Attachment

REGULAR COUNCIL MEETING AGENDA December 10, 2007 - 7:30 P.M. - Council Chambers - City Hall - City of Dover OPEN FORUM - 15 MINUTES PRIOR TO OFFICIAL MEETING (7:15 P.M.) INVOCATION BY CHAPLAIN WALLACE DIXON PLEDGE OF ALLEGIANCE AGENDA ADDITIONS/DELETIONS 1. Adoption of Minutes - Regular Council Meeting of November 26, 2007 2. Oath of Office - Administered by The Honorable Henry duPont Ridgely - Justice, Supreme Court - Council - At-Large - Thomas J. Leary 3. Recess (for photographs) - Mayor and Council * 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. 4. Presentation - Greater Dover Foundation - John W. Pitts Recreation Center Donation * 5. Legislative, Finance, and Administration Committee Report - November 26, 2007 A. Review of 2005 Charter Review Committee Recommendations - Article II B. Draft Comprehensive Annual Financial Report C. Duke Agreement Closeout * 6. Special Utility Committee Report - November 27, 2007 A. Appendix B - Zoning Ordinance, Article 3 - District Regulations, Section 29 - Source Water Protection Overlay Zone (SWPOZ), Section 29.7 - Tier 3 7. Legislative, Finance, and Administration Committee - December 10, 2007 (Except for the following tim e sensitive issues, the LF&A Com m ittee Report from Decem ber 10, 2007 will be presented to Council during their Regular Meeting of January 14, 2008 for consideration) A. Comprehensive Annual Financial Report - Final Draft B. Evaluation of Bids b-1. RedAlert Computer Aided Fire Dispatching System Upgrade b-2. Fire Fighting Turnout Gear b-3. 70 Foot Aerial Truck - Bid #08-0045DPS * 8. CIP Report - October 2007

Council Agenda December 10, 2007 Page 2 9. Evaluation of Bids A. Fiber Optic Splicing Contract B. Line Hardware for Feeders 3 & 4 C. Cartanza Substation Structures 10. Request for Proposals - Fire Resistant Clothing Rental Contract * 11. Appointment Recommended by Mayor Carey - Downtown Dover Development Corporation - Councilwoman Sophia R. Russell (To Fill Unexpired Term of Carleton E. Carey, Sr. - Term to Expire May 2008) * 12. Appointments Recommended by Council President Williams (To Fill Unexpired Terms of Carleton E. Carey, Sr. - Terms to Expire May 2008) A. Safety Advisory and Transportation Committee - Councilman Thomas J. Leary B. Utility Committee - Councilman Thomas J. Leary 13. Rezoning Request/First Reading (Recommended for referral to the Planning Commission on January 22, 2008 and that a Public Hearing be set for February 11, 2008 at 7:30 p.m.) Property located at 988-990 Forest Street (the southeast corner of Route 8 (Forest Street/Forrest Avenue) and Saulsbury Road), owned by Rt. 8 & Saulsbury Rd, LLC, consisting of 1.33+/- acres on four parcels of land totaling 2.18 +/- acres . Two parcels (0.95 acres) are currently zoned C-3 (Service Commercial Zone) and the northern portion of two parcels (0.38 acres) is currently zoned CPO (Commercial Professional Office) with the total area subject to COZ-1 (Corridor Overlay Zone). The proposed zoning for the 1.33 +/- acre subject area is C-2A (Limited Central Commercial Zone) and subject to COZ-1 (Corridor Overlay Zone). The residual portion of two parcels will remain zoned as CPO (Commercial Professional Office) and subject to COZ-1 (Corridor Overlay Zone). The developer is BBC Properties, Inc. 14. Council Members Announcements /tm S:\ClerksOffice\Agendas&Minutes\Council-Agendas\2007\12-10-2007.wpd THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

REGULAR COUNCIL MEETING The Regular Council Meeting was held on November 26, 2007 at 7:30 p.m. with Councilman Salters presiding in the absence of Council President Williams. Council members present were Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mr. Hogan, and Mr. Ruane. Council staff members present were Police Chief Horvath, Mrs. Mitchell, Mrs. Townshend, Deputy Fire Chief Carey, Mr. DePrima, City Solicitor Rodriguez, Mrs. McDowell, and Mayor Carey. OPEN FORUM The Open Forum was held at 7:15 p.m., prior to commencement of the Official Council Meeting. Councilman Salters declared the Open Forum in session and reminded those present that Council is not in official session and cannot take formal action. There was no one present wishing to speak during the Open Forum. The invocation was given by Chaplain Dixon, followed by the Pledge of Allegiance. AGENDA ADDITIONS/DELETIONS Mr. McGlumphy moved for approval of the agenda as presented, seconded by Mr. Hogan and unanimously carried. Mrs. Russell moved for approval of the consent agenda, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). ADOPTION OF MINUTES - COUNCIL WORKSHOP OF NOVEMBER 5, 2007 The Minutes of the Council Workshop of November 5, 2007 were unanimously approved by motion of Mrs. Russell, seconded by Mr. McGlumphy and bore the written approval of Mayor Carey. ADOPTION OF MINUTES - REGULAR COUNCIL MEETING OF NOVEMBER 13, 2007 The Minutes of the Regular Council Meeting of November 13, 2007 were unanimously approved by motion of Mrs. Russell, seconded by Mr. McGlumphy and bore the written approval of Mayor Carey. PROPOSED RESOLUTION - APPLICATION FOR DESIGNATION AS A PRESERVE AMERICA COMMUNITY Mr. Slavin advised members that Preserve America is a White House initiative to effectively grow grass-root support for historic preservation and issues in communities, especially for a variety of tourism and economic development issues. There are two (2) communities in the State of Delaware, the City of Lewes and the Town of Milton, that have achieved Preserve America status and, as such, are eligible for a significant amount of Preserve America grant funding available from the Federal Government. Staff prepared a proposed Resolution for the City of Dover to apply for the designation of City as a Preserve America Community. By motion of Mr. Hogan, seconded by Mrs. Russell, Council, by a unanimous roll call vote (Council President Williams absent), adopted the following Resolution:

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 2 WHEREAS, Preserve America is a White House initiative developed in cooperation with the Advisory Council on Historic Preservation, the U.S. Department of the Interior, and the U.S. Department of Commerce; and WHEREAS, the goals of this initiative include a greater shared knowledge about our Nation’s past, strengthened regional identities and local pride, increased local participation in preserving the country’s irreplaceable cultural and natural heritage assets, and support for the economic vitality of communities; and WHEREAS, this initiative is compatible with our community’s interests and goals related to historic preservation; and WHEREAS, designation as a Preserve America Community will improve our community’s ability to protect and promote its historical resources NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. That the City of Dover, Delaware will apply for the designation of City as a Preserve America Community; and 2. That the City of Dover, Delaware will protect and celebrate our heritage, use our historic assets for economic development and community revitalization, and encourage people to experience and appreciate local historic resources through education and heritage tourism programs. ADOPTED: NOVEMBER 26, 2007 PUBLIC HEARING/FINAL READING - PROPOSED ZONING TEXT AMENDMENTS A public hearing was duly advertised for this time and place to consider approval of proposed zoning text amendments that would establish a Source Water Protection Overlay Zone (SWPOZ), which addresses the “Wellhead Protection Areas” only (does not include the “Excellent Water Recharge Areas”). Mr. Slavin moved that the Final Reading of the proposed zoning text amendment be acknowledged by title only, seconded by Mr. McGiffin and unanimously carried. Members were advised that the Planning Commission recommended approval of the proposed amendments. City Clerk’s Office Note: During the Regular Council Meeting of October 22, 2007, a public hearing was scheduled to consider the adoption of proposed zoning text amendments that would establish a Source Water Protection Overlay Zone (SWPOZ), which effects over 500 parcels within the City. The proposed ordinance was reviewed by the Parks, Recreation, and Community Enhancement Committee during their meeting of October 9, 2007. Based on several comments and other discussions that occurred since the Planning Commission meeting on October 15, 2007, it was staff’s opinion that providing for an exemption may not be the best alternative to address impervious cover limitations, and suggested the possibility of balancing important economic development

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 3 factors with the protection of the recharge areas. Staff recommended that the proposed ordinance be referred to the Utility Committee and that a Public Hearing be rescheduled for January 14, 2008, to allow staff and the Utility Committee to work through these issues to bring forward an ordinance that addresses the concerns realistically. Members of City Council, during their meeting of October 22, 2007, deferred the public hearing for the proposed zoning text amendment and referred the ordinance amending Article 3 - District Regulations, Section 29 - Source Water Protection Overlay Zone (SWPOZ), of the Zoning Ordinance, to the Utility Committee in order to reconsider protective land use policies to protect Dover’s excellent water recharge areas and its well-heads and to present a revised ordinance to City Council for public hearing on January 14, 2008. During a Special Utility Committee Meeting of November 6, 2007, members considered an alternative ordinance entitled “Wellhead Protection Only”. During their Regular Meeting of November 13, 2007, Council approved the committee’s recommendation for consideration of the adoption of the alternative proposed ordinance and that a public hearing be scheduled for November 26, 2007 at 7:30 p.m. Mr. Koenig, Public Services Director, gave a presentation of the proposed zoning text amendments that would establish a Source Water Protection Overlay Zone (SWPOZ) which addresses the “Wellhead Protection Areas” only (Exhibit #1). He noted that the portion of the proposed amendments that address the “Excellent Water Recharge Areas” will be further considered by the Utility Committee and a separate public hearing will be held before City Council. Mrs. Townshend reviewed the proposed zoning text amendment in detail. She explained that since members were not able to come to a consensus regarding the excellent recharge areas at this time, the alternative is presented for consideration. She reminded members that the State is requiring the City to adopt the Overlay Zone prior to the end of the year and that it was felt that the alternative may satisfy the requirement at this time. Mrs. Townshend referred to a letter, dated November 26, 2007, received from Mr. Barndt, Program Manager for Source Water and Wellhead Protection Programs for the Department of Natural Resources and Environmental Control (DNREC), which included recommended amendments to the proposed text amendment (Exhibit #2). She advised members that staff is in agreement with the recommended amendments. Councilman Salters declared the hearing open. There being no one present wishing to speak during the public hearing, Councilman Salters declared the hearing closed. Mr. Ruane moved to delete Section 29.51(p) in its entirety, seconded by Mr. McGlumphy and unanimously carried. Mr. Ruane moved to delete the phrase “or substances” from Sections 29.83 and 29.93, seconded by Mr. Hogan and unanimously carried. Mr. Ruane moved for adoption of the following ordinance, as amended, seconded by Mr. McGiffin and carried by a unanimous roll call vote (Council President Williams absent) (the First Reading of the ordinance was accomplished during the Council Meeting of September 24, 2007):

