Attachment

EXHIBIT #1 COUNCIL M INUTES 03/23/2009 NSP eve Leveraging COUNCIL M INUTES 03/23/2009 EXHIBIT #1 1

Table of Contents 1. NSP/NMTC Overview 2. Flow of Money 3. Financing and Organizational Structure 4. Action Requested 1. Challenges 2. Opportunities 5. Questions and Answers Appendix 1. Appendix A: Zip Code Overlays 2. Appendix B: Discussion Paper, Federal Reserve Bank of Philadelphia 3. Appendix C: Columbus Housing Partnership, a NMTC example 4. Appendix D: Biographies 2

NSP Overview Finance Mechanisms The New Markets Tax Credit (NMTC) Program provides tax credits to corporate taxpayers The line of credit will eliminate the who make Qualified Equity Investments (QEIs) in Community Development Entities (CDEs) need for jurisdictions to pay for the which have received allocations of NTMCs from the U.S. Treasury Department. properties, environmental reviews and appraisals out-of-pocket while By investing NSP and an equal amount of leverage loan funds in an NMTC structure, every waiting for HUD reimbursement. NSP $1.00 will turn into approximately $2.50. The NMTC funding will pay property maintenance costs while Abbreviated Process Flow* the property is held for rehab and sale. Acquire foreclosed homes and other distressed real estate • Complete environmental review and appraisal • Renovate as necessary for marketing & sales • Sell the homes to qualified owner-occupants • Achieve affordability for homebuyers through generally conforming first mortgages, second mortgages, second chance mortgages, lease to own options, etc. • Use NSP funds as collateral for a line of credit of an equal amount • Invest NSP and loan funds through an NMTC structure and generate additional equity • Comply with NSP regulations * 18 months to obligate funds * 4 years to spend an amount equal to or greater than the initial NSP allocation 3

Flow of Money Organization Structure and Flow of Money NSP Money Leverage Loan NMTC Equity (Jurisdictions) (Outside Lender) (Private Investors) Aggregated Pool of Funds (Managed by New Community Partners & DSCLT) Community Development Entity (Morgan Stanley New Markets) Sussex New Wilmington New Kent New New Castle New Dover New Markets Housing Markets Housing Markets Housing Markets Housing Markets Housing 4

Tasks Impacted by Structure Described Unleveraged NSP Structure Proposed Leveraged NSP / NMTC Structure Jurisdiction Responsibilities Shared Responsibilities (mainly 3rd Party) • Identification of Properties • Line of credit used for all up-front expenses • Locating properties with support of realtors • Environmental review • Evaluating viability (walk-thru, general construction/make • Appraisal ready estimates) • Title search • Cost negotiations with owners • Settlement • Out of -of-pocket expenses to be reimbursed • New Market Tax Credit equity used for on-going • Environmental reviews expenses • Appraisals • General property maintenance including grass cutting • Title search • Jurisdiction receives revenue during holding period • Settlement • Property taxes paid by 3rd party entity • Property maintenance and other holding costs • Transfer taxes paid by 3rd party entity • No receipt of property taxes during ownership by jurisdiction • Staffing ramp-up is absorbed by 3rd party entity • No receipt of transfer taxes for sales • Experience doing CDBG reporting paperwork • Administration of all rehab work • Staff is more flexible in nature to be utilized only • Responsible for all administrative paperwork during NSP period, without need to carry beyond • Possible need for additional staff during NSP period term • Potential to hold and maintain properties during rehab and • Marketing, recruitment & training of buyers marketing period 5

Opportunities 1. Rapid deployment of 100% of NSP funds through financing mechanisms up front • Using private leverage funds enables a rapid acquisition of targeted properties 2. Partnerships with local non-profits, developers, and contractors • Project implementation will be done almost entirely by local partners 3. Long term ownership and management where necessary • DSCLT and partners will manage any rent-to-own properties, selected mortgage assets and all CLT properties 4. Non-profit marketing and sales • DSCLT and pa t SC rtners will co b -broker the sales with oca local ea Realtors, c a harging o lower fees than the dust industry 5. Homebuyer counseling and education • DSCLT will partner with local HUD approved counseling agencies and others to bring new homeowners into the buyer pool, ready them for homeownership, and monitor and assist them after they purchase a house; CLT homeowners have permanent relationship with DSCLT. 6. Credit rehab • DSCLT will assist homebuyers who need credit rehab to qualify for FHA or other mortgage products. This may be done during a rent-to-own arrangement. 7. Private sector p expertise and staffing flexibility • DSCLT and New Community Partners will provide immediate value added and not burden the public sector at the end of the project 6

