being Depreciated 5,933,482 5,221,267 11,154,749 - Capital Assets, Net of Depreciation 57,248,456 69,510,906 126,759,362 - Total Non-Current Assets 71,591,490 122,311,464 193,902,954 - Total Assets 84,952,172 167,615,641 252,567,813 2,299,525 Deferred Outflows of Resources: Pension Related Deferred Outflows 141,252 244,408 385,660 - OPEB Related Deferred Outflows 60,971 112,941 173,912 - Asset Retirement Oblig. Deferred Outflows - 486,361 486,361 - 202,223 843,710 1,045,933 - Liabilities Current Liabilities: Accounts Payable and Accrued Expenses 2,639,516 4,864,801 7,504,317 497,715 Due to Other Funds - Charges 615,647 11,020 626,667 - Unearned Revenue - 370,198 370,198 - Accrued Interest Payable 94,920 322,850 417,770 - Customer Deposits - 2,496,129 2,496,129 - Revenue Bonds Payable 841,523 650,000 1,491,523 - Liability for Compensated Absences 87,320 221,367 308,687 - Total Current Liabilities 4,278,926 8,936,365 13,215,291 497,715 Non-Current Liabilities: OPEB Liability 1,780,776 2,771,675 4,552,451 - Net Pension Liability 3,385,217 6,775,483 10,160,700 - Asset Retirement Obligation - 11,915,849 11,915,849 - Revenue Bonds Payable 12,356,172 16,204,752 28,560,924 - Liability for Compensated Absences 95,049 276,101 371,150 - Total Non-Current Liabilities 17,617,214 37,943,860 55,561,074 - Total Liabilities 21,896,140 46,880,225 68,776,365 497,715 Deferred Inflows of Resources: Pension Related Deferred Inflows 148,829 257,519 406,348 - OPEB Related Deferred Inflows 1,055,053 1,675,407 2,730,460 - Total Deferred Inflows of Resources 1,203,882 1,932,926 3,136,808 - Net Position Net Investment in Capital Assets 51,619,875 57,877,421 109,497,296 - Restricted for Capital Construction 6,773,920 47,579,291 54,353,211 - Unrestricted 3,660,578 14,189,488 17,850,066 1,801,810 Total Net Position $ 62,054,373 $ 119,646,200 $ 181,700,573 $ 1,801,810 The notes to financial statements are an integral part of this statement. 55

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds For the Year Ended June 30, 2019 Governmental Business-type Activities Activities Water/ Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Operating Revenues Charges for Services $ 14,163,823 $ 81,977,065 $ 96,140,888 $ - Miscellaneous Services/Income 1,853,483 1,732,355 3,585,838 809,408 Total Operating Revenues 16,017,306 83,709,420 99,726,726 809,408 Operating Expenses Water 592,138 - 592,138 - Wastewater 984,785 - 984,785 - Water Treatment Plant 1,487,255 - 1,487,255 - Water/Wastewater Engineering 313,943 - 313,943 - Kent County Wastewater Treatment 4,816,650 - 4,816,650 - General Administrative 1,669,144 4,682,180 6,351,324 416,820 Power Supply - 45,341,853 45,341,853 - Transmission/Distribution - 2,835,756 2,835,756 - Engineering - 970,783 970,783 - Metering - 351,991 351,991 - Systems Operations - 546,612 546,612 - Utility Tax - 1,270,320 1,270,320 - Depreciation 2,166,852 8,086,669 10,253,521 - Contractual Services - - - 14,277 Taxes - - - 36,244 Retirees Health Care 256,900 721,400 978,300 - Self Insurance-Workers' Compensation - - - 127,759 Total Operating Expenses 12,287,667 64,807,564 77,095,231 595,100 Operating Income/Loss 3,729,639 18,901,856 22,631,495 214,308 Non-Operating Revenues (Expenses) Interest Earned: Operating Funds 190,460 485,828 676,288 - Reserve Funds 177,407 948,034 1,125,441 37,038 Net Increase in Fair Value of Investments 383,055 1,568,155 1,951,210 41,510 Interest and Fiscal Charges (316,781) (812,367) (1,129,148) - Distribution of Earnings - PCA Credit - (2,839,650) (2,839,650) - Gain on Sale of Assets - (5) (5) - Total Non-Operating Revenue (expenses) 434,141 (650,005) (215,864) 78,548 Income before Contributions and Transfers 4,163,780 18,251,851 22,415,631 292,856 Transfers In - 498,000 498,000 - Transfers Out (1,298,000) (10,000,000) (11,298,000) - Total transfers (1,298,000) (9,502,000) (10,800,000) - Change in Net Position 2,865,780 8,749,851 11,615,631 292,856 Total Net Position--Beginning 59,188,593 122,082,656 181,271,249 1,508,954 Prior period adj. - Certain Asset Retirement Obligation - (11,186,307) (11,186,307) - Total Net Position--Beginning as Restated 59,188,593 110,896,349 170,084,942 1,508,954 Total Net Position--Ending $ 62,054,373 $ 119,646,200 $ 181,700,573 $ 1,801,810 The notes to financial statements are an integral part of this statement. 56

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2019 Governmental Business-type Activities Activities Water Electric Total Wastewater Revenue Enterprise Internal Fund Fund Funds Service Fund Cash Flows from Operating Activities Receipts from Customers $ 15,975,984 $ 77,725,974 $ 93,701,958 $ - Payments to Suppliers (including Purchased Power) (5,498,953) (48,701,522) (54,200,475) (47,597) Payments to Employees (2,323,080) (4,357,212) (6,680,292) - Payments of Personnel Related Costs (818,956) (1,647,078) (2,466,034) 757,081 Internal Activity-Payments from (to) Other Funds 234,762 (976,628) (741,866) - Other Receipts (Payments) including Claims Paid (661,723) (2,488,507) (3,150,230) (475,400) Net Cash Provided by (used for) Operating Activities 6,908,034 19,555,027 26,463,061 234,084 Cash Flows from Noncapital Financing Activities Transfers Out (1,298,000) (10,000,000) (11,298,000) - Transfers In - 498,000 498,000 - Distribution to Customers - PCA Credit - (2,839,650) (2,839,650) - Net Cash Used for Noncapital Financing Activities (1,298,000) (12,341,650) (13,639,650) - Cash Flows from Capital and Related Financing Activities Acquisition and Construction of Capital Assets (6,132,980) (3,013,058) (9,146,038) - Proceeds of issuance of debt 2,710,256 18,091,986 20,802,242 - Payment to refund bond escrow agent - (16,937,234) (16,937,234) - Bond Issuance Costs (13,153) (228,275) (241,428) - Principal Paid on Revenue Bond Maturities (824,960) (765,000) (1,589,960) - Interest Paid on Capital Debt (303,931) (812,367) (1,116,298) - Net Cash Used for Capital and Related Financing Activities (4,564,768) (3,663,948) (8,228,716) - Cash Flows from Investing Activities Interest on Investments 190,460 485,828 676,288 - Redemption of Investment Securities 684,910 1,624,220 2,309,130 - Purchase of Investment Securities (1,451,657) (1,203,833) (2,655,490) 9,902 Interest on Restricted Cash 177,407 948,034 1,125,441 - Net Cash Provided by (used for) Investing Activities (398,880) 1,854,249 1,455,369 9,902 Net Increase/Decrease in Cash and Cash Equivalents 646,386 5,403,678 6,050,064 243,986 Cash and cash equivalents June 30 (incl. $466,393 for W/WW fund and $6,938,727 for Electric fund reported in restricted accounts) 4,991,607 11,888,879 16,880,486 555,358 Cash and cash equivalents July 1 (including $923,774 for W/WW fund and $2,319,570 for Electric fund reported in restricted accounts) $ 5,637,993 $ 17,292,557 $ 22,930,550 $ 799,344 Reconciliation of Operating Income to Net Cash Provided by (Used for) Operating Activities: Operating Income $ 3,729,639 $ 18,901,856 $ 22,631,495 $ 214,308 Adjustments to Reconcile Operating Income to Net Cash provided by (Used for) Operating Activities: Depreciation Expense 2,166,852 8,086,669 10,253,521 - Effect of Changes in Operating Assets and Liabilities: Receivables (67,994) (273,046) (341,040) - Due from other funds 26,672 (5,813,500) (5,786,828) - Inventory 35,323 (214,474) (179,151) - Prepaid items 935 424,323 425,258 129,716 Deferred outflow of resources Pension (64,242) 434,871 370,629 - Deferred outflow of resources OPEB (60,971) (112,941) (173,912) - Deferred outflow of resources ARO - (486,361) (486,361) - Accounts payable and accrued expenses 1,264,836 (103,109) 1,161,727 (109,940) Unearned revenue - (75,989) (75,989) - Due to other funds 432,592 (380,258) 52,334 - Customer Deposits - 179,089 179,089 - Liability for Compensated Absences (48,232) 23,415 (24,817) - Net OPEB Liability (347,420) (643,549) (990,969) - Net pension liability (262,046) (453,423) (715,469) - Deferred inflow of resources Pension 63,979 (9,142) 54,837 - Deferred inflow of resources OPEB 38,111 70,596 108,707 - Net Cash Provided by Operating Activities $ 6,908,034 $ 19,555,027 $ 26,463,061 $ 234,084 Non-Cash Investing, Capital and Financing Activities: Change in Fair Value of Investments $ 383,055 $ 1,568,155 $ 1,951,210 $ 49,632 The notes to financial statements are an integral part of this statement. 57

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Net Position Fiduciary Funds June 30, 2019 Pension and Other Postemployment Agency Benefit Trust Funds Funds Assets Cash and Cash Equivalents $ 7,139,446 $ 858,447 Investments at Fair Value - Mutual Funds 90,914,986 - Receivables 254,150 - Prepaid Items - 20,274 Total Assets 98,308,582 878,721 Liabilities Vouchers Payable & Deposit Payable 61,820 54,927 Due to Agencies 4,451 823,794 Total Liabilities 66,271 $ 878,721 Net Position Net Position Restricted for Pension and Retiree Health Benefits $ 98,242,311 The notes to financial statements are an integral part of this statement. 58

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Financial Statements City of Dover, Delaware Statement of Changes in Net Position Fiduciary Funds For the Year Ended June 30, 2019 Pension and Other Postemployment Benefit Trust Funds Additions: Net Investment Income $ 5,769,156 City's Contribution-Payroll Based 4,934,811 City's Contribution-Lump Sum 3,801,200 Employee Contribution 190,030 State Grants 512,151 Total Additions 15,207,348 Deductions: Benefit Payments 8,298,006 General Administration 26,742 Total Deductions 8,324,748 Change in Net Position 6,882,600 Net Position - Beginning 91,359,711 Net Position - Ending $ 98,242,311 The notes to financial statements are an integral part of this statement. 59

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C INDEX IINIDIEX Notes Noles to to Financial Statements Financial Stateme1 n PAGE 1. FINANCIAL REPORTING ENTITY .................................................. 63 A. The City of Dover , Delaware ............................................................ 63 B. Reporting Entity .............................................................................. 63 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ........ 63 A. Basis of Presentation ....................................................................... 64 B. Basis of Accounting and Measurement Focus ................................... 65 C. New Pronouncements ...................................................................... 66 D. Capital Assets and Long-Term Liabilities.......................................... 67 E. Budget Procedures ........................................................................... 68 F. Major Transfers ............................................................................... 69 G. Inventories and Prepaid Items ......................................................... 70 H. Cash and Investments ...................................................................... 70 I. Accounts Receivable ........................................................................ 70 J. Restricted Assets .............................................................................. 70 K. Unbilled Service Receivables ............................................................ 70 L. Bond Accounts/Issuance Costs ......................................................... 71 M. Deferred Outflows/Inflows of Resources ......................................... 71 N. Fund Balances and Net Position ....................................................... 71 O. Estimates ......................................................................................... 72 P. Net Position Flow Assumption .......................................................... 72 3. DEPOSITS AND INVESTMENTS ..................................................... 72 A. Cash in Bank and Cash Equivalents ................................................ 72 B. Investments ..................................................................................... 73 4. CAPITAL ASSETS ................................................................................. 78 5. LONG-TERM OBLIGATIONS ........................................................... 81 A. Summary of Bonded Indebtedness by Issue ....................................... 81 B. Status as of June 30, 2019 – General Obligation Bonds ................... 82 C. Change in Long-Term Debt .............................................................. 82 D. Debt Service Requirements .............................................................. 84 E. Certain Asset Retirement Obligation ................................................ 86 6. RESTRICTED NET POSITION .......................................................... 87 61

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C INDEX IINDIEX Notes Noles to to Financial Statements Financial Stateme1n PAGE 7. FUND BALANCES & NET POSITION ............................................. 87 8. PROPERTY TAXES ............................................................................... 89 9. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS ... 89 A. Due To/From Other Funds – Charges and Allocations ...................... 89 B. Due To/From Other Funds – Temporary Advances ........................... 89 C. Interfund Transfers ........................................................................ 90 10. RENTAL INCOME ............................................................................... 90 11. MATERIAL COMMITMENTS .......................................................... 90 12. FORWARD CONTRACTS ................................................................... 91 13. INSURANCE .......................................................................................... 93 A. Health Insurance – State of Delaware .............................................. 93 B. Workers’ Compensation Fund – Self-Insurance ............................... 93 C. Other than Health or Workers’ Compensation Insurance ................. 93 14. COMPENSATED ABSENCES ............................................................. 93 15. OTHER POST-EMPLOYMENT BENEFITS ..................................... 94 Summary of Principal Plan P rovisions as of July 1, 201 5 ...................... 95 16. DEFERRED COMPENSATION PLAN .............................................. 102 17. RETIREMENT PLANS ......................................................................... 103 A. Defined Contribution Plan ............................................................... 103 B. Defined Benefit Plans ..................................................................... 104 18. RESTATEMENT IMPLEMENTATION OF GASB 83 - CERTAIN ASSET RETIREMENT OBLIGATION............................................... 122 62

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2019 1. FINANCIAL REPORTING ENTITY A. The City of Dover, Delaware The City of Dover, Delaware (the City) was incorporated in 1829 and is a municipal corporation governed by an elected mayor and a nine-member council. The accompanying financial statements present the financial position and operating results for fiscal year ended June 30, 2019. B. Reporting Entity In evaluating how to define the reporting entity, for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit was made by applying the criteria set forth in Generally Accepted Accounting Principles in the United States of America (GAAP). The criterion used is that set forth by Statement of Governmental Accounting Standards (GASB) number 14 and as updated by GASB 61 which defines the reporting entity as the primary government and those component units for which the primary government is financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Based upon this criterion, the following is a brief review of each potential component unit addressed in defining the government’s reporting entity. Included within the reporting entity: The City provides many services as follows - police protection, street maintenance, sanitation, recreation, library, community development, public improvements, planning, safety inspections, electric generation and distribution, water and wastewater services, legislative services and general administration, including employee benefits. These functions are part of the City’s daily operations and therefore are not legally separate component units. Not included within the reporting entity: The City has joined the State of Delaware Police Pension Plan for uniformed police officers employed by the City after September 1, 1982. The plan is completely managed by the State of Delaware and, therefore, is not included in the financial statements. The Robbins Hose Volunteer Fire Company and the Capital School District are not included within the financial reporting entity because they do not meet the criteria for inclusion set forth by GAAP. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. A summary of the more significant policies follows: 63

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements A. Basis of Presentation Government-wide Statements: The statement of net position and the statement of activities include the financial activities of the overall government, except for fiduciary activities. Individual funds are not displayed but the statements distinguish governmental activities, generally funded by taxes and other City revenue, from business-type activities (BTAs), generally funded in whole or in part with fees charged to external users. Eliminations have been made for the doubling-up effect of certain internal activities, however, interfund services provided and used are not eliminated in the process of consolidation. The government-wide statement of activities presents a comparison between direct program expenses and program revenues for each function of the City’s governmental activities and for each of the City’s identifiable business-type activities. Direct expenses are those that are specifically associated with a program, function or activity. Program revenues include a) charges paid by the recipients or beneficiaries of goods or services offered by the programs and b) grants and contributions that are restricted for meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. The City allocates the costs of certain governmental services to the costs of business-type activities (indirect expense allocation). These costs include allocated amounts of city management, centralized budgetary formulation and oversight, accounting, financial reporting, payroll, fleet and building maintenance, procurement contracting and oversight, investing and cash management, personnel services, etc. The allocations are charged to the BTAs based on the use of these services. As a matter of policy, the costs of certain governmental functions are not allocated to the business-type activities such as tax assessor, planning and zoning, public safety, library and recreation and community services. Fund Financial Statements: The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows/outflows, fund equity, revenues and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The fund financial statements provide information about the City’s funds, including fiduciary funds. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as non-major funds. The City reports the following major governmental fund: General Fund The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The City reports the following major proprietary funds: Water/Wastewater Fund This fund accounts for transactions related to water and wastewater services, including the payment of fees to Kent County for the treatment of sewage. The City also holds lease agreements with cell phone companies for equipment placed on City water towers. 64

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Electric Revenue Fund This fund incorporates all transactions related to the generation, transmission and distribution of electricity. The City has contracted with both The Energy Authority and North American Energy Services to manage the City’s power supply and generation assets. The City reports the following non-major funds: Internal Service Fund The City has created one internal service fund to account for the activities related to self-insured Workers’ Compensation. Receipts are provided from contributions by the City’s three major funds. Expenses are related to payment of claims, premiums, and administration costs. Actuarial analyses are completed every three years to ensure sufficient reserves for claims for the Workers’ Compensation Fund. Special Revenue Funds The City has eight Special Revenue Funds to account for proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Fiduciary Funds Fiduciary funds consist of trust and agency funds and are used to report assets held by the City in a trustee or agency capacity for other purposes. These funds are, therefore, not available to support City programs. The City is the trustee for the City’s two pension plans, the Police Pension Fund and the Employee Pension Fund, as well as the Other Post-Employment Benefit Trust. The activity of these plans is accounted for in the Basic Financial Statements. Agency Funds Agency funds are used to account for assets held by the City as an agent for individuals, private organizations or other governments. The City has two agency funds. The City acts as the receiving and paying agent for the Downtown Dover Partnership and the Fourth of July Celebration Committee. B. Basis of Accounting and Measurement Focus Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting and the current financial resources measurement focus. Their revenues are recognized when they become measurable and available as net current assets. Revenues that are susceptible to accrual include property taxes, grants and billable service charges. All other revenues are accounted for when they are received. Property taxes are recognized in the fiscal period during which they are levied, provided they are “available;” meaning they are collected in the current period or are expected to be collected soon 65

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements enough thereafter to satisfy liabilities in the current period. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end, except for trash collection, which has a thirty-day collection period. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. The exception to this general rule is principal and interest on general long-term debt which is recognized when due. Also, claims and judgments and compensated absences are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. The government-wide financial statements as well as all proprietary and fiduciary trust funds are accounted for using the accrual basis of accounting and the economic resources measurement focus. Agency funds have no measurement focus but utilize the accrual basis of accounting for reporting of assets and liabilities. A reconciliation of the governmental fund financial statements prepared on the modified accrual basis of accounting to the government-wide financial statements prepared on the accrual basis of accounting is also provided on pages 52 & 54. The types of transactions included in program revenues in the government-wide statement of activities include charges for services, operating grants and capital grants. Operating income reported in the proprietary fund financial statements includes revenue and expenses related to the continuing operations of the funds. Charges to customers for sales and services constitute the principal operating revenue for proprietary funds. Principal operating expenses are the costs of providing goods and services, which include purchased power, administrative expenses and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. C. New Pronouncements GASB Statement No. 84, “Fiduciary Activities” was issued in January 2017 and is effective for periods beginning after December 15, 2018. The requirements of this Statement will enhance consistency and comparability by (1) establishing specific criteria for identifying activities that should be reported as fiduciary activities and (2) clarifying whether and how business-type activities should report their fiduciary activities. Greater consistency and comparability enhance the value provided by the information reported in financial statements for assessing government accountability and stewardship. GASB Statement No. 87, “Leases” was issued in June 2017 and is effective for periods after December 15, 2019. This Statement will increase the usefulness of governments’ financial statements by requiring reporting of certain lease liabilities that currently are not reported. It will enhance comparability of financial statements among governments by requiring lessees and lessors to report leases under a single model. This Statement also will enhance the decision- usefulness of the information provided to financial statement users by requiring notes to financial statements related to the timing, significance, and purpose of a government’s leasing arrangements. 66

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements GASB Statement No. 88, “Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements” was issued in March 2018 and is effective for periods after June 15, 2018. This Statement will improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. This statement did not have an impact on the financial statements. GASB Statement No. 89, “Accounting for Interest Cost Incurred before the End of a Construction Period” was issued in June 2018 and is effective for periods after December 15, 2019. This Statement will enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and will also simplify accounting for certain interest costs. GASB Statement No. 90, “Majority Equity Interests” was issued in August 2018 and is effective for periods after December 15, 2018. This Statement will improve consistency in the measurement and comparability of the financial statement presentation of majority equity interests in legally separate organizations and to improve the relevance of financial statement information for certain component units. GASB Statement No. 91, “Conduit Debt Obligations” was issued in May 2019 and is effective for periods after December 15, 2020. This Statement will define conduit debt obligations for accounting and financial reporting purposes and establishes related standards for recognition, measurement, and disclosure for issuers. The requirements of this Statement apply to the financial statements of all state and local governments. The City is currently evaluating the impact of these statements. D. Capital Assets and Long-Term Liabilities Capital assets used in Governmental Fund type operations (general capital assets) are accounted for in the government-wide financial statements rather than in the funds. Public domain ("infrastructure") general capital assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, are capitalized in the government-wide financial statements along with other general capital assets. The capitalization threshold for the City’s assets is $5,000. Personal computers and related hardware valued under $5,000 are manually controlled by the Information Technology Department. All capital assets are valued at historical cost and donated capital assets are shown at acquisition value based on the developers’ cost of the infrastructure. Depreciation has been provided on general capital assets and is shown in Note 4. Depreciation has been provided over the estimated useful lives using the straight-line method. Estimated useful lives are as follows: Buildings 20 - 50 years Infrastructure 20 - 50 years Vehicles 5 - 7 years Equipment, Furniture & Fixtures 5 - 15 years Long-term liabilities expected to be financed from governmental funds and the long-term estimated liabilities for compensated absences are accounted for in the government-wide financial statements, but not in the governmental funds. 67

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Depreciation of all exhaustible capital assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is shown in Note 4 of this section. Depreciation in the proprietary funds has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are presented below: Buildings, Mains & Plant 25 - 90 years Improvements 15 - 20 years Equipment 5 - 15 years Vehicles 5 - 7 years The remaining useful life for certain buildings, vehicles, equipment and plant assets recorded in the Electric Fund is being shortened to coincide with the estimated retirement date of the City’s principal generation assets. Capital assets are maintained substantially and reported in accordance with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission (FERC) for the Electric Fund and the National Association of Regulatory Utility Commissioners (NARUC) for the Water/Wastewater Fund. E. Budget Procedures Legally adopted budgets are prepared for the General Fund, Water/Wastewater Fund, Electric Revenue Fund, the Internal Service Fund and the following non-major special revenue funds: Municipal Street Aid Fund, Electronic Red-Light Safety Program Fund, Community Development Block Grant Fund (Federal), State Department of Transportation Grants Fund (Community Transportation), Police Grant Funds, Substance Abuse Prevention Program Fund, Realty Transfer Tax Fund and Library Grants Fund. The General Governmental Capital Projects Fund provides for separate budgets to cover the planning and control of capital items for the governmental programs. The financial transactions of this fund are included in the financial statements of the General Fund. The Electric Improvement and Extension Fund and the Water/Wastewater Improvement and Extension Fund are sections of each utility enterprise. These sections are required by bond resolutions. Separate budgets for these funds cover the planning and control of only the capital items of the utilities. The financial transactions of these funds are included in the financial statements of the Electric Revenue Fund and the Water/Wastewater Fund. The City prepares the budget for the General Fund revenues on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. The budget and actual schedule in the legal budget format (non-GAAP), adopted by the City for the General Fund, the City’s major governmental fund, is presented in the required supplementary information section of this report. Budgets for the Electric Revenue Fund, Water/Wastewater Fund and Internal Service Fund are prepared on an accrual basis. Budgets are prepared under the assumption that the principal redemption of long-term debt must be assumed by Enterprise Fund activity in conformity with the bond ordinance. The Combining General Fund Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund as well as the budget and 68

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements actual schedules of the other funds are also presented in the supplementary information section of this report because they are not required to be presented elsewhere. According to the City's procedures, the preceding year's ending net budgetary balances are considered as resources for the following year. The beginning balances become operating items of revenues in the budgets. Estimated ending budgetary balances provide the balancing amount for each budget. In accordance with the City’s financial policies, adopted by City Council, the General and Water/Wastewater funds are required to maintain an 8% minimum ending budget balance and the Electric fund is required to maintain a 12% minimum. These percentages are expressed as a percentage of operating revenues, excluding the beginning budget balance. Unassigned fund balances as a percentage of current year operating revenues on a budgetary basis for the General Fund, Water/Wastewater Fund and Electric Fund are 15.3%, 13.7% & 21.3% respectively and all are exceeding the financial policy maximum for each fund. Per the Financial policy, these overages will be addressed in the next year’s budget. The City Manager may approve transfers of savings from completed CIP items to non-completed CIP items. Any transfers that cause the particular item or project to exceed its original budget 10% or greater will be communicated to Council and the Controller/Treasurer. The City Manager may approve intra-fund transfers (i.e., within the General Fund) of up to five percent per annum, with the exception of line items associated with salary and benefits. Budget amendments exceeding that authorized above or that affect budget balances shall be referred to the City Council. (Source: City of Dover Policy Manual, Budget Administration – Policy for Operating Departments, 2014). There were 2 departments that exceeded their budget, as follows: 1) The Police Department was over budget due to retro pay increases, comp-time payouts, retirements, and promotions occurring within the year. 2) The Public Services Administration Department was over budget and was attributed to salaries and pension expense due to an unanticipated mid-year pay increase. In both cases, the increase was needed to meet operational requirements of the City. F. Major Transfers The Electric Revenue Fund and Water/Wastewater Fund annually transfer a budgeted portion of their revenues to the General Fund. Transfers are also made from the Realty Transfer Tax Fund, Municipal Street Aid Fund, Electronic Red-Light Safety Program (ERLSP) Fund and Police Grant Funds to the General Fund. The purpose of these transfers is to provide routine subsidies to the General Fund for operating functions, capital project expenditures and debt service requirements. Several Special Revenue Funds represent a pass-through of revenues collected by the State of Delaware on behalf of the City or other State revenues provided for in Delaware Code. These receipts are subsequently transferred to the General Fund in support of public safety, City maintenance of State roads and other public services. Several transfers between the General Fund and the non-major governmental funds are netted in the government-wide financial statements. 69

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements G. Inventories and Prepaid Items Both inventories and prepaid items are accounted for using the consumption method. Inventories are treated as operational expenditures at the time of use rather than at the time of purchase for both the governmental and proprietary funds. Prepaid items are reflective of insurance policies and commitments due on July 1 for the following fiscal year. The warehouse inventories, consisting mostly of parts and supplies, are maintained on a perpetual inventory basis. Inventories of all funds are valued at cost and net of reserves, utilizing a weighted moving average method of valuation. The City maintains inventory reserves to charge off any damaged or obsolete items. The Electric Revenue Fund maintains fuel inventory for the generating assets on a perpetual basis and utilizes the weighted moving average method of valuation. H. Cash and Investments The City's cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the acquisition date. Investments consist of notes and bonds issued by the United States Government and its agencies, corporate debt instruments, common stock and open-end mutual funds. The fair value of investments is determined by GASB 72 Fair Value Measurements. I. Accounts Receivable Allowances for uncollectible accounts are maintained and uncollectible accounts are charged off against these allowances. The authority to write off accounts is vested with the City Council. Current balances of allowances are as follows: General Fund $475,507 Water/Wastewater Fund 83,878 Electric Revenue Fund 1,310,904 J. Restricted Assets Certain assets are restricted because their use is limited by bond covenants, endowments, or other similar third-party restrictions. Restricted assets as of June 30, 2019 total $56,415,577 including cash and cash equivalents of $7,813,061 and $48,602,516 in investments. Of this amount, $426,734 is attributed to governmental activities and $55,988,843 is attributable to business-type activities. K. Unbilled Service Receivables The City follows a policy of billing for services in accordance with billing cycle procedures. All known services rendered are billed and incorporated in the books at the end of the fiscal year. 70

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements L. Bond Accounts/Issuance Costs The City recognizes bond discounts and issuance costs in governmental funds, as well as the proprietary funds, as a current period expense in accordance with GASB 65. All unamortized bond discounts and issuance costs held by the general fund and the proprietary funds have been expensed in prior years. M. Deferred Outflows/Inflows of Resources The statement of financial position, in addition to reporting assets and liabilities, reports a separate section for deferred outflows / inflows of resources. Deferred outflows / inflows of resources represent either a consumption or acquisition of net position that applies to a future period(s) and will not be recognized as an outflow / inflow (expense / revenue) of resources until that period. The City’s deferred outflows / inflows of resources are reported on the government-wide statement of net position and proprietary funds statement of net position for pension and Other Post-Employment Benefits (OPEB). For purposes of measuring the OPEB and pension liability, deferred outflows of resources and deferred inflows of resources related to OPEB and pensions, and OPEB and pension expense, information about the fiduciary net position of the OPEB and pension plans and additions to/deductions from their fiduciary net position have been determined on the same basis as they are reported by the City of Dover’s OPEB Trust and pension systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. The OPEB and pension systems report investments at fair value. Deferred inflows of resources related to OPEB and pensions are explained in Notes 15 and 17, respectively. The City also reports unavailable revenue only in the governmental funds balance sheet, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. The governmental funds report unavailable revenues from property taxes, demolitions, general billings, grass cutting, police extra-duty, and State grants. In addition to the above deferred inflows / outflows, the City is reporting a deferred outflow of resources for asset retirement obligation on the Electric Revenue Fund, due to the retirement of the McKee Run Generating Facility. N. Fund Balances and Net Position Governmental fund balances are reported based on a hierarchy of constraints on the nature or specific purpose to which the funds can be spent. The classifications of fund balance are as follows: • The non-spendable fund balance classification includes amounts that cannot be spent either because they are in a non-spendable form or because they are legally or contractually required to be maintained intact. • The restricted fund balance classification includes amounts that can be spent only for specific purposes defined by the City Charter, the City Code, State or Federal laws, or externally imposed conditions by grantors or creditors. • The committed fund balance classification includes amounts that can be used only for specific purposes determined by the formal action by City Council through a motion or an adopted City 71

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Ordinance which is approved by a majority vote of City Council, the City’s highest level of decision-making authority. • The assigned fund balance classification includes amounts authorized and established by City Council. The City’s financial policies as adopted by City Council includes the purpose and description of all classes of fund balance. Modifications require City Council approval. • The unassigned fund balance classification includes amounts that have not met the criteria of the aforementioned fund balance classifications. The unassigned fund balance is available for expenditures as they are incurred. The general fund is the only fund that reports a positive unassigned fund balance amount. The City considers restricted, committed, or assigned amounts to have been spent when a related expenditure is incurred. Proprietary funds report net position in three categories: 1) Net investment in capital assets; 2) Restricted; and 3) Unrestricted Fund balances and net position are further explained in Note 7. O. Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. P. Net Position Flow Assumption Sometimes the City will fund outlays for a specific purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted and unrestricted net position and fund balance in the government-wide, proprietary fund, and governmental fund financial statements, a flow assumption must be made about the order in which the resources are applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position is applied. 3. DEPOSITS AND INVESTMENTS A. Cash in Bank and Cash Equivalents Custodial credit risk – deposits. The City’s depository institutions collateralize the City’s deposits over and above those covered by the $250,000 FDIC Insurance limit with specific securities, which are ‘marked to market’ daily against the aggregate balances. The market value of the collateral is at a minimum of or equal to 102% of the amount of applicable deposits. Collateral consists solely of full faith and credit obligations of the United States Government or fixed rate obligations of agencies or instruments of the United States Government. 72

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements On June 30, 2019, the carrying amount of unrestricted cash and cash equivalents totaled $17,323,411, and the bank cash balances totaled $14,272,631. The carrying amount of restricted cash totaled $7,813,061 and the bank cash balances on restricted accounts totaled $11,441,507. $2,635,825 of the bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. Fiduciary funds cash and cash equivalents carrying value of $7,997,893 included $8,015,097 of cash deposits, $613,798 of the bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. The restricted deposits are held by the City for bond related transactions, special purpose operating and capital grants. B. Investments The City Council has adopted an investment policy which is reviewed every two years and updated as needed to meet best practices. The Pension Boards have adopted their own distinct investment policies to govern the Pension Trust funds because the objectives differ from those of the City. The City’s investments are segregated from the Pension Trust investments for clarity. As of June 30, 2019, the City had the following investments: i. Investments Held by Third Party Custodian The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The City’s government wide investments are held in several different investment capacities from mutual funds and certificate of deposit with a significant investment in debt securities. • Level 1 – Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets; • Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets or identical assets or liabilities in less active markets, such as dealer or broker markets; and • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on market, exchange, dealer or broker-traded transactions. 73

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements The City recorded the following investments as of June 30, 2019: Fair Value Measurements Using: Quoted Prices Significant Weighted in Active Other Average Markets Observable Maturity for Identical Inputs Investment Type (Years) June 30, 2019 Assets (Level 1) (Level 2) Government-Wide: Investments by fair value level Debt securities: U.S. Government Treasuries 2.86 $ 27,070,612 $ - $ 27,070,612 Federal Agency Bond / Note 2.36 14,504,010 1,175,117 13,328,893 Municipal Obligations 0.63 3,809,978 - 3,809,978 Domestic Fixed Income 2.44 27,107,148 - 27,107,148 International Fixed Income 1.05 8,589,963 - 8,589,963 Certificates of Deposit 0.91 8,618,159 - 8,618,159 Federal Agency Mortgage-Backed Security 13.31 4,567,721 - 4,567,721 Total Investments by fair value level 2.73 $ 94,267,591 $ 1,175,117 $ 93,092,474 Other Investments, at amortized cost: Accrued Interest Earned 520,209 Money Market Mutual Funds & Equity Stock 882,271 Total other investments 1,402,480 Total Government-Wide Investments 95,670,071 Interest rate risk: As a means of limiting its exposure to fair value losses arising from rising interest rates the City’s investment policy limits U.S. Government securities and most other investments to a maximum maturity of 10 years from the date of purchase. Commercial Paper, Bankers’ Acceptances and Repurchase Agreements all have a much shorter investment period ranging from 90 days to 365 days. Short-term cash flow balances are invested up to one year. The portfolio’s weighted average maturity is 2.73 years. Credit risk: The City’s investment policy applies the prudent-person rule. Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital and, in general, avoid speculative investments. 74

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements As of June 30, 2019, the City’s fixed income and short-term investments carried the following S&P Global Credit Ratings as compared to the policy’s minimum ratings: Policy Minimum Percent Authorized Investments Rating Category Portfolio Ratings Allocation U.S. Government N/A AAA 28.30% U.S. Government Agency N/A AA+ to AAA 19.93% Certificates of Deposit and Short-Term A-1 Short-Term A-1 to A-1+ 9.01% Time Deposits Long-Term AA N/A Corporate Debt Issued by a US Corporation Commercial Paper A-1 N/A 0.00% Corporate Notes/Bonds A BBB+ to AAA 28.33% International Fixed Income A AAA 8.98% Repurchase Agreements ST A-1; LT AA N/A 0.00% Registered Investment Companies AAAm AAAm 1.47% (Money Market Funds) Municipal Obligations A A to AAA 3.98% Concentration of credit risk: As of June 30, 2019, United States Treasury Notes represented 28.72% of the portfolio, Federal Home Loan Bank represented 9.57% of the portfolio and Federal National Mortgage Association represented 9.42% of the portfolio. No other issuer exceeded 5% of the portfolio. ii. Investments Held by Trustee for Other Post-Employment Benefits & Pensions The Pension Trusts and OPEB Trust invest exclusively in open-end mutual funds. The fair value is measured using the net asset value (NAV) as quoted in active markets in a manner consistent with the measurement principles for investment companies calculated as of June 30, 2019. 75