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 4 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: That Appendix B - Zoning Ordinance, Article 3 – District Regulations be amended by inserting the a new section as follows: Section 29 Source Water Protection Overlay Zone (SWPOZ) 29.1 Purpose. The purpose of this Source Water Protection Overlay Zone is to provide a safe drinking water supply and to ensure that groundwater is adequately protected and maintained. The Overlay Zone’s purpose is to protect public health and safety by minimizing contamination of the aquifer and to ensure that the aquifer is property maintained and supplied with clean water through the reduction of impervious surfaces. 29.2 Definitions. Aboveground Storage Tank (AST). An AST is a single containment vessel greater than 250 gallons as defined in the Delaware Regulations Governing Aboveground Storage Tanks. ASTs with a storage capacity greater than 12,499 gallons containing petroleum or hazardous substances, and ASTs with a storage capacity greater than 39,999 gallons containing diesel, heating fuel or kerosene are subject to the design, construction, operation and maintenance requirements of the Delaware AST regulations. Hazardous Material. A material which is defined in one or more of the following categories: Ignitable: A gas, liquid or solid which may cause fires through friction, absorption of moisture, or which has low flash points. Examples: white phosphorous and gasoline. Carcinogenic: A gas, liquid, or solid which is normally considered to be cancer causing or mutagenic. Examples: PCB's in some waste oils. Explosive: A reactive gas, liquid or solid which will vigorously and energetically react uncontrollably if exposed to heat, shock, pressure or combinations thereof. Examples: dynamite, organic peroxides and ammonium nitrate. Highly Toxic: A gas, liquid, or solid so dangerous to man as to afford an unusual hazard to life. Example: chlorine gas. Moderately Toxic: A gas, liquid or solid which through repeated exposure or in a single large dose can be hazardous to man. Corrosive: Any material, whether acid or alkaline, which will cause severe damage to human tissue, or in case of leakage might damage or destroy other containers of hazardous materials and cause the release of their contents. Examples: battery acid and phosphoric acid. Underground Storage Tank (UST). An UST is one or a combination of Tanks including underground Pipes, the volume of which is 10% or more belowground, as defined in the Delaware Regulations Governing Underground Storage Tank Systems. The following USTs are not subject to the design, construction, operation and maintenance requirements of the Delaware UST Regulations: Residential Heating Fuel, Agricultural and Residential Motor Fuel USTs less than 1,100 gallons and any UST less than 110 gallons.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 5 29.3 Use and Bulk Requirements. The uses and bulk standards which govern the underlying zoning designations attached to the properties within the Source Water Protection Overlay Zone shall apply in all instances except where uses are specifically prohibited by this section and except pertaining to Impervious Surface, Ground Cover, and Floor Area Ratio. Where issues of Impervious Surface, Ground Cover, and Floor Area Ratio are concerned, the provisions of the Source Water Protection Overlay Zone are the governing provisions, overriding the existing zoning for the property. 29.4 Zone Boundaries. This section of the Zoning Ordinance encompasses the lands demarcated on the City of Dover Zoning Map as set forth in Article 2 §2 of this Ordinance, as the Source Water Protection Overlay Zone. 29.5 Uses Prohibited. The following uses are specifically prohibited throughout the Source Water Protection Overlay Zone: 29.51 Uses Prohibited a) Automobile body/repair shop, motor vehicle, boat or farm equipment service b) Gas stations and motor vehicle service stations c) Fleet/trucking/bus terminal d) Dry cleaner e) Electrical/electronic manufacturing facility f) Machine shop g) Metal plating/finishing/fabricating facility h) Chemical processing/storage facility i) Wood preserving/treating facility j) Junk yard/scrap yard/salvage yard k) Mines/gravel pit l) Land divisions resulting in high density (>1 unit/acre) septic systems m) Equipment maintenance/fueling areas n) Injection wells/dry wells/sumps, except for single-family residences directing gutter downspouts to a drywell o) Underground storage tanks p) All uses not permitted in the underlying zone district 29.6 Geothermal Wells. Geothermal wells are permitted uses within the Source Water Protection Overlay Zone in accordance with other City and State regulations. 29.7 Reserved 29.8 Tier 2: Primary Wellhead Protection Areas. Lands defined as Tier 2 lands, are areas which have been identified as Primary Wellhead Protection Areas.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 6 29.81 Purpose and Intent. The purpose of the Primary Wellhead Protection Areas is to safeguard the potable water resources of Dover and Kent County and to safeguard the public health, safety, and resources through regulation of land use and development within zones of protection surrounding potable water supply well fields. 29.82 Areas within three hundred (300) feet of the well shall be one hundred (100) percent open space. 29.83 New development within five hundred (500) feet of the well must demonstrate that the new development will not produce, store, transfer or otherwise handle hazardous materials. 29.84 The Primary Wellhead Protection area around the well may be reduced to a one hundred and fifty (150) foot radius provided a hydrogeological report, prepared by a Delaware Registered Geologist and submitted to the satisfaction of the Delaware Geological Survey and the DNREC, is prepared. The report must certify that (1) the minimum 60-day time of-travel from a point to the public water supply well is maintained and (2) the well draws from a confined aquifer. Upon completion of such a report, the regulations governing Tier 1 lands within the Source Water Protection Overlay Zone will apply. 29.85 Runoff. The natural runoff flowing into wellhead areas shall be allowed and all new stormwater run-off shall be diverted around the wellhead protection areas wherever practical. 29.86 The stormwater system’s discharge to Tier 2: Primary Wellhead Protection Areas land shall be by sheet flow through a grassland or discharge from a stormwater management facility having a wetland or aquatic bench. Stormwater runoff from all parking areas shall be directed to a stormwater management facility before it is discharged into a Primary Wellhead Protection Area. 29.87 Boundary Disputes. For primary wellhead protection area boundary determinations, a site-specific geological and hydro-geological analysis shall be performed by a State- registered professional geologist and shall be based upon thorough site investigation, subsurface testing and other testing as may be determined appropriate by the City of Dover. 29.9 Tier 1: Secondary Wellhead Protection Areas. Lands defined as Tier 1 lands, are areas which have been identified as Secondary Wellhead Protection Areas. Secondary Wellhead Areas extend a buffer of 150 feet radius from the well point located in an area of the confined aquifer. 29.91 Purpose and Intent. The purpose of this Secondary Wellhead Protection Areas is to safeguard the potable water resources of Dover and Kent County and to safeguard the public health, safety, and resources through regulation of land use and development within zones of protection surrounding potable water supply well fields. 29.92 Open Space. Areas within fifty (50) feet of the well shall be one hundred (100) percent open space.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 7 29.93 New development within seventy-five (75) feet of the well must demonstrate that the new development will not produce, store, transfer or otherwise handle hazardous materials. 29.94 The natural runoff flowing into wellhead areas shall be allowed and all new stormwater run-off shall be diverted around the wellhead protection areas wherever practical. 29.10 Intergovernmental Coordination 29.101 Review. The City of Dover, through the Development Advisory Committee, will coordinate with the Kent Conservation District and DNREC as necessary to ensure compliance with the Source Water Protection Overlay Zone. 29.102 Memorandum of Understanding. A Memorandum of Understanding must be kept and maintained between the City and any review agencies which evaluate the implementation of the required elements of the Source Water Protection Overlay Zone through the Development Advisory Committee process. 29.11 Data Distribution 29.141 The digital delineation of this overlay zone will be provided upon written request. Distribution of this information will be governed by the City of Dover’s Geographic Data Use and Distribution Policy. 29.12 Existing Development. Existing developed land which is located within the Source Water Protection Overlay Zone will be treated as a non-conforming use, subject to the provisions of Article 7. 29.13 Effective Date. The requirements of the Source Water Protection Overlay Zone shall apply to all site plan and subdivision applications filed after adoption of these requirements by City Council. ADOPTED: NOVEMBER 26, 2007 PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE REPORT - NOVEMBER 13, 2007 The Parks, Recreation, and Community Enhancement Committee met on November 13, 2007 with Chairwoman Russell presiding. Parks and Recreation/Open Space Plans - Review of Active Recreation Areas In accordance with Article 5, Section 10, of the Zoning Code, all residential developments shall provide Open Space and an Active Recreation Plan, which must be reviewed by the Parks, Recreation, and Community Enhancement Committee for a recommendation prior to consideration of the Conditional Use Site Plan by the Planning Commission. Subsection 10.7 of Article 5, Section 10, of the Zoning Code requires that all areas planned for public dedication, or cash donations provided under this section, must be submitted to and approved by the Parks, Recreation, and