Appendix A Biographies Diamond State Community Land Trust (Van Temple, Executive Director) DSCLT was incorporated in 2006 with the mission of assembling, owning and managing a statewide inventory of permanently affordable owner-occupied homes. Our core goal is to serve households at 80% AMI and below including some at 50% and below. Our primary method of operation is partnering with non- profit housing development and homebuyer education providers as well as the counties and towns. As evidence of current capacity, DSCLT, in existence a little over 2 years, has its first CLT home sold and 77 additional units in process including an innovative, new construction 50-unit project near Laurel. DSCLT, the first t t statewide community land trust in the U.S., is operating under an ambitious 10 Y biti -Year B i usiness/Production Plan to grow the inventory of /P permanently affordable homes to 350 or more homes over the next few years. Currently DSCLT has a full-time Executive Director and a part-time Administrative Assistant. We are recruiting now to fill the position of Homeownership Program Manager. By the end of the 1st quarter of 2009 we plan to fill another position, bringing the full-time staff level to three. This expanded staff will handle Neighborhood Stabilization Program activities. Van Temple, the Executive Director, is a seasoned Housing & Community Development consultant and practitioner with extensive project development and management experience and a successful record in raising subsidy funds from a variety of sources including FHLB. In addition, the Board of Directors brings considerable experience and connections to the effort. The CLT model provides homes to its buyers at prices significantly below market value through the separating ownership of the land and house. The CLT retains ownership of the land, while the homeowner owns the house. The relationship is secured by a 99-year ground lease that the homeowner signs with the CLT, leasing the land for a nominal monthly fee. When a CLT owner decides to sell, a resale formula (contained in the ground lease) governs that process. The formula allows the departing owner to earn a fair return on his/her investment while supporting an affordable price for the next CLT homeowner. All homes become a part of the statewide inventory of permanently affordable homes. These homes will continue to serve Delaware's low- and moderate-income households generation after generation without additional public and private subsidies beyond the original development deal. Van has over thirty-four year’s experience in Housing and Community Development, City Government, and Non-Profit Management. Mr. Temple held management and executive positions with the City of Dallas, Texas in Police, Personnel, Equipment Services, Information Services, and Communications Departments over a thirteen-year career. As Executive Director of Old North Dayton Development Corporation, he helped build the organization over seven years to be recognized by his peers as "one of the most productive and professional CDCs in Ohio." Since 2000 Mr. Temple has consulted with a number of cities, counties and non-profits in affordable housing and community development in Connecticut, Delaware, Indiana, Maryland, Michigan, Missouri, New Jersey, Ohio, Pennsylvania, and Virginia. His consulting work includes: Project Development & Implementation, Neighborhood Revitalization Planning & Organizing, Organizational Assessments & Strategic Planning, Financial Planning & Resource Development, & Housing Development Training. Mr. Temple has been involved in numerous affordable homeownership and rental development projects both as an executive director and consultant. Beginning in 2006 Mr. Temple is serving as the first Executive Director for the Diamond State CLT. DSCLT is a member of the National CLT Network and Mr. Temple serves on the Board of Directors. 7