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Investment Type June 30, 2019 Other Postemployment Benefits (OPEB) & Employee's Police OPEB Pension Funds (Trustee held): Plan Plan Trust Total Investments measured at the net asset value (NAV) Money market funds $ 3,662,851 $ 1,218,053 $ 1,390,668 $ 6,271,572 Fixed Income: Short-term bond funds 2,149,150 816,764 2,253,994 5,219,908 Intermediate-term bond funds 1,731,456 411,270 1,698,459 3,841,185 Long-term bond funds 2,188,524 693,087 1,530,030 4,411,641 Inflation-protected bond funds 2,156,702 683,014 1,508,091 4,347,807 High yield bond funds 2,167,511 686,456 1,894,329 4,748,296 Nontraditional bond funds 1,724,342 409,569 1,695,533 3,829,444 Total Fixed Income 12,117,685 3,700,160 10,580,436 26,398,281 Equities: Large cap value funds 3,472,885 1,099,866 3,052,289 7,625,040 Large cap growth funds 4,819,766 1,526,493 4,199,320 10,545,579 Mid-cap value funds 1,757,337 556,560 3,071,467 5,385,364 Mid-cap blend funds 1,748,366 553,710 - 2,302,076 Small-cap value funds 3,535,910 1,119,831 4,245,177 8,900,918 International growth funds 3,093,905 979,755 2,705,175 6,778,835 World stock funds 3,078,999 975,082 2,691,525 6,745,606 Diversified emerging market funds 5,292,078 1,675,881 4,626,792 11,594,751 Real estate funds 2,117,480 670,625 1,850,431 4,638,536 Total Equities 28,916,726 9,157,803 26,442,176 64,516,705 Total investments measured at the NAV $ 41,034,411 $ 12,857,963 $ 37,022,612 $ 90,914,986 76

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements The City recorded the following OPEB and Pension investments as of June 30, 2019: Quoted Prices in Active Markets for Identical Investment Type June 30, 2019 Assets (Level 1) Other Postemployment Benfits (OPEB) & Pension Funds Investments by fair value level Mutual Funds $ 90,914,986 $ 90,914,986 Other Investments at amortized Cost Money Market Mutual Funds 6,271,572 6,271,572 $ 97,186,558 $ 97,186,558 Limits on investments are as follows: Category Allocation Target Percentage Employee's Police OPEB Plan Plan Trust Cash & Short Term Bonds 11.00% 13.00% 9.00% Non-traditional Bonds 4.00% 3.00% 4.50% Inflation Protected Bonds 5.00% 5.00% 4.00% Intermediate Term Bonds 4.00% 3.00% 4.50% Long Term Bonds 5.00% 5.00% 4.00% High Yield Bond 5.00% 5.00% 5.00% Large Cap Value 8.00% 8.00% 8.00% Large Cap Growth 11.00% 11.00% 11.00% Mid Cap 8.00% 8.00% 8.00% Small Cap 8.00% 8.00% 11.00% Real Estate Investment 5.00% 5.00% 5.00% Foreign Equity 14.00% 14.00% 14.00% Emerging Markets 12.00% 12.00% 12.00% 100.00% 100.00% 100.00% Custodial Credit Risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. To avoid custodial credit risk, the City requires all investments held with a third-party custodian to be registered in the City’s name. Interest Rate Risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Pension and OPEB Plans’ investment policies do not formally address interest rate risk. As of June 30, 2019, the Pension and OPEB plans had $26,398,281 in fixed income investments. The weighted average maturity for $24,503,952 of its fixed income funds was 9.49 years, the remaining balance of $1,894,329 was not available. 77

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Credit Risk: The OPEB Plan’s investments are exposed to both market risk, the risk arising from changes in fair value, and credit risk, the risk of failure by another party to perform according to the terms of a contract. The Pension and OPEB Plan’s investment balances at June 30, 2019 consisted of open-ended mutual funds. Concentration of Credit Risk: Concentration of credit risk is the risk of loss attributable to the magnitude of an investment in a single issuer. The Pension and OPEB Plan’s investment policies do not formally address concentration of credit risk. The Pension and OPEB Plans held no positions of five percent or more in securities of any single issuer at June 30, 2019. Foreign Currency Risk is the risk that changes in the exchange rate of investments will adversely affect the fair value of an investment. As of June 30, 2019, the Pension and OPEB Plans had no investments that were denominated in foreign currency. 4. CAPITAL ASSETS A summary of the capital asset activity for the year ended June 30, 2019 is presented below and on the following page: Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated Land $ 4,688,301 $ 51,261 $ - $ 4,739,562 Construction in progress 738,629 498,417 40,927 1,196,119 Total capital assets, not being depreciated 5,426,930 549,678 40,927 5,935,681 Capital assets, being depreciated: Buildings 29,321,058 57,991 - 29,379,049 Furniture and fixtures 821,678 - - 821,678 Equipment 8,729,096 241,876 193,374 8,777,598 Vehicles 5,495,671 1,353,976 317,794 6,531,853 Lights 655,647 - - 655,647 Improvements other than buildings 55,259,173 1,831,346 - 57,090,519 Total capital assets, being depreciated 100,282,323 3,485,189 511,168 103,256,344 Less accumulated depreciation for: Buildings (6,308,166) (704,693) - (7,012,859) Furniture and fixtures (543,709) (54,735) - (598,444) Equipment (6,240,570) (515,667) 193,376 (6,562,861) Vehicles (3,989,084) (470,848) 312,798 (4,147,134) Lights (519,905) (6,648) - (526,553) Improvements other than buildings (28,990,900) (1,343,534) - (30,334,434) Total accumulated depreciation (46,592,334) (3,096,125) 506,174 (49,182,285) Total capital assets, being depreciated, net 53,689,989 389,064 4,994 54,074,059 Governmental activities capital assets, net $ 59,116,919 $ 938,742 $ 45,921 $ 60,009,740 (Continued) 78

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements (Continued) Beginning Ending Balance Increases Decreases Balance Business-type activities: Electric Revenue Fund Capital assets, not being depreciated Land $ 1,458,066 $ - $ - $ 1,458,066 Construction in progress 3,003,311 1,381,594 621,704 3,763,201 Total capital assets, not being depreciated 4,461,377 1,381,594 621,704 5,221,267 Capital assets, being depreciated Buildings 14,480,088 - - 14,480,088 Vehicles and Equipment 28,266,103 342,933 - 28,609,036 Transformers, Meters, T&D & Fiber Optic Lines, Street Lights 63,908,180 1,306,173 - 65,214,353 SS, Switch Yards, Switchgears 36,550,989 136,873 - 36,687,862 Boiler, Turbo Generators, Cap Int - VS 39,122,189 - - 39,122,189 Other (Streets, EST, Swr Lines, Wells, Eng & Legal Svcs, Land Impr) 7,662,501 - - 7,662,501 Total capital assets, being depreciated 189,990,050 1,785,979 - 191,776,029 Less accumulated depreciation for: Buildings (10,314,516) (837,801) - (11,152,317) Vehicles and Equipment (23,422,828) (1,112,652) - (24,535,480) Transformers, Meters, T&D & Fiber Optic Lines, Street Lights/Signals (35,499,747) (1,754,964) - (37,254,711) SS, Switch Yards, Switchgears (14,627,704) (1,101,706) - (15,729,410) Boiler, Turbo Generators, Cap Int - VS (24,204,794) (3,087,296) - (27,292,090) Other (Streets, EST, Swr Lines, Wells, Eng & Legal Svcs, Land Impr) (6,108,865) (192,250) - (6,301,115) Total accumulated depreciation (114,178,454) (8,086,669) - (122,265,123) Total capital assets, being depreciated, net 75,811,596 (6,300,690) - 69,510,906 Total electric revenue fund capital assets, net 80,272,973 (4,919,096) 621,704 74,732,173 Water/Wastewater Fund Capital assets, not being depreciated Land 163,240 - - 163,240 Construction in progress 912,403 5,410,322 552,483 5,770,242 Total capital assets, not being depreciated 1,075,643 5,410,322 552,483 5,933,482 Capital assets, being depreciated Buildings 2,026,662 - - 2,026,662 Pumping Stations 28,842,952 447,787 - 29,290,739 Distribution mains, hydrants, and accessories 24,293,711 159,379 - 24,453,090 Sewer Lines 33,190,813 507,535 - 33,698,348 Vehicles and equipment 7,549,513 160,744 - 7,710,257 Total capital assets, being depreciated 95,903,651 1,275,445 - 97,179,096 Less accumulated depreciation for: Buildings (894,597) (42,203) - (936,800) Pumping Stations (10,069,008) (709,408) - (10,778,416) Distribution mains, hydrant, and accessories (8,255,258) (334,324) - (8,589,582) Sewer Lines (13,605,625) (749,696) - (14,355,321) Vehicles and equipment (4,939,300) (331,221) - (5,270,521) Total accumulated depreciation (37,763,788) (2,166,852) - (39,930,640) Total capital assets, being depreciated, net 58,139,863 (891,407) - 57,248,456 Total water/wastewater fund capital assets, net 59,215,506 4,518,915 552,483 63,181,938 Total Business-type Activities $ 139,488,479 $ (400,181) $ 1,174,187 $ 137,914,111 Capital Assets, not being depreciated $ 5,537,020 $ 6,791,916 $ 1,174,187 $ 11,154,749 Capital Assets, being depreciated 133,951,459 (7,192,097) - 126,759,362 Total $ 139,488,479 $ (400,181) $ 1,174,187 $ 137,914,111 79

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 12,689 Central services 38,949 Public safety 468,965 Public works 1,984,895 Library and recreation 558,384 Financial administration 32,242 Total depreciation expense - governmental activities $ 3,096,125 80

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements 5. LONG -TERM OBLIGATIONS A. Summary of Bonded Indebtedness by Issue Original Remaining Interest Maturity Arbitrage Purpose Governmental Activities 2019 General Obligation Bonds $ 5,700,000 $ 5,700,000 2.39% 7/18/19 - 6/30/29 No Refund General Obligation Bonds Series 2012 and Series 2014 A, which funded public safety equipment and library, storm water and street infrastructure projects Business Type Activities Water/Wastewater Bonds 2000 State of Delaware - Revolving $ 750,000 $ 51,532 3.60% 10/1/00 - 4/1/20 No Wastewater Pump Station # 7 - Leipsic Loan Fund - Municipal Revenue 2009 State of Delaware - Revolving 5,581,059 3,821,547 2.00% 12/1/12 - 12/1/31 No Pump station replacements/upgrades and Loan Fund - Municipal Revenue sanitary sewer main relining 2010 State of Delaware - Revolving 2,404,017 1,593,447 2.47% 4/1/12 - 10/1/30 No Water quality improvements and main Loan Fund - Municipal Revenue replacements 2011 State of Delaware - Revolving 765,060 580,913 2.00% 6/1/12 - 12/1/31 No Pump station replacements/upgrades and Loan Fund - Municipal Revenue sanitary sewer main relining 2013 Revenue Bonds 6,125,000 4,440,000 3.58% 7/1/14 - 7/1/33 Yes Water and Wastewater capital project financing, refund 2003 Series WWW bonds 2018 State of Delaware - Revolving 2,598,099 2,598,099 2.00% 20 year term once No Water Treatment Plant Improvements Loan Fund - Municipal Revenue the project is complete 2018 State of Delaware - Revolving 112,157 112,157 2.00% 20 year term once No Replacement of 3 Pump Stations: Delaware Loan Fund - Municipal Revenue the projects are Tech, Walker Woods and Silver Lake complete (Coverage ratio on Water/Wastewater Bonds requires net revenues to be at least 1.2 times the maximum annual debt service) Electric Revenue Bonds 2018 Revenue Bonds $ 15,700,000 $ 15,700,000 3 - 5% 7/1/19 - 7/1/33 Yes Refund Electric Revenue Bonds Series 2008, which funded system expansion & upgrades (Coverage ratio on Electric Bonds requires net revenues to be at least 1.25 times the maximum annual debt service) 81

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements B. Status as of June 30, 2019 – General Obligation Bonds Long-term indebtedness of the City of Dover consists of Series 2019 General Obligation Bonds totaling $5,700,000. The total General Obligation Bonds outstanding amount includes $328,716 payable within one year. C. Change in Long-Term Debt The following tables summarize the debt transactions for the year ended June 30, 2019: i. General Long-Term Debt Payable within Item Balance 7/1/18 Additions Reductions Balance 6/30/19 One Year Police Officer Separation Agrmt $ 150,000 $ - $ 37,500 $ 112,500 $ 37,500 Compensated Absences 2,277,345 1,483,055 1,265,585 2,494,815 1,110,593 General Obligation Bonds 5,877,013 5,700,000 5,877,013 5,700,000 328,716 Net OPEB Liability 26,216,057 - 4,988,823 21,227,234 - Net Pension Liability 14,751,596 - 708,068 14,043,528 - Sub-total of General Long-Term Debt $ 49,272,011 $ 7,183,055 $ 12,876,989 $ 43,578,077 $ 1,476,809 In June 2019, the City issued General Obligation Bond Series 2019 in the amount of $5,700,000 to refund the outstanding principal of the original series 2012 and 2014A bonds. The proceeds (net of bond issuance costs), were used to satisfy all of the remaining outstanding principal on the 2012 Series bonds and 2014 A Series bonds. The City completed the refunding to reduce its total debt service payments over the next 10 years by approximately $635,000 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of approximately $290,000. ii. Enterprise Funds Debt – Water/Wastewater Fund Payable within Item Balance 7/1/18 Additions Reductions Balance 6/30/19 One Year Compensated Absences $ 230,601 $ 114,311 $ 162,543 $ 182,369 $ 87,320 Revenue Bonds-Water and Wastewater 4,795,000 - 355,000 4,440,000 360,000 State of Delaware Municipal Revenue Bond - Wastewater 4,806,555 112,157 352,563 4,566,149 361,043 State of Delaware Municipal Revenue Bond - Water 1,710,844 2,598,099 117,397 4,191,546 120,481 Net OPEB Liability 2,128,196 - 347,420 1,780,776 - Net Pension Liability 3,647,263 - 262,046 3,385,217 - Sub-total of Water/ Wastewater Fund $ 17,318,459 $ 2,824,567 $ 1,596,969 $ 18,546,057 $ 928,844 82

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements State of Delaware Water Pollution Control Revolving Fund (WPCRF) Loan and State of Delaware Drinking Water State Revolving Fund (DWSRF) The City has two New State of Delaware Revolving Fund loans that are in the process of being drawn down because the related projects are in the construction stage. Loans outstanding as of June 30, 2019 were as follows: Loan Number Interest Rate Maximum Loan Outstanding as of Amount June 30, 2019 Loan #12000090 2.0% 881,400 $112,157 Loan #21000082 2.0% 4,000,000 $2,598,099 The City’s repayment obligation is secured by a pledge of net operating revenue of the water and sewer system. Upon Completion of each project, semi-annual payments of principal and interest shall be payable in an amount sufficient to amortize the outstanding principal balance of each loan over a twenty-year term. iii. Enterprise Funds Debt – Electric Revenue Fund Payable within Item Balance 7/1/18 Additions Reductions Balance 6/30/19 One Year Compensated Absences $ 474,054 $ 277,542 $ 254,128 $ 497,468 $ 221,367 Revenue Bonds 17,890,000 15,700,000 17,890,000 15,700,000 650,000 Bond Premium - 1,154,752 - 1,154,752 - Net OPEB Liability 3,415,224 - 643,549 2,771,675 - Net Pension Liability 7,228,906 - 453,423 6,775,483 - Asset Retirement Obligation 11,915,849 - - 11,915,849 - Sub-total of Electric Revenue Fund 40,924,033 17,132,294 19,241,100 38,815,227 871,367 Sub-total of Enterprise Fund Debt 58,242,492 19,956,861 20,838,069 57,361,284 1,800,211 Grand Totals of Long-Term Debt $ 107,514,503 $ 27,139,916 $ 33,715,058 $ 100,939,361 $ 3,277,020 In August 2018, the City issued Electric Revenue Refunding Bonds, Series 2018 in the amount of $15,700,000 to refund the outstanding principal of the original series 2008 bonds. The proceeds (net of bond issuance costs), were used to satisfy all of the remaining outstanding principal on the series 2008 bonds. The City completed the refunding to reduce its total debt service payments over the next 15 years by approximately $3,614,000 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of approximately $3,024,000. The City does not receive reimbursement for debt service from any other governmental units. The City does not have any special assessment debt or defeased bonds as of June 30, 2019. In previous years, the City has used General Fund Revenues to liquidate Net Pension and Net OPEB Liabilities in the General Fund. 83

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements D. Debt Service Requirements The following are the debt service requirements to maturity on the City's general obligation bonds and revenue bonds. i. Governmental Activities: 2019 General Obligation Bonds Fiscal Year Principal Interest Total 2020 328,716 134,842 463,558 2021 335,760 126,434 462,194 2022 342,624 118,222 460,846 2023 349,632 109,842 459,474 2024 356,556 101,565 458,121 2025 364,092 92,569 456,661 2026 371,544 83,664 455,208 2027 379,140 74,576 453,716 2028 386,760 65,478 452,238 2029 2,485,176 55,843 2,541,019 Total $ 5,700,000 $ 963,035 $ 6,663,035 ii. Business-type Activities Water/Wastewater Fund 2000 Municipal Revenue 2009 Municipal Revenue 2010 Municipal Revenue 2011 Municipal Revenue Fiscal Bonds (Wastewater) Bonds (Wastewater) Bonds (Water) Bonds (Wastewater) Year Principal Interest Principal Interest Principal Interest Principal Interest 2020 51,532 1,396 271,970 75,078 120,481 40,808 37,541 20,584 2021 - - 277,437 69,611 123,646 37,643 38,905 19,219 2022 - - 283,013 64,035 126,895 34,395 40,318 17,806 2023 - - 288,702 58,346 130,228 31,061 41,783 16,341 2024 - - 294,505 52,543 133,649 27,640 43,302 14,823 2025 - - 300,424 46,624 137,160 24,129 44,875 13,250 2026 - - 306,463 40,585 140,764 20,526 46,505 11,619 2027 - - 312,623 34,425 144,461 16,828 48,195 9,930 2028 - - 318,906 28,142 148,257 13,033 49,946 8,178 2029 - - 325,316 21,732 152,151 9,138 51,761 6,364 2030 - - 331,855 15,193 156,148 5,141 53,642 4,483 2031 - - 338,526 8,522 79,607 1,039 55,592 2,534 2032 - - 171,807 1,718 - - 28,548 514 2033 - - - - - - - - 2034 - - - - - - - - Total $ 51,532 $ 1,396 $ 3,821,547 $ 516,554 $ 1,593,447 $ 261,381 $ 580,913 $ 145,645 (Continued) 84

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements ii. Business-type Activities (Continued) Water/Wastewater/Electric Revenue Funds 2013 Revenue Bonds 2018 Municipal Revenue 2018 Municipal Revenue 2018 Revenue Bonds Business- Fiscal Water/Wastewater Loan (Wastewater) Loan (Water) Electric Type Year Principal Interest Principal Interest Principal Interest Principal Interest Activities 2020 360,000 146,493 5,608 2,243 129,905 51,962 650,000 629,450 2,595,051 2021 375,000 135,469 5,608 2,131 129,905 49,364 785,000 593,575 2,642,513 2022 385,000 124,069 5,608 2,019 129,905 46,766 820,000 553,450 2,633,279 2023 395,000 112,369 5,608 1,907 129,905 44,168 865,000 511,325 2,631,743 2024 410,000 100,294 5,608 1,795 129,905 41,570 910,000 466,950 2,632,584 2025 215,000 90,919 5,608 1,682 129,905 38,971 955,000 420,325 2,423,872 2026 220,000 84,256 5,608 1,570 129,905 36,373 1,005,000 371,325 2,420,499 2027 225,000 77,106 5,608 1,458 129,905 33,775 1,055,000 319,825 2,414,139 2028 235,000 69,281 5,608 1,346 129,905 31,177 1,110,000 265,700 2,414,479 2029 245,000 60,269 5,608 1,234 129,905 28,579 1,160,000 214,750 2,411,807 2030 255,000 50,269 5,608 1,122 129,905 25,981 1,200,000 173,550 2,407,897 2031 265,000 39,869 5,608 1,009 129,905 23,383 1,240,000 136,950 2,327,544 2032 275,000 29,069 5,608 897 129,905 20,785 1,275,000 99,225 2,038,076 2033 285,000 17,869 5,608 785 129,905 18,187 1,315,000 60,375 1,832,729 2034 295,000 6,084 5,608 673 129,905 15,589 1,355,000 20,325 1,828,184 2035 - - 5,608 561 129,905 12,990 - - 149,064 2036 - - 5,608 449 129,905 10,392 - - 146,354 2037 - - 5,608 336 129,905 7,794 - - 143,643 2038 - - 5,608 224 129,905 5,196 - - 140,933 2039 - - 5,605 112 129,904 2,598 - - 138,219 Total $ 4,440,000 $ 1,143,685 $ 112,157 $ 23,552 $ 2,598,099 $ 545,601 $ 15,700,000 $ 4,837,100 $ 36,372,609 85

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements E. Certain Asset Retirement Obligation The City implemented GASB Statement No. 83 Certain Asset Retirement Obligation (ARO) during the fiscal year ended June 30, 2019. An ARO is a legally enforceable liability associated with the retirement of a tangible asset. The McKee Run Generating Station is an electric generating facility owned and operated by the City since 1972, and is scheduled to be shut down on May 31, 2021. A legal obligation exists for the City to perform future retirement activities for the decommissioning of the Mckee Run Generating Station, as the site contains hazardous and other materials that require special handling, based upon Federal Regulations and the Delaware Department of Natural Resources and Environmental Control (DNREC). Mckee Run has an estimated remaining useful life of 22 months. The City engaged a specialist to estimate the cost of decommissioning the station, and accordingly recognized a liability of $11,915,849, and deferred outflow of resources of $486,361, as of June 30, 2019. 86

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements 6. RESTRICTED NET POSITION In the government-wide financial statements the restricted net position of the governmental activities and business type activities are as follows: Governmental Activities Grants-capital projects This represents the State DOT grant $ 134,522 reported in the non-major special revenue funds. Grants-public safety These represent the Police grants, ERLSP 172,141 grant and Substance Abuse Prevention grant in the special revenue type funds. Other Purposes These represent all other funds reported in 35,622 the special revenue type, except the grants reserved for capital construction and public safety. Also included is the interest from an endowment from Mary Elizabeth Paton and the verizon reserve. Total Restricted Net Position $ 342,285 Business Type Activities Net restricted position for construction purposes - expendable Water/Wastewater Restrictions on investments $ 6,773,920 imposed by bond covenants Electric Restrictions on investments 47,579,291 imposed by bond covenants Total Restricted Net Position $ 54,353,211 7. FUND BALANCES & NET POSITION In the governmental fund financial statements, fund balances are reported based on a hierarchy of constraints on the specific purposes for which the funds can be spent. Non-spendable fund balances represent items that are not in spendable form and not expected to be converted to cash. This criterion also applies to the corpus of permanent funds, which would include the Mary Elizabeth Paton library endowment. Restricted fund balances represent amounts that have externally imposed restrictions by creditors, grantors, enabling legislation or laws and regulations of other governments. The fund balances of the City’s grant funds fall into this category, as well as a couple of accounts that have contractual restrictions imposed by a third party. Committed fund balances represent amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of City Council through a motion or an adopted city ordinance. These amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action to which it previously committed the amount. 87

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Assigned fund balances represent amounts constrained by the City’s intent to be used for specific purposes. These amounts represent the City’s capital asset appropriations. The constraints placed on assigned fund balances are implemented through internal processes such as a budget ordinance or motion of City Council. Therefore, assigned fund balances do not have the same restrictive nature as a restricted fund balance. Unassigned fund balance is the residual amount that has not met the criteria for the previously mentioned classifications. The unassigned fund balance is available for expenditures as they are incurred. The General Fund is the only fund that reports a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. The composition of the City fund balances as of June 30, 2019 follows: Other General Governmental Fund Funds Total Fund balances: Nonspendable: Inventory & Prepaids $ 213,380 $ - $ 213,380 Patronage Stock 16,594 - 16,594 Library Endowment 5,000 - 5,000 Subtotal Nonspendable: 234,974 - 234,974 Restricted for: Library Endowment Interest 2,199 - 2,199 Verizon cable franchise 24,871 - 24,871 Highway resurfacing - 142,092 142,092 ERLSP - 100 100 CDBG - 882 882 Substance Abuse Prevention - 88,556 88,556 Municipal Street Aid - 100 100 Police Grants - 83,485 83,485 Subtotal Restricted for: 27,070 315,215 342,285 Committed to: Contingency 770,914 - 770,914 Parkland 277,073 - 277,073 Subtotal Committed to: 1,047,987 - 1,047,987 Assigned to: Capital Projects 4,320,615 - 4,320,615 Unassigned 7,118,240 - 7,118,240 Total fund balances $ 12,748,886 $ 315,215 $ 13,064,101 As noted in the Introductory section of this report (page 9), the City has established the “City of Dover, Delaware Financial Policies” booklet, which is a standardized set of principles managed by the Finance Department to ensure that the City follows the minimum fund balance policies. 88

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements 8. PROPERTY TAXES Property taxes are levied under the authority of the City Charter on all real property located within the City limits. The City Assessor oversees the property assessments and the City Council levies the property tax rate. The following table provides important dates with reference to property taxes. Beginning of fiscal year for taxes July 1 Tax rate levied 2nd Council Meeting in June Taxes billed July 1 Taxes due and payable at par July 31 Penalty of one and one-half percent starts August 1 Lien established on property for property taxes July 1 Tax sales of property with unpaid taxes 2 years from date of billing As of June 30, 2019, there were no material delinquent taxes. 9. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of June 30, 2019 follows: A. Due to/from other funds – Charges and Allocations Receivable Fund Payable Fund Amount General Fund Non-Major Governmental Funds $ 37,729 Water/Wastewater Fund 279,794 Electric Revenue Fund 11,020 328,543 Water/ Wastewater Fund General Fund 1,146 Electric Revenue Fund General Fund 1,481,469 Water/Wastewater Fund 335,853 1,817,322 Total $ 2,147,011 B. Due to/from other funds – Temporary Advances Receivable Fund Payable Fund Amount Electric Fund General Fund $ 4,000,000 The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. 89

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements C. Interfund Transfers Transfers In - Electric Transfers Out General Fund Revenue Fund Total Non-Major Governmental Funds $ 2,953,381 $ - $ 2,953,381 Water/ Wastewater Fund 1,000,000 298,000 1,298,000 Electric Revenue Fund 10,000,000 - 10,000,000 General Fund - 200,000 200,000 Total $ 13,953,381 $ 498,000 $ 14,451,381 Transfers are generally made to provide operating capital or debt service subsidies to the receiving fund in accordance with City policy. 10. RENTAL INCOME The City is the lessor in two active lease agreements related to its Garrison Oak Business & Technology Center that result in miscellaneous revenue reported in the General Fund. The first lease is with LS Power – White Oak Solar Energy LLC, which generated $66,195 in rental income, and the second lease is with Garrison Energy Center which generated $34,223 in rental income. The City’s Electric Revenue Fund owns a professional office building which houses the City’s Customer Service, Finance and Information Technology Departments. Lease revenue is $116,267 in the Electric Revenue Fund consisting of office space rental of $18,150, substation rental of $30,000 and pole attachment rentals of $68,117. The City maintains several water tower leases for a group of telecommunications companies. The transactions are recorded as revenue in the Water/Wastewater Fund and totaled $399,849 in the fiscal year ended June 30, 2019. 11. MATERIAL COMMITMENTS A. The City is the guarantor on one loan for the Dover Fire Department, a separate entity from the City of Dover. The City also budgets financial contributions to assist the volunteer fire company with the acquisition of firefighting apparatus. The current fiscal year includes $145,614 in expenditures for Ladder #1, and $71,199 for Pierce Enforcer Pumper Engine in the Governmental Capital Projects Fund budget. B. The City entered into a three-year management contract with The Energy Authority effective July 1, 2016 to provide a market-based approach for power supply management. The City has extended the contract through June 30, 2022. The Energy Authority manages energy purchases and utilizes the City’s generating assets to provide a level of rate stability and to mitigate the effects of volatility in the energy markets. C. The City also entered into a management contract with North American Energy Services (NAES) to operate and maintain the generating assets of the electric utility in May 2006. The City extended the contract with NAES through June 30, 2021. The City has incorporated the budgets and financial activity of the generating assets into its procedures used for all other divisions of the electric utility. These procedures include a line item budget and adherence to City policies. All personnel are employed by NAES and personnel costs are billed to the City bi-weekly. Any capital improvements are included in the City’s capital improvement plan. The contract also provides for a monthly management fee and a 90

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements performance incentive based on budget and plant performance. The cost estimate for annual management fees and incentives totals $759,607 in fiscal year 2019 and is included in the plant operating budget. D. The City is the guarantor on two $1.3 million loans held by the Downtown Dover Partnership. The loans are secured by two parcels in the downtown business district that the Downtown Dover Partnership is marketing for its redevelopment initiative. The principal and interest on both loans is paid monthly from rental receipts the Partnership receives from its current tenants on the properties. E. The City owes $112,500 to a former employee of the City due to a separation agreement. The former employee is owed this money over the next 3 years. 12. FORWARD CONTRACTS Pursuant to the July 1, 2011 Energy Management Agreement between the City and The Energy Authority (TEA), the City has formed an Executive Risk Management Committee (ERMC). The ERMC has adopted a Governing Policy for Energy Commodity Risk Management (Policy) aimed at addressing the energy commodity risks and the Procedures and Controls Manual for Energy Commodity Risk Management (Procedures Manual). The Procedures Manual further describes the risk management philosophy under which TEA, the City’s designated provider of energy risk management services conducts its activities. The Procedures Manual authorizes TEA to enter into physical forward transactions which shall be governed by Edison Electric Institute (EEI), North American Energy Standards Board (NAESB), or similar agreements with counterparties approved by the City. These agreements will enable the City to hedge the forward price of purchased power, natural gas or fuel oil for delivery as needed to meet its load requirements. No speculative transactions for volumes in excess of forecasted power and fuel needs are permitted. TEA also provides advisory services to the City to determine the extent to which financial hedges would mitigate market and credit risk to the benefit of the City. These contracts meet the definition of a derivative instrument as defined by GASB Statement No. 53, Accounting and Reporting for Derivative Instruments (GASB 53). However, these contracts meet the normal purchases and sales exemption of GASB 53 as the City intends to use the physical commodity in its normal utility operations to supply energy to its customers. Accordingly, these contracts are not within the scope of GASB 53 and are not recorded on the City’s Statement of Net Position. Under the Procedures manual the City will not extend credit to any potential counterparty that has a credit rating below investment grade (defined as BBB as rated by S&P Global Ratings or Baa2 as rated by Moody’s Investors Service). Any counterparty that is unrated by either S&P or Moody’s must be approved by the ERMC prior to the execution of any trading activities. Credit risk is mitigated using collateral thresholds, credit limits, maximum nominal exposure and term limitations. A collateral threshold is the amount of unsecured credit granted to the counterparty. Unsecured credit exposure includes amounts owed by the counterparty, whether billed or not, and the marked-to-market differences in value of any collateral held. Any net exposure above the collateral threshold will require the posting of collateral by the counterparty. Collateral thresholds, term limitations and credit exposure limits are subject to maximums as established by the ERMC. 91

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements A summary of the contracts outstanding as of June 30, 2019 are as follows: Counterparty Credit Risk (in 1,000’s) Maximum Amount Counterparty or of Loss due to Counterparty Counterparty Guarantor Credit Line Availability Credit Risk w/o Collateral Description Threshold Rating Respect to Collateral ($) No Collateral if exposure under specified AEP Energy Partners, Inc. BBB+ $10,000 $10,648 ($648) threshold No Collateral if exposure under specified Barclays Bank, PLC BBB+ $10,000 $10,000 $0 threshold No Collateral if exposure under specified BP Energy Company A- $15,000 $15,694 ($694) threshold $10,000 guaranty from Citigroup Global Citigroup Energy, Inc. BBB+ $7,000 $7,000 $0 Markets Holdings, threshold is $7,000 Threshold is $18 million unless guarantor's EDF Trading North America, LLC BBB $18,000 $18,000 $0 credit rating falls below Baa3 No Collateral if exposure under specified Exelon Generation Company, LLC BBB $30,000 $30,000 $0 threshold Up to $15,000 is guaranteed by Macquarie Macquarie Energy, LLC A $15,000 $15,496 ($496) Bank Limited Unlimited guaranty from Morgan Stanley, Morgan Stanley Capital Group, Inc BBB+ $10,000 $14,088 ($4,088) threshold set by table in contract Guaranty from NextEra Energy Capital NextEra Energy Marketing, LLC. BBB+ $10,000 $23,333 ($13,333) Holdings, threshold set by table in contract NJR Energy Services Company NR No threshold $0 $0 No Specified threshold PJM Settlement, Inc. AA No threshold $0 $47 No Specified threshold PSEG Energy Resources & Trade, LLC BBB+ $5,000 $4,816 $184 $5,000 guaranty from PSEG Power LLC Unlimited guaranty from AGL Resources Sequent Energy Management, L.P. BBB+ $5,000 $5,000 $0 (now Southern Company Gas), threshold is $5,000 92

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements 13. INSURANCE A. Health Insurance – State of Delaware The City participates in the State of Delaware Health Insurance Program. The State offers four health plan options. The administration of benefits is coordinated with Aetna and Highmark Delaware. Pre-determined premiums consisting of City and employee contributions are subsequently paid to the State of Delaware. B. Workers’ Compensation Fund – Self-Insurance On July 1, 1990, the City began self-insuring its Workers’ Compensation insurance. For this purpose, the City has established a separate fund. Claims are processed and administered by a third-party administrator. The City manages the revenue and expenditures in this fund and maintains all records. The City maintains a fund balance reserve to cover any claims incurred but not reported. AMI Risk Consultants completed an updated valuation in fiscal year 2014. As of June 30, 2019, $490,800 is reserved for open claims in this fund. An appropriate umbrella policy for the excess coverage has been purchased and is in effect as of June 30, 2019. Workers’ Compensation activity is recorded in the General Fund as follows: 2019 2018 Claims payable, beginning of year $ 598,030 $ 751,659 Claims incurred (476,461) 239,594 Payment of claims 369,231 (393,223) Claims payable, end of year $ 490,800 $ 598,030 C. Other than Health or Workers’ Compensation Insurance The City purchases commercial insurance policies to cover risks not insured through self- insurance funds. The City has designated a contingency account to provide for uninsured losses (See Note 7). There have been no significant reductions or settlements exceeding coverage in the past five fiscal years. 14. COMPENSATED ABSENCES The City grants a specific number of vacation days with pay to its employees. Upon termination or retirement, an employee is paid for accumulated vacation days. The City also grants one paid sick day per month to all employees, except for employees covered by the International Brotherhood of Electric Workers (IBEW) contract. The IBEW employees are granted eleven sick days per year. The City of Dover follows a terminal leave policy which varies with each of the four labor unions as well as the non-bargaining group. The maximum accumulated sick days paid upon retirement is 150 days for 25 years of service. No accrued sick leave is paid when an employee is terminated. 93

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements In the government-wide and proprietary fund financial statements, unpaid compensated absences are recorded as a liability as the vested employees' benefits accrue, to the extent it is probable that the employee will be paid for sick benefits at retirement. In governmental funds, compensated absences are recorded as expenditures as payments become due; accordingly, no liability is recorded in the Governmental Funds statement. Typically, the General Fund has been used in prior years to liquidate the liability for compensated absences recorded in governmental activities. 15. OTHER POST-EMPLOYMENT BENEFITS Plan Description On May 11, 2009, the City of Dover Other Post-Employment Benefits Trust (OPEB Trust) was established pursuant to Section 115 of the Internal Revenue Code. Policy for and management of the OPEB benefits provided to retirees are the responsibility of the City of Dover. No stand- alone financial report is issued for the OPEB Trust. The City of Dover OPEB Plan is a post-retirement employee benefit program established for the purpose of funding retiree health care as provided for in Chapter 80, Article IV, Division 5 of the City Ordinances. The OPEB Trust is a single-employer defined benefit plan. The OPEB Trust provides retirement medical coverage to pensioners and their eligible dependents in the City of Dover defined benefit and defined contribution pension plans. Plan Administration Management of the plan investments are fully vested with the City of Dover OPEB Board as established in the City Code, which consists of seven members - three elected by plan members, two Council members appointed by the Council President, the City Controller/Treasurer, and the City Manager. The City Controller/Treasurer serves as an ex-officio member. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. The City purchases health insurance from the State of Delaware through a cooperative purchasing arrangement permitted by State Code. The State Office of Benefits provides the City with the medical insurance premiums by type of coverage and carrier during the budget cycle each year. The City also pays a five percent risk premium and contract administration fee for each contract in addition to the premium. Any premiums paid over or under the benefits paid out for City employees revert to the State. Membership of the plan consisted of the following at June 30, 2019: Retirees and beneficiaries receiving benefits 267 Terminated plan members entitled to but not yet receiving the benefits 10 Active plan members 324 Total 601 Substantially all City employees become eligible for post-retirement benefits if they reach retirement age while working for the City. The costs of providing these benefits are shared between the City and the retired employee. 94