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 8 Community Enhancement Committee and shall be subject to final review and approval by City Council prior to acceptance by the Planning Commission. Members reviewed the following Active Recreation Areas: Stonebrook East Planned Neighborhood Design Members were provided an application for the Recreation Plan for Stonebrook East: Planned Neighborhood Design (PND) Development. Stonebrook East consists of 45.03+/- acres of land located at the northeast corner of McKee Road and Denneys Road, north of the Mill Creek Subdivision. The applicant proposes the construction of 255 residential units (87 townhouses and 168 garden apartments), open space areas, community center, and street layout. On behalf of the applicants, Chartwell Homes, Inc. and CLMS Development, Inc., Mr. Gregg Moore of Becker Morgan Group presented the Open Space and Active Recreation Plan for Stonebrook East (as on file in the City Clerk’s Office). It was noted that Stonebrook East and Stonebrook West (see next agenda item) will be interconnected. He noted, for clarification, that the plan has been modified to reflect that the residue area has not been incorporated into the open space/recreational area. Members were advised that the overall Stonebrook Planned Neighborhood Design Development exceeds the minimum of 25% open space for a Planned Neighborhood Design Development by creating a series of open space areas, a community center, basketball court, swimming pool, gazebo, and children’s play structure. The Stonebrook East PND provides 23.78+/- acres or 52.8% of the available land towards open space. Based upon the number of residential dwelling units proposed (255 units), this subdivision is required to provide 1.609+/- acres (70,088 S.F.) of open space designed to function as Active Recreation space. Upon review of the Open Space and Active Recreation Plan for Stonebrook East, the Department of Planning and Inspections Staff submitted the following recommendations: 1. Staff recommends approval of the Community Center Area, the Park Area and the associated amenities of club house, pool area, walking trail and gazebo, and hardtop court as the Active Recreation Areas for the Stonebrook PND. Staff recommends approval of the overall Open Space provided for the project. Recommendations suggested as conditions of this approval are listed below: a. Staff recommends the addition of bicycle racks adjacent to the Clubhouse Building. b. The community park area shows five ‘Green Giant Arborvitae' trees which will obscure the view of the park from the street. These should be relocated. c. Recommend that play structure be selected for the 5-12 age group. d. An extension of the walking path must be made to the tot-lot area. e. The materials for the walking path in the community park providing access to the gazebo should be concrete sidewalk.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 9 2. Staff recommends the repositioning of the clubhouse such that it faces Charlton Drive or has a side yard facing Charlton Drive. This will provide visibility of the main entrance from a public street. 3. The following items should be included on the Plan to clarify the construction of the recreation area improvements: a. Provide a construction detail or specifications for the amenities such as the walking path construction including the width of the paths, hard court surface, etc. b. All street trees must be relocated to the individual lot (side of the sidewalk) and not within the grass strip between the curb and sidewalk. 4. Staff recommends that street intersections with adjoining sidewalks should be made barrier free for access and include crosswalk markings in order to delineate pedestrian connections to the open space and recreation areas. 5. Identify the type of lighting proposed. The placement of street light style lamp posts may be more appropriate for certain areas especially in the vicinity of the gazebo and play structure. 6. The lawn areas should be appropriately planted (seeded or sodded) and maintained for active recreational activities. 7. Identify location of curb cut/driveway depression to allow for maintenance/equipment access to the park area. Due to size of grass area, larger tractor size equipment may be utilized in the maintenance activities. 8. The applicant is reminded of the requirements for construction phasing of the recreation area as associated with the development of the residential units. (Zoning Ordinance, Article 5 §10.6) Article 5 §10.6 Construction Phasing. The recreation and open space areas shall be completed in a proportion equal to or greater than the proportion of residential dwelling units completed, except that one hundred (100) percent of the recreation and open space areas shall be completed prior to issuing building permits for the final twenty (20) percent of the dwelling units proposed. Building permits shall not be issued for dwelling units unless the requirements of this section are met. 9. There shall be provisions which insure that the common open space land shall continue as such and be properly managed and maintained. The developer shall either retain ownership and responsibility for maintenance of such open land; or provide for and establish one (1) or more organizations for the ownership and maintenance of all common open space i.e. a Homeowners Association. The organization shall be responsible for maintenance, insurance and taxes on the common open space.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 10 10. In the event, that major changes and revisions to the Preliminary Subdivision Plan which affect the Recreation Plan occur in the review process and finalization of the Plan resubmittal may be required for review by the Parks Recreation and Community Enhancement Committee or other agencies and commissions making recommendations in regards to the plan. Responding to Mr. Lewis, Mr. Moore stated that the relocation of the trees can be accomplished to provide visibility of children. Mr. Moore concurred with staff’s recommendations with the exception of the repositioning of the clubhouse. He requested that the clubhouse remain positioned towards the parking. Mrs. Melson-Williams, City Planner, explained that staff felt that the clubhouse should be positioned to face the public street rather than the pool. Responding, Mr. Moore stated that the concern is with parking, explaining that it is not desired for parking to occur on the roadway so that the main entranceway is not located where children will be walking back and forth. Mrs. Melson- Williams stated that it was staff’s hope that most individuals would be walking to the site. Responding to Mr. McGlumphy, Mrs. Melson-Williams stated that although staff would have no objections to the request, it was felt that the repositioning would provide for a better plan, since the clubhouse is meant for the entire community and not just the apartment residents. With regards to front and back elevations, Mrs. Horsey stated that a back elevation can be designed to look like a front elevation. Responding, Mrs. Melson-Williams stated that such a design would be an option and that although staff has submitted their recommendation, the committee also serves as a recommending body to City Council. She explained that it was staff’s opinion that the recommendations would improve the plan by repositioning the clubhouse to the street, since it would serve as a public building. The committee recommended approval of the open space/active recreation plan for Stonebrook East, as recommended by staff, with the exception of including the developers suggestion for the position of the clubhouse, stipulating that the back of the building appear as the front. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Stonebrook West Planned Neighborhood Design Members were provided an application for the Recreation Plan for Stonebrook West: Planned Neighborhood Design (PND) Development. Stonebrook West consists of 88.97+/- acres of land, located on the northwest corner of McKee Road and Denneys Road, east of the Carlisle Village subdivision and west of McKee Road. The applicant proposes the construction of a residential development consisting of 199 dwelling units (44 townhouses, 66 duplexes, and 89 single family homes). The northern portion of the property, consisting of approximately 21.3 acres located north of the Mudstone Branch is proposed to be retained by the owner.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 11 On behalf of the applicants, Chartwell Homes, Inc. and CLMS Development, Inc., Mr. Gregg Moore of Becker Morgan Group presented the Open Space and Active Recreation Plan for Stonebrook West (as on file in the City Clerk’s Office). It was noted that Stonebrook East (see previous agenda item) and Stonebrook Westwill be interconnected. Members were advised that the overall Stonebrook West Planned Neighborhood Design Development exceeds the minimum of 25% open space for a Planned Neighborhood Design Development with over 50 acres of open space. The open space includes active recreation areas, woodlands, wetlands, flood plain areas, and the area adjacent to the Mudstone Branch. Based upon the number of residential dwelling units proposed (199 units), this subdivision is required to provide 1.25 +/- acres (54,725 S.F.) of open space designed to function as Active Recreation space. The Plan provides for 3.76+/- acres. Upon review of the Open Space and Active Recreation Plan for Stonebrook West, the Department of Planning and Inspections Staff submitted the following recommendations: 1. Plan complies with the minimum acreage requirement for the Active Recreation Areas. The project plan also provides above the minimum 25% of total site area as Common Open Space. 2. Staff recommends approval of the general concept for the recreation area and its associated amenities of the gazebo, play structure (tot lot), hard court game surface, turf playground, and walking path as the Active Recreation Areas for the Stonebrook West PND. Recommendations suggested as conditions of this approval are listed below. a. Provide a paved path (revise path surface material) from the sidewalk into the recreation area to access the gazebo and play structure area. b. Provide a paved path to the gazebo entrance from the walking path. c. Provide a paved path to the play structure area entrance from the walking path. d. Recommend that play structure be selected for the 5-12 age group. e. Adjust placement of at least one bench to be directly adjacent to the paved path. f. Relocate some of the proposed evergreen tree plantings along Alexandra Drive to other areas of the subdivision to provide better visibility of recreation area. 3. The following items should be included on the Plan to clarify the construction of the recreation area improvements: a. Provide a construction detail or specifications for the amenities such as the walking path construction including the width of the path, hard court surface, turf playground, etc. b. Consider redesign and relocation of the connection of the walking path to the sidewalk system. A second link to the walking path as you approach from the south near Markland Drive is suggested. c. All street trees must be relocated to the individual lot (side of the sidewalk) and not within the grass strip between the curb and sidewalk.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 12 4. Identify the type of lighting proposed. The placement of street light style lamp posts may be more appropriate for certain areas especially in the vicinity of the gazebo and play structure. 5. The lawn areas should be appropriately planted (seeded or sodded) and maintained for active recreational activities. 6. Identify location of curb cut/driveway depression to allow for maintenance/equipment access to the park area. Due to size of grass area, larger tractor size equipment may be utilized in the maintenance activities. 7. The applicant is reminded of the requirements for construction phasing of the recreation area as associated with the development of the residential units. (Zoning Ordinance, Article 5 §10.6) Article 5 §10.6 Construction Phasing. The recreation and open space areas shall be completed in a proportion equal to or greater than the proportion of residential dwelling units completed, except that one hundred (100) percent of the recreation and open space areas shall be completed prior to issuing building permits for the final twenty (20) percent of the dwelling units proposed. Building permits shall not be issued for dwelling units unless the requirements of this section are met. 8. There shall be provisions which insure that the common open space land including the active recreation areas shall continue as such and be properly managed and maintained. These provisions shall be in a form acceptable to the City of Dover. The developer shall either retain ownership and responsibility for maintenance of such open land; or provide for and establish one (1) or more organizations for the ownership and maintenance of all common open space i.e. a Homeowners Association. The organization shall be responsible for maintenance, insurance and taxes on common open space and recreation facilities. a. A note should be added to the Record Plan and other plan sheets indicating the responsible entity. b. A note should be included on the Record Plan to indicate the Open Space areas. 9. In the event, that major changes and revisions to the Preliminary Subdivision Plan which affect the Recreation Plan occur in the review process and finalization of the Plan resubmittal may be required for review by the Parks Recreation and Community Enhancement Committee or other agencies and commissions making recommendations in regards to the plan. The committee recommended approval of the open space/active recreation plan for Stonebrook West, as recommended by staff. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent).