Appendix A Biographies Morgan Stanley New Markets, Inc. (Ricardo Rodriguez, Vice President) Ricardo Rodriguez has broad experience in the fields of finance, real estate and community development both within the United States and in Latin America. He is currently Vice President in the Global Capital Markets Group of Morgan Stanley in New York, where he is in charge of community-based real estate tax credit transactions. Some of the programs he oversees include New Markets Tax Credits, Historic Rehabilitation Tax Credits, certain HUD/HFA financings and Low Income Housing Tax Credits at the federal and state levels nationwide. During his tenure in the capital markets group, Mr. Rodriguez developed and created numerous business platforms on behalf of Morgan Stanley. These business lines include public-private partnerships between various entities of Morgan Stanley, for-profit developers, municipalities, housing authorities, and local non-profit partners, as well as other financial and corporate institutions. These business lines have generated a portfolio of transactions in excess of $3 billion, which has capitalized an even larger amount of transactions nationwide. This portfolio includes a variety of financial instruments, such as equity, mezzanine and first position debt, hybrid instruments, derivatives and hedges. The portfolio leverages Morgan Stanley’s own capital and that of third party investors to provide financing to development companies, community-based development organizations, non-profit organizations that promote housing and job creation, and real estate projects. These real estate projects include single and multifamily rental or for sale housing, community centers, retail, office space, small-scale hotels, mixed use, as well as businesses such as factories, manufacturing plants and renewable energy facilities. Prior to working with tax credits, Mr. Rodriguez was in charge of coverage of select Latin American debt, equity, and hybrid issuers (both corporations and governments) as part of Morgan Stanley’s Latin American Capital Markets Group. Prior to Morgan Stanley, Ricardo spent four years as a foreign liaison exchange officer from Nicaragua at the U.S. Naval Academy. Ricardo holds Bachelor of Science degrees with the highest distinction from the U.S. Naval A d cademy in Weapons & Systems E i ngineering and in Economics. He is a member of hthe Affordable Housing Investors Council, hthe New Markets Tax Credits Coalition, the Initiative for Global Development, and a board member of the Brooklyn Economic Development Corporation. 8

Appendix A Biographies New Community Partners, LLC (William, Whitman, Managing Member) New Community Partners is a Delaware limited liability company of which William Whitman is the managing member. Mr. Whitman has 30 years experience in the fields of real estate and community development, urban planning and law. He is currently also President of Telesis CDE Corporation which manages a $60 million allocation of New Markets Tax Credits, and Executive Vice President of Telesis Corporation, a position he has held since 1995. Mr. Whitman began his career at the Boston Redevelopment Authority (BRA) from 1980 – 1988 where he drafted land use regulations to conserve energy use and alleviate environmental impacts, assisted in the management of several large residential and commercial developments, administered a $30 million “linkage” fund that subsidized affordable housing, and served as Special Assistant to the Director for housing production. During his tenure at the BRA, Mr. Whitman managed successfully a variety of Federally-funded projects. Mr. Whitman went on to practice real estate law and serve as a real estate consultant for institutional clients in the Boston area before joining Telesis Corporation in 1995. During his tenure at Telesis Corporation, Mr. Whitman has been directly involved in the planning or development of several thousand units of mixed-income housing nationally, both new construction and substantial rehabilitation, and ancillary facilities financed with public and private funds. He has been principally responsible for acquisition, planning, underwriting, public sector and investor relations, closings, and, for certain projects, oversight of construction and lease up activities. He has also closed over $100 million of New Markets Tax Credit financings. New Community Partners is currently developing for-sale and rental units in New Orleans and on the Mississippi Gulf Coast, using Katrina Disaster Community Development Block Grant funds, and mixed-use projects in Memphis, Tennessee and in rural and minor metropolitan communities nationally. Mr. Whitman is an active member of the Urban Land Institute, the National Housing and Rehabilitation Association, the New Markets Tax Credit Coalition, the Novogradac Working Group, and the District of Columbia Builder’s Industry Association. 9