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Employee Benefits and Contributions The City maintains contracts with each of the following collective bargaining units. • The International Brotherhood of Electric Workers (IBEW) union contract period is July 1, 2017 through June 30, 2020. • The American Federation of State, County, and Municipal Employees (AFSCME), Council 81 contract period is July 1, 2017 through June 30, 2020. • The Fraternal Order of Police Lodge #15 (FOP) union contract period is July 1, 2018 through June 30, 2021. • The Dover Organization of Employees (DOE) union contract period is July 1, 2018 through June 30, 2021. The eligibility provisions for early retirement are as follows: SUMMARY OF PRINCIPAL PLAN PROVISIONS Benefits for Civilians: A. Covered Groups: Full-time DOE (formerly IUE), IBEW, AFSCME and non-union employees and their dependents are covered. B. Eligibility: Satisfaction of either of the following eligibility requirements: 1. Unreduced Retirement: Attainment of the earlier of the following conditions: a. Later of attainment of age 65 and completion of 10 years of service. b. If hired prior to May 1, 1994, later of attainment of age 50 and completion of 20 years of service. c. If hired prior to May 1, 1994, completion of 25 years of service. d. If hired on or after May 1, 1994, later of attainment of age 55 and completion of 80 points (age plus service). 2. Reduced Retirement: For DOE, AFSCME and non-union members hired prior to July 1, 1994, attainment of age 55 and completion of 10 years of service. Other members who meet this condition have the option to pay 100% of the premiums for coverage. 3. Vested Termination: For DOE, AFSCME and non-union members hired prior to July 1, 1994, completion of 10 years of service. Coverage commences upon attainment of age 65. Coverage is not available to other members. 4. Active Death: Surviving spouses of members eligible for an unreduced pension upon death or for DOE and non-union members hired prior to July 1, 1994, completion of 10 years of service. C. Premium Cost Sharing: Cost-sharing varies by employee group, date of retirement and/or date of hire as follows: 1. Non-Union Employees: a. None if retired prior to July 1, 1991 b. 0% for individual coverage and 25% for spouse coverage if retired on or after July 1, 1991 and prior to July 1, 2012 (Continued) 95

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements SUMMARY OF PRINCIPAL PLAN PROVISIONS (Continued) c. 15% for individual and spouse coverage if retired on or after July 1, 2012 2. DOE Employees: a. None if retired prior to September 1, 1991 b. 0% for individual coverage and 25% for spouse coverage if retired on or after September 1, 1991 and prior to June 1, 2013 c. 15% for individual and spouse coverage if hired prior to December 22, 2015, upon direct retirement with an unreduced pension d. 20% for individual coverage if hired on or after December 22, 2015, upon direct retirement with an unreduced pension. The retiree will have the option to purchase dependent coverage under the City’s group rate plan at full cost to the employee/retiree. 3. IBEW Employees: a. 0% for individual coverage and 25% for spouse coverage if hired prior July 1, 1986 b. 0% for individual coverage and 100% for spouse coverage if hired on or after July 1, 1986 and prior to July 1, 2014 c. 20% for individual coverage and 100% for spouse coverage if hired on or after July 1, 2014 4. AFSCME Employees: a. 0% for individual coverage and 25% for spouse coverage if retire prior to July 1, 2015 b. 15% for individual and spouse coverage if hired prior to May 20, 2014 and retire on or after July 1, 2015 c. 20% for individual coverage and 100% for spouse coverage if hired on or after May 20, 2014 D. Benefit Duration: Retiree coverage is provided for lifetime. Spouse coverage is provided for the spouse’s lifetime. E. Medicare Part B Reimbursement: Eligible retirees receive reimbursement of the Medicare Part B premium. The Medicare Part B standard premium was $135.50 for 2019; for 2018 the average premium was $111.0, and the standard premium was $134.0. Spouses are not eligible for the reimbursement. Eligible retirees are: 1. Non-union and AFSCME employees who were hired prior to July 28, 2009. 2. IBEW employees who retired prior to July 1, 2009. 3. DOE employees who retired prior to January 31, 2010. Benefits for Police Officers: A. Covered Groups: Full-time FOP employees and their dependents are covered. Only provisions for members hired on after September 1, 1982 are shown. B. Eligibility: Satisfaction of either of the following eligibility requirements: 1. Unreduced Retirement: Attainment of the earlier of the following conditions: a. Later of attainment of age 62 and completion of 10 years of service. b. Completion of 20 years of service. c. Later of completion of 10 years of service and 75 points (age plus service). 96

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements 2. Reduced Retirement: Not applicable. 3. Vested Termination: None. 4. Active Death: Surviving spouses of members eligible for an unreduced pension upon death. C. Premium Cost Sharing: 1. None if retired prior to July 1, 1991 2. 0% for individual coverage and 25% for spouse coverage if retired on or after July 1, 1991 and prior to July 1, 2012 3. 15% for individual and spouse coverage if retire on or after July 1, 2012. 4. Employees hired on or after October 9, 2015, contribute 20% for individual coverage. The retiree will have the option to purchase dependent coverage under the City’s group rate plan at full cost to the employee/retiree. D. Benefit Duration: Retiree coverage is provided for lifetime. Spouse coverage is provided for the spouse’s lifetime. E. Medicare Part B Reimbursement: Eligible retirees receive reimbursement of the Medicare Part B premium. The Medicare Part B standard premium was $135.50 for 2019; for 2018, the average premium was $111.0, and the standard premium was $134.0. Spouses are not eligible for the reimbursement. Eligible retirees are members who retired prior to September 30, 2006. Employer Contributions: The City of Dover funds the other post-employment benefits for current retirees on a pay-as-you- go basis along with funding for future benefits at a rate that is approved in the annual budget, but not actuarially determined. Additional funding has also been provided on an ad hoc basis. The employer contributions towards retiree health care premiums this fiscal year are as follows: General Government $ 4,373,985 Water/Wastewater Fund 293,954 Electric Revenue Fund 779,489 Total Contributions $ 5,447,428 Transactions are recorded in the OPEB Trust for the payment of administrative and investment expenses and financed through investment earnings. City appropriations and other employer contributions for health care are recorded in the OPEB Trust. The OPEB Board of Trustees is responsible for the management of the trust investments. Contributions The contribution rates for the employer are established annually by the budgeting process of the City. Those rates include an employer contribution based on projected pay-as-you-go financing requirements as a percent of premiums, with an additional amount to prefund benefits, which is not actuarially determined. For the year ended June 30, 2019, the City’s average contribution rate was 27.8% of covered payroll of $19,580,134. 97

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements The components of the Net OPEB liability of the City at June 30, 2019, are as follows: Other Post Employment Benefits Fund Changes in Net OPEB Liability Increase Total (Decrease) OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Changes in Net OPEB Liability (a) (b) (a) - (b) Balances as of June 30, 2018 $ 66,118,639 $ 34,359,162 $ 31,759,477 Changes for the year: Service cost 1,201,696 - 1,201,696 Interest 4,287,917 - 4,287,917 Differences between expected and actual exp (5,152,216) - (5,152,216) Effect of assumption changes or inputs 1,311,796 - 1,311,796 Benefit payments (2,748,016) (2,748,016) - Employer contributions - 5,447,428 (5,447,428) Net investment income - 2,184,357 (2,184,357) Trust administrative expenses - (2,800) 2,800 Balances as of June 30, 2019 $ 65,019,816 $ 39,240,131 $ 25,779,685 Plan Fiduciary Net Position as % of total OPEB Liability 60.4% Actuarial Methods and Significant Assumptions The total OPEB liability was determined by an actuarial valuation as of July 1, 2017 with liabilities projected to the June 30, 2019 measurement date, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Rate of return. For the year ended June 30, 2019, the annual money-weighted rate of return on investments, net of investment expense, was 7.87%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested. Actuarial cost method Entry Age Normal Level % of Salary Amortization method Level Dollars Amortization period 29 years Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Inflation 2.5% per year included in payroll growth Healthcare cost trend rates Pre-65 Medical / Rx Initial rate of 8.0% decreasing by 0.5% annually to an ultimate rate of 4.5% 98

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Post-65 Medical / Rx Initial rate of 8.0% decreasing by 0.5% Annually to an ultimate rate of 4.5% Mortality RPH-2018 Total Dataset Mortality Table fully generational using Scale MP-2018 for all employees Changes in Actuarial Assumptions or Methods The long term expected rate of return on OPEB plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2019 are summarized in the following table: OPEB Trust Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash & Short-Term Bond 9.00% 0.50% Fixed Income 22.00% 3.55% Equity 64.00% 8.26% Real Estate 5.00% 7.96% Alternatives 0.00% 0.00% Long-Term Expected Rate of Return 6.51% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. Discount Rate The discount rate used to measure the total OPEB liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability as of June 30, 2019, calculated using the discount rate of 6.50%, as well as what the City’s net OPEB liability would be if it were calculated using a 99

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. Other Post-Employment Benefits 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net OPEB liability $ 34,687,013 $ 25,779,685 $ 18,512,409 Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate The following presents the net OPEB liability as of June 30, 2019, calculated using the health care trend rates assumed and what it would be using 1% higher and 1% lower health care trend rates: Health Care Trend Rates Assumptions 1% Current 1% Decrease Trend Rate Increase Net OPEB liability $ 18,202,036 $ 25,779,685 $ 35,106,011 • The current health care trend rate starts at an initial rate of 8.0% decreasing to an ultimate rate of 4.5%. • The 1% decrease in health care trend rates would assume an initial rate of 7.0%, decreasing to an ultimate rate of 3.5%. • The 1% increase in health care trend rates would assume an initial rate of 9.0%, decreasing to an ultimate rate of 5.5%. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2019, the City recognized OPEB expense (credit) of ($925,840) as calculated in the following table: OPEB Expense Service cost $ 1,201,696 Interest 4,287,917 OPEB plan administrative expenses 2,800 Projected earnings on OPEB plan investments (2,319,606) Current period recognition of deferred outflows/(inflows) of resources Differences between expected and actual experience (2,928,710) Differences between projected and actual earnings on plan investments (324,746) Changes of assumptions (845,191) Total OPEB Expense $ (925,840) 100

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements At June 30, 2019, the City reported deferred outflows (inflows) of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows Deferred Outflows (Inflows) of Resources Differences between expected and actual experience $ - $ (9,158,731) Changes in assumptions 1,049,437 (2,215,098) Net difference between projected and actual earnings on OPEB plan investments - (657,425) Total Deferred Outflows (Inflows) of Resources $ 1,049,437 $ (12,031,254) Amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Year Ending June 30: 2020 $ (4,098,647) 2021 (4,098,643) 2022 (2,043,492) 2023 (741,035) Separate Other Postemployment Benefit fund financial statements have not been issued; accordingly, they are presented as required by GASB Statement No. 34, as follows: The City of Dover, Delaware Schedule of Other Postemployment Benefits Trust Fund Net Position June 30, 2019 Other Postemployment Benefit Trust Fund ASSETS: Cash and cash equivalents $ 2,085,721 Receivables 137,500 Investments at Fair Value - Mutual Funds 37,022,611 Total Assets 39,245,832 LIABILITIES: Accounts Payable 5,701 Total Liabilities 5,701 NET POSITION: Net Position Restricted for Retiree Health Benefits $ 39,240,131 101

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements The City of Dover, Delaware Schedule of Changes in Other Postemployment Benefits Trust Fund Net Position June 30, 2019 Other Postemployment Benefit Trust Fund ADDITIONS: Net Investment Income $ 2,184,357 City's Contribution-Payroll Based 2,231,228 City's Contribution-Lump Sum 3,216,200 Total Additions 7,631,785 DEDUCTIONS: Benefit Payments 2,748,016 General Administration 2,800 Total Deductions 2,750,816 Change in Net Position Net Position - Beginning 4,880,969 Net Position - Ending 34,359,162 $ 39,240,131 16. DEFERRED COMPENSATION PLAN Effective November 14, 1983, the City added a self-directed 457 Deferred Compensation Plan to its employee benefit options. The plan is administered by the International City Management Retirement Corporation (RC). The assets are held in the name of each participant with the ICMA (International City/County Management Associations) Retirement Trust. Employees are eligible to make contributions to the plan not to exceed the ceiling set by federal regulations. The City later added an alternative investment option for the Deferred Compensation Plan with Nationwide Retirement Solutions. In May 1994, the City offered the 457 Deferred Compensation Plan to employees as their pension plan in lieu of participation in the General Employee Pension Plan. At that time 41 employees opted out of the Defined Benefit Pension Plan and enrolled in the Deferred Compensation Plan. The ICMA 457 Deferred Compensation Plan has assets of $9,394,178 (market value) as of June 30, 2019, with 151 active employees contributing $473,810. The Nationwide plan has assets of $3,429,063 (market value) as of June 30, 2019 with 15 active employees contributing $107,499. Quarterly statements are mailed to each participant by the plan administrators. All administration fees are borne by the participants. All contributions are 100% vested upon election of the plan. Employees are eligible to withdraw or rollover to another plan the employer and employee benefits upon separation of service. Withdrawals prior to age 59½ could be subject to penalty. Employees who participate in the defined benefit plan are also eligible for the 457 Deferred Compensation Plan. No matching employer contribution is made to the 457 Deferred Compensation Plan. As of June 30, 2019, there are 374 employees eligible to enroll in the 457 Deferred Compensation Plan. 102

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements 17. RETIREMENT PLANS The City participates and/or manages four retirement plans on behalf of its employees. Three of the pension plans are defined benefit plans and one is a defined contribution plan. Two of the defined benefit plans are closed to new hires. All full-time employees are required to enroll in a pension plan. During fiscal year 2019, the total wages were $20.6 million, and the total pensionable wages were $20.1 million for all full-time employees. The number of employees eligible for pension benefits as of June 30, 2019 is 374. Following is the total of the City of Dover’s pension liabilities, pension assets, deferred outflows of resources and deferred inflows of resources related to pensions, and the pension expense and expenditures for the fiscal year ended June 30, 2019: 2019 Police General DPERS Total Pension Assets $ 14,294,532 $ 44,707,648 $ 30,956,514 $ 89,958,694 Pension Liabilities 18,207,829 63,058,424 32,896,671 114,162,924 Net Pension Liabilities 3,913,297 18,350,776 1,940,155 24,204,228 Deferred Outflows of Resources - 811,879 3,596,263 4,408,142 Deferred Inflows of Resources (135,912) (855,431) (1,152,604) (2,143,947) Pension Expense 131,616 2,228,697 1,173,558 3,533,871 A. Defined Contribution Plan Effective July 1, 2000, the City implemented an IRC 401a Money Purchase Plan “401a Plan,” a self-directed defined contribution plan, as an alternative for pension benefits. The contribution and funding requirements of the plan are both established and amended by the City. The plan is administered by the International City Management Retirement Corporation (RC). The assets are held in the name of each participant with the ICMA (International City/County Management Associations) Retirement Trust. Quarterly statements are mailed to each participant by RC. All administration fees are borne by the participants. All eligible employees not represented in a bargaining unit may contribute to the 401a Plan from the minimum of 3% to the maximum of 6% of pensionable wages. The City provides a dollar-for- dollar match of the contribution to the 401a Plan, not to exceed 6%. The City provides an additional dollar-for-dollar match into the 401a Plan if the employee contributes to their 457 Plan, up to a maximum of 3% for a total matching contribution not to exceed 9%. (see note 17 – Deferred Compensation Plan). The Dover Organization of Employees (DOE) union contract renewed effective July 1, 2018 through June 30, 2021. The contract changed the mandatory minimum employee contribution (MMEC) as well as the City’s minimum matching contribution as follows: Minimum Effective Date Employee Contribution City’s Match (Up To) March 27, 2016 4% 7% July 1, 2016 5% 8% July 1, 2017 6% 9% 103

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements All other employees, except for FOP members, must contribute 3% of pensionable wages into the 401a Plan. The City matches the 3% contribution into the 401a Plan. The City provides an additional dollar-for-dollar match into the 401a Plan if the employee contributes to their 457 Plan, up to a maximum of 3% for a total matching contribution not to exceed 6%. (see note 16 – Deferred Compensation Plan). The 401a Plan and 457 Plan contributions are calculated on base wages plus on-call pay, pay adjustments, and scheduled overtime. All full-time regular employees are eligible, excluding law enforcement personnel. Personnel that have elected the defined contribution plan are not eligible for the defined benefit plan. All contributions are 100% vested upon election of the plan. To be eligible for benefit payments, the participant must meet the same eligibility requirements as the participants in the defined benefit plan. Employees are eligible to withdraw or rollover to another plan the employer and employee benefits upon separation of service. Withdrawals prior to age 59 ½ could be subject to penalty. As of June 30, 2019, there were 154 full-time employees enrolled in the 401a plan. The City contributed a total of $425,960 on wages of approximately $6.9 million. Employees contributed $304,674 to the 401a Money Purchase Plan. The market value of the 401a plan assets totaled $7,349,926 as of June 30, 2019. B. Defined Benefit Plans The City participates in three defined benefit pension plans: City of Dover Police Pension Plan (closed), City of Dover General Employee Pension Plan (closed), and State of Delaware County and Municipal Police Pension Plan. The City of Dover Police Pension Plan, a single employer defined benefit plan, covers all uniformed police officers hired prior to September 1, 1982. The City of Dover General Employee Pension Plan, a single employer defined benefit plan, covers all eligible full-time permanent employees, other than police officers hired prior to September 29, 2009. The State of Delaware County and Municipal Police Pension Plan, a multi- employer cost sharing defined benefit plan, covers all uniformed police officers hired on or after September 1, 1982. The City makes employer contributions to all three plans. The City holds, on behalf of the Pension Boards of Trustees, the assets of the two single-employer defined benefit plans and, accordingly, is required to prepare pension trust fund financial statements using the accrual basis of accounting. Investments are reported at fair value based on quoted market prices. Receivables and payables represent year end accruals of short-term receipts or charges. The administration of plan assets for both the Police Pension Plan and the General Employee Pension Plan is conducted by the Pension Boards as described in the subsequent disclosures. 104

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Separate pension fund financial statements for the City Police Pension and General Employees’ Pension Plan have not been issued; accordingly, they are presented as required by GASB Statement No. 34, as follows: The City of Dover, Delaware Combining Schedule of Pension Trust Fund Net Position June 30, 2019 Police General Pension Pension Totals ASSETS: Cash and cash equivalents $ 1,380,039 $ 3,673,686 $ 5,053,725 Investments at fair value - Mutual Funds 12,857,963 41,034,412 53,892,375 Receivables 116,650 - 116,650 Total Assets 14,354,652 44,708,098 59,062,750 LIABILITIES: Accounts Payable (60,120) (450) (60,570) Net position held in trust for pension benefits $ 14,294,532 $ 44,707,648 $ 59,002,180 The City of Dover, Delaware Combining Schedule of Changes in Pension Trust Fund Net Position For the Year Ended June 30, 2019 Police General Pension Pension Totals Additions Net investment income $ 819,535 $ 2,765,264 $ 3,584,799 City's contribution - payroll based - 2,703,583 2,703,583 City's contribution - lump sum 585,000 - 585,000 Employee contribution - 190,030 190,030 State contributions 512,151 - 512,151 Total Additions to Net Position 1,916,686 5,658,877 7,575,563 Deductions Benefit payments 1,517,190 4,032,800 5,549,990 General administration 5,093 18,849 23,942 Total Deductions From Net Position 1,522,283 4,051,649 5,573,932 Change in net position 394,403 1,607,228 2,001,631 Net Position - Beginning 13,900,129 43,100,420 57,000,549 Net Position - Ending $ 14,294,532 $ 44,707,648 $ 59,002,180 Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each plan are recognized when due, pursuant to formal commitments, to provide contributions. Benefits or refunds are recognized when due and payable in accordance 105

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements with the terms of each plan. Investment management and consultant fees are paid from the Pension Trust Funds. All actuarial costs are paid from other City funds. i. City of Dover Police Pension Plan Plan Description This contributory pension plan began on January 1, 1970 under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71 through 62-84. The contribution and funding requirements of the plan are established by the City and may be amended by the City Council. It is a closed plan. The last active employee retired June 29, 2006. An officer’s pension right is vested upon the completion of 15 years of continuous service. As of June 30, 2019, there are 46 retirees and beneficiaries receiving benefits. Fully vested employees who have completed 20 to 25 years of continuous service are entitled to annual benefits equal to 2.5% of their average earnings for each year of continuous service. The maximum benefit is 62.5% of average earnings. If a participant terminates after completing 15 years of service, the participant will be eligible for a deferred benefit commencing at age 60 with a benefit accrued at the date of termination. In place of this vesting, participants may elect to receive their accumulated contributions. Disability benefits are paid to a participant who is totally or partially disabled in the performance of his or her duties. The total duty-connected disability benefit is payable monthly and equal to 75% of the monthly rate of earning at the time of disability. The partial duty-connected disability benefit is the accrued benefit at the date of disability if not less than 50% of average earnings. Disability benefits cease if the participant recovers or dies. If the disabled participant reaches his normal retirement date, the benefit is reduced by one-third. Survivor’s benefits are payable monthly in an amount equal to 75% of the participant’s rate of earnings, for a duty related death. Survivor’s benefits are payable monthly in an amount not to exceed 25% of the participant’s rate of earnings, for a non-duty related death, if the participant has completed 10 years of service. If a retired participant dies, his or her spouse receives 50% of the benefit. All benefits under the plan, including survivor’s benefits, are increased 2% per annum. There have been no changes in benefits during the valuation period by City Council. Plan Administration Management of the plan investments are fully vested with the City of Dover Police Pension Board as established in the City Code, which consists of seven members – three elected by plan members, two Council members appointed by the Council President, the Chief of Police, and the City Manager. The City Controller/Treasurer serves as an ex-officio member. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. Funding Policy The City intends to continue to fund the Actuarially Determined Contribution (ADC) as provided for in the actuarial valuation. The funding may be impacted by differences in actual experience and the actuarial assumptions. The employer contributions are considered by the actuaries in their determination of the ADC. In addition, the City has adopted in its financial policies to have any surplus in the budget balances of the prior year be transferred to the retirement benefit plans to further reduce the net pension liability. 106

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements The State contributes to the pension fund on behalf of the City based on 1) an allocation to the City based on a 0.25% surcharge on insurance policies issued in the state and the number of officers employed and 2) 75% matching grant for the annual cost of living increase (COLA) granted to police retirees on January 1 each year. For the fiscal year ending June 30, 2019, the State contributed $512,151. The ADC conforms to the entry age method as defined in GASB Statement No. 67/68. The City has interim valuations completed each year between the required biennial valuations to monitor the funding progress. The City’s actuary is Nyhart of Indianapolis, Indiana. The ADC is being amortized using a level dollar method. The amortization period is 6 years for the 2019 fiscal year and will decline by 1 each year until 1 year. Total contributions to the plan for the fiscal year ending June 30, 2019 were $1.1 million, which is 104.5% of the ADC. The ADC is based on a closed 10-year level dollar amortization of the Unfunded Actuarial Accrued Liability (UAAL). The Schedule of Changes in the Net Pension Liability, and a Schedule of Employer Contributions are presented as Required Supplementary Information (RSI) following the notes to the financial statements. Net Pension Liability The total pension liability was determined by an actuarial valuation as of July 1, 2018 with liabilities projected to the June 30, 2019 measurement date. As of June 30, 2019, the plan was 78.51% funded. The total pension liability for benefits was $18.2 million, and the fiduciary net position was $14.3 million, which resulted in a net pension liability (NPL) of $3.9 million for the primary government. There are no active officers; therefore, there is no covered payroll or ratio of the net pension liability to cover payroll. Key methods and assumptions used in calculating the total pension liability in the latest actuarial valuation, are presented below: Rate of return. For the year ended June 30, 2019, the annual money-weighted rate of return on investments, net of investment expense, was 6.43%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested. Actuarial Methods and Significant Assumptions Valuation date July 1, 2018 Actuarial cost method Entry Age Method Amortization method Level Dollars Amortization period Closed Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases none, no remaining active participants Includes inflation at 2.3% Automatic Cost of living (retirees) 2.0% Mortality RP-2014 Blue Collar with fully generational improvements from 2006 based on Society of Actuaries Scale MP-2018 107

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Changes in Actuarial Assumptions or Methods The long term expected rate of return on pension plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2019 are summarized in the following table: Police Pension Fund Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash and Equivalents 7.00% 2.51% Fixed Income 27.00% 4.00% Real Estate 5.00% 7.61% Stocks 61.00% 8.13% Long-Term Expected Rate of Return 100.00% 6.50% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. 108

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Police Pension Fund Changes in Net Pension Liability Increase Total (Decrease) Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) Balances as of June 30, 2018 $ 18,797,596 $ 13,900,129 $ 4,897,467 Changes for the year: Interest on total pension liability 1,172,535 - 1,172,535 Effect of assumptions changes or inputs (245,112) - (245,112) Benefit payments (1,517,190) (1,517,190) - Employer contributions - 1,097,151 (1,097,151) Net investment income - 819,535 (819,535) Administrative expenses - (5,093) 5,093 Balances as of June 30, 2019 $ 18,207,829 $ 14,294,532 $ 3,913,297 Discount Rate The discount rate used to measure the total pension liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability, calculated using the discount rate of 6.50%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. Police Pension Fund 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net pension liability $ 5,670,032 $ 3,913,297 $ 2,416,838 Pension Expense, Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2019, the City recognized pension expense of $131,616 calculated in the following chart: 109

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Police Pension Expense July 1, 2018 to June 30, 2019 Interest on total pension liability $ 1,172,535 Projected earnings on pension plan investments (889,692) Administrative expenses 5,093 Current period recognition of deferred outflows/(inflows) of resources Changes of assumptions (245,112) Differences between projected and actual earnings on plan investments 88,792 Total Pension Expense $ 131,616 As of June 30, 2019, the City reported deferred outflows/(inflows) of resources related to pension from the following sources: Police Pension Plan Deferred Inflows of Resources Net difference between projected and actual earnings $ (135,912) Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Police Pension Plan Fiscal Year Ending June 30: 2020 $ (25,267) 2021 (127,552) 2022 2,874 2023 14,033 ii. City of Dover General Employee Pension Plan Plan Description The City of Dover General Employee Pension Plan started on July 1, 1967, under the authority of the City Council, Municipal Code, Chapter 2, Article IV, Division 7, General Employee Pension Plan, Sections 2-321 through 2-370, and was made contributory on July 1, 1983. Employees contribute 3.5% of gross salary, exclusive of unscheduled overtime. An employee’s pension right is vested upon completion of 10 years of continuous service. As of the valuation date, July 1, 2018, 95 employees and 210 retirees participate in the plan. The General Employee Pension Plan is comprised of the following: Retired and beneficiaries currently receiving benefits 210 Active employees Fully Vested 95 Non-Vested 16 110

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Deferred vested 17 The percentage of covered payroll which employees contribute is stated in the City Code and is considered by the actuaries in their determination of the actuarial determined contribution for service cost. For the year ended June 30, 2019, gross payroll earnings of $5.4 million were reported to and covered by this plan. An employee hired before May 1, 1994 is eligible for normal retirement benefits under this plan, when they attain the age of 65 with 10 years of continuous service. This same employee is eligible for early retirement when he/she attains the age of 50 with 20 years of continuous service or has completed 25 years of service. Employees hired on or after May 1, 1994 who attained age 55 and whose attained age plus years of continuous service is equal to or greater than 80 are eligible for early-unreduced retirement benefits under this plan. The monthly benefits are 1/50 of the average actual monthly earnings multiplied by years and months of credited service upon retirement (highest 36 consecutive months in his/her final 10 years of continuous service). The monthly benefit shall not be less than $200 per month. Benefits are paid for the lifetime of the participant. Upon the death of the participant, 50% of the payments to which the participant was or would have been entitled shall be made to their eligible survivor. An employee may also take an early-reduced retirement on any date following the attainment of age 55 and the completion of 10 years of continuous service. However, the early retirement benefit is calculated in the same manner as the normal retirement benefit, at a reduced rate of one-half percent for each month computed from the date of early retirement to age 65 years. If an employee terminated before becoming vested in the plan, they are eligible to withdraw this total contribution with interest compounded annually. Survivor's benefits are payable to eligible survivors of a participant who dies after completing 10 years of continuous service. The amount of the death benefit is equal to 50% of the retirement benefit the participant would have received had he retired the day before he died. A participant is vested in the pension plan after completing 10 years of continuous service, with survivor benefits commencing when the employee would have attained the age of 65. The benefit is calculated using the normal retirement benefit formula and service at date of termination. Effective September 29, 2009 the City Council voted to close the General Employees’ Pension plan to new hires. There have been no changes in benefits during the valuation period by City Council. Plan Administration Management of the plan investments are fully vested with the City of Dover Employees’ Pension Board as established in the City Code, which consists of three elected by plan members, two Council members appointed by the Council President, the City Controller/Treasurer, and the City Manager. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. Funding Policy The City intends to fund the actuarial determined contributions (ADC) as provided for in the actuarial valuation. The City uses the percentage of payroll determined by the actuary for its contributions. The funding may be impacted by differences in actual experience and the actuarial assumptions. The employer contributions are considered by the actuaries in their determination of the actuarial determined contribution. In addition, the City has adopted in its financial policies 111

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements to have any surplus in the personnel related budget balances of the prior year be transferred to the retirement benefit plans to further reduce the net pension obligation. The City makes payroll-based contributions for active members in the plan. The Actuarially Determined Contribution is based on a closed 15-year level dollar amortization of the Unfunded Actuarial Accrued Liability (UAAL). The Schedule of Changes in the Net Pension Liability, and a Schedule of Employer Contributions are presented as Required Supplementary Information (RSI) following the notes to the financial statements. Net Pension Liability The total pension liability was determined by an actuarial valuation as of July 1, 2018 with liabilities projected to the June 30, 2019 measurement date. As of June 30, 2019, the plan was 70.90% funded. The total pension liability for benefits was $63.1 million, and the fiduciary net position was $44.7 million, which resulted in a net pension liability (NPL) of $18.4 million for the primary government. The covered payroll (annual payroll of active employees covered by the plan) was $5.4 million and the ratio of the NPL to the covered payroll was 340.11%. Rate of return. For the year ended June 30, 2019, the annual money-weighted rate of return on investments, net of investment expense, was 6.76%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Key methods and assumptions used in calculating the total pension liability are presented in the following chart: Actuarial Methods and Significant Assumptions Valuation date July 1, 2018 Actuarial cost method Entry Age Amortization method Level Dollar Amortization period Closed; 15-year of the Unfunded AAL Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases 3.0% Includes inflation at 2.3% Mortality RP-2014 Mortality Table with fully generational improvements from 2006 based on Society of Actuaries Scale MP-2018 Changes in Actuarial Assumptions or Methods The long-term expected rate of return on pension plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2019 are summarized in the following table: 112

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements General Employee Pension Plan Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash 6.00% 2.51% Fixed Income 28.00% 3.99% Stocks 61.00% 8.13% Real Estate 5.00% 7.61% Long-Term Expected Rate of Return 100.00% 6.50% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. General Employee Pension Fund Changes in Net Pension Liability Increase Total (Decrease) Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) Balances as of June 30, 2018 $ 62,957,382 $ 43,100,420 $ 19,856,962 Changes for the year: Service cost 424,017 - 424,017 Interest on total pension liability 3,988,725 - 3,988,725 Changes of benefit terms - - - Effect of economic/demographic gains or losses - - - Effect of assumptions changes or inputs (278,900) - (278,900) Benefit payments (4,032,800) (4,032,800) - Employer contributions - 2,703,583 (2,703,583) Member contributions - 190,030 (190,030) Net investment income - 2,765,264 (2,765,264) Administrative expenses - (18,849) 18,849 Balances as of June 30, 2019 $ 63,058,424 $ 44,707,648 $ 18,350,776 Discount Rate The discount rate used to measure the total pension liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those 113

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability, calculated using the discount rate of 6.50%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. General Employee Pension Fund 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net pension liability $ 25,807,735 $ 18,350,776 $ 12,143,190 114

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Pension Expense, Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2019, the City recognized pension expense of $2,228,697 as calculated in the following chart: General Employee Pension Expense July 1, 2018 to June 30, 2019 Service cost $ 424,017 Interest on total pension liability 3,988,725 Changes of benefit terms - Administrative expenses 18,849 Member contributions (190,030) Projected earnings on pension plan investments (2,763,891) Current period recognition of deferred outflows/(inflows) of resources Differences between expected and actual experience 444,938 Differences between projected and actual earnings on plan investments 132,063 Changes of assumptions 174,026 Total Pension Expense $ 2,228,697 As of June 30, 2019, the City reported deferred outflows/(inflows) of resources related to pension from the following sources: General Employee Pension Plan Deferred Outflows of Resources Changes in City assumptions contributions sebsequent to the $ 300,152 Differences between expected and actual experience 511,727 Total Deferred Outflows of Resources $ 811,879 Deferred Inflows of Resources Changes in assumptions $ (219,094) Net difference between projected and actual earnings (636,337) Total Deferred Inflows of Resources $ (855,431) 115

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: General Employee Pension Plan Fiscal Year Ending June 30: 2020 $ 527,474 2021 (537,122) 2022 (33,631) 2023 (273) iii. Delaware Public Employee Retirement System - County and Municipal Police and Firefighters’ Pension Plan Plan Description and Contribution Information The City participates in the “County and Municipal Police and Firefighters’ Pension Plan” (the Plan) is a cost sharing multiple-employer defined-benefit plan established in the Delaware code. The City’s uniformed police officers whose employment with the City started on or after September 1, 1982 under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71 can participate in this plan. The General Assembly is responsible for setting benefits, contributions and amending plan provisions; administrative rules and regulations are adopted and maintained by the Board of Pension Trustees (the Board). The management of the Plan is the responsibility of the Board. The Board is comprised of five members appointed by the Governor and confirmed by the State Senate, plus two ex-officio members. The daily operation is the responsibility of the Office of Pensions. Although most of the assets of the plan are commingled with other Plans for investment purposes, the Plan’s assets may be used only for the payment of benefits to the members of the Plan in accordance with the terms of the Plan. The Plan’s service benefits calculation is 2.5% of final average monthly compensation multiplied by years of credited service up to 20 years, plus 3.5% of final average monthly compensation multiplied by years of service in excess of 20 years. For this plan, final average monthly compensation is the monthly average of the highest three consecutive years of compensation. Vesting is at five years of credited service and retirement age is 62 with five years of service; age plus credited service (but not less than 10 years) equals 75; or 20 years of credited service. As of June 30, 2019, city membership in this plan is comprised of the following: Retired and beneficiaries currently receiving benefits 65 Active employees: Fully Vested 5 years 68 Non-Vested 31 The following are brief descriptions of the Plan. For a more complete description, please refer to the DPERS CAFR on the web at https://accountingfiles.delaware.gov/docs/2018cafr.pdf. 116

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements County and Municipal Police and Firefighters’ Pension Plan Retirement Age 62 with 5 years of service; age plus credited service (but not less than 10 years) equals 75; or 20 years of credited service. Disability Benefits Duty – Total Disability – 75% of final average compensation plus 10% for each dependent not to exceed 25% for all dependents. Duty – Partial Disability – Calculated the same as Service Benefits, subject to minimum 50% of final average compensation. Non-Duty – Same as Service Benefits, total disability subject to a minimum 50% of final average monthly compensation plus 5% of each dependent not to exceed 20% for all dependents. Partial disability is subject to a minimum of 30% of final average monthly compensation. Survivor Benefits If employee is receiving a pension, then eligible survivor receives 50% of pension; if employee is active, eligible survivor receives 50% of pension the employee would have received at age 62. If the member is killed in the line of duty, the eligible survivor receives 75% of the member’s compensation. Contributions: Employer – Determined by Board of Pension Trustees. Employer contributions were 16.68%, 13.6% and 13.77% of earnings for the Fiscal Year 2019, 2018 and 2017, respectively. The City’s contributions to the plan for years ended June 30, 2019, 2018 and 2017 were $1,258,817, $827,827 and $980,117, respectively, and were equal to the required contributions for each year. Total eligible full-time wages covered by the State plan were $7.4 million this fiscal year. Member – 7% of compensation. Basis of Presentation The DPERS financial statements are prepared on the accrual basis of accounting, whereby expenses are recorded when the liability is incurred, revenues are recorded in the accounting period in which they are earned and become measurable, and investment purchases and sales are recorded as of the related trade date. Plan member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has a legal requirement to provide contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the DPERS Plan and additions to/deductions from DPERS’s fiduciary net position have been determined on the same basis as they are reported by DPERS. Employer Allocation Percentage Methodology The amounts assigned to each employer in the Schedule of Pension Amounts by Employer is each employer’s proportional share of the net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense (the Collective Pension Amounts) determined in accordance with Governmental Accounting Standards Board No. 68, Accounting and Financial Reporting for Pensions (GASB 68). Management has elected to allocate the employer’s proportionate shares of the collective pension amounts based on the percentage of actual 117