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 13 Blue Hen Apartments Members were provided an application for the Active Recreation Area Plan for Blue Hen Apartments, which is being reviewed as a Site Development Plan. The property consists of 20.66+/- acres of land located east of Bay Road, behind the Blue Hen Corporate Center. The applicant proposes the construction of 13 apartment buildings for a total of 162 units and a clubhouse building. On behalf of the applicant, Blue Hen Apts., LLC, Mr. Gregg Moore of Becker Morgan Group presented the Open Space and Active Recreation Plan for Blue Hen Apartments (as on file in the City Clerk’s Office). Upon review of the Open Space and Active Recreation Plan for Blue Hen Apartments, the Department of Planning and Inspections Staff submitted the following comments and recommendations: 1. The proposed plan meets the area requirements for the Active Recreation Area. The plan is required to provide 1.02 acres of Active Recreation Area and it is proposing 1.13 acres of Active Recreation Area. 2. Staff recommends approval of the swimming pool, clubhouse, and play area equipment (provided age of proposed equipment) with the swing set, benches, and other play equipment. 3. The following items should be included on the Plan to clarify the construction of the recreation area improvements: a. A list of the proposed features needs to be provided on the Active Recreation Plan (i.e. the number of benches and the details of the items). b. Show tree planting locations on the Recreation Plan. c. Provide lighting around the play area. d. Indicate if the area around the play area is grass. If it is a walkway into the site is needed for accessibility. e. Lawn areas shall be appropriate planted (seeded or sodded) a maintained for active recreation activities. f. Indicate the location of the access points into the play area. 4. Staff recommends the plan provide intraconnectivity (a sidewalk) between the dwelling unit buildings to the clubhouse and other Active Recreation Areas. 5. Staff recommends providing a walking path around the site. This could be in place of the basketball court to add a feature less age reliant. The walking path would allow for connectivity from the residential development to the Blue Hen Corporate Center. 6. In the event, that major changes and revisions to the Site Plan occur in the finalization of the Site Plan contact the Department of Planning and Inspections. Examples include reorientation of building, relocation of site components like stormwater management areas,

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 14 and increases in floor area. These changes may require resubmittal for review by the Development Advisory Committee, Planning Commission, or other agencies and commissions making recommendations in regards to the plan. 7. The applicant is reminded of the requirements for construction phasing of the recreation area as associated with the development of the residential units. Article 5 §10.6 Construction Phasing. The recreation and open space areas shall be completed in a proportion equal to or greater than the proportion of residential dwelling units completed, except that one hundred (100) percent of the recreation and open space areas shall be completed prior to issuing building permits for the final twenty (20) percent of the dwelling units proposed. Building permits. 8. There shall be provisions which insure that the common open space land (including active recreation area) shall continue as such and be properly managed and maintained. The developer shall either retain ownership and responsibility for maintenance of such open land; or provide for and establish one (1) or more organizations for the ownership and maintenance of all common open space i.e. a Homeowners Association. The organization shall be responsible for maintenance, insurance and taxes on the common open space. a. Add a note on the Site Plan regarding who is responsible for maintenance, insurance and taxes on the common open space. Mrs. Melson-Williams advised members that the plan has been revised and adjusted by the developer since staff prepared their comments and recommendations. Specifically, she stated that the original plan proposed a basketball court, which has since been eliminated from the plan by the developer. Mr. Moore explained that although it has been agreed upon to eliminate the basketball court at this time, it remains on the plan since they would like to have this option if it is determined that such an amenity would benefit the neighborhood, which will be dependent upon the age group of residents. Responding to Mr. McGlumphy, Mr. Moore assured members that the concerns of the residents of Schoolview have been taken into consideration and the plan developed to comply with their requests. In response to Mr. Lewis regarding staff’s concerns with the basketball court, Mrs. Melson-Williams explained that there was concern due to its proximity to the rear of the Blue Hen Corporate Center and excessive parking available, which may invite users from other areas. She explained that there have been instances when these conditions have created police issues. Mrs. Townshend also stated that staff felt that there was a need for pedestrian opportunities; therefore, rather than an age specific activity, such as the basketball court, providing additional walking paths would prove to be more beneficial. Mr. Moore questioned if the motion includes the understanding that although the basketball court would not be built initially, it would remain in the plan for possible inclusion at a later time. He explained that the basketball court must be considered during the calculation for the stormwater

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 15 management, as it is an impervious surface. Responding, Mr. McGlumphy stated his understanding was that the basketball court would not be included in the plan at this time and that when and if it is desired, such a request would be presented at that time for consideration. Ms. Fenorosky of Petinaro advised members that they would like to retain the option of the basketball court so that it can be accomplished if it is later determined to be the request of the residents. Responding, Mrs. Townshend noted that the concerns with regards to the basketball court, as previously mentioned, were located within developments where the recreation areas were managed by a homeowners association. She explained that this development is different in the sense that Petinaro will manage the development, including the recreation/open space areas. Responding to Mr. Moore, Mrs. Townshend explained that a sidewalk waiver would be required to have the pedestrian walkway remain as proposed by the developer. Mr. Moore advised members that the placement of the walkway was developed with consideration for the adjacent Schoolview property owners. The committee recommended approval of the open space/active recreation plan for Blue Hen Apartments, as recommended by staff, with the applicant working with staff on recommendations #4 and #5 regarding the walking paths and sidewalks. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Updates Members were provided the following updates: Puncheon Run Watershed Action Team Update Mr. Koenig, Public Services Director, advised members that the Action Team meeting was held on October 31st and that members were provided a very long and detailed engineering overview of all the options. Members will be reviewing the various options for commenting and will meet again to discuss the options. He stated that there is not one (1) single “fix” for the problem. There is work scheduled to occur in the basin, Governors Avenue project, and discussion with regards to removing vegetation on the southern end of the Puncheon Run. These actions are scheduled to occur this fall and early next year. Mr. Koenig stated that the Action Team will be developing a series of recommendations and that, at this time, it is a matter of finalizing the projects, obtaining the necessary funding, etc. John W. Pitts Recreation Center Mr. Carter, Director of Parks and Recreation, advised members that it is important to have the building enclosed to begin the interior work. He stated that due to the rain, it may be difficult to meet the scheduled January 2008 opening. Noting that the report reflects a private donation being received in the amount of $25,000, Mr. Carter advised members that the correct amount should be $75,000, which was received from the Bieser-West Family.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 16 Planning and Funding for New Library Mr. Richard Thau, Library Director, provided an update on the planning and funding for the new library. CDBG Program Members were provided the status report on the FY 2006 and FY 2007 Program Funds Spent for the CDBG Program. Responding to Mr. Lewis, Mrs. Harvey, Community Development Director, stated that once an applicant has been awarded the grant, the funds are required to be spent 60 days prior to the end of the current fiscal year. 2008 Comprehensive Plan Update Mrs. Townshend, Director of Planning and Inspections, provided an update on the Comprehensive Plan development process for the 2008 Comprehensive Plan. At the next meeting, it is her intention to provide members with an outline of the various chapters and the responsible staff person as well as committee assignments. By consent agenda, Mrs. Russell moved for acceptance of the Parks, Recreation, and Community Enhancement Committee Report, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE REPORT - NOVEMBER 13, 2007 The Legislative, Finance, and Administration Committee met on November 13, 2007 with Chairman Slavin presiding. Review of 2005 Charter Review Committee Recommendations - Article I. General Provisions During their meeting of September 10, 2007, members approved the schedule to complete a comprehensive review of the 2005 Charter Review Committee Recommendations, including public hearings in each election district, over the next six (6) months. Members began their review during their meeting on October 8, 2007. As scheduled, members considered the recommendations to Article II - Mayor and Council, of the Dover Charter, as follows: Section 4, City Charter - Government Vested in Mayor and City Council (Section 2.01, Model City Charter - General Powers and Duties.) The committee recommended that Section 4 be replaced with Section 2.01, as stated in the Model City Charter, including the title. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent).

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 17 Section 5, City Charter (1st paragraph) - Council to be Legislative Body Members considered the possibility of the 1st paragraph of Section 5 being moved to appear with Section 6.02(a) of the Model City Charter. It was the consensus of members that the 1st paragraph of Section 5 follow Section 4, and that it not be included at Section 6.02(a) of the Model City Charter. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Section 5, City Charter (5th paragraph) - Qualifications (Section 2.02, Model City Charter - Eligibility, Terms, and Composition - (a) Eligibility The committee recommended retaining the language in Section 5 (5th paragraph) rather than Section 2.02 of the Model City Charter, amending subsection (4) by replacing “Twenty-one (21)” with “Eighteen (18)”. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Section 5, City Charter (3rd and 4th paragraphs) - Terms of Mayor and Councilmen (Section 2.02, Model City Charter - Eligibility, Terms, and Composition - (b) Terms It was noted that the 2005 Charter Review Committee recommended that the term for the Mayor be extended from two (2) to four (4) years. Mr. McGiffin suggested that any changes recommended for the Mayor or of that position should be inclusive in their consideration rather than it being accomplished piecemeal. After much discussion regarding the terms for both the Mayor and Council being increased to four (4) years, with the stipulation that a recall provision be added (to Section 6.04 of the Model City Charter), Mr. Slavin indicated that members could return to this Section for further consideration at a later time. Section 5, City Charter (2nd paragraph) - Size; Districts (Section 2.02, Model City Charter - Eligibility, Terms, and Composition - (c) Composition) Mr. Slavin felt that the size and district issue should have the input of the NAACP and suggested that action be deferred and that representatives of the NAACP be invited to attend a meeting to further discuss this issue. It was the consensus of members that consideration of the size and districts should be deferred to allow representatives of the NAACP to attend a meeting to further discuss this issue. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent).