Appendix A Biographies Discover Bank (Matthew Parks, CRA and Wholesale Banking Director) Matt began his banking career in 1991 as a summer intern with WSFS Bank working in various capacities. After graduating from LeMoyne College in 1994 with a B.S in finance, Matt helped lead the start-up and growth of WSFS’ mortgage lending subsidiaries Community Credit and Wilmington National Finance. In 2001, Matt joined Discover Bank as a regional manager for its national deposit products business where he oversaw the call center and back office operations. In 2003, after obtaining his MBA from the University of Delaware and graduating from the ABA Stonier Graduate School of Banking, Matt was asked to provide assistance with Discover’s CRA mortgage lending and investment programs. Matt was promoted to Director in 2007 and is now responsible for the development of deposit partnerships with third parties, along with his management of the Bank's CRA program compliance. Matt has over 17 years of broad banking experience in both consumer and commercial banking. He has held management positions in the areas of loan origination, underwriting, servicing, secondary marketing, deposit operations and relationship management. Over the past 5 years, Matt has been responsible for the growth and management of the bank’s $130mm CRA investment portfolio. This responsibility has afforded him the opportunity to gain experience in investing in low income housing tax credits, new markets tax credits, and municipal bonds. Two of Matt’s most noteworthy accomplishments were the creation of the Morgan Stanley / Discover (MSD) Community Development Corporation (now known as the Discover Community Development Corporation, DCDC) and his work with the Delaware State Housing Authority (DSHA) to create a mortgage lending partnership that enhances the state's first time homebuyer Single Family Mortgage Revenue Bond Program. Through his efforts to improve the Bank’s CRA loan and investment programs, Matt was able to work closely with associates in Morgan Stanley's fixed income group to create an entity that enabled the Bank to lend capital in community development projects located in Southern Delaware. In the first year of operation, DCDC was able to provide over $25MM in loans. The DSHA partnership allowed Discover Bank to provide a subsidy in lieu of paying mortgage origination fees, that is passed onto first time homebuyers in the form of down payment assistance and lower interest rates. When compared to past Discover CRA programs, this program provided the bank with a greater rate of return and eliminated the default risk of holding and servicing mortgage loans. Since the creation of the partnership, Discover has invested $70MM in state housing bonds through the program. Matt was recognized for this accomplishment at a national CRA conference as a recipient of the Freddie Mac Community Impact Award. In addition to his Bank responsibilities, Matt finds time to assist the non-profit community. Matt is currently the Vice President of the Community Legal Aid Society’s Board, a member of the Affordable Housing Investors Council, and is a former member of the American Banker’s Association Housing and Economic Development Committee. 10

EXHIBIT #2 COUNCIL M INUTES 03/23/2009 March 23, 2009 Van Temple Executive Director Diamond State CLT, Inc. P.O. Box 1326 Dover, DE 19903 Re. NON-BINDING LETTER OF INTENT: NEW MARKET TAX CREDITS LEVERAGING INITIATIVE The City of Dover pledges $ 1,500,000.00 of its Neighborhood Stabilization Program (“NSP”) allocation to be a part of the Delaware Investment Fund for purposes of leveraging additional loan funds and attracting New Markets Tax Credits (‘NMTC’) investment. The purpose of this initiative is to expand the pool of dollars available for acquiring vacant, foreclosed properties and all other NSP activities as outlined in the City of Dover’s current NSP budget and plan. We understand that Diamond State CLT (“DSCLT”) and its NMTC partners, Morgan Stanley and New Community Partners, are seeking participation from each of Delaware’s five NSP-funded jurisdictions and that the Delaware State Housing Authority (“DSHA”), as the HUD grantee for all of Delaware’s NSP funding, supports this initiative. We also understand that if a pool of $7 million or more of NSP funds is pledged through these non-binding letters of intent, DSCLT and its NMTC partners will be empowered to obtain commitments for the leveraged loan and NMTC allocation during over the next 60 days. If DSCLT and its partners are able to obtain the necessary commitments, the Investment Fund, organizational structure, contractual relationships with each jurisdiction, including scopes of work and budgets, and all necessary policies and procedures required by DSHA and HUD will be put in place. This work will all be coordinated with DSHA under its contractual obligations to HUD.

In submitting this Non-Binding Letter of Intent we understand that our current NSP program planning efforts should be continued without interruption. The City of Dover’s commitment of our NSP allocation is supported provided that the City of Dover‘s credit will not be at risk and that the City of Dover will not own any assets, including mortgages, associated with the leveraging of NSP with these additional funding sources. If the DSCLT and its NMTC partners are unable obtain the credits, investor or leverage loan, or if the City of Dover’s credit would be put at risk or the City would own assets, this non-binding letter of intent is null and void and there is no obligation required of the City of Dover. Sincerely, ___________________________ Jurisdiction