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements employer contributions as documented in the Schedule of Employer Allocations. The City’s proportionate share percentage is 8.4242% for the current fiscal year, 8.6629% for the prior year and the change is a decrease of 0.2387%. Pension Liabilities, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources related to Pensions At June 30, 2019, the City reported a net pension liability of $1,940,155 for its proportionate share of the collective net pension liability. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the percentage of actual employer contributions. The components of the proportionate share of the net pension liability of the Plan as of June 30, 2019 were as follows (dollar values expressed in thousands): County and Municipal Police & Firefighter's Pension Plan (dollar values expressed in thousands) (3) The Employers' (1) (2) proportionate Total Plan fiduciary share of the proportionate proportionate net pension share of the share of the liability (asset) Year pension liability net position (1)-(2) 2018 $ 32,897 $ 30,957 $ 1,940 2017 29,103 28,230 873 2016 27,030 25,599 1,431 118

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements The City recognized pension expense of $1,173,558 for the year ended June 30, 2019, associated with membership within the Delaware State Police Pension Plan. As of June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: County and Municipal Police & Firefighter's Pension Plan Deferred Outflows of Resources Differences between expected and actual experience $ 1,670,672 Change in proportion 12,195 Changes of assumptions 637,347 City contributions subsequent to the measurement date 1,276,048 Total Deferred Outflows of Resources $ 3,596,262 Deferred Inflows of Resources Differences between expected and actual experience $ (457,562) Changes in assumptions (273,820) Net difference between actual and expected earnings (338,089) Change in proportion (83,133) Total Deferred Inflows of Resources $ (1,152,604) The City’s contributions of $1,276,048 are subsequent to the measurement date and therefore are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ending June 30, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: County and Municipal Police & Firefighter's Pension Plan Fiscal Year Ending June 30: 2020 $ 82,952 2021 82,952 2022 82,952 2023 82,952 2024 82,952 Thereafter 752,850 119

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements The components of collective pension expense for the year ending June 30, 2018 are as follows: County and Municipal Police & Firefighter's Pension Expense June 30, 2018 Service cost $ 1,432,956 Member contributions (511,180) Administrative expenses 12,215 Interest on the total pension liability 2,174,408 Projected earnings on plan investments (1,943,181) Recognition of deferred outflow and inflows of resources: - Changes in assumptions in the measurement of total pension liability 40,520 Differences between expected and actual experience 130,912 Differences between projected and actual earnings on plan investments (163,093) Total Pension Expense $ 1,173,558 The proportionate share of the total pension liability for the June 30, 2018 measurement date was determined by an actuarial valuation as of June 30, 2017, with update procedures used to roll forward the total pension liability to June 30, 2018. These actuarial valuations used the following actuarial assumptions: Actuarial Assumptions Investment rate of return/Discount rate1 7.0% Projected salary increases1 2.5% + Merit Cost-of-living adjustments 0.0% Inflation is included at 2.5%; the total pension liabilities are measured based on assumptions pertaining to the interest rates, inflation rates, and employee demographic behavior in future years. It is likely that future experience will not exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the larger the impact on future financial statements. Mortality assumptions are based on the RP – 2014 tables with gender adjustments for healthy annuitants and disabled retirees and an adjusted version on MP-2015 mortality improvement scale on a fully generational basis. Projected benefit payments do not include the effects of projected ad hoc cost-of-living adjustments (ad hoc COLAs) as they are not substantively automatic. The primary considerations relevant to making this determination include the historical pattern of granting the changes and the consistency in the amounts of the changes. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by an asset allocation percentage, which is based on the nature and mix of current and expected plan investments, and by adding expected inflation. Best 120

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements estimates of geometric real rates of return for each major asset class included in the Plan’s current and expected asset allocation are summarized in the following table: County and Municipal Police & Firefighter's Pension Plan Long-Term Expected Rate of Return Long-Term Expected Real Asset Rate of Return Allocation Asset class: Domestic equity 5.7% 30.7% International equity 5.7 13.9 Fixed income 2.0 23.3 Alternative investments 7.8 24.4 Cash and equivalents - 7.7 Discount Rate The discount rate for all plans used to measure the total pension liability was 7.0%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rates and that contributions from employers will be made at rates determined by the Board of Pension Trustees, actuarially determined. Based on those assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability (asset) of the Plan, calculated using the discount rate of 7.0%, as well as what the Plans’ net pension liability (asset) would be if it were calculated using a discount rate that is one-percentage-point lower or one-percentage-point higher than the current rate (dollar values expressed in thousands): County and Municipal Police & Firefighter's Pension Plan (dollar amounts expressed in thousands) 1% Current 1% Decrease Discount Rate Increase 6.00% 7.00% 8.00% Proportionate share of the net pension liability (asset) $ 7,112 1,940 (2,198) Separately issued financial statements for DPERS are available from the pension office at: McArdle Building, Suite 1 860 Silver Lake Blvd Dover, DE 19904 Or at the following web address: www.delawarepensions.com 121

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to Financial Statements 18. RESTATEMENT IMPLEMENTATION OF GASB 83 - CERTAIN ASSET RETIREMENT OBLIGATION The City adopted GASB Statement No. 83 Certain Asset Retirement Obligation (ARO) which improves accounting and financial reporting by state and local governments to enhance comparability of financial statements among governments by instituting uniform criteria for recognition and measurement of AROs. GASB concluded an ARO meets the criteria for recognition as a liability and should be recognized when the liability is both incurred and reasonably estimable. This pronouncement requires restatement of the June 30, 2018 net position of the business type activities and electric fund as follows: Business type Electric Fund Net activities Net Position June 30, Position June 30, 2018 2018 As previously stated 181,271,249 122,082,656 Cumulative effect of application of GASB 83 (11,186,307) (11,186,307) As restated 170,084,942 110,896,349 122

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section PART PART D D REQUIRED REQUIRED SUPPLEMENTARY SUPPLEMENTARY INFORMATION INFORMATION 123

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information SERVICES TO OUR RESIDENTS AND CUSTOMERS Animal Control Leaf Collection Beautification Building Library Bulky Trash Collection Parks & Recreation Community Development/Housing Planning & Zoning Community Policing Police Protection Elections Snow Removal Electricity Street Maintenance/Cleaning Economic Development Trash Collection Emergency Preparedness Tree Maintenance Fire Protection Water & Wastewater Inspections & Code Enforcement 124

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information CITY OF DOVER, DELAWARE GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Non-GAAP Basis) For the Year Ended June 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance $ 5,399,700 $ 8,239,400 $ 8,239,430 $ 30 REVENUES: Fines & Police Revenue 688,300 688,300 513,450 (174,850) 911 Fee 63,300 63,300 58,059 (5,241) Interest Earnings 137,900 137,900 327,613 189,713 Library Revenues - General 100,000 100,000 136,141 36,141 Library Revenues - County Reimb. 300,000 300,000 274,012 (25,988) Business Licenses 1,470,000 1,470,000 1,437,532 (32,468) Permits & Other Licenses 1,969,000 1,969,000 1,472,138 (496,862) Miscellaneous Revenues 57,000 57,000 57,470 470 Police Extra Duty Fees 510,000 510,000 579,872 69,872 Property Taxes 13,274,400 13,274,400 13,448,025 173,625 Franchise Fees 685,600 685,600 631,884 (53,716) Recreation Revenue 150,000 150,000 141,436 (8,564) Sanitation Fees 3,095,400 3,095,400 3,068,399 (27,001) Garrison Farm Rent 97,900 97,900 100,418 2,518 Court of Chancery Fees 1,439,500 1,439,500 1,588,140 148,640 Interfund Service Receipts 5,640,100 5,640,100 5,233,208 (406,892) Transfer Tax 1,459,300 1,459,300 1,638,543 179,243 Grants: Green Energy Grant 25,000 25,000 16,355 (8,645) Miscellaneous Grants 98,500 98,500 98,500 - Police Pension Grant 466,000 466,000 512,152 46,152 Cable EG Grant - - 8,158 8,158 Transfer from Police Grant Funds 90,000 90,000 59,141 (30,859) Transfer from Municipal Street Aid 665,300 665,300 806,285 140,985 Transfer from Civil Traffic Penalties 497,000 497,000 449,412 (47,588) Transfer from Water/Wastewater Fund 1,000,000 1,000,000 1,000,000 - Transfer from Electric Fund 10,000,000 10,000,000 10,000,000 - Total Revenues 43,979,500 43,979,500 43,656,343 (323,157) TOTAL BEGINNING BALANCE & REVENUES $ 49,379,200 $ 52,218,900 $ 51,895,773 $ (323,127) (Continued) 125

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information (Continued) VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) EXPENDITURES: Tax Assessor $ 244,500 $ 246,900 $ 239,845 $ 7,055 Fire 789,800 789,800 721,189 68,611 Library 1,767,400 1,781,100 1,682,610 98,490 Recreation 1,000,600 1,015,700 931,374 84,326 Life Safety 504,200 513,400 465,240 48,160 Code Enforcement 610,500 617,700 484,807 132,893 Planning Commission 568,200 573,500 572,172 1,328 Public Inspections 568,100 570,100 565,567 4,533 Police 17,337,500 17,764,800 17,925,521 (160,721) Streets 1,409,100 1,357,900 1,094,290 263,610 Sanitation 2,475,200 2,479,700 2,192,665 287,035 Engineering 277,600 282,200 266,332 15,868 Allocated Expenditures: City Clerk 442,500 454,500 426,162 28,338 Council 144,800 144,800 114,103 30,697 Grounds Maintenance 1,195,000 1,198,800 1,140,066 58,734 City Manager 1,005,200 1,011,700 857,431 154,269 Information Technology 731,000 750,500 747,527 2,973 Finance 946,200 949,700 866,905 82,795 Public Services-Administration 720,800 725,200 731,292 (6,092) Facilities Management 652,900 653,100 637,578 15,522 Procurement and Inventory 726,000 726,000 588,366 137,634 Fleet Maintenance 832,500 884,500 845,193 39,307 Customer Services 1,197,100 1,199,500 1,139,043 60,457 Human Resources 485,600 541,200 415,233 125,967 Mayor 173,700 173,700 145,329 28,371 Insurance 735,000 735,000 644,963 90,037 Budget Appropriations Contribution to Downtown Dover Partnership 150,000 150,000 150,000 - Miscellaneous Grant Expense 25,000 25,000 8,323 16,677 Other Employment Expenses 500,000 - - - Bank & Credit Card Fees 28,000 28,000 18,719 9,281 Retiree Benefits 1,894,900 1,894,900 1,894,900 - Subtotal 40,138,900 40,238,900 38,512,745 1,726,155 Debt Service - Principal and Interest 500,000 500,000 455,574 44,426 Bond issue Costs - - (98,056) 98,056 Transfer to Capital Fund for Projects 3,013,800 3,432,000 3,432,000 - Transfer to Electric I & E 200,000 200,000 200,000 - Transfer to Police Pension Fund 466,000 466,000 512,151 (46,151) Transfer to Uncollectible Reserve 100,000 100,000 100,000 - Transfer to Cable Franchise Reserve - - 16,355 (16,355) Appropriation to Police Pension Fund 585,000 585,000 585,000 - Street Lights 815,000 815,000 805,185 9,815 Total Expenditures 45,818,700 46,336,900 44,520,955 1,815,945 Budget Balance 3,560,500 5,882,000 7,374,818 (1,492,818) Total Budget Balance & Expenditures $ 49,379,200 $ 52,218,900 $ 51,895,773 $ 323,127 Budget Balance - Working Capital $ 7,374,818 Perspective and GAAP (Non-GAAP) Differences: Fair Value of Investment Adjustment 103,879 Deferred Revenues - Non-spendable (147,077) Inventory & Prepaids - Non-spendable (213,380) Unassigned Fund Balance 7,118,240 126

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Police Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands) Fiscal Year Ending June 30, 2019 2018 2017 2016 2015 2014 Total Pension Liability Interest on total pension liability $ 1,173 $ 1,197 $ 1,211 $ 1,281 $ 1,311 $ 1,325 Effect of economic/demographic (gains) or losses (157) - - (836) 286 25 Effect of assumption changes or inputs (88) (44) 116 - 932 - Benefit payments (1,517) (1,541) (1,528) (1,528) (1,557) (1,548) Net change in total pension liability (590) (388) (201) (1,083) 972 (198) Total pension liability, beginning 18,798 19,186 19,387 20,471 19,499 19,697 Total pension liability, ending (a) $ 18,208 $ 18,798 $ 19,186 $ 19,388 $ 20,471 $ 19,499 Fiduciary Net Position Employer contributions $ 1,097 $ 1,295 $ 1,118 $ 1,093 $ 1,386 $ 1,229 Investment income net of investment expenses 820 908 1,433 279 283 1,583 Benefit payments (1,517) (1,541) (1,528) (1,528) (1,557) (1,548) Administrative expenses (5) (5) (4) (4) (6) (20) Net change in plan fiduciary net position 394 657 1,019 (160) 106 1,244 Fiduciary net position, beginning 13,900 13,243 12,225 12,385 12,279 11,035 Fiduciary net position, ending (b) $ 14,295 $ 13,900 $ 13,244 $ 12,225 $ 12,385 $ 12,279 Net pension liability, ending = (a) - (b) $ 3,913 $ 4,898 $ 5,942 $ 7,163 $ 8,086 $ 7,220 Fiduciary net position as a % of total pension liability 78.51% 73.95% 69.03% 63.05% 60.50% 62.97% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. Police Pension Fund Schedule of Employer Contributions Contribution as Fiscal Year Actuarially Actual Contribution a Percentage of Ended Determined Employer Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll 2019 $ 1,050,375 $ 1,097,151 $ (46,776) $ - N/A 2018 1,205,092 1,294,750 (89,658) $ - N/A 2017 1,176,462 1,118,346 58,116 - N/A 2016 1,212,000 1,093,278 118,722 - N/A 2015 1,176,422 1,385,789 (209,367) - N/A 2014 1,155,110 1,229,363 (74,253) - N/A 2013 1,155,796 1,074,599 81,197 - N/A 2012 979,132 668,274 310,858 - N/A 2011 1,082,956 633,636 449,320 - N/A 2010 786,436 496,587 289,849 - N/A 127

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Police Pension Plan Schedule of Investment Returns (1) Fiscal year 2017 through 2019 Fiscal year ending June 30 2019 2018 2017 Money-weighted rate of return, net of investment expense 6.43% 7.16% 12.34% (1) This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2017 is not available. Police Pension Plan Net Pension Liability June 30, 2019 June 30, 2018 Total pension liability $ 18,207,829 $ 18,797,596 Fiduciary net position 14,294,532 13,900,129 Net pension liability 3,913,297 4,897,467 Fiduciary net position as a % of total pension liability 78.51% 73.95% Covered payroll - - Net pension liability as a % of covered payroll N/A N/A The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and was then projected forward to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. The total pension liability was determined by an actuarial valuation as of July 1, 2018 with liabilities projected to the June 30, 2019 measurement date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. Actuarial Methods and Significant Assumptions Valuation date July 1, 2018 Actuarial cost method Entry Age Method Amortization method Level dollar Amortization period Closed Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases none, no remaining active participants Includes inflation at 2.3% Automatic Cost of living (retirees) 2.0% Mortality RP-2014 Blue Collar with fully generational Improvements from 2006 based on Society of Actuaries Scale MP-2018 128

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information General Employee Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands) Fiscal Year Ending June 30 2019 2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 424 $ 406 $ 433 $ 401 $ 459 $ 484 Interest on total pension liability 3,989 3,827 3,729 3,719 3,861 3,810 Changes of benefit terms - 830 - - - - Effect of economic/demographic (gains) or losses - 1,504 41 (267) (422) 111 Effect of assumption changes or inputs (279) (99) 1,200 - 1,956 - Benefit payments (4,033) (3,976) (3,746) (3,718) (3,700) (3,654) Net change in total pension liability 101 2,492 1,657 135 2,154 751 Total pension liability, beginning 62,957 60,465 58,808 58,673 56,519 55,768 Total pension liability, ending (a) $ 63,058 $ 62,957 $ 60,465 $ 58,808 $ 58,673 $ 56,519 Fiduciary Net Position Employer contributions $ 2,704 $ 4,777 $ 2,877 $ 3,090 $ 3,420 $ 3,473 Member contributions 190 195 202 202 209 212 Investment income net of investment expenses 2,765 2,757 4,351 850 955 4,153 Benefit payments (4,033) (3,976) (3,746) (3,718) (3,700) (3,654) Administrative expenses (19) (18) (18) (16) (19) (20) Net change in plan fiduciary net position 1,607 3,735 3,666 408 865 4,164 Fiduciary net position, beginning 43,100 39,364 35,699 35,291 34,426 30,263 Fiduciary net position, ending (b) $ 44,708 $ 43,100 $ 39,365 $ 35,699 $ 35,291 $ 34,427 Net pension liability, ending = (a) - (b) $ 18,350 $ 19,857 $ 21,100 $ 23,109 $ 23,382 $ 22,092 Fiduciary net position as a % of total pension liability 70.90% 68.46% 65.10% 60.70% 60.15% 60.91% Covered payroll $ 5,396 $ 5,561 $ 5,636 $ 5,504 $ 5,864 $ 5,971 Net pension liability as a % of covered payroll 340.11% 357.06% 374.39% 419.88% 398.73% 370.03% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. General Employee Pension Plan Schedule of Employer Contributions Contribution as Fiscal Year Actuarially Actual Contribution a Percentage of Ended Determined Employer Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll 2019 $ 2,885,737 $ 2,703,583 $ 182,154 $ 5,395,564 50.11% 2018 3,016,283 4,777,466 (1,761,183) 5,561,300 85.91% 2017 2,824,098 2,876,657 (52,559) 5,635,987 51.04% 2016 3,025,982 3,089,409 (63,427) 5,504,387 56.13% 2015 2,983,776 3,419,512 (435,736) 5,864,089 58.31% 2014 2,628,694 3,472,736 (844,042) 5,970,703 58.16% 2013 3,217,964 9,788,571 (6,570,607) 7,076,322 138.33% 2012 3,130,022 3,142,951 (12,929) 7,974,057 39.41% 2011 3,149,493 3,347,728 (198,235) 8,256,751 40.55% 2010 2,564,767 2,270,623 294,144 8,786,981 25.84% 129

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information General Employee Pension Plan Schedule of Investment Returns (1) Fiscal year 2017 through 2019 Fiscal year ending June 30 2019 2018 2017 Money-weighted rate of return, net of investment expense 6.76% 7.12% 12.50% (1) This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2017 is not available. General Employee Pension Plan Net Pension Liability June 30, 2019 June 30, 2018 Total pension liability $ 63,058,424 $ 62,957,382 Fiduciary net position 44,707,648 43,100,420 Net pension liability 18,350,776 19,856,962 Fiduciary net position as a % of total pension liability 70.90% 68.46% Covered payroll 5,395,564 5,561,300 Net pension liability as a % of covered payroll 340.11% 357.06% The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and was then projected forward to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. The total pension liability was determined by an actuarial valuation as of July 1, 2018 with liabilities projected to the June 30, 2019 measurement date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. Actuarial Methods and Significant Assumptions Valuation date July 1, 2018 Actuarial cost method Entry Age Amortization method Level dollar Amortization period Closed; 15-year – Unfunded AAL Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases 3.0% Includes inflation at 2.3% Mortality RP-2014 Mortality Table with fully generational improvements from 2006 based on Society of Actuaries Scale MP-2018 130

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information County & Municipal Police and Firefighter's Pension Plan Schedule of the City of Dover's Proportionate Share of the Net Pension Liability Fiscal Year Ending 2018 2017 2016 2015 2014 City's proportion of the net pension liability(asset) 8.4242% 8.6629% 9.0042% 9.6070% 9.6334% City's proportionate share of the net pension liability(asset) $ 1,940,156 $ 873,337 $ 1,431,281 $ (524,958) $ (1,042,117) City's covered payroll $ 6,843,159 $ 6,996,159 $ 7,117,770 $ 7,060,453 $ 6,582,053 City's proportionate share of the net pension liability(asset) as a 28.35% 12.48% 20.11% (7.44%) (15.83%) percentage of its covered payroll Plan fiduciary net position as a percentage of the total pension liability 94.10% 109.23% 105.59% 101.97% 104.47% GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the City will present information for those years for which information is available. County & Municipal Police and Firefighter's Pension Plan Schedule of City of Dover's Contributions Fiscal Year Ending 2019 2018 2017 2016 2015 2014 Contractually required contribution $ 1,258,817 $ 944,356 $ 951,199 $ 977,587 $ 933,750 $ 990,588 Contributions in relation to the contractually required contribution (1,258,817) (944,356) (951,199) (977,587) (933,750) (990,588) Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - City's covered payroll $ 7,372,815 $ 6,843,159 $ 6,843,159 $ 7,117,770 $ 7,060,453 $ 6,582,053 Contributions as a percentage of covered payroll 17.07% 13.80% 13.90% 13.73% 13.23% 15.05% This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2014 is not available. 131

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information OPEB Trust Fund Schedule of Changes in Net OPEB Liability, Related Ratios Fiscal Year Ending June 30 2019 2018 2017 Total OPEB Liability Service cost $ 1,202 $ 1,222 $ 1,655 Interest 4,288 4,498 4,682 Effect of economic/demographic (gains) or losses (5,152) (6,202) (2,871) Effect of assumption changes or inputs 1,311 - (4,833) Benefit payments (2,748) (2,704) (2,663) Net change in total OPEB liability (1,099) (3,186) (4,030) Total OPEB liability, beginning 66,119 69,305 73,335 Total OPEB liability, ending (a) $ 65,020 $ 66,119 $ 69,305 Fiduciary Net Position Employer contributions $ 5,448 $ 5,722 $ 4,603 Investment income net of investment expenses 2,184 2,295 3,074 Benefit payments (2,748) (2,704) (2,663) Administrative expenses (3) (8) (3) Net change in plan fiduciary net position 4,881 5,305 5,011 Fiduciary net position, beginning 34,359 29,054 24,043 Fiduciary net position, ending (b) $ 39,240 $ 34,359 $ 29,054 Net OPEB liability, ending = (a) - (b) $ 25,780 $ 31,760 $ 40,251 Fiduciary net position as a % of total OPEB liability 60.40% 52.00% 41.90% Covered payroll $ 19,578 $ 19,101 $ 17,657 Net OPEB liability as a % of covered payroll 131.70% 162.20% 210.70% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. OPEB Trust Fund Schedule of City’s Contributions (In Thousands) For the year ended June 30 2019 2018 2017 Actuarially determined contribution (ADC) $ 4,044 $ 4,560 $ 4,644 Contributions in relation to the ADC (5,447) (5,722) (4,603) Contributions deficiency / (excess) $ (1,403) $ (1,162) $ 41 Covered payroll $ 19,580 $ 19,578 $ 19,101 Contributions as a percentage of covered payroll 27.8 29.2 24.1% This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, governments should present information for those years for which information is available. 132

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Post-Employment Other than Pensions Plan (OPEB) Schedule of Investment Returns (1) Fiscal year 2017 through 2019 Fiscal year ending June 30 2019 2018 2017 Money-weighted rate of return, net of investment expense 6.10% 7.87% 12.66% (1) This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2017 is not available. Actuarial Methods and Significant Assumptions Valuation date July 1, 2017 Actuarial cost method Entry Age Normal Level % of Salary Amortization method Level Dollars Remaining amortization period 29 years Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Inflation 2.5% per year included in payroll growth Healthcare cost trend rates Pre-65 Medical / Rx Initial rate of 8.0% decreasing by 0.5% annually to an ultimate rate of 4.5% Post-65 Medical / Rx Initial rate of 8% decreasing by 0.5% Annually to an ultimate rate of 4.5% Mortality RPH-2018 Total Dataset Mortality Table fully generational using Scale MP-2018 for all employees 133

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information NOTES TO REQUIRED SUPPLEMENTARY INFORMATION GOVERNMENTAL BUDGETS Budgetary Basis of Accounting The City prepares its budget for the General Fund revenue on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. Encumbrances are established when purchase orders are issued and accounted for as a reservation of fund balance at year-end and are not on a modified accrual basis. The budget is amended in the subsequent year for the outstanding encumbrances of the prior year. The modified accrual basis of accounting is used for the fund financial statements. General Fund actual revenues were lower than the final budget by $323,157 with positive variances in interest earnings, library revenues – general, police extra duty fees, property taxes, court of chancery fees, transfer tax, police pension grant, cable EG grant and municipal street aid grant. The sources of revenues with negative variances are fines and police revenue, library revenues – county reimbursement, business licenses, permits and other licenses, franchise fees, inter-fund services receipts, transfer from Police Grant Funds and civil traffic penalties. Expenditures were lower than budget by $1,815,945 due to lower than budgeted expense across almost all functions a result of personnel reductions through attrition and retirements. The net result is an increase of $1,492,818 to the General Fund ending fund balance. Budget Amendments During this fiscal year, the City Council amended the budget three times. These budget amendment or supplemental appropriation ordinances were primarily for the following purposes: 1. To re-appropriate budget balances for ongoing capital projects. 2. To amend the grant budgets, and reserve accounts for the actual results of the prior fiscal year, and all carried forward budget balances for the major operating funds from the prior fiscal year, as well as program revenues and expenses based on changes in program revenues, expenses based on actual amounts. 3. To amend revenue and expense accounts based on actual experience during fiscal year 2019. 134

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information The differences for the year ended June 30, 2019 were as follows: Total revenues- budgetary basis $ 43,656,343 Total expenditures- budgetary basis 44,520,955 Net decrease in fund balance- budgetary basis (864,612) Perspective differences Transfer to Reserves 16,355 General Fund Subfund Expense Activity for the Capital Project Fund (2,383,754) Intrafund Transfers to the General Fund- Capital Projects Fund 3,432,000 General Fund Subfund Revenue Activity for the Capital Project Fund 290,070 Fair Value of Investments 295,372 Deferred Revenue Adjustment (5,435) Net increase in fund balance - GAAP Basis $ 779,996 135

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section PART PART EE SUPPLEMENTARY SUPPLEMENTARY INFORMATION INFORMATION 137

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information FINANCIAL STATEMENTS GENERAL FUND COMBINING SCHEDULES The General Fund contains a sub-fund for capital projects which is separately budgeted. The combining schedules are presented in the supplementary information. The budgetary comparison for the Governmental Capital Projects Fund has its own separate budget and is presented in this section to show legal compliance. The perspective difference between the basis of budgeting and GAAP is explained in the reconciliation of the basis of budgeting to GAAP. 139

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information The City of Dover, Delaware Combining General Fund Balance Sheet June 30, 2019 General Total General Capital Projects General Fund Fund Funds Assets: Cash and Cash Equivalents $ (328,624) $ 1,327,261 $ 998,637 Restricted Cash and Cash Equivalents - - - Investments 15,322,358 3,394,318 18,716,676 Restricted Investments 18,793 - 18,793 Receivables, net Accounts 370,335 5,000 375,335 Taxes 23,067 - 23,067 Due from Other Funds 328,543 - 328,543 Prepaid Items 105,648 - 105,648 Inventory, at Cost 107,732 - 107,732 Total Assets $ 15,947,852 $ 4,726,579 $ 20,674,431 Liabilities: Accounts Payable $ 1,879,073 $ 61,595 $ 1,940,668 Unearned Revenue 37,402 57,825 95,227 Due to Other Funds 1,473,144 9,471 1,482,615 Temporary Advances 4,000,000 - 4,000,000 Other 259,958 - 259,958 Total Liabilities 7,649,577 128,891 7,778,468 Deferred Inflows of Resources: Unavailable revenue 147,077 - 147,077 Total Deferred Inflows of Resources 147,077 - 147,077 Fund Balances: Non-Spendable Inventory and Prepaids 213,380 - 213,380 Library Endowment 5,000 - 5,000 Patronage Stock 16,594 - 16,594 Restricted Library Endowment 2,199 - 2,199 Verizon Cable Franchise 24,871 - 24,871 Committed Contingency 770,914 - 770,914 Parkland Reserve - 277,073 277,073 Assigned Capital Projects - 4,320,615 4,320,615 Unassigned 7,118,240 - 7,118,240 Total Fund Balances 8,151,198 4,597,688 12,748,886 Total Liabilities and Fund Balances $ 15,947,852 $ 4,726,579 $ 20,674,431 140

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information The City of Dover, Delaware Combining Schedule of Revenues, Expenditures and Changes in Fund Balances of the General Fund (Non-GAAP Basis) For the Year Ended June 30, 2019 General Total General Capital Projects General Fund Fund Funds Revenues Fines $ 571,508 $ - $ 571,508 Library Revenue- General 136,141 - 136,141 Library Revenue County Reimbursement 274,013 - 274,013 Licenses and Permits 2,909,670 - 2,909,670 Sanitation Fees and Rebates 3,068,399 - 3,068,399 Miscellaneous Services 1,511,080 133,952 1,645,032 Property Taxes 13,448,025 - 13,448,025 Grants Received 635,165 44,000 679,165 Court of Chancery Fees 1,588,140 - 1,588,140 Investment Income 308,893 23,827 332,720 Total Revenues 24,451,034 201,779 24,652,813 Expenditures Current: General Government 1,639,152 19,500 1,658,652 Library Services 1,682,610 - 1,682,610 Public Safety and Law Enforcement 21,259,475 712,040 21,971,515 Public Works 1,777,509 269,085 2,046,594 Recreational Services 931,374 156,020 1,087,394 Streets and Sanitation Services 3,286,955 1,171,374 4,458,329 Engineering services 266,332 - 266,332 Financial Administration 698,670 55,735 754,405 Garage and Stores 494,303 - 494,303 Insurance 276,689 - 276,689 Retiree Health Care 1,894,900 - 1,894,900 Employee Pension - - - Community and Economic Development 150,000 - 150,000 Street Lights 805,185 - 805,185 Debt Service: Principal Retirement 224,689 - 224,689 Interest and Fiscal Charges 132,829 - 132,829 Total Expenditures 35,520,673 2,383,754 37,904,427 Excess (deficiency) of Revenues over Expenditures (11,069,639) (2,181,975) (13,251,614) Other Financing Sources and Uses Reserve Transfers (116,355) 175,879 59,524 Interfund Transfers 10,321,382 3,432,000 13,753,382 Total other Financing Sources and Uses 10,205,027 3,607,879 13,812,906 Net Change in Fund Balances (864,612) 1,425,904 561,292 Fund Balances at Beginning of Year 8,239,430 1,415,201 9,654,631 Fund Balances at End of Year $ 7,374,818 $ 2,841,105 $ 10,215,923 Perspective and GAAP (Non-GAAP) Differences: Fair Value of Investment Adjustment $ 103,879 $ 23,009 $ 126,888 Deferred Revenues - Non-spendable (147,077) - (147,077) Inventory & Prepaids - Non-spendable (213,380) - (213,380) Capital Asset - Assigned - (2,864,114) (2,864,114) Unassigned Fund Balance $ 7,118,240 $ - $ 7,118,240 141

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE GOVERNMENTAL CAPITAL PROJECTS FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget & Actual (Non-GAAP Basis) For the Year Ended June 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 521,700 $ 1,415,200 $ 1,415,201 $ 1 REVENUES: State Grant - Other - - 44,000 44,000 Transfer from General Fund for Projects 3,013,800 3,432,000 3,432,000 - Transfer from Parkland Reserve 80,000 301,700 88,886 (212,814) Transfer from Capital Asset Reserve 388,800 440,100 89,993 (350,107) Income from Sale of Assets - 19,500 94,351 74,851 Interest Earnings - - 23,827 23,827 Miscellaneous Receipts - - 39,601 39,601 Total Revenues 3,482,600 4,193,300 3,812,658 (380,642) TOTAL BEGINNING BALANCE & REVENUES $ 4,004,300 $ 5,608,500 $ 5,227,859 $ (380,641) EXPENDITURES: Fire $ 222,500 $ 216,900 $ 216,813 $ 87 Grounds Maintenance 188,000 250,500 220,866 29,634 Police 512,000 602,300 495,227 107,073 Recreation 536,100 755,600 156,020 599,580 Sanitation 34,400 452,600 447,825 4,775 Streets 2,215,000 2,844,000 723,549 2,120,451 Information Technology 57,600 57,600 55,735 1,865 City Manager - 19,500 19,500 - Facilities Management 28,800 53,900 48,219 5,681 Subtotal 3,794,400 5,252,900 2,383,754 2,869,146 TRANSFERS AND MISCELLANEOUS EXPENSES: Parkland Acquisition - Silver Lake - 51,300 - 51,300 Transfer to Parkland Reserve - - 3,000 (3,000) Total Expenditures 3,794,400 5,304,200 2,386,754 2,917,446 Budget Balance - Working Capital 209,900 304,300 2,841,105 (2,536,805) Budget Balance & Expenditures $ 4,004,300 $ 5,608,500 $ 5,227,859 $ 380,641 Budget Balance - Working Capital $ 2,841,105 Perspective and GAAP (Non-GAAP) Differences: Fair value of investment adjustment 23,009 Assigned to Capital assets 1,456,501 Committed to Parks & Recreation improvements 277,073 Total Fund Balances $ 4,597,688 142

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS Special Revenue Funds include the group of funds classified as grant funds and a Realty Transfer Tax Fund. The proceeds from specific revenue sources are restricted to specified expenditure purposes. The City adopts budgets for selected Special Revenue Funds. Combining and individual statements appear in this section. POLICE GRANTS The City of Dover Police Department receives various grants from the State of Delaware for public and highway safety and the U.S. Department of Justice for local law enforcement. All grant transactions are recorded in this fund. LIBRARY GRANTS The City of Dover Public Library receives various grants from the State of Delaware, Kent County, and the Federal Government. Activities associated with these grants are recorded in this fund. MUNICIPAL STREET AID The State of Delaware has passed legislation to share a portion of Delaware’s motor fuel tax revenue with local municipalities through grants. The amount of the grant the City receives depends on its population and miles of streets maintained. The grant is used for street light expense within the City. CDBG HOUSING GRANTS & NEIGHBORHOOD STABILIZATION PROGRAM The City receives a U.S. Department of Housing and Urban Development Entitlement Grant for the Community Development Block Grant Program. This is to provide decent housing, a suitable living environment and expand economic opportunities primarily for people of low and moderate incomes. Combined with the CDBG Fund is the Neighborhood Stabilization Program (NSP) that provides assistance in the redevelopment of residential properties that have been abandoned and foreclosed upon to stabilize residential communities. 143

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS (continued) STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS The State of Delaware Department of Transportation grants provide funds for specific street projects in the City. State law provides funds to the State’s elected officials for suburban street aid, which officials can then provide to their respective districts. The City receives these funds for designated street projects and records all transactions for this fund. SUBSTANCE ABUSE PREVENTION GRANT The State of Delaware General Assembly Grant-In-Aid Program provides funds to implement a substance abuse prevention program for at-risk and/or disadvantaged youths in the City of Dover. ELECTRONIC RED-LIGHT SAFETY PROGRAM (ERLSP) The State of Delaware Department of Transportation provides a grant to municipalities that implement the Electronic Red- L i g h t Safety Program. Under this program, the City is granted a portion of the fines collected from drivers who are ticketed for running red lights installed with electronic photo identification equipment within the City limits. REALTY TRANSFER TAX Delaware Code states that realty transfer tax realized by the City shall be segregated from the general fund and the funds shall be expended solely for the capital and operating costs of public safety services, economic development programs, public works services, capital projects and improvements, infrastructure projects and improvements and debt reduction. 144

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET JUNE 30, 2019 MUNICIPAL CDBG/NSP STATE SUBSTANCE REALTY POLICE LIBRARY STREET HOUSING D.O.T. ABUSE ERLSP TRANSFER GRANTS GRANTS AID GRANTS GRANTS PREV. GRANT TAX TOTALS ASSETS: Cash $ 61,456 $ 14,904 $ 352 $ 10,378 $ 231,305 $ 89,330 $ 100 $ 116 $ 407,941 Receivables 51,766 - - - - - - - 51,766 Due from other governments 11,060 - - - - - 24,636 - 35,696 TOTAL ASSETS $ 124,282 $ 14,904 $ 352 $ 10,378 $ 231,305 $ 89,330 $ 24,736 $ 116 $ 495,403 LIABILITIES AND FUND BALANCE: Liabilities: Vouchers Payable $ 35,402 $ 7,334 $ - $ - $ 96,783 $ 774 $ - $ - $ 140,293 Deferred Revenue 2,166 - - - - - - - 2,166 Due to other funds-charges 3,229 - 252 9,496 - - 24,636 116 37,729 Total Liabilities 40,797 7,334 252 9,496 96,783 774 24,636 116 180,188 Fund Balances: Restricted 83,485 7,570 100 882 134,522 88,556 100 - 315,215 Total Fund Balances 83,485 7,570 100 882 134,522 88,556 100 - 315,215 TOTAL LIABILITIES AND FUND BALANCES $ 124,282 $ 14,904 $ 352 $ 10,378 $ 231,305 $ 89,330 $ 24,736 $ 116 $ 495,403 145