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 18 Section 14, City Charter - Duties of Mayor (Section 2.03, Model City Charter - Mayor, Subsection (a) Powers and Duties) The committee recommended retaining the language of Section 14 rather than Subsection (a) of Section 2.03 of the Model City Charter. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Section 53, City Charter - Police; Mayor to be Conservator of Peace The committee recommended retaining the language of Section 53 of the City Charter. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Section 15, City Charter - Council President/Vice-Mayor, Duties of (Section 2.03, Model City Charter - Mayor, Subsection (b) Election - Mayor Elected At-Large) The committee recommended retaining the language of Section 15 rather than Subsection (b) of Section 2.03 of the Model City Charter. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Section 12, City Charter - Compensation and Expenses - Mayor and Council and Other Elected or Appointed Officials (Section 2.04, Model City Charter - Compensation; Expenses) Members were advised that during their meeting of July 20, 2006, the 2005 Charter Review Committee recommended the establishment of a Compensation Commission. Mrs. McDowell, City Clerk, advised members that the 2005 Charter Review Committee recommended adoption of a Resolution establishing the Compensation Commission, which was provided to members for their review. Prior to taking action, Mr. Slavin requested that the City Clerk provide members with the July 20, 2006 Minutes of the 2005 Charter Review Committee. He suggested that the Compensation issue be considered by members during their next meeting. Due to time constraints, Mr. Slavin stated that members will review the remainder of the items, as well as continue their review of the 2005 Charter Review Committee Recommendations, in accordance with the schedule adopted. Itron Mobile Lite Meter Reading Collection System - Sole Vendor Members were advised that the portable Itron Mobile Lite Collection System demonstrates the advances in wireless meter reading technology and replaces the original system proposed in the CIP. The Mobile Lite System is a result of the advancement of portable collection technology and, unlike the original system, is designed for a utility the size of Dover. This system will maximize

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 19 operational efficiency, reduce costs, and improve performance. The portable unit does not require installation and can be transferred between vehicles. The City currently uses Itron handheld metering devices and the meters are compatible with these devices; therefore, due to the City’s investment in meters and electronic reading devices, this would be a sole vendor purchase. The quote received for the Mobile Lite Collection System is as follows: Two Mobile Lite Units at $10,000 each $20,000 Upgraded Replacement Handheld Devices 4,300 Mobile Lite Portability Kit 400 Total Cost $24,700 Mrs. Tieman, Senior City Administrator, advised members that readings that would take two (2) hours for the meter readers would be reduced to half an hour by using the new devices. Responding to Mr. McGlumphy, she stated that the City could eventually eliminate one (1) to two (2) meter reading positions as a result of the use of the readers, which would be accomplished through attrition (due to retirement) or transfers. Staff recommended approval of the purchase of two (2) Itron Mobile Lite meter reading collection systems, mobile life portability kit, and one (1) handheld meter reading device, in the amount of $24,700. It was noted that the plan would be to have the system installed and in use by June 30, 2008. The committee recommended approval of staff’s recommendation. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Review of Budget Instruction Package Mrs. Tieman, Senior City Administrator, reminded members that during the recent Budget Post- Mortem, members of Council requested the opportunity to review the Budget Instruction Package. For clarification, Mr. Slavin explained that the package is provided to staff members for preparation of the draft budget, which is then presented to members of Council. Mrs. Tieman explained the instruction package, including the instructions that are provided to staff for the development of their budget, as well as the budget calendar for FY 2008-2009. Draft Comprehensive Annual Financial Report Members were provided a Draft of the City’s Comprehensive Annual Financial Report for the year ending June 30, 2007, which was also provided to the City’s audit firm Faw, Casson, & Company, LLC. Mrs. Teal, Assistant Finance Director, distributed a summary and explained that the statistical section, divider tabs, and page numbers, as well as any changes recommended by the auditors, still need to be completed. She advised members that since the draft was prepared, negotiations with Duke Energy have been finalized; therefore, according to the auditors, it is necessary for some of the electric amounts to be corrected.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 20 The final draft is expected to be completed and presented to members of the committee on November 26th. Mrs. Teal suggested that members peruse the financial section, which summarizes the financial activities for the year, to gain an understanding. Due to time constraints and the length of the report, Mr. Slavin requested that members be given additional time to review the report and that this matter be brought back to the committee for further review during their next meeting. Bond Engineering Consultant Proposal Members were reminded that the City of Dover Electric Bond Resolution requires the City to retain an independent engineering consultant to annually inspect the City’s electric system and to review the electric budgets and insurance program to ensure proper fiscal operation. Mrs. Teal, Assistant Finance Director, stated that the contract was bid; however, only one (1) responsive proposal was received from Burns & McDonnell for a three (3) year contract, as follows: 1) 2007 - $15,500; 2) 2008 - $16,000; and 3) 2009 - $16,500, for a total firm fixed price in the amount of $48,000 for a three (3) year contract. Staff has determined that the proposal is based on adequately priced competition and is considered reasonable based on historical pricing for the same type effort. Burns & McDonnell has completed the Engineering Consultant Report for the City since 2002 and hase the previous experience to provide a thorough and cost effective study. Staff recommended awarding a three (3) year contract to Burns & McDonnell (2007 - $15,500; 2008 - $16,000; and 2009 - $16,500) for a total amount of $48,000. The committee recommended approval of staff’s recommendation. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). Finance Procedures Regarding Grants and Grant Management Members were provided revised Grant Application Procedures (#F317), developed by the Finance Director/Treasurer, which now include a “Decision Making Process” Form that was requested by City Council. The committee recommended adoption of the Grant Application Procedures (#F317) as presented by staff. By consent agenda, Mrs. Russell moved for approval of the committee’s recommendation (Exhibit #3), seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). By consent agenda, Mrs. Russell moved for acceptance of the Legislative, Finance, and Administration Committee Report, seconded by Mr. McGlumphy and carried by a unanimous roll call vote.

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 21 MONTHLY REPORTS - OCTOBER 2007 By motion of Mrs. Russell, seconded by Mr. McGlumphy, the following monthly reports were accepted by consent agenda: Budget Report Chief of Police Report City Assessor Report City Manager's Report Planning and Inspections Report Dover Fire Department Report IUE CONTRACT SETTLEMENT Mr. DePrima, City Manager, provided members with detailed proposed changes to the IUE- CWA/City of Dover Contract Settlement Terms and reviewed the major changes to the contract (Exhibit #4). Staff recommended approval of the IUE Contract Proposal, which has been ratified by the Union. Responding to Mr. Ruane, Mr. DePrima stated that the City’s current budget includes adequate funds and will not require additional funds for the items included in the Contract. Mr. Slavin moved to ratify and confirm the settlement with the IUE-CWA (Exhibit #5) outlining the six (6) bullet points presented. The motion was seconded by Mr. Hogan and carried by a unanimous roll call vote (Council President Williams absent). ELECTION RESULTS - 2007 SPECIAL AT-LARGE MUNICIPAL ELECTION Mrs. McDowell, City Clerk, reported the results of the 2007 Special At-Large Municipal Election held on November 20, 2007, as follows: AT-LARGE COUNCIL Prameela D. Kaza 393 Thomas J. Leary 674 Total District Votes Cast 1,067 Total Registered Voters 19,596 Mr. Hogan moved for approval of the Election Results as reported by the City Clerk. The motion was seconded by Mr. Slavin and carried by a unanimous roll call vote (Council President Williams absent). ELECTION OF OFFICERS - ROBBINS HOSE COMPANY - YEAR 2008 FIRE LINE OFFICERS The Fire Line Officers of the Robbins Hose Company are elected annually on the third Monday of November. Members were provided the results from the November 19, 2007 Robbins Hose Company Election for consideration as follows:

CITY COUNCIL MEETING OF NOVEMBER 26, 2007 PAGE 22 Fire Chief - David Carey Deputy Fire Chief - Sean Christiansen (uncontested) First Assistant Fire Chief - Paul Strochine (uncontested) Second Assistant Fire Chief - Glenn Whitt (uncontested) Third Assistant Fire Chief - Mike O’Connor, II (uncontested) Fourth Assistant Fire Chief - Benjamin Smetana (uncontested) First Fire Line Captain - Joseph Simmons Second Fire Line Captain - Cole Enright (uncontested) By consent agenda, Mrs. Russell moved for acceptance of the Fire Line Officers for Robbins Hose Company No. 1 for the Year 2008, as submitted, seconded by Mr. McGlumphy and carried by a unanimous roll call vote (Council President Williams absent). COUNCIL MEMBERS ANNOUNCEMENTS Mr. Hogan congratulated Mr. Leary on his recent election to serve as the At-Large Councilman and thanked Mrs. Kaza for her efforts. Mr. Slavin extended congratulations to Delaware State University football team for a great season and suggested that the Mayor issue a proclamation to Dr. Sessom, the football coach, and team members. Mr. McGlumphy moved for adjournment, seconded by Mr. Hogan and unanimously carried. Meeting Adjourned at 8:15 P.M. TRACI A. McDOWELL CITY CLERK All orders, ordinances, and resolutions adopted by City Council during their Regular Meeting of November 26, 2007, are hereby approved. CARLETON E. CAREY, SR. MAYOR /TM/jg S:\ClerksOffice\Agendas&Minutes\Council-Minutes\2007\11-26-2007.wpd Exhibits Attached to Original Minutes and File Copy Exhibit #1 - Presentation - Source Water Protection Overlay Zone (SWPOZ) the “Wellhead Protection Areas” Exhibit #2 - Letter of November 26, 2007 from Mr. Barndt (DNREC) Exhibit #3 - Grant Application Procedures (#F317) Exhibit #4 - IUE-CWA/City of Dover Contract Settlement Terms (Major Items) Exhibit #5 - IUE-CWA/City of Dover Contract