EXHIBIT #3 COUNCIL M INUTES 03/23/2009 City of Dover March 23, 2009 Anas Ben Addi Delaware State Housing Authority 18 The Green Dover, DE 19904 RE: Leveraging Neighborhood Stabilization Program Funds with New Market Tax Credits Dear Mr. Ben Addi: The Dover City Council has reviewed the proposal for leveraging Neighborhood Stabilization Program (NSP) funding using New Market Tax Credits (NMTC). The City has signed a letter of intent to enter into this leveraging partnership; however the City has some reservations as to how the proposal is to be administered and managed. The City believes that this proposal would be best managed if the State of Delaware, through the Delaware State Housing Authority (DSHA), leveraged the NSP funds through the NMTC partnership before distributing the funds to the local jurisdictions. In doing this, the DSHA should distribute the leveraged funds to the local jurisdictions according to the proportions allocated in the initial action plan. Dover City Council believes that the State is better prepared to administer and monitor this program, as NMTCs are new to Delaware. We would appreciate a response from DSHA on whether or not you will take on this role. If you have any questions, please contact Ann Marie Townshend, our City Planner, at (302) 736-7196. Sincerely, Kenneth L. Hogan Dover City Council President cc: Tracey Harvey, Community Development Manager Ann Marie Townshend, City Planner P.O. Box 475 ❖ Dover, Delaware ❖19903 Community Excellence Through Quality Service

EXHIBIT #4 COUNCIL M INUTES 03/23/2009

EXHIBIT #5 COUNCIL M INUTES 03/23/2009 ACTION FORM PROCEEDING: Legislative, Finance, & Administration AGENDA ITEM NO.: DEPARTMENT OF ORIGIN: Finance Department DATE SUBMITTED: 06/23/08 PREPARED BY: Donna Mitchell, Controller/Treasurer SUBJECT: Independent Accountant Report – Haggerty & Haggerty EXHIBITS: N/A EXPENDITURE REQUIRED: N/A AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): RECOMMENDED ACTION: Acceptance of Agreed Upon Procedures BACKGROUND A review was conducted of the financial procedures being followed by the Fire Department when expending funds provided by the City of Dover. Council requested the Finance Director and Fire Chief to report back to the committee within two (2) to four (4) weeks with a set of procedures that will be beneficial to all parties involved. Several meetings have been held. The Agreed Upon Procedures were also reviewed and agreed upon with the City Manager. AGREED UPON PROEDURES Members of the Finance Department, Central Services, and the Fire Department met in March 2008 and have come up with the following solutions. At the request of the Fire Chief, Ken Hogan and Tim Slavin met with the Fire Chief and the President to discuss this issue on July 3, 2008. 1. We reaffirmed that the City would make the agreed upon loan payments on Robbins Hose Company loans for fire apparatus directly to the lending bank. The amount of the loan payments will be included in the fire department budget. The fire apparatus will be titled to Robbins Hose Company. 2. The Fire Chief or his designee will adhere to provisions of personnel policies and contracts as applicable to City employees. 3. The Fire Department will adhere to the provisions of the City of Dover Purchasing Policy as adopted on April 28, 2008 and any subsequent changes to said policy in expending City monies. 4. The Fire Department will prepare blanket bids for purchasing of all items that have recurring use to insure economic benefits and access to government procurement by responsible contractors or suppliers. A sample copy of a blanket bid and material listing was provided to the Fire Department by the Contract & Procurement Manager. 5. The City Contract & Procurement Manager will be presented with a detailed plan on the type of fire apparatus that needs to be purchased and the approximate cost as outlined in the CIP. The Fire Department will spec the apparatus. The spec will be reviewed by the Contract & Procurement Manager prior to going to bid. 6. The Fire Department is receptive to using the on-line vehicle and equipment sale process that the City is currently using to try and obtain the greatest amount of proceeds from the sale. 7. The Fire Department will turn over to the City any proceeds from the sale of apparatus that has been fully funded by the City. In return the City will deposit the funds in an account that will be used for the purchase of equipment needed for the new apparatus. 8. We all agreed to seek clarification and assistance when ever needed.