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2019 MUNICIPAL CDBG/NSP STATE SUBSTANCE REALTY POLICE LIBRARY STREET HOUSING D.O.T. ABUSE PREV. ERLSP TRANSFER GRANTS GRANTS AID GRANTS GRANTS GRANT TAX TOTALS REVENUES: Grants received $ 525,539 $ 295,771 $ 803,494 $ 216,560 $ 273,636 $ 28,030 $ - $ - $ 2,143,030 Recreation revenue - - - - - 61,147 - - 61,147 Police fines - - - - - - 449,412 - 449,412 Transfer taxes - - - - - - - 1,637,194 1,637,194 Investment income (loss) 2,949 - 2,791 - 7,323 - - 1,349 14,412 TOTAL REVENUES 528,488 295,771 806,285 216,560 280,959 89,177 449,412 1,638,543 4,305,195 EXPENDITURES: Program expenditures 587,183 289,163 - 217,691 808,789 94,292 - - 1,997,118 TOTAL EXPENDITURES 587,183 289,163 - 217,691 808,789 94,292 - - 1,997,118 Excess (deficiency) of revenues over (under) expenditures (58,695) 6,608 806,285 (1,131) (527,830) (5,115) 449,412 1,638,543 2,308,077 OTHER FINANCING SOURCES (USES): Transfers-out (59,141) - (806,285) - - - (449,412) (1,638,543) (2,953,381) Net Change in fund balances (117,836) 6,608 - (1,131) (527,830) (5,115) - - (645,304) FUND BALANCE AT BEGINNING OF YEAR 201,321 962 100 2,013 662,352 93,671 100 - 960,519 FUND BALANCE AT END OF YEAR $ 83,485 $ 7,570 $ 100 $ 882 $ 134,522 $ 88,556 $ 100 $ - $ 315,215 146

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE POLICE GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 63,500 $ 201,300 $ 201,321 $ 21 Interest earned - - 2,949 2,949 Grants received 393,000 675,800 525,539 (150,261) TOTAL REVENUES & BEGINNING BALANCE 456,500 877,100 729,809 (147,291) EXPENDITURES: Personnel 13,500 13,500 13,494 (6) Program expenses/supplies 317,000 643,600 539,262 (104,338) Telephone/fax 20,000 20,000 14,911 (5,089) Training/Conference/Food/Travel 15,000 19,700 19,516 (184) Consulting/audit fees 1,000 1,000 - (1,000) TOTAL EXPENDITURES 366,500 697,800 587,183 (110,617) Other financing uses: Operating transfers - out (90,000) (100,300) (59,141) 41,159 BALANCE CARRIED TO NEXT YEAR $ - $ 79,000 $ 83,485 $ 4,485 147

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE LIBRARY GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ 18,900 $ 962 $ (17,938) Grants received: State 287,900 280,800 287,931 7,131 Grants received: Other - - 5,500 5,500 Grants received: Federal 1,600 1,800 2,340 540 TOTAL REVENUES & BEGINNING BALANCE 289,500 301,500 296,733 (4,767) EXPENDITURES: Program expenditures/supplies (Fed Grant) 1,600 2,700 2,500 (200) Program expenditures/supplies (Other Grant) - - 1,918 1,918 Program expenditures/supplies (State Grant) 26,100 25,500 27,852 2,352 Office Supplies 25,000 28,000 25,667 (2,333) Printing/duplicating 12,500 13,700 13,500 (200) Postage 100 200 31 (169) Books 126,000 128,800 124,024 (4,776) Furniture/Fixtures 5,500 5,500 5,499 (1) Audio visual supplies 79,000 79,000 76,693 (2,307) Training/conference/food/travel 4,000 4,200 2,504 (1,696) Office equipment repairs 2,000 4,000 4,562 562 Office equipment lease 2,200 2,100 2,158 58 Computer software 2,000 2,500 1,869 (631) Computer hardware 3,500 5,300 386 (4,914) TOTAL EXPENDITURES 289,500 301,500 289,163 (12,337) BALANCE CARRIED TO NEXT YEAR $ - $ - $ 7,570 $ 7,570 148

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE MUNICIPAL STREET AID FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 100 $ 100 $ 100 $ - State Grant - Operations 665,300 803,700 803,494 (206) Interest Earned - - 2,791 2,791 TOTAL REVENUES & BEGINNING BALANCE 665,400 803,800 806,385 2,585 Other financing uses: Operating transfers-out (665,300) (803,700) (806,285) (2,585) BALANCE CARRIED TO NEXT YEAR $ 100 $ 100 $ 100 $ - 149

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE HOUSING PROGRAMS - CDBG & NSP SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance CDBG $ 2,500 $ 2,500 $ 2,013 $ (487) Beginning balance NSP 6,300 6,300 - (6,300) Federal grant received 230,300 250,000 217,691 (32,309) TOTAL REVENUES & BEGINNING BALANCE 239,100 258,800 219,704 (39,096) EXPENDITURES: Closing Cost/Down Payment Program 70,000 71,400 104,938 (33,538) Connections Community Support 5,000 1,800 1,037 763 Dover Interfaith Ministry 22,000 22,000 23,353 (1,353) MHDC Emergency Home Repair 29,200 12,700 12,002 698 Habitat Homeowner Repair 20,000 17,000 13,846 3,154 Milford Housing H/O Rehab 38,000 1,000 27,368 (26,368) Administrative Expense 46,100 92,800 35,147 57,653 TOTAL EXPENDITURES 230,300 218,700 217,691 1,009 CDBG BALANCE CARRIED TO NEXT YEAR $ 2,500 $ 33,800 $ 2,013 $ 31,787 NSP BALANCE CARRIED TO NEXT YEAR $ 6,300 $ 6,300 $ - $ 6,300 Fund Balance - Working Capital 2,013 GAAPDifferences Deferred Revenue - non-spendable (1,131) Total Fund Balance 882 150

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 70,900 $ 70,900 $ 662,352 $ 591,452 Grants received: State 500,000 500,000 273,636 (226,364) Interest earned - - 7,323 7,323 TOTAL REVENUES & BEGINNING BALANCE 570,900 570,900 943,311 372,411 EXPENDITURES: Program expenditures grant related 500,000 500,000 808,789 308,789 TOTAL EXPENDITURES 500,000 500,000 808,789 (308,789) BALANCE CARRIED TO NEXT YEAR $ 70,900 $ 70,900 $ 134,522 $ 63,622 CITY OF DOVER, DELAWARE SUBSTANCE ABUSE PREVENTION PROGRAM SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 45,700 $ 93,700 $ 93,671 $ (29) Grants revenue 28,000 28,000 28,030 30 Recreation revenue 33,000 33,000 61,147 28,147 TOTAL REVENUES & BEGINNING BALANCE 106,700 154,700 182,848 28,148 EXPENDITURES: Temporary help/benefits 67,700 67,700 66,272 (1,428) Program expenditures/supplies 35,000 35,000 35,512 512 TOTAL EXPENDITURES 102,700 102,700 101,784 (916) BALANCE CARRIED TO NEXT YEAR $ 4,000 $ 52,000 $ 81,064 $ 29,064 151

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information FINANCIAL SCHEDULES PROPRIETARY FUND TYPES ENTERPRISE FUNDS The following schedules pertaining to the major enterprise funds are not required under GAAP, but are included for public review of budgetary compliance. Accordingly, no reconciliation to the GAAP financial statements is provided. WATER/WASTEWATER FUND The Water/Wastewater Fund accounts for all operating activity of the Water/Wastewater Utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, sewerage treatment fees, debt service, and transfers to other funds and the Improvement and Extension Fund. The Water/Wastewater Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized. ELECTRIC REVENUE FUND The Electric Revenue Fund accounts for all operating activity of the electric utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, purchased power cost, debt service, and transfers to other funds and the Improvement and Extension Fund. The Electric Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized. 152

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE WATER/WASTEWATER FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Water $ 1,991,200 $ 1,912,800 $ 1,912,846 $ 46 Beginning Balance - Wastewater 1,680,900 1,053,000 1,052,990 (10) TOTAL BEGINNING BALANCES 3,672,100 2,965,800 2,965,836 36 REVENUES: Water Services 5,897,400 5,463,000 5,682,005 219,005 Wastewater Services 3,620,600 3,794,600 3,720,797 (73,803) Wastewater Treatment Services 2,819,300 2,970,000 2,902,852 (67,148) Groundwater inflow adjustment 1,813,100 1,901,200 1,858,169 (43,031) Miscellaneous service fees 54,400 12,700 12,303 (397) Water tank space leasing 400,600 400,600 399,848 (752) Interest - Water 7,600 15,000 34,121 19,121 Interest - Wastewater 7,600 15,000 21,283 6,283 Water Impact Fees 450,000 620,600 753,200 132,600 Wastewater Impact Fees 420,000 574,200 688,132 113,932 Total Revenues 15,490,600 15,766,900 16,072,710 305,810 TOTAL BEGINNING BALANCES & REVENUES $ 19,162,700 $ 18,732,700 $ 19,038,546 $ 305,846 EXPENSES: Engineering & Inspection $ 502,400 $ 507,800 $ 421,709 $ 86,091 Water Department 750,000 750,900 621,906 128,994 Water Treatment Plant 1,805,800 1,815,100 1,737,023 78,077 Wastewater Department 986,200 992,400 990,837 1,563 Kent County Treatment Charge 3,750,000 4,627,300 4,816,650 (189,350) Interfund Service Fees 1,764,600 1,764,600 1,688,242 76,358 Retirees Health Care 215,500 215,500 215,500 - OPEB Unfunded Liability 41,400 41,400 41,400 - Debt Service - Water 520,500 520,500 523,093 (2,593) Debt Service - Wastewater 611,200 611,200 612,565 (1,365) Other Employment Expenses 30,000 4,200 - 4,200 Bank & Credit Card Fees 28,000 28,000 29,134 (1,134) Bond Issue Cost 40,000 30,000 13,152 16,848 Transfer To: Water Improvement and Extension 1,800,000 1,800,000 1,800,000 - Wastewater Improvement and Extension 1,800,000 1,100,000 1,100,000 - Impact Fee Reserve - Water - 100,100 394,209 (294,109) Impact Fee Reserve - Wastewater - - 535,229 (535,229) General Fund from Water 500,000 500,000 500,000 - General Fund from Wastewater 500,000 500,000 500,000 - Electric Improvement and Extension 298,000 298,000 298,000 - Total Expenses 15,943,600 16,207,000 16,838,649 (631,649) Budget Balance - Water 1,937,750 1,487,000 1,854,498 (367,498) Budget Balance - Wastewater 1,281,350 1,038,700 345,399 693,301 Total Budget Balances - Working Capital 3,219,100 2,525,700 2,199,897 325,803 TOTAL BUDGET BALANCES & EXPENSES $ 19,162,700 $ 18,732,700 $ 19,038,546 $ (305,846) 153

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance -Water $ 2,275,200 $ 5,672,600 $ 5,672,564 $ (36) Beginning Balance -Wastewater 88,300 1,148,800 1,148,815 15 TOTAL BEGINNING BALANCES 2,363,500 6,821,400 6,821,379 (21) REVENUES: State Loan Fund - Water 4,000,000 4,000,000 2,598,099 (1,401,901) State Loan Fund - Wastewater 1,033,900 1,033,900 112,157 (921,743) Interest earnings 90,000 90,000 135,056 45,056 Transfer from Operating Fund - Water 1,800,000 1,800,000 1,800,000 - Transfer from Operating Fund - Wastewater 1,800,000 1,100,000 1,100,000 - Transfer from Water Impact Fee Reserve 40,400 40,400 40,400 - Transfer from Wastewater Impact Fee Reserve 421,100 421,100 20,997 (400,103) Total Revenues 9,185,400 8,485,400 5,806,709 (2,678,691) TOTAL BEGINNING BALANCES & REVENUES $ 11,548,900 $ 15,306,800 $ 12,628,088 $ (2,678,712) EXPENSES: Water $ 515,300 $ 723,700 $ 656,164 $ 67,536 Wastewater 2,505,200 2,638,100 1,558,362 1,079,738 Water Treatment Plant 4,000,000 6,468,200 4,157,995 2,310,205 Total Expenses 7,020,500 9,830,000 6,372,521 3,457,479 Budget Balance - Water 3,645,300 4,366,100 5,348,927 (982,827) Budget Balance - Wastewater 883,100 1,110,700 906,640 204,060 Total Budget Balances - Working Capital 4,528,400 5,476,800 6,255,567 (778,767) TOTAL BUDGET BALANCES & EXPENSES $ 11,548,900 $ 15,306,800 $ 12,628,088 $ 2,678,712 0 0 0 0 154

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE ELECTRIC REVENUE FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 12,393,600 $ 16,024,400 $ 16,025,317 $ 917 Distribution of Earnings - PCA Credit (2,877,400) (2,989,900) (2,839,650) 150,250 9,516,200 13,034,500 13,185,667 151,167 REVENUES: Direct base sales 81,192,600 82,607,300 80,706,744 (1,900,556) Rental income 104,500 60,000 116,267 56,267 Miscellaneous services 524,300 565,000 1,031,168 466,168 Utility tax 1,299,100 1,320,700 1,270,320 (50,380) Green Energy 127,400 133,800 133,902 102 Interest earned - operating 195,000 195,000 294,968 99,968 Total Revenues 83,442,900 84,881,800 83,553,369 (1,328,431) TOTAL BEGINNING BALANCE & REVENUES $ 92,959,100 $ 97,916,300 $ 96,739,036 $ (1,177,264) EXPENSES: Power Supply & Generation Hedged Energy $ 24,232,900 $ 24,232,900 $ 23,453,963 $ 778,937 Power Supply Management 1,085,000 835,000 834,996 4 Capacity Charges 16,663,400 16,663,400 16,215,822 447,578 Dover Sun Park Energy 2,685,400 2,685,400 2,474,940 210,460 Solar Renewal Energy Credits 392,300 392,300 359,905 32,395 Renewable Energy Credits 309,600 309,600 489,071 (179,471) RGGI 54,000 54,000 - 54,000 PJM Charges - Energy 5,394,600 4,404,600 2,670,097 1,734,503 PJM Charges - Transmission & Fees 6,921,000 6,921,000 6,661,642 259,358 Total Power Supply 57,738,200 56,498,200 53,160,436 3,337,764 Plant Operations 6,216,000 6,306,000 5,569,240 736,760 Generation Fuels 778,400 1,678,400 1,306,819 371,581 Capacity Credits (14,589,000) (14,589,000) (14,589,000) - PJM Spot Market Energy (1,089,100) (1,089,100) (1,006,903) (82,197) PJM Credits (454,400) (454,400) (452,916) (1,484) Total Generation (9,138,100) (8,148,100) (9,172,760) 1,024,660 Utility Tax 1,299,100 1,320,700 1,270,320 50,380 Administration 625,400 625,400 547,145 78,255 Transmission/Distribution 3,673,500 3,673,500 3,194,307 479,193 Electrical Engineering 1,223,500 1,249,700 1,105,770 143,930 Systems Operations 690,700 690,700 636,052 54,648 Meter Reading 401,800 402,800 407,880 (5,080) Contractual Services - Power Supply - 150,000 30,915 119,085 Legal Expenses - 100,000 23,827 76,173 Provision for Uncollectible 250,000 250,000 250,000 - Retirees Health Care 721,400 721,400 721,400 - Green Energy Payment to DEMEC 127,400 127,400 134,717 (7,317) Bank & CC Fees 327,000 327,000 334,509 (7,509) Interest on Deposits 17,500 17,500 18,237 (737) Intrafund Service Fees 3,875,500 3,875,500 3,544,967 330,533 Other Appropriations: Electric Capital Project Fund 6,400,000 6,400,000 6,400,000 - General Fund 10,000,000 10,000,000 10,000,000 - Debt Service 1,584,700 1,586,500 1,591,774 (5,274) Bond Issue Costs - - 228,275 (228,275) Rate Stabilization Fund - 2,000,000 2,000,000 - Depreciation Reserve 2,500,000 2,500,000 2,500,000 - Other Employment Expenses 163,800 - - - TOTAL EXPENSES 82,481,400 84,368,200 78,927,771 5,440,429 Budget Balance - Working Capital 10,477,700 13,548,100 17,811,265 (4,263,165) TOTAL BUDGET BALANCE & EXPENSES $ 92,959,100 $ 97,916,300 $ 96,739,036 $ 1,177,264 155

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE ELECTRIC IMPROVEMENT AND EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 8,332,100 $ 11,123,900 $ 11,123,889 $ (11) TOTAL BEGINNING BALANCES 8,332,100 11,123,900 11,123,889 (11) REVENUES: Transfer from Electric Operating Fund 6,400,000 6,400,000 6,400,000 - Transfer from Water/Wastewater Fund 298,000 298,000 298,000 - Transfer from General Fund 200,000 200,000 200,000 - General Service Billing 450,000 450,000 388,896 (61,104) Miscellaneous Grant Revenue - 21,500 - (21,500) Miscellaneous Receipts - 40,600 62,117 21,517 Interest Earnings 109,800 109,800 190,860 81,060 Total Revenues 7,457,800 7,519,900 7,539,873 19,973 TOTAL BEGINNING BALANCES & REVENUES $ 15,789,900 $ 18,643,800 $ 18,663,762 $ 19,962 EXPENSES: Power Plant $ 1,546,000 $ 1,658,000 $ 1,069,552 $ 588,448 Transmission/Distribution 1,383,000 1,474,900 732,338 742,562 Engineering 2,245,500 2,362,800 973,499 1,389,301 Administration 1,175,200 - - - ERP System 548,000 1,027,200 730,645 296,555 Total Expenses 6,897,700 6,522,900 3,506,034 3,016,866 Budget Balance - Improvement & Extension Fund 8,892,200 12,120,900 15,157,728 (3,036,828) Total Budget Balances - Working Capital 8,892,200 12,120,900 15,157,728 (3,036,828) TOTAL BUDGET BALANCES & EXPENSES $ 15,789,900 $ 18,643,800 $ 18,663,762 $ (19,962) 156

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information FINANCIAL SCHEDULES PROPRIETARY FUND TYPES INTERNAL SERVICE FUNDS WORKERS’ COMPENSATION INSURANCE FUND The City has created this fund to account for the revenues and expenses related to a self- insured Workers’ Compensation Fund. The revenues are received from the City's various funds. These funds contribute to the Workers’ Compensation Fund an amount based on salaries at a pre-determined assessment rate. Claims paid, reinsurance cost and third- party administrator's fees are charged to this fund. Budgetary schedule is included for public review of budgetary compliance. 157

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE INTERNAL SERVICE FUND - WORKERS' COMPENSATION SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2019 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) OPERATING REVENUES: Beginning Balance $ 1,444,700 $ 1,257,700 $ 1,542,806 $ 285,106 Interest Earned 22,500 22,500 37,038 14,538 City Contribution 908,500 904,300 757,081 (147,219) Miscellaneous Revenue - - 52,327 52,327 TOTAL REVENUES $ 2,375,700 $ 2,184,500 $ 2,389,252 $ 204,752 OPERATING EXPENSES: Program Expenses $ 550,000 $ 565,000 $ 416,820 $ 148,180 Contractual Services 25,000 25,000 14,277 10,723 Insurance 110,000 110,800 127,759 (16,959) State of Delaware - Self-Insurance Tax 39,000 39,000 36,244 2,756 TOTAL EXPENSES $ 724,000 $ 739,800 $ 595,100 $ 144,700 BUDGET BALANCE - CARRY FORWARD $ 1,651,700 $ 1,444,700 $ 1,794,152 $ (349,452) 158

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information FINANCIAL STATEMENTS FIDUCIARY FUND TYPES AGENCIES DOWNTOWN DOVER PARTNERSHIP The City established the Downtown Dover Partnership as an agency for the development of the downtown urban area. FOURTH OF JULY CELEBRATION COMMITTEE The Fourth of July Celebration Committee is designed to provide recreation enjoyment and educational events commemorating the birth of our nation. 159

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information CITY OF DOVER, DELAWARE COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2019 BALANCE BALANCE JUNE 30, 2018 ADDITIONS DEDUCTIONS JUNE 30, 2019 DOWNTOWN DOVER PARTNERSHIP ASSETS: Cash $ 672,541 $ 843,307 $ 669,461 $ 846,387 Receivables 52,918 - 52,918 - Prepaid Items 342 1,932 - 2,274 Total Assets $ 725,801 $ 845,239 $ 722,379 $ 848,661 LIABILITIES: Vouchers Payable 79,915 $ 354,247 $ 406,667 $ 27,495 Deposit Payable 27,432 - - 27,432 Due to Agencies 618,454 175,280 - 793,734 Total Liabilities $ 725,801 $ 529,527 $ 406,667 $ 848,661 4TH OF JULY CELEBRATION COMMITTEE ASSETS: Cash $ 31,520 $ 20,979 $ 40,439 $ 12,060 Prepaid items 9,500 18,000 9,500 18,000 Total Assets $ 41,020 $ 38,979 $ 49,939 $ 30,060 LIABILITIES: Vouchers Payable $ 2,200 $ - $ 2,200 $ - Due to Agencies 38,820 - 8,760 30,060 Total Liabilities $ 41,020 $ - $ 10,960 $ 30,060 TOTAL-ALL AGENCY FUNDS ASSETS: Cash & Investments $ 739,730 $ 864,286 $ 709,900 $ 858,447 Receivables 3,579 - 52,918 - Prepaid Items 4,889 19,932 9,500 20,274 Total Assets $ 748,198 $ 884,218 $ 772,318 $ 878,721 LIABILITIES: Vouchers Payable $ 19,676 $ 354,247 $ 408,867 $ 27,495 Deposit Payable 27,432 - - 27,432 Due to Agencies 701,090 175,280 8,760 823,794 Total Liabilities $ 748,198 $ 529,527 $ 417,627 $ 878,721 160

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware STATISTICAL STATISTICAL SECTION SECTION This section of the City of Dover’s Comprehensive Annual Financial Report represents detailed information as a context for understanding what the statements, note disclosures, and required supplementary information says about the Government’s overall financial health. 161

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2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section STATISTICAL SECTION This part of the City of Dover’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. REVENUE CAPACITY These schedules contain information to help the reader assess the City’s most significant local revenue source, property tax. DEBT CAPACITY These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. OPERATING INFORMATION These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 163

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 1 City of Dover, Delaware Net Position by Component Last Ten Fiscal Years (Accrual basis of accounting) Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Governmental Activities Net investment in capital assets $ 54,309,740 $ 53,239,906 $ 54,350,984 $ 54,325,174 $ 51,485,408 $ 50,738,483 $ 49,577,021 $ 49,642,124 $ 38,839,995 $ 35,742,504 Restricted 342,285 961,101 306,474 932,728 556,553 612,054 721,682 482,780 1,774,167 1,250,342 Unrestricted (29,348,340) (36,772,282) (44,105,399) (22,214,284) (27,947,709) (7,142,570) (4,791,553) (6,759,433) (99,435) 4,820,682 Total governmental activities net position 25,303,685 17,428,725 10,552,059 33,043,618 24,094,252 44,207,967 45,507,150 43,365,471 40,514,727 41,813,528 Business-type activities Net investment in capital assets 109,497,296 111,894,357 110,779,002 110,647,045 108,565,514 101,670,949 100,079,972 98,303,263 97,270,906 96,660,480 Restricted 54,353,211 46,693,086 44,176,110 37,026,527 36,751,850 36,123,755 34,665,736 33,836,315 34,148,330 31,302,487 Unrestricted 17,850,066 22,683,806 21,086,446 26,876,166 21,732,221 36,098,998 39,534,763 33,947,753 23,286,232 19,318,633 Total business-type activities net position 181,700,573 181,271,249 176,041,558 174,549,738 167,049,585 173,893,702 174,280,471 166,087,331 154,705,468 147,281,600 Primary government Net investment in capital assets 163,807,036 165,134,263 165,129,986 164,972,219 160,050,922 152,409,432 149,656,993 147,945,387 136,110,901 132,402,984 Restricted 54,695,496 47,654,187 44,482,584 37,959,255 37,308,403 36,735,809 35,387,418 34,319,095 35,922,497 32,552,829 Unrestricted (11,498,274) (14,088,476) (23,018,953) 4,661,882 (6,215,488) 28,956,428 34,743,210 27,188,320 23,186,797 24,139,315 Total primary government net position $ 207,004,258 $ 198,699,974 $ 186,593,617 $ 207,593,356 $ 191,143,837 $ 218,101,669 $ 219,787,621 $ 209,452,802 $ 195,220,195 $ 189,095,128 NOTE The fiscal years prior to 2015 show fund balances as they were reported prior to GASB No. 68. The Change in Net Position for fiscal 2017 includes a prior period adjustment for the OPEB Liability associated with GASB No. 74 & 75. 164

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 2 City of Dover, Delaware Changes in Net Position Last Ten Fiscal Years (Accrual basis of accounting) Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Expenses Governmental activities: General government $ 3,296,331 $ 3,443,595 $ 3,456,943 $ 4,648,999 $ 3,374,955 $ 1,288,977 $ 1,474,045 $ 1,180,327 $ 1,248,124 $ 1,510,308 Public safety 17,597,828 17,441,023 14,947,553 19,919,050 21,336,042 19,219,986 17,989,463 17,638,304 16,848,343 16,357,692 Public works 6,183,329 7,736,355 6,942,760 7,381,557 3,848,402 6,594,829 6,099,484 8,135,172 6,257,946 7,115,319 Library and recreation 3,211,586 3,106,031 2,866,441 2,183,802 3,079,426 2,942,800 2,313,048 2,377,363 2,731,492 2,265,205 Community and economic development 461,983 513,857 449,356 551,879 444,474 676,554 939,966 773,208 1,173,546 2,228,744 Central services 521,020 589,846 473,498 483,426 443,072 512,586 454,816 469,385 599,498 544,611 Financial administration 894,670 964,051 746,714 1,249,012 1,247,976 1,368,048 1,122,830 1,146,524 2,463,426 2,353,180 Other post-employment benefits - - - - - 3,348,267 5,119,778 6,534,630 6,142,627 2,843,480 Interest on long-term debt 178,514 129,723 118,275 118,565 174,912 122,812 114,785 90,161 75,397 78,581 Total governmental activities expenses 32,345,262 33,924,481 30,001,540 36,536,290 33,949,259 36,074,859 35,628,215 38,345,074 37,540,399 35,297,120 Business-type activities Water and sewer 12,604,448 11,728,740 11,416,394 11,925,299 11,322,958 11,397,992 10,905,358 11,068,607 10,912,722 11,971,445 Electric 68,459,581 72,553,319 62,992,850 61,054,151 67,562,077 74,481,048 74,595,585 77,625,673 90,296,244 90,940,056 Total business-type activities 81,064,029 84,282,059 74,409,244 72,979,450 78,885,035 85,879,040 85,500,943 88,694,280 101,208,966 102,911,501 Total primary government expenses 113,409,291 118,206,540 104,410,784 109,515,740 112,834,294 121,953,899 121,129,158 127,039,354 138,749,365 138,208,621 Program Revenues Governmental activities: Charges for services: General government 2,520,022 2,456,576 2,362,123 2,336,389 2,116,233 2,137,574 2,463,437 4,043,168 1,503,243 1,307,296 Public safety 4,510,464 5,367,450 5,171,989 4,920,783 4,558,200 4,676,162 4,240,847 4,803,827 4,682,687 4,309,516 Public works 3,068,399 3,714,187 2,514,645 2,527,478 2,578,892 2,595,648 2,624,877 1,903,623 2,173,434 1,340,729 Library and recreation 612,737 640,061 602,873 667,996 696,179 699,622 656,001 632,824 632,861 650,283 Operating grants and contributions 2,441,900 2,190,146 2,025,522 2,759,367 2,298,936 2,159,616 2,914,696 2,654,051 5,032,926 3,813,842 Capital grants and contributions 372,136 344,561 360,538 675,784 166,379 1,226,559 2,107,444 6,292,303 856,338 169,130 Total governmental activities program revenues 13,525,658 14,712,981 13,037,690 13,887,797 12,414,819 13,495,181 15,007,302 20,329,796 14,881,489 11,590,796 (Continued) 165

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section (Table 2 Continued - Changes in Net Position) Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Program Revenues Business-type activities: Charges for services: Water and sewer 16,017,306 16,319,193 16,054,096 14,976,213 14,875,806 13,268,213 13,387,706 13,775,833 14,033,678 11,531,595 Electric 83,709,415 83,883,757 83,655,870 80,695,910 79,802,674 79,489,192 90,685,693 93,529,401 101,902,619 100,278,474 Capital contributions - - 1,201,963 44,955 1,516,932 401,947 - 441,285 997,750 392,855 Total business-type activities program revenues 99,726,721 100,202,950 100,911,929 95,717,078 96,195,412 93,159,352 104,073,399 107,746,519 116,934,047 112,202,924 Total primary government program revenues 113,252,379 114,915,931 113,949,619 109,604,875 108,610,231 106,654,533 119,080,701 128,076,315 131,815,536 123,793,720 Net (expense)/revenue: Governmental activities (18,819,604) (19,211,500) (16,963,850) (22,648,493) (21,534,440) (22,579,678) (20,620,913) (18,015,278) (22,658,910) (23,706,324) Business-type activities 18,662,692 15,920,891 26,502,685 22,737,628 17,310,377 7,280,312 18,572,456 19,052,239 15,725,081 9,291,423 Total primary government net revenue (expense) (156,912) (3,290,609) 9,538,835 89,135 (4,224,063) (15,299,366) (2,048,457) 1,036,961 (6,933,829) (14,414,901) General Revenues and Other Changes in Net Position Governmental activities: Property taxes 13,448,025 13,065,098 12,895,597 12,846,774 11,176,763 11,094,479 11,126,395 11,050,198 10,904,908 10,029,584 Transfer taxes 1,637,194 2,022,165 1,634,707 2,191,915 1,713,505 1,543,626 1,107,686 1,373,103 1,461,983 867,692 Investment earnings 809,345 100,903 132,228 263,667 92,479 142,390 36,793 141,925 137,218 268,748 Transfers 10,800,000 10,900,000 10,875,000 16,295,503 10,500,000 8,500,000 10,491,718 8,300,796 8,856,000 7,306,120 Total governmental activities 26,694,564 26,088,166 25,537,532 31,597,859 23,482,747 21,280,495 22,762,592 20,866,022 21,360,109 18,472,144 Business-type activities: Investment earnings 3,752,939 208,800 379,160 1,058,028 544,624 832,919 112,402 630,420 554,787 837,564 Transfers (10,800,000) (10,900,000) (10,875,000) (16,295,503) (10,500,000) (8,500,000) (10,491,718) (8,300,796) (8,856,000) (7,306,120) Total business-type activities (7,047,061) (10,691,200) (10,495,840) (15,237,475) (9,955,376) (7,667,081) (10,379,316) (7,670,376) (8,301,213) (6,468,556) Total primary government 19,647,503 15,396,966 15,041,692 16,360,384 13,527,371 13,613,414 12,383,276 13,195,646 13,058,896 12,003,588 Change in Net Position Government activities 7,874,960 6,876,666 8,573,682 8,949,366 1,948,307 (1,299,183) 2,141,679 2,850,744 (1,298,801) (5,234,180) Business-type activities 11,615,631 5,229,691 16,006,845 7,500,153 7,355,001 (386,769) 8,193,140 11,381,863 7,423,868 2,822,867 Total primary government $ 19,490,591 $ 12,106,357 $ 24,580,527 $ 16,449,519 $ 9,303,308 $ (1,685,952) $ 10,334,819 $ 14,232,607 $ 6,125,067 $ (2,411,313) NOTE The Change in Net Position for fiscal 2015 includes a prior period adjustment for the Net Pension Liability associated with GASB No. 68. The Change in Net Position for fiscal 2017 includes a prior period adjustment for the OPEB Liability associated with GASB No. 74 & 75. 166

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 3 City of Dover, Delaware Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified accrual basis of accounting) Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 General fund Reserved $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 315,580 Unreserved - - - - - - - - - 7,242,323 Non-spendable 234,974 259,258 187,294 195,134 202,620 207,884 227,457 198,175 191,567 - Restricted 27,070 10,572 7,979 173,769 127,706 129,476 131,237 83,356 85,070 - Committed 1,047,987 1,111,182 2,441,641 1,059,197 1,041,130 723,300 936,899 920,475 3,484,203 - Assigned 4,320,615 2,865,373 1,956,061 2,735,602 3,839,571 3,163,431 3,519,012 658,890 614,559 - Unassigned 7,118,240 7,722,505 5,528,605 4,995,522 3,991,442 3,435,079 3,391,714 3,007,983 3,385,209 - Total general fund 12,748,886 11,968,890 10,121,580 9,159,224 9,202,469 7,659,170 8,206,319 4,868,879 7,760,608 7,557,903 All other governmental funds Special revenue funds Unreserved - - - - - - - - - 872,309 Non-spendable - 9,990 3,993 350 181 2,447 - 13,099 4,203 - Restricted 315,215 950,529 298,495 758,959 428,847 482,578 590,445 399,424 764,512 - Assigned - - - - - - 123,349 171,381 289,221 - Total all other governmental funds 315,215 960,519 302,488 759,309 429,028 485,025 713,794 583,904 1,057,936 872,309 Total fund balances $ 13,064,101 $ 12,929,409 $ 10,424,068 $ 9,918,533 $ 9,631,497 $ 8,144,195 $ 8,920,113 $ 5,452,783 $ 8,818,544 $ 8,430,212 NOTE The fiscal years prior to 2011 show fund balances as they were classified and reported prior to GASB No. 54. 167

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 4 City of Dover, Delaware Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified accrual basis of accounting) Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Revenues Fines $ 1,020,920 $ 1,121,135 $ 1,142,722 $ 1,128,211 $ 1,161,876 $ 1,011,156 $ 912,004 $ 1,202,615 $ 1,665,496 $ 1,418,354 Library revenue 410,154 392,108 380,561 419,677 480,823 498,553 471,065 475,822 444,455 465,387 Licenses and permits 2,866,796 3,786,167 3,548,401 3,525,992 2,893,990 2,952,015 2,548,913 2,816,866 2,417,363 2,424,768 Sanitation fees and rebates 3,068,399 3,133,360 2,514,645 2,527,478 2,578,892 2,595,648 2,624,877 1,903,623 2,173,434 1,340,729 Recreation 61,147 87,125 53,301 65,145 66,038 49,144 40,446 44,522 44,292 36,100 Miscellaneous services 1,672,401 2,210,980 1,679,390 1,874,534 1,650,153 1,831,683 2,470,200 3,940,294 1,480,845 1,247,096 Taxes 15,103,449 15,125,329 14,564,304 15,085,481 12,930,532 12,655,035 12,333,520 12,462,532 12,366,891 10,897,276 Grants 2,814,036 2,534,707 2,386,060 3,449,238 2,489,239 3,416,319 5,119,089 8,909,758 5,551,175 4,482,259 Court of chancery fees 1,588,140 1,496,520 1,343,020 1,239,300 1,118,680 1,034,460 917,700 863,220 766,340 675,390 Investment income 730,797 93,751 123,234 234,885 77,769 122,490 45,198 117,405 112,722 237,631 Total revenues 29,336,239 29,981,182 27,735,638 29,549,941 25,447,992 26,166,503 27,483,012 32,736,657 27,023,013 23,224,990 Expenditures General government 1,760,851 1,710,100 2,026,568 2,116,749 1,425,786 1,271,523 1,107,122 1,093,772 1,348,911 1,525,854 Library services 1,971,773 1,981,201 1,926,561 1,720,021 1,675,989 1,697,982 5,514,217 13,518,569 4,369,578 1,951,347 Public safety 22,558,701 21,018,381 21,248,561 21,240,506 20,218,519 19,130,832 18,048,642 17,001,619 16,139,953 15,948,298 Public works 2,855,382 1,918,473 2,119,186 2,146,917 1,708,658 2,572,965 1,758,405 2,074,061 2,535,060 2,504,061 Recreational services 1,087,393 821,613 733,961 783,976 865,938 683,363 651,341 827,230 834,124 746,868 Streets and sanitation services 4,458,329 4,637,145 4,275,648 6,081,813 6,574,262 4,634,091 2,990,430 3,280,165 3,383,465 3,181,025 Engineering services 266,332 263,930 219,198 166,579 26,996 - - - - - Financial administration 754,400 762,860 764,622 919,086 979,112 1,002,539 909,877 902,009 866,314 895,570 Garage and stores 492,111 499,289 501,559 465,843 419,597 415,593 431,542 503,036 490,113 526,286 Insurance 276,689 302,258 295,923 280,901 278,682 272,895 241,395 198,241 203,343 197,723 Retiree health care lump sum 1,894,900 2,063,000 2,039,700 1,567,700 1,636,500 1,636,500 1,620,600 1,614,241 1,297,509 1,006,397 Employee pension unfunded liability - 619,000 - 594,300 543,000 121,000 1,693,500 1,545,000 1,544,978 - Street lights 805,185 803,924 811,992 804,246 775,197 774,533 878,760 986,430 968,562 956,860 Community and economic development 461,983 513,857 449,356 551,879 444,474 676,554 939,966 773,208 1,173,546 2,228,744 (Continued) 168