LEGISLATIVE, FINANCE AND ADMINISTRATION COMMITTEE The Legislative, Finance, and Administration Committee meeting was held on November 26, 2007, at 4:32 p.m. with Chairman Slavin presiding. Members present were Mr. McGlumphy, Mr. Salters (arrived at 4:35 p.m.) , Mrs. Jones, and Mr. Shevock. Other members of Council present were Mr. Hogan (arrived at 4:52 p.m.) and Mr. Ruane. AGENDA ADDITIONS/DELETIONS Mr. McGlumphy moved for approval of the agenda, seconded by Mr. Shevock and unanimously carried. Review of 2005 Charter Review Committee Recommendations - Article II (Continued) During their meeting of September 10, 2007, members approved the schedule to complete a comprehensive review of the 2005 Charter Review Committee Recommendations, including public hearings in each election district, over the next six (6) months. Members began their review during their meeting on October 8, 2007. As scheduled, members continued consideration of the recommendations to Article II - Mayor and Council, of the Dover Charter, as follows: Section 5, City Charter (2nd paragraph) - Size; Districts (Section 2.02, Model City Charter - Eligibility, Terms, and Composition - (c) Composition) Mr. Slavin reminded members that during their meeting of November 13, 2007, they felt that the size and district issue should have the input of the NAACP. He advised members that letters will be sent out to representatives of the NAACP and that a meeting will be scheduled specifically for this issue during the January 14, 2008, committee meeting. He has verbally contacted some of the representatives of the NAACP regarding this invitation, as well as Deputy City Solicitor Pepper. Section 12, City Charter - Compensation and Expenses - Mayor and Council and Other Elected or Appointed Officials (Section 2.04, Model City Charter - Compensation; Expenses) During their meeting of November 13, 2007, members considered the 2005 Charter Review Committee’s recommendation for adoption of a Resolution that would establish a Compensation Commission. As requested, the City Clerk provided members with the July 20, 2006, Minutes of the 2005 Charter Review Committee. Mr. McGlumphy moved to recommend retaining Section 12 of the City Charter rather than Section 2.04 of the Model City Charter, seconded by Mr. Salters. Mr. McGlumphy relayed opposition to relinquishing the responsibility of City Council to a Commission for determining the salary for the Mayor and Council. Referencing the language in Section 2.04 of the Model City Charter, Mr. Shevock noted that it includes the provision for any increase to be provided after an election is held and that the current City Charter does not prohibit current members from an immediate salary increase. Mr. Slavin reminded members that there is a provision in the United States Constitution that sitting Congress cannot raise their own salary.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF NOVEMBER 26, 2007 PAGE 2 Mr. Ruane stated his support for the creation of a Compensation Commission, noting that previous discussions regarding salaries for the Mayor and Council have been very contentious. Concurring, Mr. McGiffin stated that consideration of these salaries has also been personal. It was his opinion that by having a commission responsible for this consideration, it would remove the personal element from the consideration and that it would be more objective. Mrs. Jones indicated her support for the adoption of a Resolution creating a Compensation Commission, as well as the recommendation to include the language in Section 2.04 of the Model City Charter, rather than that of Section 12 of the current City Charter. On a call for the question, the motion recommending that Section 12 of the City Charter be retained rather than Section 2.04 of the Model City Charter failed (Mr. Slavin, Mrs. Jones, and Mr. Shevock voting no). Mr. Slavin stated that the issue for establishment of a Compensation Commission would address concerns regarding members of Council having a decision in the matter since the Council could reject the Commission’s recommendation; however, they would not be able to increase their salaries. Mr. Shevock moved to recommend acceptance of the 2005 Charter Review Recommendation that Section 12 be replaced with Section 2.04 of the Model City Charter and adoption of the Resolution establishing the Compensation Commission, seconded by Mrs. Jones and carried with Mr. McGlumphy and Mr. Salters voting no. Section 2.05 - Prohibitions, Subsection (a) - Holding Other Office, Model City Charter Mr. McGlumphy moved to recommend including Section 2.05 - Prohibitions, Subsection (a) - Holding Other Office, as stated in the Model City Charter. The motion was seconded by Mrs. Jones and unanimously carried. Section 5, City Charter (6th paragraph) - Councilman Filing and Running for Mayor Members considered retaining the 6th paragraph of Section 5 to appear following Section 2.05(a) of the Model City Charter. Mr. Hogan suggested that this requirement be inclusive of all elections. City Clerk’s Office Note: Due to a recent Special Election, it was the opinion of the City Solicitor that a member of Council wishing to file and run for the Mayor’s position would not have to relinquish their current seat as a member of Council. Before this matter is presented to City Council, Mr. Ruane requested that the City Clerk conduct research regarding this paragraph of Section 5 of the current City Charter. Mr. Slavin questioned if the rationale for the paragraph is to provide a fairness for members of City Council, explaining that if the requirement was not in place, half of the members of Council would be required to relinquish their Council seat to run for Mayor and the other half would not.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF NOVEMBER 26, 2007 PAGE 3 Concurring, Mr. Hogan suggested that to alleviate this unfairness, with nine (9) members of Council, there could be three (3) year staggered terms and, with a Mayor having a four (4) year term, the election for the Mayor would fall on a different group of Council each election. In consideration of different alternatives, Mr. Ruane suggested consideration of the Mayor being elected by the members of City Council. Mr. Slavin indicated that this matter will be deferred to allow the City Clerk to conduct research with regards to the 6th paragraph of Section 5 of the City Charter. Section 35 - Removal of Employees by Manager (Section 2.05 - Prohibitions, Subsection (b) - Appointments and Removals, Model City Charter) Mr. Salters moved to recommend including the language in Section 2.05 - Prohibitions, Subsection (b) - Appointments and Removals, as stated in the Model City Charter, rather than Section 35 of the City Charter. The motion was seconded by Mrs. Jones and unanimously carried. Due to time constraints, Mr. Slavin stated that members will continue their review of the 2005 Charter Review Committee Recommendation at “Section 36 - Council not to Interfere with Appointments or Removals of Manager; Giving Orders to Subordinates of Manager Prohibited; Penalty for Same (Section 2.05 - Prohibitions, Subsection (c) - Interference with Administration, Model City Charter)” during their next meeting. Responding to Mr. Ruane, Mr. Slavin explained that the purpose of this review is to create a document for consideration by Council so that when Council accepts the report and recommendations of the committee regarding the review of the Charter, they are accepting the work that the committee has accomplished as a work product and not as a final product. Draft Comprehensive Annual Financial Report During their meeting of November 12, 2007, members were provided a Draft of the City’s Comprehensive Annual Financial Report (CAFR) for the year ending June 30, 2007, which has also been provided to the City’s audit firm Faw, Casson, & Company, LLC. Due to time constraints and the length of the report, Mr. Slavin requested that members be given additional time to review the report and that this matter be brought back to the committee for further review during their next meeting. In accordance with the auditing services calendar, staff provided members with a draft of the City of Dover CAFR for the year ending June 30, 2007. Still to be completed is the review of the statistical section, divider tabs, and page numbering, as well as including any changes recommended by the City’s auditors. Mrs. Mitchell, Finance Director/Treasurer, advised members that the auditors are still reviewing individual fund statements and schedules, as well as the corresponding narrative in the report. She also noted that this is the first time the Audit Committee approach is being used in the preparation

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING OF NOVEMBER 26, 2007 PAGE 4 and presentation of the CAFR. Mrs. Mitchell provided explanations to major highlights, as well as any subsequent changes that will be incorporated into the final CAFR, which will be presented to members on December 10, 2007. Duke Agreement Closeout Members were reminded that the City’s contract with Duke Energy ended on June 30, 2006. The contract had a provision that required an audit of the financial results each year. Duke requested that the City negotiate a settlement to close out the contract and forego an audit. The remaining items that needed to be settled were the purchase of all spare parts and fuel inventories, metering equipment and the annual rebate to the City. Mrs. Mitchell, Finance Director/Treasurer, provided members with the pre-negotiated and the post- negotiated invoices, as follows: Duke Negotiated Invoice Settlement 9/7/2006 11/17/2007 Consumable Inventory Expenses for FY2005-06 $2,666,923 $2,666,923 Meter System Expenses for FY2005-06 $75,000 $75,000 Spare Parts Inventory Expenses for FY2005-06 $1,214,326 $910,745 Rebate for FY2006 ($879,777) ($1,079,000) Net Invoice Amount $3,076,472 $2,573,668 Net Cash Flow Savings $502,804 Staff recommended that the City Manager be authorized to sign the Duke Contract Close documents. Mr. Salters moved to recommend approval of staff’s recommendation, seconded by Mrs. Jones and unanimously carried. Mrs. Jones moved for adjournment, seconded by Mr. Salters and unanimously carried. Meeting Adjourned at 5:33 P.M. Respectfully submitted, Timothy A. Slavin Chairman TAS/TM/jg S:\ClerksOffice\Agendas&Minutes\Committee-Minutes\2007\11-26-2007 LF&A.wpd

SPECIAL UTILITY COMMITTEE A Special Utility Committee meeting was held on November 27, 2007 at 4:30 p.m. with Chairman Ruane presiding. Members present were Mr. McGiffin, Mr. Cregar, and Mr. Snaman. Members of Council present were Mr. Hogan and Mayor Carey (arrived at 4:39 p.m.). AGENDA ADDITIONS/DELETIONS Mr. Snaman moved for approval of the agenda, seconded by Mr. Cregar and unanimously carried. Appendix B - Zoning Ordinance, Article 3 - District Regulations, Section 29 - Source Water Protection Overlay Zone (SWPOZ), Section 29.7 - Tier III (Referred by City Council on October 22, 2007) During the Regular Council Meeting of October 22, 2007, a public hearing was scheduled to consider the adoption of proposed zoning text amendments that would establish a Source Water Protection Overlay Zone (SWPOZ), which affects over 500 parcels within the City. It was noted that the proposed ordinance was reviewed by the Parks, Recreation, and Community Enhancement Committee during their meeting of October 9, 2007. Based on several comments and other discussions that occurred since the Planning Commission meeting on October 15, 2007, it was staff’s opinion that providing for an exemption may not be the best alternative to address impervious cover limitations and suggested the possibility of balancing important economic development factors with the protection of the recharge areas. Staff recommended that the proposed ordinance be referred to the Utility Committee and that a Public Hearing be rescheduled for January 14, 2008, to allow staff and the Utility Committee to work through these issues to bring forward an ordinance that addresses the concerns realistically. Members of City Council, during their meeting of October 22, 2007, deferred the public hearing for the proposed zoning text amendment and that the ordinance, amending Article 3 - District Regulations, Section 29 - Source Water Protection Overlay Zone (SWPOZ) of the Zoning Ordinance, be referred to the Utility Committee in order to reconsider protective land use policies to protect Dover’s excellent water recharge areas and its well-heads and to present a revised ordinance to City Council for public hearing on January 14, 2008. During a Special Committee Meeting on November 6, 2007, members reviewed an alternative draft ordinance entitled “Wellhead Protection Only” due to the difficulty of members coming to a consensus regarding the excellent recharge areas at this time. Members were reminded that the State is requiring the City to adopt the Overlay Zone prior to the end of the year and it was felt by staff that the alternative may satisfy the requirement at this time. The committee recommended adoption of the alternative proposed ordinance, as amended, and that a public hearing be scheduled accordingly (public hearing set for November 26, 2007 at 7:30 p.m.). During their Regular Meeting of November 12, 2007, members of City Council accepted the committee’s recommendation. A public hearing was held on November 26, 2007 and Council adopted the alternative ordinance. Members were provided Section 29.7 - Tier III, of Article 3 - District Regulations, Section 29 - Source Water Protection Overlay Zone (SWPOZ) of Appendix B - Zoning Ordinance, for their consideration.