EXHIBIT #6 COUNCIL M INUTES 03/23/2009 Independent Accountant Report Haggerty & Haggerty Joint Committee (City of Dover and Dover Fire Department) Recommendation The firm of Haggerty and Haggerty, Public Accountants and Management Consultants, was commissioned by city council to review funding provided to the Dover Fire Department from the City of Dover. Upon completion of the review both members of city council and the fire department raised concerns about funding allocated to the fire department and current procedures. A joint committee of council members and fire department personnel was created to review and recommend policies, procedures, and standards dealing with City of Dover financial contributions to the Dover Fire Department. These recommended policies, procedures, and standards will allow for improved fire department operations, and provide a transparent monitoring of allocated funding. After numerous meetings, the committee has developed the following proposed agreement. The committee firmly stands behind this agreement as a means to improve the working relationship between the city council and the fire department. 1. City of Dover Employees: (A) All current and future City of Dover employees assigned to the Dover Fire Department will remain City of Dover employees assigned to the Dover Fire Department. (B) All items pertaining to City of Dover employees will remain under the city budget, and will follow the current budgeting and financial procedures. These items are listed under 110-100-514.10 and include, but are not limited to, salaries, overtime, temporary help, FICA taxes, health insurance, LID insurance, workers compensation, educational assistance, and pension. (C) The City of Dover will cover all upgrades, maintenance, and repairs needed to the Dover Fire Department communications center. This includes any upgrades needed to allow the City of Dover employees to effectively complete their duties. (D) All City of Dover employees assigned to the Dover Fire Department will remain under the authority of the company elected volunteer Fire Chief. With the approval of city council a Supervisor / Administrative Assistant position will be created to fill the vacancy of the current fire department administrative assistant. If approved by city council this position will be tasked with the supervision of the fire dispatchers, and will act as the Fire Chief’s administrative assistant. The company elected volunteer Fire Chief will supervise the new position.

(E) The company elected volunteer Fire Chief; while reporting directly to the City Council President, will consult with the City Manager in an advisory role on matters of personnel policy as set forth in the Employee Handbook, Labor Contracts, and other adopted personnel policies of the City of Dover. 2. The Dover Fire Department will follow the City of Dover budgeting process. After completion of the fiscal year budget and adoption by City Council, the Dover Fire Department budget will be allocated to the department in equal quarterly financial contributions on or before July 31, October 31, January 31, and April 30. All personnel costs as outlined in item 1 of this agreement are not included in the quarterly allotment. 3. The company elected volunteer Fire Chief will report to Council President and will act as the liaison to the City of Dover from the Dover Fire Department. 4. All City of Dover financial contributions to the Dover Fire Department will be placed in a financial account maintained by the Dover Fire Department. This account will be for the sole purpose of managing City of Dover financial contributions. 5. Monthly financial reports from the Dover Fire Department will be provided to the City Council and Mayor. The report will cover all incoming / outgoing monies from the aforementioned account for the calendar month prior. Each report will be included with the monthly Fire Chief’s report. The report format shall be approved by city council and Fire Chief. 6. The annual financial review, prepared for the State of Delaware, shall be provided to the city council. If requested by City Council, the Dover Fire Department will have an opinion audit conducted at the end of the fiscal year. The audit will be completed through an accountant firm of the City Council’s choice. All associated costs of an audit will be paid for by the Dover Fire Department. 7. The Dover Fire Department will follow State of Delaware purchasing policies and procedures which all fire departments in the State of Delaware are required to follow. 8. Any capital needs beyond the City of Dover’s yearly financial contributions that may arise will be brought to City Council for approval through a Committee Action Form (CAF). The Fire Chief will submit an updated 10 year Capital Investment Plan (CIP) in the January Fire Chief’s report. All CIP allocations will be paid directly by the City of Dover to the financial institutions. 9. The Dover Fire Department will continue to utilize the City of Dover for the tax exempt rates.