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 4 (Continued) - Changes in Fund Balances of Governmental Funds Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Expenditures Debt service Principal 322,745 332,355 573,497 553,824 848,069 429,239 296,003 275,000 270,000 260,000 Interest 34,773 128,455 118,771 118,565 114,243 122,812 73,071 52,734 65,225 68,410 Other charges (issuance of debt) - - - - 60,668 - 1,029 27,255 - - Total expenditures 40,001,547 38,375,841 38,105,103 40,112,905 38,595,690 35,442,421 37,155,900 44,672,570 35,490,681 31,997,443 Excess of revenues over(under) expenditures (10,665,308) (8,394,659) (10,369,465) (10,562,964) (13,147,698) (9,275,918) (9,672,888) (11,935,913) (8,467,668) (8,772,453) Other financing sources (uses) Bond proceeds 5,700,000 - - - 4,135,000 - 2,648,500 851,500 - - Transfers in 13,953,381 14,220,407 13,885,445 14,339,821 13,500,366 11,458,445 12,666,208 10,959,204 12,420,329 9,156,575 Transfers out (3,153,381) (3,320,407) (3,010,445) (3,489,821) (3,000,366) (2,958,445) (2,174,490) (2,658,408) (3,564,329) (1,850,455) Payments to refunded bond escrow agent (5,700,000) - - - - - - - - - Total other financing sources (uses) 10,800,000 10,900,000 10,875,000 10,850,000 14,635,000 8,500,000 13,140,218 9,152,296 8,856,000 7,306,120 Net change in fund balances $ 134,692 $ 2,505,341 $ 505,535 $ 287,036 $ 1,487,302 $ (775,918) $ 3,467,330 $ (2,783,617) $ 388,332 $ (1,466,333) Debt service as a percentage of noncapital expenditures 0.99% 1.27% 1.97% 1.96% 3.09% 1.74% 1.14% 1.07% 0.85% 1.05% Capital outlay included in total expenditures (1) $ 3,993,940 $ 2,066,950 $ 2,973,131 $ 5,753,588 $ 7,500,186 $ 3,777,578 $ 4,872,122 $ 13,927,288 $ 5,296,536 $ 2,434,391 NOTES (1) Capital outlay has been included in functional expenditures. Debt service as a percentage of non-capital expenditures excludes capital outlay expenditures. 169

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 5 City of Dover, Delaware Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) Fiscal Property Transfer Year Tax Tax Total 2019 $ 13,448,025 $ 1,637,194 $ 15,085,219 2018 13,065,098 2,022,165 15,087,263 2017 12,895,597 1,634,707 14,530,304 2016 12,846,772 2,191,915 15,038,687 2015 11,176,763 1,713,788 12,890,551 2014 11,094,479 1,543,626 12,638,105 2013 11,126,395 1,107,686 12,234,081 2012 11,050,198 1,373,103 12,423,301 2011 10,904,908 1,461,983 12,366,891 2010 10,029,584 867,692 10,897,276 NOTES 1. Property Tax rate of $.4050 per $100 of 100% assessed value (See Table 6 for tax rates). Revenues include payments in lieu of taxes, farm land roll back and penalties. 2. Transfer Taxes equal 1.5% of the real property sales value. 170

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 6 City of Dover, Delaware Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years REAL PROPERTY Ratio of Direct Less: Total Taxable Tax Fiscal Total Assessed Exempt Total Taxable Estimated Value to Total Rate Year Value Properties Assessed Value Actual Value Assessed Value Per $100 2019 $ 4,600,542,300 $ 1,342,452,800 $ 3,258,089,500 $ 4,600,542,300 70.82% $ 0.4050 2018 4,553,536,100 1,338,792,000 3,214,744,100 4,553,536,100 70.60% 0.4050 2017 4,493,113,000 1,336,802,000 3,156,311,000 4,493,113,000 70.25% 0.4050 2016 4,443,188,600 1,335,276,500 3,107,912,100 4,443,188,600 69.95% 0.4050 2015 4,584,108,050 1,376,954,490 3,207,153,560 4,584,108,050 69.96% 0.3378 2014 4,525,547,960 1,365,654,100 3,159,893,860 4,525,547,960 69.82% 0.3378 2013 4,510,303,860 1,328,807,500 3,181,496,360 4,510,303,860 70.54% 0.3378 2012 4,469,369,160 1,300,061,400 3,169,307,760 4,469,369,160 70.91% 0.3378 2011 4,363,518,360 1,226,879,300 3,136,639,060 4,363,518,360 71.88% 0.3378 2010 4,139,869,700 1,232,858,580 2,907,011,120 4,139,869,700 70.22% 0.3300 Source: Tax Assessor's Office, City of Dover. NOTES 1. There is no tax on personal properties. Therefore, no figures are presented. 2. In 2010, the City property values were reassessed, effective for tax year 2011. The tax rate was increased from $ .330 to $ .3378 per $100. Had the tax rate been rolled back to a revenue neutral rate, the rate would have been $ .3108 per $100. The revised rate represents a $ .027 rate increase. 171

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 7 NOTES City of Dover, Delaware 1. Section 48 of the City of Property Tax Rates - All Direct and Overlapping Dover charter provides that Governments with the Capital School District the amount of money to be (Per $100 of Assessed Value) raised through property Last Ten Fiscal Years taxes shall not exceed 2% of the total taxable assessment. 2. Kent County Property tax Direct Overlapping rates reflect the 1987 City Capital Vo-Tech Total reappraisal of properties in Fiscal of Kent School School Direct & Kent County. Year Dover County District District Overlapping 3. In 2010, the City property 2019 0.4050 0.3000 1.8307 0.1541 2.6898 values were reassessed, 2018 0.4050 0.3000 1.7942 0.1522 2.6514 effective for tax year 2011. 2017 0.4050 0.3000 1.8065 0.1484 2.6599 Tax rate increased to 2016 0.4050 0.3000 1.8115 0.1415 2.6580 $.3378. 2015 0.3378 0.3000 1.8215 0.1372 2.5965 2014 0.3378 0.3000 1.8500 0.1372 2.6250 4. In 2015, the City property 2013 0.3378 0.3000 1.9090 0.1372 2.6840 values were reassessed, 2012 0.3378 0.3000 1.8320 0.1351 2.6049 effective for tax year 2016. 2011 0.3378 0.3000 1.8320 0.1351 2.6049 Tax rate increased to 2010 0.3300 0.3100 1.7685 0.1304 2.5389 $.4050. Sources: Tax Assessor's Office - City Receiver of Taxes Office - Kent County Property Tax Rates - FY 2019 All Direct & Overlapping Governments I· City of Dover •Kent County • Capital School • Vo-Tech School 172

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 8 Principal Tax Payers Current Year and Nine Years Ago PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL 2019 TAXABLE 2010 TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAX PAYERS VALUATION RANK VALUATION VALUATION RANK VALUATION Dover Downs Prop, Inc. $147,924,900 1 3.22% $168,411,200 1 5.79% Dover Mall LP/Dover Commons 71,706,800 2 1.56% 75,714,000 2 2.60% Dover Medical Center 39,202,300 3 0.85% 24,887,600 3 0.86% Blue Hen Apt LLC 30,895,300 4 0.67% 1,627,500 - 0.06% Leander Lakes LLC 27,484,300 5 0.60% - - - CW Dover LLC FKA Dover South Coast 23,071,400 6 0.50% 14,470,300 9 0.50% Kraft-General Foods Corp. 21,534,700 7 0.47% 20,624,800 4 0.71% Onix Dover LLC 16,617,800 8 0.36% 8,951,100 - 0.31% GM Country Club LLC 15,788,600 9 0.34% 11,415,800 - 0.39% Multi Residential M LLC 14,415,500 10 0.31% 10,343,500 - 0.36% Millers Dover Downs - - - 14,837,900 8 0.51% Dover Bay Court Plaza - - - 19,107,300 5 0.66% Berks City Real Estate LLC - - - 18,034,400 6 0.62% East Country Village - - - 15,981,800 7 0.55% Morgan Cannon Mill Apts - - - 11,650,000 10 0.40% 8.90% $416,057,200 14.31% Source: Tax Assessor's Office, City of Dover $408,641,600 Total taxable assessed valuation for current year is 4,593,440,200 Total taxable assessed valuation for ten years ago is 2,907,011,120 173

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 9 City of Dover, Delaware Property Tax Levies and Collections Last Ten Fiscal Years Total Collected Within Collection Collected in Total Collection Fiscal Tax the Fiscal Year as Percentage Subsequent Collections as Percentage Year Levy of the Levy of Levy Years to Date of Levy 2019 $ 12,887,417 $ 12,870,997 99.9% $ - $ 12,870,997 99.87% 2018 12,669,581 12,628,024 99.7% 37,746 12,665,770 99.97% 2017 12,478,630 12,401,338 99.4% 75,314 12,476,652 99.95% 2016 12,437,857 12,204,948 98.1% 232,909 12,437,857 98.13% 2015 10,737,703 10,612,272 98.8% 125,431 10,737,703 100.00% 2014 10,696,886 10,493,954 98.1% 202,932 10,696,886 100.00% 2013 10,594,623 10,398,888 98.2% 195,735 10,594,623 100.00% 2012 10,549,631 10,280,930 97.5% 268,701 10,549,631 100.00% 2011 10,481,734 10,166,681 97.0% 315,053 10,481,734 100.00% 2010 9,525,034 9,314,327 97.8% 210,707 9,525,034 100.00% Source: City of Dover Assessor & Customer Service Reports. Property Taxes Levied Last Ten Fiscal Years $13 - $11 Millions $9 $7 $5 $3 $1 $(1) 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 NOTES 1. Section 48 of the City of Dover charter provides that the maximum budget to be raised through property taxes shall not exceed 2% of the total taxable assessment. 2. Total Tax Levy represents the annual tax billings, quarterly billings and adjustments from tax appeals. 3. The table excludes payments in lieu of taxes and farm land roll back taxes. 174

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 10 City of Dover, Delaware Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-type Activities General Water/Sewer Electric Total Percentage Fiscal Obligation Revenue Revenue Primary of Personal Per Year Bonds Bonds Bonds Government Income Capita Population 2019 $ 5,700,000 $ 13,197,695 $ 15,700,000 $ 34,597,695 3.8% 916 37,790 2018 5,877,013 11,312,399 17,890,000 35,079,412 4.1% 921 38,422 2017 6,209,368 12,111,088 18,620,000 36,940,456 4.3% 978 37,686 2016 6,782,865 12,888,791 19,315,000 38,986,656 4.6% 1,041 37,941 2015 7,336,689 13,650,787 21,680,000 42,667,476 5.4% 1,137 37,560 2014 4,049,758 14,412,347 23,940,000 42,402,105 5.4% 1,130 37,540 2013 4,478,997 10,926,717 26,110,000 41,515,714 5.1% 1,138 36,492 2012 2,085,815 10,865,354 27,995,025 40,946,194 5.0% 1,129 36,267 2011 1,499,143 7,913,384 30,033,446 39,445,973 4.9% 1,070 37,341 2010 1,758,971 3,765,547 34,543,730 40,068,248 5.7% 1,112 36,627 Source: City of Dover Financial Records Population Source: City Count 175

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 11 Ratio of Net General Obligation Bonded Debt To Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Ratio of Net Net Net Bonded Bonded Taxable Gross Net Debt To Debt Fiscal Assessed Bonded Bonded Assessed Per Year Population Value Debt Debt Value Capita 2019 37,790 $3,258,089,500 $ 5,700,000 $ 5,700,000 0.17% 150.83 2018 38,422 3,214,744,100 5,877,013 5,877,013 0.18% 154.24 2017 37,686 3,156,311,000 5,877,013 5,877,013 0.19% 154.24 2016 37,941 3,107,912,100 6,782,865 6,782,865 0.22% 179.51 2015 37,560 3,207,153,560 7,336,689 7,336,689 0.23% 195.03 2014 37,540 3,159,893,860 4,049,758 4,049,758 0.13% 107.88 2013 36,492 3,181,496,360 4,478,997 4,478,997 0.14% 121.97 2012 36,267 3,169,307,760 4,478,997 4,478,997 0.14% 122.74 2011 37,341 3,136,639,060 2,085,815 2,085,815 0.07% 57.51 2010 36,627 2,907,011,120 1,550,000 1,550,000 0.05% 41.51 Source: City of Dover Financial Records, Tax Assessor’s Office and Delaware Population Consortium Annual Population Projections (City Count). NOTES 1. This table includes all long-term general obligation bonded debt only. The Enterprise Funds have no general obligation debt. 2. Assessed value reflects the net billable tax base and does not include the exempt value, exemption for Senior Citizens and exemption for disability. 176

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 12 City of Dover, Delaware Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years Ratio of Debt Service Total Total to Total Fiscal Debt General General (1) Year Principal Interest Service Expenditures Expenditures 2019 $ 322,745 $ 132,829 $ 455,574 $ 46,907,709 0.97% 2018 332,355 128,455 460,810 44,049,712 1.05% 2017 573,497 118,771 692,268 44,378,544 1.56% 2016 553,824 118,565 672,389 46,477,667 1.45% 2015 848,069 114,243 962,312 45,484,211 2.12% 2014 429,239 122,812 552,051 39,646,120 1.39% 2013 296,003 73,071 369,074 40,517,512 0.91% 2012 275,000 52,734 327,263 47,743,864 0.69% 2011 270,000 65,225 335,225 38,898,945 0.86% 2010 260,000 68,410 328,410 32,786,465 1.00% Source: City of Dover Financial Records. NOTES 1. The General Expenditures include all operating items, capital items and debt service. 177

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 13 City of Dover, Delaware Computation of Direct and Overlapping Debt with the Capital School District June 30, 2019 Percentage Amount Net Debt Applicable to Applicable to Jurisdiction Outstanding City of Dover City of Dover City of Dover $ 5,700,000 100% $ 5,700,000 Kent County (1) 51,179,528 0% N/A (2) Capital School District 46,416,895 N/A N/A TOTAL $ 103,296,423 $ 5,700,000 Sources: City of Dover Financial Records, Kent County Levy Court - Accounting Department and Capital School District - Administration Department. NOTES 1. Kent County: Total debt for Kent County is $51,179,528 as of June 30, 2019. Although Kent County's bonds are general obligation bonds, $47,580,700 is payable from the Kent County Sewer Fund(s) or other committed sources. 2. Capital School District: As of June 30, 2019, the net outstanding debt was $46,416,895. Percentage and amount is not applicable to the City of Dover. 178

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 14 Computation of Legal Debt Margin Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Debt Limit $ 162,904 $ 160,737 $ 157,816 $ 155,396 $ 158,485 $ 157,995 $ 159,075 $ 158,465 $ 156,832 $ 145,351 Net (Taxable) Assessed Value on Books 3,258,090 3,214,744 3,156,311 3,107,912 3,207,154 3,159,894 3,181,496 3,169,308 3,136,639 2,907,011 Total net debt applicable to limit 5,700 5,877 6,209 6,783 7,337 4,050 4,479 1,550 1,820 2,080 Legal Debt Margin $ 157,204 $ 154,860 $ 148,613 $ 151,149 $ 153,945 $ 154,596 $ 156,915 $ 155,012 $ 143,271 $ 142,520 Total Net Debt applicable to limit as a percentage of debt limit 3.50% 3.61% 4.36% 4.63% 2.56% 2.82% 0.98% 1.16% 1.43% 1.69% Legal Debt Margin Calculation for Fiscal Year 2016 Net (Taxable) Assessed Value on Books $ 3,258,090 Debt Limit - 5 Percent of Total Assessed Value $ 162,904 DEBT (For which the City's full faith and credit has been pledged) Gross Bonded Debt 5,700 LEGAL DEBT MARGIN $ 157,204 Source: City of Dover Financial Reports, City of Dover Charter, Section 50(b), and Tax Assessor's Office July 2009 the Charter was amended and the debt limit was reduced from 25% of the total assessed value to 5%. 179

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 15 City of Dover, Delaware Revenue Bond Coverage - Electric Revenue Bonds Last Ten Fiscal Years Available Fiscal Gross Operating For Debt Debt Service Requirements of Each Fiscal Year Year Revenue Expenses Service Principal Interest Total Coverage 2019 $ 84,195,248 $ 56,720,895 $ 27,474,353 $ 765,000 $ 669,785 $ 1,434,785 19.15 2018 84,235,174 60,595,349 23,639,825 730,000 847,454 1,577,454 14.99 2017 83,943,882 54,748,915 29,194,967 695,000 883,954 1,578,954 18.49 2016 80,846,658 54,418,343 26,428,315 2,365,000 918,704 3,283,704 8.05 2015 79,769,994 66,521,873 13,248,121 2,260,000 1,036,954 3,296,954 4.02 2014 79,476,865 68,594,189 10,882,676 2,170,000 1,131,854 3,301,854 3.30 2013 90,876,162 68,546,508 22,329,654 2,110,000 1,205,554 3,315,554 6.73 2012 93,650,277 71,607,021 22,043,256 2,060,000 1,260,054 3,320,054 6.64 2011 102,734,764 84,195,802 18,538,962 2,370,000 1,609,192 3,979,192 4.66 2010 100,316,323 86,089,451 14,226,872 2,260,000 1,716,134 3,976,134 3.58 Source: City of Dover Financial Records. NOTES 1. Coverage required by the bond resolution is 1.25. 4. Figures presented in this table compare the net revenue available for debt service to the debt service requirements of the same fiscal year. 2. Calculation of gross revenue for fiscal year 2019 is as follows: Gross Revenue: 5. In November 2011, the City issued Electric Revenue Refunding Operating Revenues $ 83,709,420 Bonds in the amount of $8,810,000 to refund the 2014 Series. Interest Earned-Operating Funds 485,828 This refunding reduced the principal payable by $2,620,000. Total Gross Revenue $ 84,195,248 6. In August 2018, the City issued Electric Revenue Refunding 3. Direct operating expenses do not include depreciation expense. Bonds in the amount of $15,700,000 to refund the 2008 Series. This refunding reduced the principal payable by $2,190,000. 180

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 16 City of Dover, Delaware Revenue Bond Coverage - Water/Wastewater Bonds Last Ten Fiscal Years Maximum Requirements Net Revenue Maximum Direct Available Debt Fiscal Gross Operating For Debt Service Actual Year Revenue Expenses Service Requirement Coverage 2019 $ 15,278,328 $ 10,120,815 $ 5,157,513 $ 1,132,806 4.55 2018 14,975,823 9,046,827 5,928,996 1,132,806 5.23 2017 15,354,263 8,906,722 6,447,541 1,132,806 5.69 2016 15,005,695 9,621,676 5,438,408 1,132,806 4.80 2015 14,385,625 9,250,346 5,637,043 1,132,806 4.98 2014 13,307,253 9,326,405 3,980,848 1,132,806 3.51 2013 13,282,782 8,841,757 4,441,025 1,019,315 4.36 2012 13,647,145 9,063,553 4,583,592 993,837 4.61 2011 13,758,048 9,222,105 4,535,943 416,423 10.89 2010 11,204,911 10,319,728 885,183 416,423 2.13 Source: City of Dover Financial Records. NOTES 1. Coverage required by bond resolution is 1.20. 2. The maximum debt service requirement presented above covers all revenue bond requirements. Rates were increased in 2011 for debt service coverage on multi-year projects. 3. Direct operating expenses do not include depreciation expense for coverage purposes as per the bond indenture. 4. In Fiscal year 2013, various capital projects were completed. These capital projects were financed by three state revolving fund loans issued in 2009, 2010 & 2011 in the amount of $5.9 million, $2.4 million and $0.8 million, respectively, resulting in an increase in debt service. 5. In Fiscal year 2014, the City issued Water and Sewer Revenue Bonds in the amount of $6,125,000. These bonds were issued to refund the Series 2003 Water and Wastewater Revenue bonds and provided $4,005,960 for two capital projects. 6. Gross Revenue includes $16,017,306 Operating Revenue plus $190,460 Operating Interest less transfers to the Water & Sewer Impact Fee Reserves $929,438. 181

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 17 City of Dover, Delaware Top 10 Water and Wastewater Utility Customers Fiscal Year Ended June 30, 2019 Water % of % of Consumption Total Revenue Total Customer (Tgal) Consumption Billed Revenue Garrison Energy Center 328,073 19.04% $ 987,279 17.38% Procter and Gamble 55,996 3.25% 168,048 2.96% Delaware State University 48,102 2.79% 144,513 2.54% Dover Downs 45,111 2.62% 135,393 2.38% Kraft Foods Global 32,775 1.90% 98,385 1.73% Kent General Hospital 27,515 1.60% 82,815 1.46% Dover Housing Authority 22,437 1.30% 70,344 1.24% Alder & Pine Holdings 15,911 1.14% 63,929 1.13% Bayhealth Medical Center 20,812 0.92% 62,736 1.10% Sovereign Property Management 19,611 1.21% 59,853 1.05% Totals for Top 10 Customers 616,343 35.78% 1,873,295 32.97% All Other 1,106,291 64.22% 3,808,710 67.03% Total for System 1,722,634 100.00% $ 5,682,005 100.00% Wastewater % of % of Consumption Total Revenue Total Customer (Tgal) Consumption Billed Revenue Kraft Foods Global 53,973 4.34% $ 350,315 4.13% Dover Downs 45,111 3.62% 292,830 3.45% Procter and Gamble 31,342 2.52% 203,500 2.40% Kent General Hospital 27,515 2.21% 178,842 2.11% Dover Housing Authority 22,386 1.80% 148,176 1.75% Bayhealth Medical Center 20,812 1.67% 135,370 1.60% Sovereign Property Management 19,611 1.58% 128,295 1.51% Alder & Pine Holdings 15,911 1.28% 117,728 1.39% Garrison Energy Center 16,240 1.30% 105,458 1.24% State of Delaware 12,158 0.98% 79,725 0.94% Totals for Top 10 Customers 265,059 21.29% 1,740,239 20.52% All Other 979,749 78.71% 6,741,579 79.48% Total for System 1,244,808 100.00% $ 8,481,818 100.00% NOTES: 1. Both the Water and Wastewater revenue billed amounts for each vendor, do not include the monthly flat rate of $2.50. 2. The total Revenue amounts for both Water and 182 Wastewater include the monthly flat rates.

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 18 City of Dover, Delaware Top 10 Electric Utility Customers Fiscal Year Ended June 30, 2019 % of Total Revenue % of Total Customer Kwh Kwh Billed Revenue Dover Air Force Base 63,102,208 8.5% $ 3,763,988 4.7% Kraft 47,560,937 6.4% 2,011,042 2.5% Edgewell Personal Care Products 42,621,711 5.7% 2,068,785 2.6% Delaware State University 29,344,095 3.9% 1,317,295 1.7% Bay Health/Kent General 25,504,054 3.4% 1,214,268 1.5% Dover Downs 23,670,424 3.2% 1,065,146 1.3% State of Delaware 14,513,056 1.9% 870,366 1.1% Procter & Gamble 13,323,802 1.8% 579,981 0.7% Capital School District 10,962,442 1.5% 625,183 0.8% Eden Hill Medical Center 5,265,000 0.7% 355,370 0.4% Totals for Top 10 Customers 275,867,729 37.0% 13,871,425 17.4% All Other 469,695,041 63.0% 65,629,789 82.6% Total for System 745,562,770 100.0% $ 79,501,213 100.0% Note: The revenue billed includes direct base sales and utility Tax. 183

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 19 City of Dover, Delaware Demographic and Economic Statistics Last Ten Calendar Years Per Capita Personal Personal Median School Unemployment Year Population Income Income Age Enrollment Rate 2019 37,790 $ 921,244,620 $ 24,378 29.9 6,519 5.7% 2018 38,422 865,182,114 22,707 29.5 6,494 5.8% 2017 37,686 827,207,700 21,950 30.0 6,523 6.2% 2016 37,941 842,783,433 22,213 30.2 6,486 5.7% 2015 37,560 730,354,200 19,445 31.3 6,665 7.4% 2014 37,540 788,039,680 20,992 29.8 6,527 6.4% 2013 36,492 821,361,936 22,508 31.1 6,344 9.6% 2012 36,267 828,258,924 22,697 33.2 6,984 9.3% 2011 37,341 818,158,759 22,379 31.3 7,185 9.9% 2010 36,627 712,212,015 19,445 32.9 7,117 10.2% Population Source: City Count Personal Income Source: Estimation based on Population times Per Capita Personal Income Per Capita Personal Income Source: U.S. Census Bureau, 2012-2016 American Community Survey 5-Year Estimates Median Age Source: 2012-2016 American Community Survey 5-Year Estimates Capital School Enrollment Source: Includes kindergarten through 12th grade, as of Summer 2018 Unemployment Rate Source: Delaware Department of Labor Statistics Not Seasonally Adjusted, June 2018 184

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 20 City of Dover, Delaware Major Employers by Industry Current Year and Nine Years Ago 2018 4th Quarter 2009 4th Quarter Percentage of Percentage of Number of Total County Number of Total County Industry Description Employees Rank Employment Employees Rank Employment Government 18,785 1 27.9% 18,697 1 30.9% Retail trade 9,475 2 14.1% 9,144 2 15.1% Health care & social assistance 10,219 3 15.2% 7,823 3 12.9% Accommodation & food services 6,569 4 9.7% 4,803 4 7.9% Manufacturing 4,892 5 7.3% 3,301 5 5.5% Arts, entertainment, & recreation 1,474 6 2.2% 2,023 9 3.3% Construction 2,620 7 3.9% 2,157 6 3.6% Transportation & warehousing 2,637 8 3.9% 2,152 7 3.6% Admin and waste services 2,611 9 3.9% 2,559 8 4.2% Professional & technical services 2,107 10 3.1% 1,331 10 2.2% 61,389 91.1% 53,990 89.2% Total - All Industries 67,414 60,554 Source: Delaware Department of Labor/Office of Occupational and Labor Market Information/Payroll Data/Quarterly Census of Employment and Wages (Geography information is available by County only, not by City) Note: The names of the top employers & number of employees is confidential and may not be disclosed to the public pursuant to 20 CFR (Code of Federal Regulations) Part 603. As a result, the employment information provided is by industry. 185

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 21 City of Dover, Delaware Full-time Equivalent City Government Employees by Function - Budgeted Last Ten Fiscal Years 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Assessor 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.5 City Clerk 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 City Manager 5.0 5.0 4.0 4.0 4.0 4.0 3.0 5.0 5.0 5.0 Customer Services 16.0 16.0 13.0 14.0 14.0 15.0 14.0 14.0 15.0 16.0 Facilities Management 5.0 5.0 5.0 7.0 7.0 7.0 9.0 12.0 13.0 13.0 Finance 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 Fire 5.0 5.0 5.0 5.0 6.0 8.0 6.0 6.0 6.0 6.0 Fleet Maintenance 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Human Resources 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.0 Information Technology 4.0 4.0 4.0 4.0 5.0 5.0 5.0 5.0 7.0 8.0 Library 13.0 13.0 13.0 13.0 14.0 13.0 13.0 12.0 17.5 18.0 Mayor 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Parks and Recreation 9.0 5.0 5.0 5.0 5.0 5.0 5.0 6.0 8.0 8.0 Police Civilian 33.0 33.0 33.0 33.0 31.0 31.0 29.0 29.0 29.0 29.0 Police Law Enforcement 101.0 101.0 101.0 101.0 93.0 93.0 93.0 93.0 91.0 90.0 Procurement & Inventory 5.0 3.0 3.0 3.0 3.0 4.0 4.0 6.0 6.0 8.0 Public Works, Administration 6.0 6.0 6.0 6.0 5.0 5.0 6.0 5.0 4.0 4.0 Planning, Inspections 6.0 6.0 6.0 6.0 6.0 6.0 7.0 7.0 7.0 7.0 Planning, Life Safety 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 Economic Development - - - 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Public Works, Engineering 3.0 3.0 3.0 3.0 3.0 - - - - - Planning 6.0 6.0 6.0 6.0 5.0 4.5 4.5 5.0 5.0 6.0 Planning, Code Enforcement 5.0 5.0 5.0 5.0 5.0 5.0 4.0 4.0 4.5 5.0 Community Development - - - - - 0.5 0.5 1.0 1.0 1.0 Public Works, Grounds Maintenance 13.0 13.0 13.0 13.0 13.0 14.0 14.0 14.0 15.0 16.0 Public Works, Sanitation 10.0 10.0 10.0 10.0 11.0 11.0 11.0 13.0 12.0 13.0 Public Works, Streets 8.0 8.0 8.0 8.0 8.0 8.0 10.0 11.0 11.0 11.0 General Fund Total 281.0 275.0 271.0 277.0 269.0 270.0 269.0 279.0 289.0 298.5 Public Utilities, Electric Administration 3.0 5.0 5.0 4.0 3.0 3.0 3.0 4.0 4.0 4.0 Public Utilities, Electric Engineering 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 12.5 Public Utilities, Electric System OPS 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 Public Utilities, Electric Meter Reading 4.0 4.0 4.0 4.0 3.0 3.0 3.0 3.0 3.0 4.0 Public Utilities, Electric Transmission & Distribution 24.0 24.0 24.0 24.0 24.0 24.0 24.0 25.0 25.0 28.0 Electric Fund Total 46.0 48.0 48.0 47.0 45.0 45.0 45.0 47.0 47.0 53.5 Public Utilities, Construction - - - - 3.0 3.0 5.0 6.0 6.0 7.0 Public Utilities, Wastewater Engineering 5.0 5.0 5.0 5.0 5.0 5.0 6.0 6.0 6.0 8.0 Public Utilities, Wastewater Management 10.0 11.0 11.0 11.0 11.0 11.0 10.0 10.0 9.0 11.0 Public Utilities, Water Management 7.0 6.0 6.0 6.0 4.0 4.0 5.0 4.0 4.0 5.0 Public Utilities, Water Treatment Plant 13.0 13.0 13.0 13.0 11.0 11.0 10.0 10.0 10.0 10.0 Water Meter Reading - - - - - - - - - 1.0 Water/Wastewater Fund Total 35.0 35.0 35.0 35.0 34.0 34.0 36.0 36.0 35.0 42.0 Total Full-Time Equivalents 362.0 358.0 354.0 359.0 348.0 349.0 350.0 362.0 371.0 394.0 Source: City of Dover Budget 186

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 22 City of Dover, Delaware Operating Indicators and Capital Assets Used in Operations Last Ten Fiscal Years June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011 June 30, 2010 Land area - Acres 15,193.00 15,191.70 15,191.70 15,191.70 14,914.50 14,909.33 14,909.33 14,909.33 14,909.33 14,909.33 Land area - Square Miles 23.74 23.74 23.74 23.74 23.30 23.29 23.29 23.29 23.29 23.29 Total Miles of Street 170.52 170.33 169.08 168.01 167.78 164.49 164.08 162.81 158.94 159.62 City Maintained Miles of Streets 111.17 110.98 109.73 108.66 108.43 105.14 104.73 103.46 101.59 100.27 State Maintained Miles of Streets 59.35 59.35 59.35 59.35 59.35 53.35 59.35 59.35 57.35 59.35 Dover Population - U. S. Census data 36,047 36,047 36,047 36,047 36,047 36,047 36,047 36,047 36,047 32,043 Dover Population - City Count 37,790 38,422 37,686 37,941 37,560 37,540 36,492 36,267 37,341 36,627 Registered Voters 25,131 24,513 23,942 24,170 22,837 22,779 21,998 22,362 21,454 21,897 Electric Utility: Generating Units 2 2 2 4 4 4 4 4 4 4 Co-Generating Unit 0 0 0 0 1 1 1 1 1 1 Total Units 2 2 2 4 5 5 5 5 5 5 Generating Capacity 147 mw 147 mw 147 mw 175 mw 175 mw 175 mw 175 mw 175 mw 175 mw 175 mw Co-Generating Capactiy 0 mw 0 mw 0 mw 0 mw 175 mw 175 mw 175 mw 175 mw 175 mw 175 mw Area of Service 74.8 sq. mi. 74.8 sq. mi. 67.77 sq. mi. 67.77 sq. mi. 67.77 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. Substations 15 15 15 15 15 15 15 15 15 15 High Peak Load 165.16 mw 162.87 mw 165.9 mw 158.5 mw 158 mw 164.162 mw 171 mw 172 mw 162.6 mw 164.082 mw Customers: Residential 20,899 20,545 20,155 20,065 20,143 19,900 19,990 19,908 19,782 19,785 Commercial 3,541 3,577 3,424 3,310 3,343 3,412 3,412 3,354 3,386 3,370 Primary 36 36 37 37 36 37 37 39 38 36 69 KV Industrial 5 5 5 5 4 5 4 4 4 4 Municipal - Total number of meters 0 0 0 0 0 0 0 0 0 0 Total Customers Sales $ $79,501,247 $80,295,500 $79,413,094 $76,657,592 $78,406,554 $78,187,300 $88,329,610 $91,947,980 $99,513,157 $98,081,648 Total Customers Sales kWh 745,562,770 742,240,636 737,014,329 705,214,632 715,001,017 714,150,305 723,106,532 710,327,722 734,102,972 708,530,322 PowerSupply $ (Including Plant Operations) $44,018,591 $46,928,628 $43,406,314 $42,292,251 $49,645,951 $57,003,103 $55,367,147 $58,758,032 $68,852,937 $72,508,956 kWh 785,285,000 775,661,000 773,550,000 740,871,000 756,867,000 762,254,000 752,869,000 738,190,000 768,254,000 751,250,000 Fire Department: Stations 2 2 2 2 2 2 2 2 2 2 Officers 8 8 8 8 8 8 8 8 8 8 Firemen - Membership (Volunteers-Active) 125 125 125 125 125 160 100 100 100 120 Equipment 14 14 10 10 16 15 15 15 14 14 Parks and Recreation: Major Parks 3 3 3 3 3 3 3 3 3 3 Small Parks 25 25 25 24 24 24 24 24 22 22 (Continued) 187

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 22 Table 22 (Continued) June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011 June 30, 2010 Police Department: Station 1 1 1 1 1 1 1 1 1 1 Uniformed Personnel 97 98 99 100 89 94 93 93 93 90 Automobiles 77 81 80 80 76 77 75 78 67 66 Motorcycles 7 7 7 7 7 7 7 7 7 7 Motor Boats 0 0 0 0 0 0 0 0 1 1 Bicycles 8 8 7 7 12 12 12 12 4 4 Specialty Vehicles 7 7 7 7 7 7 7 7 7 7 Trailers 5 4 3 2 2 2 2 2 3 3 Golf Carts 6 6 6 6 5 0 0 0 0 0 Public Library: Books 108,763 113,253 103,187 106,493 106,125 100,262 97,801 93,050 103,091 138,931 Audiovisual Materials (VCRs, DVDs, CDs, Cassettes, Recorded Books) 23,626 24,021 26,158 22,345 22,366 21,008 16,929 15,265 14,409 15,572 Computer Usage* 49,591 Wireless Usage* 19,355 Members 31,997 32,256 40,412 41,221 41,348 37,531 34,308 32,717 33,466 36,534 Magazine Subscriptions 138 140 147 161 174 191 187 217 178 201 Newspaper Subscriptions 11 11 11 12 10 10 11 11 19 19 Circulation of Materials 376,380 364,849 377,314 412,969 449,746 463,113 444,333 407,611 400,130 375,632 Electronic Downloads (E-Books) 38,467 32,856 28,397 30,811 24,801 17,219 11,770 2,635 0 0 Water Utility: Supply - Wells 21 21 21 21 22 22 22 22 22 22 Storage Tanks 7 7 7 7 6 6 6 6 6 6 Total Storage Capacity (Gallons) 5,250,000 5,250,000 5,250,000 5,250,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 Water Mains (miles) 229 226 225 225 225 223 222 217.5 miles 215.7 miles 215.7 miles Average Day (Gallons Pumped) 5,198,288 5,021,299 5,288,271 4,521,047 4,521,047 4,197,984 4,245,153 4,405,923 4,656,334 4,474,063 Peak Day (Gallons) 7,671,000 7,695,000 8,605,000 7,466,000 7,048,000 6,305,000 7,169,000 8,620,000 8,620,000 6,756,000 Total Water Production (Gallons Pumped) 1,897,375,000 1,832,774,000 1,930,219,000 1,833,877,000 1,650,329,000 1,532,264,000 1,553,727,000 1,608,161,895 1,699,562,000 1,633,033,000 Total Water Consumption (Gallons Billable) 1,722,634,000 1,692,407,000 1,766,064,000 1,648,819,000 1,441,559,000 1,374,855,000 1,410,424,000 1,459,923,000 1,539,590,000 1,466,943,000 Avearge Day (Gallons Billable) 4,719,545 4,636,732 4,838,531 4,517,312 3,949,476 3,766,726 3,864,175 3,988,861 4,218,055 4,019,022 Number of Metered Customers 12,904 12,729 12,556 12,376 12,365 12,341 12,373 12,385 12,330 13,863 Number of New Connections 175 173 180 11 24 0 0 55 0 488 Wastewater Utility: Pumping Stations 44 44 42 45 41 40 40 40 42 42 Sanitary Sewer Mains (Miles) 195.31 192.41 191.00 191.00 191.00 187.59 186.87 186.87 185.00 185.00 Average Day (Gallons Pumped) 5,795,360 4,785,079 4,592,821 4, 706,133 4,897,731 4,893,424 4,312,742 4,379,033 4,230,819 5,385,060 Wastewater Discharge (Gallons Pumped) 2,115,306,558 1,746,554,000 1,676,379,600 1,717,738,575 1,787,672,000 1,786,100,000 1,574,151,000 1,602,726,000 1,544,249,000 1,965,547,000 Wastewater Discharge (Gallons Billable) 1,244,808,000 1,224,105,000 1,274,087,000 1,258,961,000 1,264,140,000 1,246,804,000 1,242,238,000 1,316,656,000 1,303,587,000 1,328,195,000 Average Day (Gallons Billable) 3,410,433 3,353,712 3,490,649 3,449,208 3,463,397 3,415,901 3,403,392 3,607,277 3,571,471 3,638,890 Number of New Connections 185 169 179 0 22 0 5 55 0 488 Water Treatment Plant: Capacity 4.6 MGD 4.6 MGD 4.6 MGD 4.6 MGD 4.6 MGD 4.6 MGD 4.6 MGD 4.6 MGD 4.6 MGD 4.6 MGD Sales to Customers: Water Fees $5,682,005 $5,584,474 $5,776,109 $5,457,061 $4,889,046 $4,459,808 $4,551,840 $4,707,918 $4,945,385 $4,274,966 Wastewater Fees $3,720,797 $3,612,194 $3,718,736 $3,745,497 $3,735,855 $3,562,400 $3,564,615 $3,722,985 $3,694,020 $3,015,856 Wastewater Treatment Fees $2,902,852 $2,813,867 $2,912,660 $2,936,831 $2,952,857 $2,930,333 $2,926,616 $3,050,127 $3,058,656 $3,100,547 Inflow & Infiltration Surcharge $1,858,169 $1,800,156 $1,863,151 $1,878,057 $1,831,784 $1,316,209 $1,314,033 $1,290,968 $1,171,376 $0 Sources: Various City departments * Newly added reporting 188