SPECIAL UTILITY COMMITTEE MEETING OF NOVEMBER 27, 2007 PAGE 2 Mr. Koenig, Public Services Manager, reviewed a presentation of the “Excellent Recharge Areas”, Section 29.7 - Tier III, of the Dover’s Source Water Protection Overlay Zone (Attachment #1). Mrs. Townshend, Director of Planning and Inspections, provided members with a revised draft of Section 29.7 - Tier III, of the Dover’s Source Water Protection Overlay Zone (Attachment #2) and reviewed the proposed text amendment in detail. Responding to Mr. Ruane, Mrs. Townshend explained that there are two (2) types of site plans that are received in the Planning Office. There are those that are very small, which can be reviewed administratively and those that require review by the Planning Commission. Rather than such a broad reference to Article 10, she suggested that Section 29.71 be amended by replacing the word “any” with “only” and elimination of the “as set forth in Article 10”. Mr. Snaman moved to recommend that Section 29.71 be amended to read as follows: “29.71 Applicability. The impervious cover restrictions of this section shall apply only to activities requiring approval of the planning commission”. The motion was seconded by Mr. McGiffin and unanimously carried. Mr. John Barndt, Program Manager for Source Water and Wellhead Protection Programs for the Department of Natural Resources and Environmental Control (DNREC), relayed concern regarding Section 29.72, as it relates to the stormwater and provided material (Delaware Ground-Water Recharge Design Manual - Supplement 1 and an Excerpt from NCC-UDC) with regards to this issue (Attachment #3). Mrs. Townshend requested that staff be provided the opportunity to review the material to develop appropriate language for Section 29.72. At the request of Mrs. Townshend with regards to the change from 20 to 30 for impervious surface and 30 to 60 for impervious cover, as referenced in Section 29.72, Mr. Gregory Moore of Becker Morgan Group, representing Dover Downs and Delaware State University, stated that although it is felt that the change is better, he has not had the opportunity to evaluate the change. He is in the process of re-calculating all the holdings of Delaware State University and requested the opportunity to discuss the impacts with representatives. Mr. Phil McGinnis, Kent County Association of Realtors, stated that having just received the information, he has not had the opportunity for a thorough review, although he stated that higher percentages would be preferred. Mr. Moore advised members that, in the best interest of all parties, he would like the opportunity to introduce, as an incentive, Green Building possibilities and would like to share this information with staff. The Green Building design deals with site improvements and providing criteria for impervious surface, stormwater, and discharge. Mr. Moore noted that it is not just the percentages, but how to meet the criteria to get to the percentages. Responding, Mrs. Townshend indicated that this is, essentially, the entirety of Section 29.72. Mr. McGiffin moved to recommend to defer Section 29.72 until the next meeting, seconded by Mr. Snaman and unanimously carried.

SPECIAL UTILITY COMMITTEE MEETING OF NOVEMBER 27, 2007 PAGE 3 Responding to Mr. Ruane, Mrs. Townshend stated that the Kent Conservation District reviewed the proposed ordinance and sent a letter of support in October 2007. However, she stated that they have not had the opportunity to review any changes that have been made to the draft. Mrs. Townshend assured members that she will forward the final draft to Kent Conservation District and DNREC before the proposed ordinance is presented to City Council for consideration. Referring to Section 29.77, Mr. Ruane relayed concern with nebulous words such as “desirable” and “consistent” since they are subjective and interpretive. He stated that if a waiver is to be permitted, there should be very specific requirements and criteria. With regards to Section 29.710, Mr. Moore stated his support, explaining that residential property owners would not have a sophisticated engineer to assist them; therefore, although the Planning Commission review would not be required, it would be helpful for a homeowner to have clear direction of their abilities. In response to Mr. McGiffin, Mrs. Townshend advised members that staff developed the language for paragraph (a) of Section 29.711 after meeting with interested parties yesterday; therefore, staff is not necessarily recommending the specific language, particularly the word “mitigation”, as it currently reads. Mr. McGinnis stated that since the meaning of paragraph (a) of Section 29.711 is to compensate, he suggested that the word “compensation” replace “mitigation”. He relayed concern with the use of the City’s assessment of property due to many of these assessments being higher than the market value; therefore, an appraisal done by a qualified, certified appraiser would be preferred. Since the paragraph discusses a reduction of property rights, due to the reduction of impervious surface, Mr. McGinnis advised members that the property value could reduce. He questioned what change, if any, would be made to the assessed value. If it is the intent for the funds obtained through “payment-in-lieu” to be used towards the purchase of property, Mr. McGinnis suggested that the ordinance be specific in this regard. Mr. Moore, on behalf of the Greater Dover Committee, explained his opposition to not allowing an exemption for the downtown area. He explained that the original design of downtown was based on a grid system that was intended to have full development similar to Loockerman Street. If you limit the redevelopment of those properties to 60% impervious, the result will be suburban, for a downtown that currently “feels” urban. This would be a serious change to Dover and would hinder the ability to redevelop any property in the downtown. It was his opinion that downtown Dover is an area that should be exempted without question. Responding to Mr. Ruane, Mr. Moore indicated that the downtown is an incentive area, explaining that incentives are offered for the redevelopment of downtown. He stated that by requiring developers to contribute to the City, to allow for the purchase of lands elsewhere, is a disincentive, which is against the attempts to revitalize the downtown. Mr. John Paradee of Prickett, Jones, and Elliott,11 N. State Street, addressed members as a member of the Greater Dover Committee and relayed concurrence with the comments made by Mr. Moore.

SPECIAL UTILITY COMMITTEE MEETING OF NOVEMBER 27, 2007 PAGE 4 He stated that anything that increases the cost of redevelopment in the downtown area is a disincentive and is exactly counter to the efforts for the revitalization of downtown. Reminding members that these revitalization efforts have been difficult, Mr. Paradee explained that such a requirement would only make them more difficult. Also, as a Board Member of Kent General Hospital, he advised members that the proposal would have an effect on the hospital’s master plan and requested that representatives of the hospital be given the opportunity to review and reflect how the proposed ordinance may affect their Master Plan, which is an important part of downtown Dover. In response to Mr. Ruane, Mrs. Townshend indicated that since a Master Plan has been submitted by Kent General Hospital, they would fall under Section 29.79 of the proposed ordinance. She explained that since a Master Plan for the hospital has already been approved, and if they were to develop the land accordingly, they would not be subject to the proposed ordinance; however, if the hospital submitted a new or revised Master Plan, they would be subject to the requirements as stipulated in the proposed ordinance. As a board member of the hospital and preparer of their Master Plan, Mr. Moore assured members that the 20-Year Master Plan will need to be updated. He explained the importance of allowing the hospital to maintain itself in its current location and develop to its fullest. If the City does not provide the hospital this ability, they will be challenged and possibly move to a suburban site. Mrs. Townshend also referred to a letter received from Mr. David Braun of Braun Engineering regarding the imposition of the zone on the downtown area (Attachment #4), which was provided to members. Mr. Snaman questioned the current percentage of impervious surface in the downtown area. He also questioned if the reservoir, where the hospital is located, remains healthy. Mr. John Barndt, Program Manager for Source Water and Wellhead Protection Programs for the Department of Natural Resources and Environmental Control (DNREC), advised members that Dover is the first urban community to work on this issue and that DNREC is attempting to be sensitive to understanding that having an extreme urban environment and working with resource protection is a challenge. DNREC is concerned with a blanket exemption due to the precedent that would be set. Although DNREC is sensitive that consideration to this area is necessary, Mr. Barndt suggested that rather than a blanket exemption, a higher threshold be considered that would be acceptable and workable. Responding to Mr. Ruane, Mr. Barndt stated that although Delaware is one of a few states that actually has a state level source water rule, there are others that he could contact to determine how they addressed this issue. He relayed a willingness to work, on behalf of the City, on this issue and conduct research to determine what urban areas in other states that have this type of law are doing. Mr. Cregar questioned the reasons why the City would not consider a total exemption for the downtown.

SPECIAL UTILITY COMMITTEE MEETING OF NOVEMBER 27, 2007 PAGE 5 Due to time constraints and there being no objections, Mr. Ruane stated that members will defer further consideration of this matter. He requested that staff provide information regarding the various questions raised and information requested by members during their next meeting, including an opinion from the City Solicitor with regards to the affect of an exemption from these requirements for only part of the City. Mr. Snaman moved that a Special Meeting be held on December 11, 2007 at 4:30 p.m. to continue review of the Tier 3, Excellent Recharge Areas (Section 29.7 of the proposed ordinance amendment), seconded by Mr. Cregar and unanimously carried. Mr. Snaman moved for adjournment, seconded by Mr. Cregar and unanimously carried. Meeting Adjourned at 5:48 P.M. Respectfully submitted, Eugene B. Ruane Chairman EBR/TM/jg S:\ClerksOffice\Agendas&Minutes\Committee-Minutes\2007\11-27-2007 SPECIAL UTILITY.wpd Attachments to Original Minutes and File Copy Attachment #1 - Presentation of the "Excellent Recharge Areas", Section 29.7 - Tier III, of the Dover's Source Water Protection Overlay Zone Attachment #2 - Revised Draft Ordinance, Section 29.7 (Tier 3, Excellent Recharge Areas) Attachment #3 - Stormwater Material (Delaware Ground-Water Recharge Design Manual - Supplement 1 and Excerpt from NCC-UDC) Attachment #4 - Letter from Mr. David Braun of Braun Engineering, dated November 27, 2007

The City of Dover, Delaware is a place where people want to live! Through the team effort of its elected officials, employees, and citizens, Dover has a reputation opportunity where all citizens are heard, enjoy a high quality of life, and diversity is valued. Comprehensive Annual Financial Report for the Year Ended June 30, 2007 for being a clean and safe community, with a future of balanced growth and