EXHIBIT #7 COUNCIL M INUTES 03/23/2009 City of Dover Finance Department PO Box 475 Dover DE 19903-0475 Phone: (302-736-7018 FAX: (302) 760-4930 E-Mail: dmitchell @dover.de.us MEMORANDUM To: Members of City Council From: Donna Mitchell, Controller/Treasurer Copy: Mayor, City Council, City Manager, Fire Chief, City Clerk, & Asst. Finance Director Date: March 23, 2009 Subject: Recommendation of Haggerty & Haggerty Ad-hoc Review Committee Listed below are a few clarifying points in regards to the City of Dover’s financial requirements for the Fire Department. • The Fire Department budget and general ledger accounts are looked upon as a City program just as any other City Department. • The City of Dover is not required to follow the State of Delaware Title 29 procurement code because we have our own City Council approved Purchasing Policy. Our policy, however, mirrors the State Code and references are made to this in the policy. Our policy does not lessen any requirement of the State Code therefore any agency could follow the City policy and be compliant with State Code. • All Grant-In-Aid appropriations provided to the Volunteer Fire Companies and other agencies by the State of Delaware have explicit requirements that have to be met in order to receive their quarterly appropriations. These requirements are included in the Fiscal 2009 Grant-In-Aid Bill, formerly Senate Bill No. 320. • All agencies receiving State Funds are required to provide a financial statement audit, except Volunteer Fire Companies. They are required to provide a Review Report which is less in scope than an audit. The Summary of Evidence from a public hearing in 2008 along with the requirements for reporting are attached. These requirements include associated penalties for not reporting timely. • The Robbins Hose Fire Department No. 1 has had a review completed for several years now. The City has no timely reporting requirement and in the past has had to make several requests for the Review. The latest report we have is for fiscal year ended June 30, 2007. • The State of Delaware has a revolving loan program for Volunteer Fire Services which would allow the Fire Department to apply for low interest loans (3%) to address their capital plan needs. The details of this program are attached for your information. • The City is responsible for assignment of employee wages, benefits, addressing complaints and grievances. This matter could be easily addressed by assigning supervisory duties to the City’s Emergency Management Coordinator for these employees. The Emergency Management Coordinator would continue to report to the City Manager for the City’s Emergency Preparedness program. This change provides the City with consistent application of the City’s internal control procedures as well as provides the employees with the same full-time supervisor each year for completing performance evaluations. This would also provide standardized coordination efforts with each newly elected volunteer Fire Chief and reduce the burden placed on the Chief. We are not

Recommendation of Haggerty & Haggerty Ad-hoc Review Committee March 23, 2009 advocating the responsibility for the City’s Emergency Preparedness Program be transferred to the Fire Company. • City employees should be permitted to inform City management of any concerns regarding adherence to City policies and procedures. The Supervisory change would provide these employees with the ability to speak freely to City Management. • Past experience has been that we have encountered conflicts of interest when line officers or board members are also City employees. • The City provides supplies and materials to the Fire Company such as gasoline, supplies from inventory, utilities, safety shoes and uniforms for the employees. These charges are reflected in non- personnel accounts in their budget. The City will now be required to bill the Company for these charges under this proposal, unless the Company is advocating using their own credit and purchasing these items directly from the vendor as do other volunteer fire departments. • Concerns regarding certain expenses of the Fire Department were originally brought to Council’s attention on March 12, 2007. • At the Legislative, Finance, & Administrative Committee on August 28, 2008 the Fire Chief spoke on behalf of the members present and explained that he was directed to bring a request for Option 1 of the Independent Accountant’s report to the Committee and request a response if it were rejected. Much of the discussion by the members of the Robbins Hose Company has surrounded the double requirements they have to adhere to between the State and the City. The Company preferred to follow the State’s requirements as they do for Grant-In-Aid and not have a dual requirement placed on them by the City. A provision of which is to have all State Grant-In-Aid provided by a quarterly appropriation with a Review Reporting requirement to the State Fire Prevention Commission. Then shouldn’t the decision be to follow either the State or the City’s requirements and not pick and choose which requirement from each they want to follow? Wouldn’t the best solution be to adopt Option 1 (except personnel) with the understanding that the Fire Company would be subject to possible compliance audits by City staff and the Review Report requirement would carry the same penalties for timeliness as it has for the State of Delaware? In essence the City would adopt the same requirements and penalties for the Volunteer Fire Company for quarterly appropriations as a State Grant-In-Aid Recipient. Encouraging the Fire Company as a non-profit organization to seek grants or low interest loans through the State program, would lessen the burden on the City’s taxpayers, particularly in this difficult economy. The latest Review Report we received for June 30, 2007 shows the City contributions make up 61% of the Company’s revenue. If the State was not able to provide the loan or grant, the City could adopt the procedures of the Council on Volunteer Fire Service and have the capital needs go through an application process for low interest loans. If Council would like assurance of full disclosure and transparency to meet their stewardship responsibility over taxpayer funds, any requirements of the City should come with a greater degree of reporting not less. Any request for funding should come with a full budget presentation of all the Company’s revenues, expenditures and reserve balances to determine the funding level needed from the City. Respectfully submitted. 2