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 City of Dover, Delaware Summary of Insurance As of June 30th, 2019 PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Property Blanket Building & Contents (Special Form, RC, Agreed Amount) $159,809,615 $10,000 Deductible Personal Property of Others $ 250,000 Earthquake $2,000,000 $50,000 Deductible Flood Zones X or C $2,000,000 $50,000 Deductible Flood Zones (Zones unidentifiable) $100,000 Deductible Zones located A, B Shaded X, V & D are excluded Blanket Business Earnings & Expense $1,000,000 72 Hours Business Income from Dependent Properties $250,000 $25,000 Deductible Accounts Receivable $250,000 Civil Authority - 30 days Claims Data Expense $25,000 Covered Leasehold Interest $100,000 Debris Removal (Additional Amount) $250,000 Deferred Payments $25,000 EDP Data & Media $50,000 Employee Tools ($18,000 item) $100,000 $250 Deductible Expediting Expenses $250,000 Exhibitions (Property Damage) $50,000 Extra Expense $25,000 Fine Arts $250,000 Fire Dept. Services Charge Included Fire Protective Equipment Discharge Included Fungus, Wet Rot, Bacteria $25,000 Furs, Fur Garments $25,000 Jewelry, Gold, Silver, Platinum $25,000 Green Bldg Alternatives 1% / Max. $100,000 each building Green Bldg Reengineering & Recertification $25,000 Loss of Master Key $25,000 Newly Acquired or Constructed -Buildings Each $2,000,000 each building -Personal Property at each loc. $1,000,000 Non-Owned Detached Trailers $25,000 Ord & Law Coverage A $250,000 Ord & Law Coverage B $250,000 Ord & Law Coverage D Included up to Extra Expense Limit Outdoor Property $250,000 Outside Signs –Described – Prem. $100,000 Personal Effects $50,000 Personal Property at Undescribed Premises $50,000 Personal Property in Transit out of Coverage Territory $50,000 189

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Pollution Cleanup & Removal $100,000 Preservation of Property-Direct $250,000 -Direct loss or damage to moved Prop. Included Reward Coverage- Up to 25% $25,000 Stored Water $25,000 Theft or Damage to Rented Property Included Undamaged Parts of Stock in Process $50,000 Valuable Papers on Premises $100,000 Valuable Papers off Premises $100,000 Appurtenant Buildings and Structures $100,000 Utility Service Direct Damage $50,000 Confiscated Property $100,000 Street Lights – Each Item $2,500 Street Lights – Max Per Occur $50,000 Street Signs – Each Item $2,500 Street Signs – Max Per Occur $50,000 Traffic Signs and Lights –Each $2,500 Traffic Signs and Lights - Max Per Occur $50,000 Stadium Lights – Each Item $2,500 Stadium Lights – Max Per Occur $50,000 Spoilage Coverage Extension $50,000 Sewer or Drain Backup $250,000 Boiler & Machinery/Equipment Breakdown Coverage Limit Property Limit Deductible $10,000 Expediting Expenses $250,000 Hazardous Substance $250,000 Spoilage $250,000 Ammonia Contamination $250,000 Inland Marine Contractors Equipment – Replacement Cost - 90% Co-Insurance Unlisted Items/equipment $100,000 Not to exceed $5,000 per item Leased or Rented Items $100,000 Not to exceed $100,000 per item New Acquired contractors equipment $250,000 Rental Cost (per Item) $5,000 Loss to any one Replacement Item $100,000 Scheduled Items $84,285 Basic Deductible $1,000 Employee Tool Deductible $250 Flood Deductible $50,000 Earthquake Deductible $50,000 Windstorm Deductible $10,000 190

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Crime Employee Theft per Loss $500,000 $500 Deductible Forgery or Alteration $100,000 $1,000 Deductible Inside the Premises – Theft of Money & Securities $100,000 $500 Deductible Robbery or Safe Burglary of Other Property $100,000 $500 Deductible Outside the Premises $100,000 $500 Deductible Computer Fraud $100,000 $1,000 Deductible Money Orders & Counterfeit Currency $100,000 $1,000 Deductible Faithful Performance of Duty Coverage Endorsement – Governmental Employees Liability Coverage: Commercial General Liability Each Occurrence Limit $1,000,000 General Aggregate Limit $3,000,000 Products Completed Operations Aggregate $3,000,000 Limit Personal & Advertising Injury Each Person $1,000,000 Damages to Premises Rented to You Limit (Any One Premises) $100,000 Medical Expenses Excluded Sewer Back Up $1,000,000 (resulting from negligence) Failure to Supply $1,000,000 Each Abuse or Molestation Offense Limit $1,000,000 Abuse or Molestation Aggregate Limit $2,000,000 Statutory Cap Limits of Coverage Endorsement Delaware Each Occurrence Statutory Cap Limit $300,000 Employee Benefit Plans Administration Liability - Claims Made Retroactive Date: None Aggregate Limit $3,000,000 Each Employee Limit $1,000,000 Deductible- Each Employee $1,000 Law Enforcement Liability - Occurrence Aggregate Limit $3,000,000 Each Wrongful Act Limit $1,000,000 Each Wrongful Act Deductible $15,000 Statutory Cap Limits of Insurance Endorsement Delaware Statutory Cap Limit $300,000 191

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Public Entity Management Liability - Claims Made Retroactive Date: 7/1/1996 Aggregate Limit $3,000,000 Each Wrongful Act Limit $1,000,000 Deductible $25,000 Employment Practices Liability - Claims Made Retroactive Date: 7/1/1996 Aggregate Limit $3,000,000 Each Wrongful Employment Practice Offense Limit $1,000,000 Deductible $25,000 Business Auto Policy Coverage: Automobile Liability $1,000,000 Personal Injury Protection $300,000 Uninsured/Underinsured Motorist $40,000 (Physical Damage Applies to Police & Specified Electric & Sanitation Trucks) $1,000 Comp Ded/$1,000 Collision Ded Non-owned Liability $1,000,000 Hired Auto Liability $1,000,000 Employees as Additional Insured Hired Auto Physical Damage $90,000 Hired Car Physical Damage Deductibles Comprehensive Deductible $250 Collision Deductible $250 Statutory Cap Limits of Coverage Endorsement Delaware Statutory Cap Limit $300,000 Excess Crime Policy Coverage: Excess Crime Employee Theft per Loss $500,000 excess of $500,000 (Over Policy# 630OB165227) 192

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Umbrella Excess Liability Coverage: Umbrella General Aggregate Limit $6,000,000 Each Occurrence Limit $6,000,000 Each Wrongful Employment Practice Offense Limit $6,000,000 Products & Completed Work Aggregate Limit $6,000,000 Personal and Advertising Injury Any One Person or Organization Limit $6,000,000 Each Occurrence Limit $6,000,000 Retained Limit Any One Occurrence or Event $10,000 Umbrella Underlying Policies: General Liability $1,000,000 Employment Benefits $1,000,000 Auto Liability $1,000,000 Law Enforcement Liability $1,000,000 Public Entity Management $1,000,000 Employment Practices Liability Employers Liability (Safety Nat’l) $1,000,000 Cyber Liability Coverage: Cyber Liability – Claims Made Retroactive Date: 12/01/2012 Aggregate Limit $1,000,000 Third-Party Liability Network & Information Security Each Wrongful Act Limit $1,000,000 Deductible $10,000 First-Party Liability Security Breach Notification & Remediation Expenses Sublimit $500,000 Deductible $10,000 Crisis Management Service Expenses $500,000 Deductible $10,000 Pollution Liability Coverage: Pollution Liability Each Pollution Event Limit $5,000,000 Aggregate Policy Limit $10,000,000 Crisis Management Expense Aggregate Limit $250,000 Green Mediation Aggregate Limit $50,000 Green Standards Aggregate Limit $50,000 Deductibles $25,000 Each Pollution Event 193

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Claims Made Retroactive Date 4/1/1997 Includes: 2 underground storage tanks-710 Williams St., Dover, DE & 2 Power Plants Excess Worker’s Compensation Coverage: Employers Liability Limit: $1,000,000 Specific Limit: Statutory Aggregate Excess Limit: $3,000,000 $600,000 Retention (Police) $500,000 Retention (All Other) Worker's Compensation-TPA Services (Charges based on claim count, this number could fluctuate) Travel Accident Policy Principal Sum: $100,000 $0 Deductible Covered Positions: The Mayor, HR Director, Police Chief, Police Major, Police Captains, IT Director, PW Director, Waste/Wastewater Manager, PW Operations Manager, Electric Director, Engineering and Systems Operations, Line Crew Foreman, City Manager, Assistant City Manager, Planning Director, Principal Planner, Fire Marshall, City Clerk, Assistant City Clerk, Controller, Assistant Finance Director, Library Director, Assistant Library Director, Tax Assessor, Economic Development Director, and Council Members of the Policyholder. Bond-Self Insured Worker’s Compensation - State of Delaware Limit: $750,000 Bond – Public Officials Bond - Donna Mitchell – Treasurer Limit: $100,000 Bond- Public Officials Bond - Traci McDowell – City Clerk/Assistant Treasurer Limit: $100,000 Bond- Public Officials Bond – Denise Devine – Asst. City Clerk Limit: $100,000 Bond- Public Officials Bond – Lori Peddicord – Controller Limit: $100,000 Bond- Public Officials Bond – Kimberly A. Cruz – Asst. Controller/Treasurer Limit: $100,000 194

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 23 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Power Plants – Property & Boiler and Machinery (2 policies 50/50) Locations: McKee Run Generating Plant VanSant Station Policy #1 XL Insurance Company – $50,000,000 per Occurrence (50% Carrier Capacity Limit of $100,000,000) Coverages: 50% policy limit: $50,000,000 Per Occurrence Agreed Amount, Special Extra Expense: $2,000,000 Errors & Omissions $2,000,000 Expediting Cost: $1,000,000 Property in the Course of Construction: $5,000,000 Earthquake: $20,000,000 Flood: $10,000,000 Debris Removal $2,500,000 Property in Transit $2,500,000 Demolition & Increase Cost of Construction $10,000,000 Deductibles: $750,000 per Occurrence, except; $100,000 per Occurrence as respects Transit, In respect of Time Element loss (Extra Expense): 45 days per Occurrence, except; 72 hours per Occurrence in respect of Service Interruption Policy #2 Ace American Insurance Company – $50,000,000 per Occurrence (50% Carrier Capacity Limit of $100,000,000) Coverages: 50% policy limit: $50,000,000 Per Occurrence Agreed Amount, Special Extra Expense: $2,000,000 Errors & Omissions $2,000,000 Expediting Cost: $1,000,000 Property in the Course of Construction: $5,000,000 Earthquake: $20,000,000 Flood: $10,000,000 Debris Removal $2,500,000 Property in Transit $2,500,000 Demolition & Increase Cost of Construction $10,000,000 Deductibles: $750,000 per Occurrence, except; $100,000 per Occurrence as respects Transit, In respect of Time Element loss (Extra Expense): 45 days per Occurrence, except; 72 hours per Occurrence in respect of Service Interruption 195

2019 Comprehensive Annual Financial Report for the City of Dover, Delaware Statistical Section Table 21 - Continued PROTECTION TYPE OF COVERAGE LIMIT IN DOLLARS Unmanned Aircraft Policy: Limit of Liability- Each Occ. $1,000,000 Medical Expenses $10,000 Physical Damage- Scheduled Limit Insured Value, Less Depreciation Newly Acquired Aircraft or Scheduled Aircraft Modified during Policy Period $10,000 In Motion Deductible 5% Not in Motion Deductible 5% Spare Engine and Spare Parts` $1,000 5% War, Hi-Jacking and Other Perils Exclusion cap $300,000 Volunteer Special Accident: Accidental Medical Expense Benefits: Maximum Benefits $15,000 Deductible $100 Maximum Dental Limit $250 196

ACTION FORM PROCEEDING: City Council DEPARTMENT OF ORIGIN: Planning Department DATE SUBMITTED: 5/4/20 PREPARED BY: Tracey Harvey, Planner/CDBG Program Administrator SUBJECT: Final 2020-2024 Consolidated Plan and Proposed FY20 Action Plan REFERENCE: N/A RELATED PROJECT: N/A REVIEWED BY: CDBG Program Administrator/Planning Director EXHIBITS: N/A EXPENDITURE REQUIRED: $277,443.00 AMOUNT BUDGETED: $277,443.00 FUNDING SOURCE (Dept./Page in CIP & Budget): TIMETABLE: Pending Council approval, the Consolidated Plan will be submitted to HUD STAFF RECOMMENDATION: Staff recommends approval of the 2020-2024 Consolidated Plan and the FY20 Action Plan Community Development staff met with the Community Development Advisory Committee (CDAC) on March 10, 2020 for the review and recommendations for the multi-year 2020-2024 CDBG grant applications and the proposed FY20 Action Plan budget. The following are the recommendations from the CDAC Committee: A. Community Development Block Grant (CDBG) Application Review A-1. Dover Interfaith Mission for Housing (DIMH) (Committee recommended that $21,016.45 be awarded for operations cost for the shelter) A-2. Central Delaware Housing Collaborative (Committee recommended that $20,600.00 be awarded for operations cost for the shelter) A-3. Homeownership Assistance Program (Committee recommended that $100,000 be awarded to the Homeownership Assistance Program for first-time homebuyers to receive up to $20,000 in settlement assistance to purchase affordable housing in the City of Dover. A-4. NCALL Research Inc. (Committee recommended that $30,000 be awarded for the demolition of two houses in the Restoring Central Dover area in order to construct affordable housing on the vacant lots.) A-5 Milford Housing Development Corporation (MHDC) A-5-1. (Committee recommended that $40,000 be awarded for Emergency Home Repairs) A-5-II. (Committee recommended that $25,826.55 be awarded for Homeowner Rehabilitation) A-6 Dover Interfaith Mission for Housing (DIMH) Committee recommended that $40,000 be awarded to DIMH for the renovation of an existing building to be utilized as a homeless shelter.

CITY OF DOVER PROPOSED ORDINANCE STAFF SUBSTITUTE #1 FOR ORDINANCE #2020-05 1 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN 2 COUNCIL MET: 3 That Chapter 22 - Buildings and Building Regulations, Article IX - Lodginghouses, Division 1 - 4 Generally, Section 22-281 - Purpose; applicability; definitions; compliance, be amended by inserting 5 the text indicated in bold, blue and deleting the text indicated in red strikeout as follows: 6 ARTICLE IX. - LODGINGHOUSES 7 DIVISION 1. - GENERALLY 8 Sec. 22-281. - Purpose; applicability; definitions; compliance. 9 (a) Purpose. The purpose and intent of this article is to ensure public health, safety and 10 welfare insofar as the continued occupancy and maintenance of lodginghouses 11 operated for public use affect them. The health, safety and welfare of the occupants 12 of the lodginghouses are of the utmost importance to the city. 13 (b) Applicability. The provisions of this article shall apply to all matters affecting or 14 relating to lodginghouses. Where, in this article, different sections of this Code may 15 specify different requirements, the most restrictive shall govern. 16 (c) Definitions. The following words, terms and phrases, when used in this article, shall 17 have the meanings ascribed to them in this subsection, except where the context 18 clearly indicates a different meaning: 19 Lodginghouse means a building operated principally for the temporary residence of 20 the transient public, including but not limited to hotels, motels, inns, 21 boardinghouses, rooming houses, tourist homes, and dormitories. 22 (d) Compliance. No person shall operate, occupy or let to another for occupancy any 23 lodginghouse which is not in compliance with this chapter. No person shall operate, 24 occupy or let to another for occupancy any lodginghouse unless it is clean and 25 sanitary, and complies with the requirements of this article. 26 (Code 1981, § 10-61; Ord. of 4-10-2000) 27 BE IT FURTHER ORDAINED: 28 That Chapter 22 - Buildings and Building Regulations, Article IX - Lodginghouses, Division 2 - 29 Permit, Section 22-303 - Suspension, be amended by inserting the text indicated in bold, blue and 30 deleting the text indicated in red strikeout as follows: 31 Sec. 22-303. - Suspension. 32 33 (a) Grounds; duration. The building inspector shall suspend the permit issued or withhold the 34 permit paid for, pursuant to this division, when he determines that the lodginghouse or the 35 premises surrounding the lodginghouse fails to meet the requirements of this chapter or any 36 rule or regulation issued pursuant thereto. Suspension shall last until the violations have been 37 corrected to the satisfaction of the building inspector, or the suspension shall have been

STAFF SUBSTITUTE (SS#1) FOR ORDINANCE #2020-05 PAGE 2 38 reversed on appeal. 39 (b) Notice to owner. Upon suspending any permit under this section or withholding the permit 40 paid for, the building inspector shall notify the owner of the violations of the applicable code 41 and shall prescribe a period in which the violation shall be corrected. 42 (c) Appeal. Any owner or operator of any lodginghouse, whose permit to operate the structure 43 is suspended by the building inspector pursuant to the procedures of this section, shall have 44 the right to appeal and notice as provided in section 22-22522-1. 45 (d) Effect of appeal. Upon suspension of a permit, or withholding of a permit ordered by the 46 building inspector and upon the permittee serving the city clerk with a notice of appeal 47 pursuant to section 22-22522-1, the permit suspension shall be stayed and an existing permit 48 shall remain in force until the appeal is decided. 49 (Code 1981, § 10-78; Ord. of 4-10-2000) 50 BE IT FURTHER ORDAINED: 51 That Chapter 22 - Buildings and Building Regulations, Article X - Rental Dwellings, Division 1 - 52 Generally, Section 22-331 - Purpose; applicability; definitions; compliance, be amended by inserting 53 the text indicated in bold, blue and deleting the text indicated in red strikeout as follows: 54 CHAPTER 22 - BUILDINGS AND BUILDING REGULATIONS 55 ARTICLE X. - RENTAL DWELLINGS 56 DIVISION 1. - GENERALLY 57 58 Sec. 22-331. - Purpose; applicability; definitions; compliance. 59 (a) Purpose. The purpose and intent of this article is to ensure public health, safety and welfare 60 insofar as they are affected by the continued occupancy and maintenance of dwellings 61 operated for lease to the public. The health, safety and welfare of the occupants of the 62 dwellings are of the utmost importance to the city, as is the general community character 63 in which these dwelling units are located. 64 (b) Applicability. The provisions of this article shall apply to all matters affecting or relating 65 to rental dwellings. Where, in this article, different sections of this Code may specify 66 different requirements, the most restrictive shall govern. 67 (c) Definitions. The following words, terms and phrases, when used in this article, shall have 68 the meanings ascribed to them in this subsection, except where the context clearly indicates 69 a different meaning: 70 (1) Criminal activity is defined as any crime classified by applicable law as a (a) felony, 71 (b) Class A misdemeanor, or (c) any of the following offenses: any drug offense 72 defined by Title 16 of the Delaware Code, and the following misdemeanors in 73 addition to any Class A misdemeanor, as defined by Title 11 of the Delaware Code: 74 § 601-Offensive touching, § 602-Menacing, § 628-Vehicular assault 3, § 763-Sexual 75 harassment, § 764-Indecent exposure, § 811-Criminal mischief, § 812-Graffiti, §

STAFF SUBSTITUTE (SS#1) FOR ORDINANCE #2020-05 PAGE 3 76 820-Trespassing, § 821/2/3-Criminal trespassing, § 1105-Crime against a vulnerable 77 adult, § 1106-Unlawfully dealing with a child, § 1301-Disorderly conduct, § 78 1313-Malicious interference with emergency communications, § 1315-Public 79 intoxication, § 1321-Loitering, § 1322-Criminal nuisance, § 1323-Obstructing of 80 public passage, § 1341-Lewdness, § 1342-Prostitution, § 1343-Patronizing a 81 prostitute, § 1445-Unlawfully dealing with a dangerous weapon, § 1446-Unlawfully 82 dealing with a switchblade knife. 83 (2) Dwelling unit means a single unit providing complete independent living facilities 84 for one or more persons, including permanent provisions for living, sleeping, eating, 85 cooking and sanitation. 86 (3) Multiple-family dwellings means dwelling units operated as a group, and located in 87 the same building. This shall include apartments, roominghouses, condominium 88 dwelling units, and accessory apartments located within structures principally used 89 for owner occupancy. 90 (4) Rental dwelling means a dwelling unit that is leased for occupancy to a person or 91 persons in exchange for monetary payment or provision of goods or services to the 92 owner of the dwelling unit. 93 (5) Single-family dwellings means dwelling units operated singly, and separated from 94 other units. In general, this definition shall apply to single-family detached dwellings; 95 mobile homes and manufactured homes; and attached units, including duplexes and 96 townhouses. 97 (d) Compliance required. No person shall operate, occupy or let to another for occupancy any 98 dwelling which is not in compliance with the International Property Maintenance Code 99 adopted in section 22-221 and all other applicable codes. 100 (e) Fines. Fines for violation of this Section shall be as imposed in Appendix F - Fees and 101 Fines, Chapter 1 - General Provisions. 102 (Code 1981, § 10-86; Ord. of 4-10-2000; Ord. No. 2013-04, 4-8-2013; Ord. No. 2016-16 , 8-8-2016) 103 BE IT FURTHER ORDAINED: 104 That Chapter 22 - Buildings and Building Regulations, Article X - Rental Dwellings, Division 2 - 105 Permit, Section 22-352 - Suspension, be amended by inserting the text indicated in bold, blue and 106 deleting the text indicated in red strikeout as follows: 107 Sec. 22-352. - Suspension. 108 (a) Grounds; duration. The building inspector shall suspend the permit issued or withhold the 109 permit paid for, pursuant to this division, when: 110 (1) The building inspector determines that any dwelling or the premises surrounding the 111 dwelling fails to meet the requirements of this chapter or any rule or regulation issued 112 pursuant thereto; 113 (2) The failure of the property owner or property manager to initiate and prosecute in

STAFF SUBSTITUTE (SS#1) FOR ORDINANCE #2020-05 PAGE 4 114 good faith eviction proceedings following notification by the city that the terms of 115 the safe communities lease addendum have been violated; or 116 (3) The failure of the property owner or property manager to attend a safe communities 117 seminar when required by section 22-371(b). 118 Suspension shall last until the violations have been corrected to the satisfaction of the 119 building inspector, or the suspension shall have been reversed. 120 (b) Notice of violations. Upon suspending any permit under this section or withholding the 121 permit paid for, the building inspector shall notify the owner of the violations of the 122 applicable code and shall prescribe a period in which the violation shall be corrected. 123 (c) Appeal. Any owner or operator of any dwelling, whose permit to operate the structure is 124 suspended by the building inspector pursuant to the procedures of this section, shall have 125 the right to appeal and notice as provided in section 22-22522-1. 126 (d) Effect of appeal. Upon suspension of a permit, or withholding of a permit ordered by the 127 building inspector and upon the permittee serving the city clerk with a notice of appeal 128 pursuant to section 22-22522-1, the permit suspension shall be stayed and an existing 129 permit shall remain in force until the appeal is decided. 130 (Code 1981, § 10-97; Ord. of 4-10-2000; Ord. No. 2009-26, 12-14-2009; Ord. No. 2013-04, 131 4-8-2013) 132 Secs. 22-353-22-369. - Reserved. 133 BE IT FURTHER ORDAINED: 134 That Chapter 22 - Buildings and Building Regulations, Article X - Rental Dwellings, be amended 135 by inserting a new Division 4 - Short-tem Rentals, as follows: 136 DIVISION 3. - SHORT-TERM RENTALS 137 Sec. 22-370. - Purpose; applicability; definitions; compliance 138 (a) Purpose. The City of Dover wishes to permit the limited and temporary rental use of single 139 family residences in established areas of the City as an economic asset, allowing for 140 increased travel, visitation and tourism and affording property owners of the opportunity 141 to earn revenue from such occupancy, while ensuring that such uses do not become a 142 nuisance, that neighborhood character is not compromised, and that such businesses are 143 properly operated and maintained. The purpose of this Division shall be to minimize public 144 safety risks and noise, trash and parking problems often associated with short-term rentals; 145 to ensure that traditional neighborhoods are not turned into tourist areas to the detriment 146 of long-term residents; and to ensure that individual dwellings are not turned into pseudo 147 hotels or party houses. 148 (b) Applicability: Short-term Rental (STR) uses shall be allowed in any single-family zoning 149 district in the City, but not allowed in any multi-family or apartment district. Such uses are 150 allowed by right and do not require a variance or conditional use. STR uses are not allowed 151 in commercial or any other non-residential zones.

STAFF SUBSTITUTE (SS#1) FOR ORDINANCE #2020-05 PAGE 5 152 (c) Definitions. The following words, terms and phrases, when used in this division, shall have 153 the meanings ascribed to them in this division, except where the context clearly indicates 154 a different meaning: 155 (1) Good Neighbor Brochure means a document provided by the owner to the guests or 156 guests and containing: the name and telephone number for the owner; notification on 157 standards of behavior and occupancy relating to parking, noise, trash collection, 158 waste disposal, street maintenance, snow removal, and public safety services and 159 including contact and web access information; and such other information as the City 160 may for time to time prescribe. 161 (2) Guest or guests means the individual or individuals renting the short-term rental for 162 the purposes of staying overnight. 163 (3) Local contact person means an individual other than the owner who shall be available 164 by telephone for the purpose of immediately responding to complaints related to the 165 short-term rental and taking remedial action to resolve such complaints. 166 (4) Owner means the person or persons holding legal or equitable title to the property 167 being offered as a short-term rental. 168 (5) Short-term Rental (STR) means rental of all or part of a residential dwelling unit for 169 a duration of occupancy of less than 30 days. 170 (d) Compliance: No person shall operate, offer for occupancy or let to another for occupancy 171 as a short-term rental any dwelling which is not in compliance with is Article or any other 172 applicable codes. 173 Sec. 22-371. - Registration and Inspection Requirements 174 (a) The Owner of any dwelling proposed for a short-term rental must obtain an annual Short- 175 term Rental (STR) license and pay a license fee as established by the City of Dover. 176 (b) An inspection by the City of Dover Code Inspection Department shall be required to 177 determine compliance with City Property Maintenance, Life Safety and Building Codes. 178 Any items in non-compliance shall be remedied before a license shall be granted. 179 (c) The rental license must be kept current during anytime the dwelling is offered as a Short- 180 term Rental. 181 (d) The license shall be valid for up to one year and must be renewed no later than January 31 182 of each year of continued operation. 183 (e) The Short-term Rental (STR) License must be clearly displayed inside the dwelling along 184 with any state licenses or permits. 185 (f) The Short-term Rental (STR) license may not be transferred to any party except heirs and 186 assigns and shall be void upon transfer of ownership of the property where the STR is 187 located. 188 (g) No uses otherwise not allowed in zone shall be permitted under the STR license.

STAFF SUBSTITUTE (SS#1) FOR ORDINANCE #2020-05 PAGE 6 189 (h) Short-term Rental’s (STR's) may be located no closer than 1,000 (one thousand) feet in any 190 direction from any other STR in existence and properly licensed. 191 Sec. 22-372. - Owner obligations and responsibilities. An owner of a dwelling seeking to use 192 a property as a short-term rental (STR) shall comply with the following obligations and 193 responsibilities: 194 (a) The Owner of the property being used as a short-term rental must be a permanent resident 195 of the City of Dover and must reside in the dwelling when it is not being used as a short- 196 term rental (STR). Determination of residency shall be based on meeting voting and/or 197 school residency eligibility. 198 199 (b) The Owner must provide the name and phone number of a local contact person to address 200 complaints on a 24/7 basis when the dwelling is being rented. 201 (c) A "Good Neighbor" brochure must be provided in the dwelling listing City provisions as 202 required. 203 (d) The Owner must demonstrate arrangements for trash and property maintenance. 204 (e) The Owner shall provide information regarding the short-term rental (STR) 205 ownership/rental information/notice provisions to all neighbors within 500'of the property 206 boundary. 207 (f) The Owner has the responsibility to not knowingly allow any illegal or criminal activity 208 on the property, and failure to do so may be grounds for revoking the rental license. 209 210 (g) The Owner is solely responsible for utility charges and for damage to any City property, 211 roadway, or public facility. 212 Sec. 22-373. - Limitations on occupancy and use. 213 (a) The number of guests permitted at any time shall not exceed twice the number of bedrooms 214 (i.e. 3 bedrooms x 2 = 6 occupants), with a maximum of 8 occupants at any one time 215 regardless of number of bedrooms available 216 (b) No more than 1 extra vehicle per bedroom beyond the base number allowed in the zoning 217 district, not to exceed 6 in total; all parking shall comply with all requirements relating to 218 street maintenance, fire access, parking on paved surfaces, trash collection, obstacles to 219 travel, etc. Violations shall be ticketed offenses. 220 (c) Signage identifying the short-term rental (STR) shall be limited to one sign, mounted on 221 the dwelling, not illuminated, and not to exceed one (1) square feet in size overall. 222 (d) Quiet hours must be observed (10:00 p.m. - 8:00 a.m. weeknights/12:00 p.m. - 8:00 a.m. 223 weekend nights). 224 (e) No meals are to be provided or served but access to a kitchen is permitted as part of the 225 rental. 226 (f) Access to a full bath must be provided.

STAFF SUBSTITUTE (SS#1) FOR ORDINANCE #2020-05 PAGE 7 227 (g) Maximum number of rented days offered for short-term rental, regardless of number of 228 separate rentals, is limited to 30 (thirty) days total per calendar/license year. 229 (h) Guests shall be prohibited from further subletting the dwelling. 230 (i) Weddings, graduation parties, corporate events, commercial functions, large gatherings, 231 or other special events shall be prohibited unless a City of Dover Special Event Permit 232 shall have been granted for a specific activity and date. 233 (j) The guests shall not create a public nuisance to include but not limited to creating noise, 234 causing odors, permitting an unsafe condition, disorderly conduct, generation of trash, or 235 other behavior which unreasonably disturbs the peace, safety and general welfare of the 236 neighborhood. 237 Section 22-347. Enforcement, Fees and Penalties, Reporting. 238 (a) Payment of a short-term rental (STR) license fee is required annually beginning January 239 1 of each year; the fee will be prorated for a partial year, as provided for in Appendix 240 F—Fees and Fines 241 (b) Penalties and fines for poor management or failure to register and obtain a license shall be 242 as provided for in Appendix F—Fees and Fines. 243 (c) A property cited three times as a nuisance or the location of illegal or criminal activity by 244 any City department within any consecutive 12-month period shall have its short-term 245 rental (STR) license suspended for not less than the rest of the year or a longer period up 246 to permanently. 247 (d) The Owner shall be required to report to the City as required annually documenting the 248 occupancy and frequency of rentals obtained, such report to be due not later than January 249 31 of the following year. 250 *(suggesting $100 for first offense; $300 for second offence and $500 for any subsequent office 251 or suspension of the license for 24 months or permanently). 252 Section 22-348. Revenue Matters. 253 (a) The Owner shall be required to submit to the City Manager's Office an annual financial 254 report each year documenting the rental income derived. 255 (b) Rental income derived from STR uses shall be subject to the City of Dover Lodging Tax, 256 payable by July 1 of each year (as applicable) 257 (c) Failure to report and pay the required Lodging Tax constitutes fraud subject to suspension 258 of license, fines, liens, or other legal actions. 259 Section 22-349. Enforcement, Notice and Appeals. 260 Violations of this Division shall be as set forth in Section 22-XXX (whatever id already in Chapter 261 22 should be referenced here by section number) 262 263 - Section 22-360 Severability and Effective Date (repeat wording or reference what is already in Chapter 22)

STAFF SUBSTITUTE (SS#1) FOR ORDINANCE #2020-05 PAGE 8 264 BE IT FURTHER ORDAINED: 265 That Appendix B - Zoning, Article 12 - Definitions, be amended by deleting the word nonprofit from 266 the definition of Family, as follows: 267 Family: One or more persons occupying a dwelling unit as a single nonprofit housekeeping unit. 268 More than five persons, exclusive of domestic servants, or not more than one boarder or roomer, 269 not related by blood, marriage or adoption, shall not be considered to constitute one family. 270 ADOPTED: * 271 S:\ORDINANCES\2020\DRAFT\ORDINANCE #2020-05 - CH 22-BUILDINGS, ART IX-LODGINHOUSES AND ART X-RENTAL DWELLINGS\SS#1 - ORDINANCE #2020-05-CH 22 BLDGS, 272 ART IX-LODGINHOUSES AND ART X-RENTAL DWELLINGS.wpd 273 SYNOPSIS 274 This Ordinance recognizes that Short Term Rentals are an economic asset, allowing for 275 increased travel, visitation and tourism and affording property owners of the opportunity to 276 earn revenue from such occupancy, while setting forth the purposes and establishing 277 regulations to ensure that such uses do not create public safety risks or become nuisances. 278 The Ordinance establishes an annual licensing process and sets forth owner's rules, 279 responsibilities and obligations with limits on frequency of rental and occupancy. It provides 280 safeguards to protect established neighborhoods, address nuisances, provide notice, and 281 address complaints. It also includes provisions for reporting, enforcement and penalties for 282 violations. Finally, it makes corrective amendments in the Code to ensure consistency. 283 (SPONSORS: HARE AND HUGG) 284 Actions History 285 05/11/2020 - Staff Substitute Scheduled for Introduction - City Council 286 02/25/2020 - Introduced - Council Committee of the Whole/Legislative, Finance, and Administration Committee 287 (referred back to Staff)

Monthly Report March 2020 Office of City Assessor

Number of Deeds Stamped for the Month of March 2019/2020 Transfer Tax Dollar Amount for the Month of March 2019/2020 25 25 19 19 21 $100 $67 20 16 15 Thousand $51 15 $50 $35 $27$27 $31 10 5 s $0$11 5 2 2 0 •2020 $0 •2020 0 •2019 •2019 First Time Buyer for the Month March 2019/2020 Realty of March 2019/2020 Property Sales in Dollars 25 Received Prior to Recording 25 19 19 20 16 $6 $4 $4 $4 $3 •Res. Non‐First $2 Millions $4 $2 15 Time Buyers $0 $1 $2 10 •Res. First Time • 2020 $0 5 Buyers • 2019 0 2020 2019 Major Updates Jan ‐ 20 Feb ‐ 20 March ‐ 20 Assessment Change $188,300 ‐$130,00 $6,691,000 Residential Sales Ratio Report Sales in Study Total Assessed Total Sale Price Ratio PRD Value 36 $5,182,600 $6,791,700 0.76 1.03 Ratio – Assessed Value divided by Sale Price. PRD – Mean – A PRD above 1.03 tends to indicate assessment regressivity – high valued properties are under appraised relative to low valued properties. A PRD below .98 tends to indicate assessment progressivity – high valued properties are relatively over appraised.

Points of Interest Scanning & Filing ‐ All new deeds are being scanned and attached to the CAMA software for easy retrieval. ‐ All appeal documents and correspondence are being scanned and attached to the CAMA software for easy retrieval. ‐ All old property record cards are being scanned and indexed into Fortis. 2020 Revaluation ‐ Tyler Technologies conducted and completed Informal Hearings and mailed out new value letters. (See attached Status Report for March 2020) Assessor’s Office ‐ Preparing Delinquent Tax Bills with door hangers for properties with outstanding property taxes. ‐ Finalized and printed Assessment Registers for the April 01, 2020 deadline.

APR 29, 2020 CITY OF DOVER PAGE: 1 01:57 PM SALES RATIO REPORT CA324 PARID NBHD LUC ADDRESS UNITS STYLE YRBLT STORIES SFLA GRADE CDU TOTAL APPR SALE DT PRICE ASR ED05-056.20-01-30.00 18 R10 190 MAPLE GLEN DR 1 14 2004 1 1960 B+ AV 201,100 31-MAR-20 269,000 .75 ED05-057.17-02-28.00 18 R10 236 GRINDING WHEEL DR 1 8 1999 2 1632 C+ AV 150,100 18-MAR-20 219,000 .69 ED05-067.05-01-55.00 18 R10 15 FAIRWAY CT 1 13 1990 2 2171 B AV 164,900 12-MAR-20 232,500 .71 ED05-067.09-01-31.00 18 R10 221 MERION RD 1 16 1976 1 1840 C AV 152,200 16-MAR-20 234,500 .65 ED05-067.09-02-06.01 3A R0 276 TROON RD 50,700 25-MAR-20 188,000 .27 ED05-067.09-03-04.00 3 R10 279 PINE VALLEY RD 1 13 1982 2 2390 B- AV 170,400 20-MAR-20 225,000 .76 ED05-067.14-02-14.00 2 R10 14 FOREST CREEK DR 1 13 1975 2 1273 C- AV 81,800 31-MAR-20 128,500 .64 ED05-067.15-02-08.00 2 R10 111 MCKEE RD 1 14 1955 1 900 C- AV 91,500 20-MAR-20 115,000 .80 ED05-067.15-04-41.00 10 R10 881 WILSON DR 1 14 1968 1 1768 C GD 160,300 31-MAR-20 183,400 .87 ED05-067.15-04-49.00 10 R10 838 SCHOOLHOUSE LN 1 5 1965 2 2128 C AV 158,000 20-MAR-20 190,000 .83 ED05-067.15-05-26.00 10 R10 852 WOODCREST TRN 1 13 1984 2 1922 C AV 121,500 19-MAR-20 150,000 .74 ED05-067.17-02-08.00 3 R10 8 SHINNECOCK RD 1 5 1999 2 2732 A- AV 264,100 20-MAR-20 325,000 .81 ED05-067.17-02-18.00 3 R10 54 SHINNECOCK RD 1 5 2000 2 2547 A- AV 247,400 02-MAR-20 325,000 .76 ED05-067.19-03-31.00 17 R10 2 DECLARATION DR 1 5 1987 2 2443 B AV 206,100 19-MAR-20 235,000 .88 ED05-067.20-01-53.00 10 R10 511 N WEST ST 1 14 1955 1 1254 C AV 114,800 09-MAR-20 155,000 .74 ED05-068.14-02-63.00 13 R10 331 NIMITZ RD 1 5 1965 2 1743 C+ AV 150,500 26-MAR-20 215,000 .7 ED05-068.14-03-44.00 13 R10 1254 HARRISON DR 1 5 1964 2 1880 C+ AV 136,000 05-MAR-20 128,000 1.06 ED05-068.17-02-49.00 8 R10 224 N STATE ST 1 1 1920 2 2768 B VG 233,500 27-MAR-20 330,000 .71 ED05-068.18-02-70.00 7 R10 96 N HALSEY RD 1 14 1951 1 1416 C GD 119,900 02-MAR-20 165,000 .73 ED05-068.18-04-26.00 7 R10 175 MITSCHER RD 1 14 2005 1 1248 C AV 123,300 31-MAR-20 159,900 .77 ED05-068.19-02-24.00 6 R10 112 TEAK CT 1 8 1999 2 1596 C AV 139,300 05-MAR-20 162,000 .86 ED05-076.03-02-52.00 14 R10 399 TRIBBITT ST 13 2019 2 1760 C+ AV 154,400 31-MAR-20 187,500 .16 ED05-076.05-02-27.00 14 R10 53 STONEY DR 1 8 1986 2 1406 C+ AV 127,900 05-MAR-20 165,000 .78 ED05-076.05-03-01.00 14 R10 2 STONEY DR 1 14 1985 1 1324 C AV 133,600 17-MAR-20 206,900 .65 ED05-076.06-07-07.00 17 R10 1105 DWIGHT CT 1 5 1991 2 1801 C AV 150,800 06-MAR-20 225,000 .67 ED05-076.08-04-52.00 C23 R90 415 W DIVISION ST 5 147,100 11-MAR-20 137,000 1.07 ED05-076.08-05-81.00 9 R10 54 S NEW ST 1 1 1920 2 1610 C- FR 61,500 25-MAR-20 52,000 1.18 ED05-076.08-06-48.00 9 R10 38 S QUEEN ST 1 1 1915 2 1008 C+ AV 102,300 30-MAR-20 120,000 .21 ED05-076.10-03-46.00 16 R10 1406 WOODMILL DR 1 8 1991 2 1445 C+ AV 130,000 25-MAR-20 160,000 .81 ED05-076.13-03-15.00 14 R10 305 CHARRING CROSS DR 1 13 1998 2 1804 C+ AV 124,000 03-MAR-20 135,000 .92 ED05-076.13-05-29.00 14 R10 255 NORTHDOWN DR 1 13 2001 2 1848 C+ AV 125,800 13-MAR-20 163,000 .77 ED05-076.20-03-27.00 12 R10 1103 WESTVIEW TER 1 5 1961 2 2044 B GD 182,400 18-MAR-20 250,000 .73 ED05-077.10-01-36.00 4 R10 403 COWGILL ST 1 13 1983 2 1008 C- AV 94,400 02-MAR-20 107,000 .88

APR 29, 2020 CITY OF DOVER PAGE: 2 01:57 PM SALES RATIO REPORT CA324 PARID NBHD LUC ADDRESS UNITS STYLE YRBLT STORIES SFLA GRADE CDU TOTAL APPR SALE DT PRICE ASR ED05-077.18-02-08.00 4 R10 38 EVERGREEN DR 1 14 1954 1 1064 C GD 102,900 13-MAR-20 145,000 .71 ED05-085.08-03-33.00 12 R10 276 FIDDLERS GRN 1 5 1966 2 1795 C+ GD 171,100 18-MAR-20 209,900 .82 ED05-085.12-03-09.00 12 R10 361 MIMOSA AVE 1 5 1971 2 1660 C+ AV 137,000 06-MAR-20 193,600 .71

•••• •••••• March 1, 2020 • • 801 Poquonnock Road #6 Groton, CT 06340 Cheryl Bundek, City of Dover Assessor 5 E. Reed Street P: 800.273.8605 Dover, DE 19903 F: 937.278.3711 www.ty1enech.com The following is a listing of current activities and the status of each for the Dover, Delaware Revaluation Project to date. Please note new items in bold: I. Project Commencement  August 19th – Kickoff meeting held with Cheryl Bundek in assessment office. Andy Siegel also attended for IT needs specific to the Revaluation Project.  VPN for Ryan Zuck established on 09/23/19 by Andy Siegel  VPN for Randy Brougher & Steve Beccio established on 11/19/19 by Andy Siegel II. Data Edits/Review  Review NBHD’s per Assessor. Look for consistency with Dwelling Info and Sketch. o Fox Hall West o Lexington Glen o Clearview Meadows o Eden Hill Farm o Patriot Village III. Sales Verification  Sampling Period for Sales in 1/1/2017 – 12/31/2019. Only Valid Sales will be utilized for market analysis. o As of end of September there are a total of 2,713 sales with 1,232 being valid sales (45.41%) ‐ 30% of the sales file has been validated. o As of end of October there are a total of 2,943 sales with 1,329 being valid sales (45.15%) ‐ 60% of the sales file has been validated. o As of end of November there are a total of 3,393 sales with 1,591 being valid sales (46.89%) ‐ 90% of the sales file has been validated. o As of end of December there are a total of 3,561 sales with 1,625 being valid sales (45.63%) IV. Residential Analysis  9/18/19 – Data Mailers mailed out. Total count – 9,375.  11/20/19 – Residential Cost Analysis started by Randy Brougher  Completed Residential Review on 01/10/2020

V. Commercial Analysis  9/06/19 – Income & Expense forms mailed out  9/16/19 ‐ Start Analysis of returned Income & Expense forms.  10/25/19 – Analysis of I&E continues  11/25/19 – Commercial Cost & Income analysis started by Steve Beccio  Starting on 1/2/2020, Michael Tew will assist with Commercial Review  Completed Commercial Review on 01/24/2020 VI. Informal Hearings  Notice to Tax Payers (NTP) will be mailed the first week of February to property owners. Property owners will have 3 weeks to schedule appts for review.  Informal Hearings are scheduled between 2/17/2020 – 3/06/2020  Informal Hearings will be made appointment only by calling our Tyler Hotline at 877‐ 895‐9675  Total appointments scheduled for Informal Hearings – 354 of 12,485 – 2.9%  Total appointments (Cancelled) – 9 of 354 – 2.6%  Total appointments (No‐Show) – 18 of 354 – 5.1%  Total Appointment with (Change in Value) – 156 of 354 – 44.1%  Total Appointment with (No Value Change) – 171 of 354 – 48.3% ACTION ITEMS City of Dover:  Mail Re‐Notice Letter to any property owner with an Informal hearing and/or Value Change Tyler/CLT:  Prep Re‐Notice file for assessor as result of informal hearings  Formal Hearings will start 3rd week of May, 2020 Respectfully Submitted, Ryan Zuck Appraisal Project Manager Cc: Derek Arnold, Tyler Northeast Regional Manager Cheryl Bundek, City of Dover Assessor

Activity From To Progress Responsible Party Project Commencement 08/19/19 08/19/19 100% Ryan Zuck Data Mailers (mailed) 09/01/19 09/30/19 100% City of Dover Income & Expense (mailed) 09/01/19 09/30/19 100% City of Dover Data Edits 08/19/19 12/31/19 100% Ryan Zuck Sales Verification 08/19/19 12/31/19 100% Ryan Zuck Residential Analysis 11/01/19 12/13/19 100% Randy Brougher Commercial Analysis 11/01/19 12/20/19 100% Steve Beccio/Ryan Zuck Residential Review 11/01/19 12/31/19 100% Ryan Zuck Commercial Review 11/01/19 01/10/20 100% Steve Beccio/Michael Tew Assessor Review of Values 12/01/19 01/24/20 100% City of Dover Mail Notices to Taxpayers 02/03/20 02/07/20 100% City of Dover Schedule/Conduct Informals 02/01/20 02/28/20 100% Tyler Technologies Staff Informals Resolution 02/12/20 03/06/20 100% Ryan Zuck Formal Appeals 05/18/20 06/05/20 0% Ryan Zuck Project Completion 06/31/20 06/31/20 0% Ryan Zuck CITY OF DOVER, DELAWARE TYLER/CLT DIVISION STAFF MANAGEMENT Derek Arnold Northeast Regional Manager Ryan Zuck Appraisal Project Supervisor Randy Brougher Residential Analyst Steve Beccio Commercial Analyst Michael Tew Commercial Reviewer Chris Gobin Messier Technical Support Senior Project Supervisor Note: Staffing will be determined by availability based on commitments to other projects and may differ from the plan. All staff is subject to the approval of the Assessor. Actual dates may differ and will be finalized once detailed project plan is completed.

CITY COUNJCIL COM~UNJITY ENJHANJCEMENJT fUNJD REPORT M~RCH 2020

CITY COUNCIL - FY 19/20 Page 1 of 5 CITY COUNCIL COMMUNITY ENHANCEMENT FUND JULY 1, 2019 - MAY 1, 2020 100-10-12-99-000-53037 Current Balance - $16,029.50 COMMUNITY ENHANCEMENT FUND - $2,500 FOR EACH COUNCIL MEMBER PER DISTRICT AND $5,000 FOR THE AT-LARGE COUNCIL MEMBER. THE PURPOSE OF THE BUDGETED AMOUNT $25,000.00 FUND IS TO ALLOW MEMBERS TO CONTRIBUTE FUNDS TO A SMALL PROJECT OR COMMUNITY NEEDS IN EACH DISTRICT. TOTAL $25,000.00 COUNCIL P.O. #/ TOTAL YEAR TO DATE SPONSOR VENDOR DESCRIPTION INVOICE # CHARGES DATE BALANCE 07/10/19 Taylor Convoy of Hope - Councilman Taylor authorized the Email from $1,000.00 $1,000.00 $24,000.00 Dover designation of $1000.00 of his community Ralph Taylor enhancement funds to Convoy of Hope - Dover to Janella Tauchus and email from Cornelius Murphy, Calvary Assembly of God dated 07/10/19 07/10/19 Polce Convoy of Hope - Councilman Polce authorized the designation Email from $1,500.00 $2,500.00 $22,500.00 Dover of $1500.00 of his community Tanner Polce enhancement funds to Convoy of Hope - Dover to Janella Tauchus and email from Cornelius Murphy, Calvary Assembly of God dated 07/10/19 05/01/20 S:\BUDGETS\Coun-20.qpw

CITY COUNCIL - FY 19/20 Page 2 of 5 07/24/19 Anderson Downtown Dover Councilman Anderson authorized the Email from $50.00 $2,550.00 $22,450.00 Partnership (DDP) - designation of $50.00 of his community David Capital City enhancement funds to the Downtown Dover Anderson to Farmers Partnership (DDP) - Capital City Farmers Janella Market Aprons Tauchus and email and invoice from 07/26/19 Anderson Destiny Christian Councilman Anderson authorized the Tina Bradbury Email from $500.00 $3,050.00 $21,950.00 Church designation of $500.00 of his community David enhancement funds to Destiny Christian Church Anderson to for their Book Bag and Supplies Giveaway the City Clerk's for low income youth Office and email and receipt from 07/29/19 Anderson Inner City Cultural Councilman Anderson authorized the Pastorfrom Email Dale L. $1,000.00 $4,050.00 $20,950.00 League designation of $1000.00 of his community David enhancement funds to the Inner City Cultural Anderson to League for their string orchestra program the City Clerk's Office and letter from Mr. Reuben 08/02/19 Anderson Dover Post Councilman Anderson authorized the Saltersfrom Email dated $496.00 $4,546.00 $20,454.00 designation of $496.00 of his community David enhancement funds to the Dover Post for the Anderson to Central Delaware Housing Collaborative the City Clerk's advertisement for the Innovative Readiness Office and Training Program Public Notice letter from Mr. Gregg Bunkley 08/05/19 Neil Persimmon Park Councilman Neil authorized the designation of and EmailPublic from $100.00 $4,646.00 $20,354.00 Place Condominium $100.00 of his community enhancement funds Fred Neil to Council, (PPPCC) to the Persimmon Park Place Condominium Traci Inc. Council, Inc. for their "Back to School event" McDowell and a letter from Ms. Joyce Talley, 08/05/19 Cole Persimmon Park Councilman Cole authorized the designation President Email fromof $100.00 $4,746.00 $20,254.00 Place Condominium of $100.00 of his community enhancement Scott Cole to Council, (PPPCC) funds to the Persimmon Park Place Traci Inc. Condominium Council, Inc. for their "Back to McDowell and School event" a letter from Ms. Joyce Talley, President of 05/01/20 S:\BUDGETS\Coun-20.qpw

CITY COUNCIL - FY 19/20 Page 3 of 5 08/06/19 Anderson Delaware Councilman Anderson authorized the Email from $100.00 $4,846.00 $20,154.00 Multicultural and designation of $100.00 of his community David Civic Organization, enhancement funds to DEMCO for their Back to Anderson to Inc. (DEMCO) School Block Party the City Clerk's Office and a letter from Ms. Leandra 08/13/19 Taylor Delaware Marshall, Councilman Taylor authorized the designation Email fromVP, $250.00 $5,096.00 $19,904.00 Multicultural and of $250.00 of his community enhancement Ralph Taylor Civic Organization, funds to DEMCO for their Back to School Block to the Janella Inc. (DEMCO) Party Tauchus and a letter from Ms. Leandra Marshall, VP, 08/30/19 Cole Actors Attic External Councilman Cole authorized the designation of Email from $100.00 $5,196.00 $19,804.00 $100.00 of his community enhancement funds Scott Cole to Actors Attic to pay for a bee mascot costume dated 08/29/19 for the Citizen Corp/DEMA Annual Family and Kay Sass Emergency Preparedness Day (Mascot and invoice Costume to be used multiple times for annual from Actors event) Attic dated 11/08/19 Sudler 08/29/2019 The Boulevard Line Councilman Sudler authorized the desgination Email from $500.00 $5,696.00 $19,304.00 Entertainment of $500.00 of his community enhancement Roy Sudler, Jr. Restaurant funds to The Boulevard Live Entertainment dated Resaurant's Feeding the Less Fortunate 11/08/2019 Thanksgiving Event to be used for travel, food, and letter from and supples for the homeless Mr. Charles Boyer dated 11/08/19 Taylor The Boulevard Line Councilman Taylor authorized the 11/05/2019 Email from $400.00 $6,096.00 $18,904.00 Entertainment desgination of $400.00 of his community Ralph Taylor, Restaurant enhancement funds to The Boulevard Live Jr. dated Entertainment Resaurant's Feeding the Less 11/08/2019 Fortunate Thanksgiving Event to be used for and letter from travel, food, and supples for the homeless Mr. Charles Boyer dated 11/25/19 Hare 11/05/2019 The Boulevard Line Councilman Hare authorized the desgination of Email from $400.00 $6,496.00 $18,504.00 Entertainment $400.00 of his community enhancement funds Willam Hare Restaurant to The Boulevard Live Entertainment dated Resaurant's Feeding the Less Fortunate 11/25/2019 Thanksgiving Event to be used for travel, food, and letter from and supples for the homeless Mr. Charles Boyer dated 11/05/2019 05/01/20 S:\BUDGETS\Coun-20.qpw

CITY COUNCIL - FY 19/20 Page 4 of 5 11/27/19 Slavin The Children's Councilman Slavin authrorized the desgination Email from $400.00 $6,896.00 $18,104.00 Theatre, Inc. of $400.00 of his community enhancement Timothy Slavin funds to The Children's Theatre, Inc. ad to dated support performances featuring children ages 12/02/2019 8-18 and new actor microphones. and program ad order form 12/02/19 Cole The Children's Councilman Cole authorized the designation of Email from $300.00 $7,196.00 $17,804.00 Theatre, Inc. $300.00 of his community enhancement funds Scott Cole to The Children's Theatre, Inc. to support dated performances featuring children ages 8-18 and 12/02/2019 new actor microphones. 12//18/19 Cole Captial School Councilman Cole authorized the designation of Email from $620.50 $7,816.50 $17,183.50 District - Central $620.50 of his community Scott Cole Middle School enhancement funds to Capital School District - dated 12/16/19 Central Middle School for the 8th grade trip to and letter from the African American History and Culture Ms. Shan Museum to Washington, D.C. in April 2020 Green, Principal of Central Middle School 12/30/19 Anderson Code Purples Kent Councilman Anderson authorized the Email from $354.00 $8,170.50 $16,829.50 County designation of his remining balance of $354.00 David of his community enhancement funds to Code Anderson to Purple Kent County to assist in purchsae of City Clerk's cots, air mattresses, sleeping bags, blankets, Office dated sheets, etc. for Dover 12/26/2019 and letter from Ennio Emmanuel, CPKC, dated 12/26/2019 05/01/20 S:\BUDGETS\Coun-20.qpw

CITY COUNCIL - FY 19/20 Page 5 of 5 02/12/20 Cole Dover PAL Councilman Cole authorized the designation of Email from $500.00 $8,670.50 $16,329.50 $500.00 of his community enhancment funds to Scott Cole Dover Police Atheltic League (P.A.L.) to assit dated with the "Outrunning Childhood Cancer 5k 02/05/2020 Run/Walk" event - the $500 would go towards and from provided participant race day t-shirts Officer Anthony Smith (DPD) dated 02/05/2020 04/16/20 Cole ELAN (formally Councilman Cole authorized the designation of Email from $300.00 $8,970.50 $16,029.50 known at WSFS - J. $300.00 of his community enhancement funds Scott Cole Tauchus' CC to the Bayhealth Foundation - COVID-19 dated Statement) Response to feed hospital staff and patients 04/16/2020 Bayhealth Foundation $8,970.50 $16,029.50 Budgeted District Council Sponsor YTD Expenditures Balance Amount $5,000.00 At-Large Slavin $400.00 $4,600.00 $2,500.00 1st District Lindell $2,500.00 $2,500.00 1st District Polce $1,500.00 $1,000.00 $2,500.00 2nd District Hare $400.00 $2,100.00 $2,500.00 2nd District Taylor $1,650.00 $850.00 $2,500.00 3rd District Cole $1,920.50 $579.50 $2,500.00 3rd District Neil $100.00 $2,400.00 $2,500.00 4th District Anderson $2,500.00 $0.00 $2,500.00 4th District Sudler $500.00 $2,000.00 TOTAL $8,970.50 $16,029.50 05/01/20 S:\BUDGETS\Coun-20.qpw

CITY MANAGER’S MONTHLY REPORT FEBRUARY 2020

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City of Dover Cust omer Services Department FY 2020 FY 2019 I Major Procnim Updates Number of Customers Served Feb 2020 19,8GG Feb 2019 19,G28 Difference 2J8 Vear-to-Date 188,0,11 Year-to-Date 187,8G2 Final Dills 4G~ 449 lG 4,307 4,531 Estimated Bills 158 187 (29) 1.499 1,546 l'l'r1:.illic~ l'u~h.•d $ , .9 ~~ $ / , 144 $ (, , 189) $ ~,.,B $ ~, ,881 1-dr.n~ion~ of <:rr-rlit Am ou nt b:tr.ndr.c1 $ 1:-14,o n $ 1 4 1, 1:,:{ $ ( I, B l ) ., s 1 ,0,Y,0 1 8 $ '181, 1'1/ Balance Transfers $ '1,120 $ 699 $ 3, 121 $ 172,701 $ 72,150 Utilicy Collections $ 2) ,94) $ 18,593 s 5,350 $ 298,0lJ $ 2SG,347 Miscellaneous Billings $ 162., 270 $ 85,875 s 76,396 $ 1,274,526 $ 1,739, 168 Ti.l.Xl' ~ l t•vit•d $ 162,049 $ 217,834 $ (SS,784 ) $ 162,04 9 $ 217,834 Killing Acl j11~t mr.nt r, s ., ( / .~ ) ) $ ( I) $ (/4h) ., s ( / .~ ) ) $ ( /) Tnt.:il T~xP.s r.ollP.ct?.rl $ S1,9 1 S $ 'lR, 150 $ (•16,:'i~S) $ 1,1, , .'17,076 $ H,001, 1 ?7 Taxes Outstanding $ 109,381 $ 119,3G7 s (9,98S) $ 10 9,381 $ 119,367 Write Ott Request s - $ 88,062 s (88,062) $ 40 S,653 s 206,630.44 'N1ilt- 0 11 Requt>-:l - lCS ad jus Unt-11l $ - $ - $ - $ 27 $ - Disconnect Summary Repon %nf<u.rt<ut Feb 1!1 ~1~ Mar 1!l .~:i~ Anr 1!l q;>~ M:!V1!l q,~~ Jun 1!1 q:i~ Jul 19 All£ 19 q ~,; q,'11\ IC"'' q~,; o,rnl q:i,; N0\' 1 •~s,; °"' t qg,; J.Jn )I 11,,; IC~~ qq~ ~.of lnfl!l$r ur Tnu l n.,y.t 1.w11!:1h!" tn 'Ji~; ..u~·. ' lfr', ·~·. ' Iii% ' l'i:', 'If:', •n;·, 'If:', 'Mi', •1111·, •1:.':', •1:,~·. ( Uf ,. ,. ,.., 11 f-,l,.19 i: Moi -19 J\pt-19 " Mo•;-19 Jun-19 Jul-1.9 :11 J\u~-1.9 l' S..11-l <M•l ll Nw,l lo O.o l ll lo J,111-2 feb-~ ll Anra~e Auounb Cut P-=,o-.., l6 1-eb-1!1 Sl r,ar-1!1 Sl Ajlt-1!1 S9 May-1!1 <S Jun•l!I •9 JUl•lll 34 Au~-lll ,.,.,l , • O<t•t l NEW· 1 l5 Lle(·l: Jan-·, ll teb-11 l A1·c1-..gL•NA.ounb A\'JlbblNO( Ut rcro.w ss ss ., ' ' t l, Tnu l nnmlPln.,11!~ ..,, l9 II)) SI I i,q l),U 4S rn lZ l "·~ .... ,,., .~.u IIH'l "" "' " lntlll $nnmiPin.:il list $ 11.S., Ui,,] I) $ MS.,11,"l.fJ $ fli)ll llkl $ Ji,\'1'"1.1)1) $ JJ/_.llti!l.~'I t, J ll.,'.l:Ml.:U $ :.O ~.,'l:lll.:l'! $ :l't\\\ti,'.0 t, n~..,11:1.1~ t, :.0:1-vn:11) $ Ul'l_.l)l)J.'11 '; 1.:i•1,:11KU:l '; ,"l,'":U .:1/ loUIAttu.;I l'lJSt t'lJt 100, ,. "'· :;:1, Tnti l ~nf ActuAI r ur ) !lb !lt,;l lJJU> llU> !U! fJ! " " $lll..:s,:i.:s, $ f J:..,,1..,,D ?i.u ..,..,'$:i:. $.U-:l••.''$l'$l $1.v ....... :.::,1 $ J..U..~'$J.ii $ 11.1.. ,'lU.:lll $1~:l,~ .:m $ 11\1.,'$:S....11 $ 11'$,)$:S.18 $ l U,:.:s~u.41.l $n:,:b.i:~ $ :,,xso.~ J:! Average Disconnects 5758 5251 5958 4845 4947 3629 3428 2720 4438 3026 2518 3327 19 8 • Average Accounts Cut Per Day • Average Accounts Available to Cut Per Day

Work Orders Processed Finals * Initials * Check Reads * Verify Off * Medicals * Misc. 2,000 1,500 1,000 500 0 FEB-19 MAR-19 APR-19 MAY-19 JUN-19 JUL-19 AUG-19 SEP-19 OCT-19 NOV-19 DEC-19 JAN-20 FEB-20 Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- 19 19 19 19 19 19 19 19 19 19 19 20 20 I I I I I I I I I I I I I • Series1 1,380 1,687 1,572 1,753 1,686 1,736 1,930 1,535 1,831 1,394 1,282 1493 1,327 Payment Agreements / Extensions 800 700 600 500 ·- - - - - - - --- 400 f----- - - - 300 200 100 0 Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- 19 19 19 19 19 19 19 19 19 19 19 20 20 • Series1 510 446 479 457 408 507 631 597 449 341 481 685 524 CUSTOMER PAYMENT USAGE 80,000 60,000 40,000 20,000 0 Drive-Thru Over the Mail, Drop Box Credit Cards Bank Drafts Window Counter • 2020 YTD 14,853 28,102 140,041 1,825 15,744 • 2019 YTD 15,630 31,998 135,318 1,645 15,214

ELECTRIC DEPARTMENT Electric Divisions System Peak Total System Load Number of New Month outages customers May 18 63,188 Services May 18 127.43 June 18 68,290 Jan 18 4 263 Jan 18 17 June 18 146.76 July 18 78,686 Feb 18 1 32 Feb 18 89 July 18 160.51 Mar 18 29 3,635 Mar 18 52 Aug 18 165.16 Aug 18 82,843 Apr 18 6 521 Apr 18 48 Sep 18 160.41 Sep 18 70,142 May 18 5 301 May 18 46 Oct 18 61,417 June 18 9 315 June 18 18 Oct 18 134.70 July 18 3 972 July 18 34 Nov 18 102.85 Nov 18 57,164 Aug 18 4 87 Aug 18 81 Dec 18 102.40 Dec 18 60,284 Sep 18 5 1,331 Sep 18 43 Jan 19 117.57 Jan 19 65,342 Oct 18 4 123 Oct 18 47 Feb 19 57,306 Nov 18 6 46 Nov 18 69 Feb 19 111.72 Dec 18 5 5 Dec 18 11 Mar 19 106.88 Mar 19 59,310 Jan 19 1 1 Jan 19 29 Apr 19 91.74 Apr 19 52,734 Feb 19 1 3 Feb 19 23 May 19 60,603 Mar 19 0 0 Mar 19 22 May 19 138.05 Apr 19 5 277 Apr 19 77 Jun 19 146.50 Jun 19 68,769 May 19 3 148 May 19 18 Jul 19 164.38 Jul 19 83,229 Jun 19 11 418 Jun 19 23 Aug 19 163.55 Aug 19 78,519 Jul 19 15 4,066 Jul 19 8 Sep 19 67,274 Aug 19 9 335 Aug 19 16 Sep 19 150.74 Sep 19 5 225 Sep 19 15 Oct 19 150.16 Oct 19 57,886 Oct 19 7 386 Oct 19 15 Nov 19 98.35 Nov 19 55,732 Nov 19 7 61 Nov 19 14 Dec 19 104.57 Dec 19 60,552 Dec 19 2 1,325 Dec 19 4 Jan 20 60,649 Jan 20 4 78 Jan 20 15 Jan 20 103.57 Feb 20 4 2,120 Feb 20 16 Feb 20 98.58 Feb 20 54,412 Electric Monthly Outage Report The annual outage goal will be less than 295 minutes per customer, which is a Delaware Standard. This will be measured by calculating the System Average Interruption Duration Index. FY 20 YTD FY 19 FY 18 27.47 38 152 Outages Average Response Time Goal is less than 30 minutes Month Year-to-date Month Year-to-date 4 51 22.75 Minutes 33.95 Minutes PROGRAM UPDATES FEB 20 FEB 19 FY20 YTD Tree Trimming 158 241 1698 Number of Oil Releases 1 0 1 Lost Time Accidents – All Electric Utility Divisions 0 0 0 New Services 16 23 103

Fleet & Facilities Management Monthly Report FEBRUARY 2020 Fleet Maintenance PM Work Orders Completed: 43 Number of Tire Repairs: 10 Number of Road Repairs: 5 Other Work Orders: 56 Repair Hours: 151 Road Repair Hours: 6 Total Work Orders: 99 Fabrication Hours: 2 Misc. Hours: 6 PM Hours: 108 # Of Scheduled PM’s: 30 # Of PM’s: Completed: 43 Major Program Updates FEBRUARY FEBRUARY MEASURE 2020 2019 DIFFERENCE Fleet Maintenance - Scheduled PM 43 out of 30 18 out of 30 appointments vs completed PM’s 83.33 % 144.33 % 60.00 % (Quantity and Percentage) Facilities Maintenance Facilities - Routine work orders 9 out of 11 17 out of 19 completed within 5 days -7.65 % 81.82 % 89.47 % (Quantity and Percentage) Facilities - Emergency work orders 3 out of 4 2 out of 2 completed within 2 days -25.00 % 75.00 % 100 % (Quantity and Percentage)

HUMAN RESOURCES February 2020 Feb Mar. April May June July Aug Sept Oct Nov Dec Jan Feb Total Category 19 19 19 19 19 19 19 19 19 19 19 20 20 Caucasian* 290 294 292 295 297 297 297 299 294 293 293 297 303 n/a Minorities* 80 80 80 78 78 77 75 78 77 77 78 78 77 n/a Hired 3 5 2 3 4 1 2 8 3 1 4 7 11 54 Terminated/Resigned/ 1 1 4 2 3 2 3 4 7 2 2 5 6 42 Retired/Other Transferred/Promoted 0 1 1 1 3 1 1 1 3 1 1 4 1 19 Jobs Posted 4 3 1 11 2 3 3 31 2 0 9 9 17 95 Workers Comp. 2 5 2 5 1 3 2 1 2 2 3 7 4 39 Injuries Workers Comp. 77 20 104 196 160 187 270 169 186 178 176 168 112 2003 Hours *354 Full-time Employees: Part-time Employees: 26 (3) Pitts Center, 1 Recreation, 16 Library, 5 Police Department, 1 Central Services) -Numbers do not reflect, temporary, seasonal, relief fire dispatchers, committee or council members. Position Hired: Police Clerk 1, Electrical Engineer, Central Services Admin Assistant, Asst to Dir of Council Affairs, Groundworker, Electric Department Director, Chief of Police, MEO 1-Sanitation, Inspector 1-Code Enforcement, Inspector 1 – Life Safety/Fire Marshal, Field Service Rep 1 Transferred/Promoted: Assistant City Clerk Position Terminated/Resigned/Retired/Other: (4) Police Officers, Police Cadet, Library Page Positions on Terminal Leave: (3) Police Officer – April and June, Police Master Corporal – June, Library Director – April, Admin Assistant PW – March, Water/Wastewater Maintenance Supervisor- June, Arborist-June, Recruitment Information (February) .- - Native American Black/ Hawaiian/ Two or Not Ind ian/ Hispanic/ Pos iton Tota l Apps In Dover Out of Dover Unknown Asian African Other More White Unknown Hispanic/ Unknown Male Fema le Unknown Alaskan Latino American Pacific Races Latino Native Islander Fleet & Facilities Manager 14 2 12 0 0 0 0 0 0 12 2 1 9 3 13 0 1 Ad min. Ass istant Clerk's Office 74 33 41 0 1 1 18 0 7 34 13 6 52 16 6 56 12 MEO II Floater (PW) 5 3 2 0 0 0 1 0 0 3 1 0 4 1 4 1 0 MEO I Streets 8 5 3 0 0 0 4 0 0 4 0 0 8 0 7 1 0 Gra nt Writer 9 5 3 1 0 0 2 0 1 4 2 0 7 2 3 6 0 Library Clerk (part-t ime) 86 50 36 0 1 3 14 0 4 49 15 5 63 18 21 49 16 Civil Engineer 3 0 3 0 0 1 0 0 0 0 2 0 1 2 1 0 2 Admin. Assi st - Public Works 103 49 53 1 2 2 21 0 12 48 18 10 79 14 8 87 8 Motor Equ ipment Operator II 4 3 1 0 0 0 3 0 0 1 0 0 4 0 2 2 0 SW Night Street Grounds Division Arborist 5 1 4 0 0 0 1 0 0 4 0 0 5 0 5 0 0 WW Division Utility 3 2 1 0 0 0 0 0 0 3 0 0 3 0 3 0 0 Maintenance Mechan ic II MEOI Storm water 3 2 1 0 0 0 1 0 0 2 0 0 3 0 2 1 0 Service Clerk (part-time) 37 21 16 0 0 1 14 0 5 11 6 4 27 6 9 25 3 MEOI WWW 6 4 2 0 0 0 4 0 0 2 0 0 5 1 5 1 0 MEO Ill Stormwater 1 0 1 0 0 0 0 0 0 1 0 0 1 0 1 0 0 MEO II Stormwater 2 0 2 0 0 0 0 0 0 2 0 0 2 0 2 0 0 Wrww Maint. Supervisor 3 0 3 0 0 0 0 0 0 3 0 0 3 0 3 0 0 Labore r II 15 4 11 0 0 0 4 0 1 9 1 1 12 2 13 0 2 *Resumes come from Indeed do not always list address

HUMAN RESOURCES (Continued) Open or Currently Recruiting* Open or Currently Feb March April May June July Aug Sept Oct Nov Dec Jan Feb Recruiting by Dept. 19 19 19 19 19 19 19 19 19 19 19 20 20 Electric 6 6 7 7 6 6 6 7 9 9 6 7 0 Public Works 11 9 7 6 4 5 5 10 10 11 11 8 7 Police 4 2.5 4.5 5.5 5.5 5.5 6 6 4 4 3 2 0 Water Waste Water 4 4 All Other Departments 7 8.5 7.5 6.5 7.5 7 7.5 16.5 18.5 18 17 15.5 6 Totals 27 26 26 25 23 23.5 24.5 39.5 41.5 42 37 36.5 17 *Not used for Budgeting Purposes All Other Departments Electric: (3) Lineman, Engineering Services Superintendent Public Works: Motor Equipment Operator I – Sanitation, Motor Equipment Operator I -Stormwater, Motor Equipment Operator III – Stormwater, Motor Equipment Operator II-PW Floater, Motor Equipment Operator I – Streets, Motor Equipment Operator II – Night Street Sweeper, MEO III-Streets, MEO II- Stormwater Police: (7) Police Officers, Cadet Water/Waste Water: Motor Equipment Operator I, (2) Civil Engineer, Utility Maintenance Mechanic II, Water/Waste Maintenance Supervisor All Other Departments: Accountant II, Mechanic I, Administrative Assistant – Mayor, Grant Writer, Laborer II– Parks and Recreation, Service Center Clerk (PT), Fleet and Facilities Manager, Library Clerk I (PT), Librarian I (PT), Assistant Library Director, Office Assistant II, Administrative Assistant – City Clerk’s Office, Administrative Assistant – Pu