COMPREHENSIVE ANNUAL FINANCIAL REPORT for the Fiscal Year Ended June 30, 2007 Prepared by the Finance Department Donna S. Mitchell, Director

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CITY OF DOVER, DELAWARE Comprehensive Annual Financial Report For the Year Fiscal Ended June 30, 2007 TABLE OF CONTENTS PAGE INTRODUCTORY SECTION Letter of Transmittal ……………………………………………………………. 1 Certificate of Achievement for Excellence in Financial Reporting ………… 7 List of Elected Officials ………………………………………………………… 8 List of Appointed Officials ……………………………………………………… 9 List of Commissions & Committees …………………………………………… 10 Organizational Chart …………………………………………………………... 11 The City of Dover Vision and Mission Statement …………………………… 12 FINANCIAL SECTION PART A Independent Auditor's Report ………………………………………………… 15 PART B Management’s Discussion and Analysis ……………………………………. 19 PART C Basic Financial Statements Government-wide Financial Statements Statement of Net Assets …………………………………………………........ 33 Statement of Activities …………………………………………………………. 34 Fund Financial Statements Balance Sheet - Governmental Funds ……………………………………….. 35 Reconciliation of Governmental Fund Balances to Government-Wide Net Assets ……………………………………………... 36 Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds …………………………………… 37 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the the Statement of Activities ………………………………………………......... 38 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware iii

FINANCIAL SECTION - CONTINUED PAGE Statement of Net Assets-Proprietary Funds ………………………………… 39 Statement of Revenues, Expenses and Changes in Fund Net Assets-Proprietary Funds ………………………………………. 40 Statement of Cash Flows-Proprietary Funds ……………………………….. 41 Statement of Fiduciary Net Assets …………………………………………… 42 Statement of Changes in Fiduciary Net Assets …………………………….. 43 Notes to Financial Statements Index to Notes to Financial Statements……………………………………… 45 Notes to Financial Statements ………………………………………………… 47 Part D Required Supplementary Information General Fund-Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual …………………………………………. 88 Schedule of Funding Progress - Police Pension Fund ……………………… 91 Schedule of Funding Progress – General Employee Pension Fund ………. 92 Part E Supplementary Information Special Revenue Funds ………………………………………………………... 95 Combining Balance Sheet …………………………………………………….. 97 Combining Statement of Revenues, Expenditures and Changes in Unreserved Fund Balance ………………………………………………….. 98 Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance - Budget (Non-GAAP Basis) and Actual-Municipal Street Aid Fund ………………………………………... 99 Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance - Budget (Non-GAAP Basis) and Actual-Community Development Block Grant ...................................... 100 iv 2007 Comprehensive Annual Financial Report – City of Dover, Delaware

FINANCIAL SECTION - CONTINUED PAGE Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance - Budget (Non-GAAP Basis) and Actual- Delaware Prevention Network ……………………………………………….… 101 Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance - Budget (Non-GAAP Basis) and Actual- State of Delaware Department of Transportation …………………………… 102 Proprietary Fund Types - Enterprise Funds: Schedule of Revenues and Expenses-Budget (Non-GAAP Basis) and Actual-Water/Wastewater Fund …………………... 104 Schedule of Revenues and Expenses-Budget (Non-GAAP Budget) and Actual-Water/Wastewater Improvement & Extension Fund ……………………………………………….. 105 Schedule of Revenues and Expenses - Budget (Non-GAAP Basis) and Actual-Electric Revenue Fund ……………….……. 106 Schedule of Revenues and Expenses - Budget (Non-GAAP Basis) and Actual-Electric Improvement & Extension Fund ……………………………………………………….………. 107 Proprietary Fund Types - Internal Service Funds: Schedule of Revenues and Expenses Budget (Non-GAAP Basis) and Actual - Workers’ Compensation ……………………………………………… 110 Fiduciary Fund Types - Trusts and Agencies: Combining Statement of Changes in Assets and Liabilities -All Agency Funds …………………………………………………… 112 STATISTICAL SECTION Net Assets by Component …………………………………………………..…. 116 Governmental Activities Tax Revenues by Source ……………………......... 117 Changes in Net Assets …………………………………………………………. 118 Fund Balances of Governmental Funds ………………………………………. 119 Changes in Fund Balances of Governmental Funds ……………………...... 120 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware v

STATISTICAL SECTION - CONTINUED PAGE General Fund - Revenues and Other Financing Trend Data ………………. 121 General Fund - Expenditure and Other Uses Trend Data …………………. 122 Assessed and Estimated Actual Value of Taxable Property ………………. 124 Property Tax Rates - All Direct and Overlapping Governments with the Capital School District ……………………………………………….. 125 Property Tax Rates - All Direct and Overlapping Governments with the Caesar Rodney School District ……………………………..……... 126 Principal Tax Payers ……………………………………………………………. 127 Property Tax Levies and Collections …………………………………………. 128 Special Assessment Collections ………………………………………………. 129 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures ……………………..…………………..... 130 Ratios of Outstanding Debt by Type …………………..…………………..... 131 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net Bonded Debt Per Capita …………………………………………... 132 Computation of Direct and Overlapping Debt with the Capital School District ……………………………………………... 133 Computation of Direct and Overlapping Debt with the Caesar Rodney School District ……………………………………... 134 Computation of Legal Debt Margin …………………………………..……….. 135 Revenue Bond Coverage - Electric Revenue Bonds………………………… 136 Water/Wastewater Bond Coverage Revenue Bonds………………………… 137 Demographic and Economic Statistics ……………………………………… 138 Major Employers ………………………………………………………………… 139 Full-time Equivalent City Government Employees by Function ……………………………………………………….…………….. 140 vi 2007 Comprehensive Annual Financial Report – City of Dover, Delaware

STATISTICAL SECTION - CONTINUED PAGE Operating Indicators and Capital Assets Used in Operations ……………... 141 Population and Housing Summary Statistics for 2000 ……………………... 143 Property Value and Construction .................................................................144 Number of Various Businesses Licensed .....................................................145 Analysis of Development Projects, Permits, and Inspections ……………... 146 Crime Clearance Comparison ………………………………………………… 147 Number of Service Requests - Dover Police Department …………………. 148 Schedule of Insurance …………………………………………………………. 149 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware vii

viii 2007 Comprehensive Annual Financial Report – City of Dover, Delaware

INTRODUCTORY SECTION THIS SECTION CONTAINS THE FOLLOWING: LETTER OF TRANSMITTAL CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING LIST OF ELECTED OFFICIALS LIST OF APPOINTED OFFICIALS LIST OF COMMISSIONS ORGANIZATIONAL CHART

December 3, 2007 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, 2007. This report is published to comply with the provisions of Section 46 of the City Charter. It is also intended to provide financial data to the tax and rate payers, bond holders, 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 Faw Casson and Co, LLP, an independent firm of certified public accountants as required by Section 46 of the City Charter. Faw Casson and Co., LLP has provided an unqualified opinion on the City of Dover financial statements for the year ended June 30, 2007. The independent auditor’s report 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. 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

Introductory Section – Transmittal Letter 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 square miles and serves a population of approximately 35,200. 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. Council members are elected from four districts and serve staggered, two-year terms. One member of Council and the Mayor are elected at-large and serve two-year terms. 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 the 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, streets and sanitation maintenance, recreation, library, community 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 the City Council 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 Finance Director, Department Heads may transfer resources within or between 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. LOCAL ECONOMY The City of Dover’s two largest employers are Dover Air Force Base and the State of Delaware. The City is also home of Dover Downs Co. Inc. which includes a race track, video lottery casino, and hotel. Dover International Speedway is known for the “Monster 2 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Introductory Section – Transmittal Letter Mile” track and attracts over 200,000 people to Dover in May and September each year for NASCAR Racing. The City continues to experience job growth in the construction, hospitality, health care and social services, construction, retail, and food service industries. Job losses have been experienced in the manufacturing and financial service industries due to company mergers, acquisitions or process innovations. The non-farm average annual wages of $34,563 grew 4.3 % between 2005 and 2006 and the related jobs grew 3.2% for this same time period. The current unemployment rate for Dover is 2.1 % as compared to 2.9 % in 2006. The unemployment rate consistently tracks lower than the national average due to the significant military and state government employment in the City. Unemployment is expected to remain stable. The population is expected to continue to grow at an annual rate of 2 %. A portion of the past growth is attributed to a significant number of workers and retirees relocating from other states seeking lower tax and housing costs as well as an attractive quality of life. The region is losing manufacturing jobs but gaining in retail sales and services, medical and office related jobs. The City of Dover is distinguished as the dominant center of employment, commerce, educational opportunity, and cultural activity in central Delaware. Development activity in the capital city has remained strong over the course of the current fiscal year. Significant residential growth continues to occur primarily in the more suburban west Dover area, although other areas of the City are gaining more interest as well. Major institutions and government agencies continue to expand to meet the demands of a growing regional population and economy. Commercial corridor areas of U.S. Routes 13/113 and DE Route 8 have continued to attract medium and large scale commercial development with increased interest in U.S. Route 113. Efforts to revitalize the traditional urban core of downtown Dover are beginning to show major results with several recent redevelopment and construction projects that reflect renewed interest and confidence in downtown Dover as a viable central business district. The population of Dover also continues to increase at a manageable rate of slightly more than 1% annually. Total value of construction for the current fiscal year reached $106.9 million, nearly a 16 % increase in value from fiscal year 2006. Growth and development trends during the current fiscal year are further discussed and summarized below: A total of 318 new residential housing starts were recorded during the current fiscal year. This reflects continuation of the levels of residential development realized in Dover throughout the 1990’s and an increase in recent years. With an overall decline in manufacturing jobs, the retail and commercial sector of Dover has become more important to the overall economic outlook. Investment in this sector has continued even with the national economic slowdown. In fiscal year 2007, Dover continued to expand its dominance as a center for retail and service in central Delaware. Retail commercial development continued to show gains through the period. Additionally, Dover has seen numerous hotel applications for several locations throughout the city. General office development seems to be in pace with other segments of the local market 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 3

Introductory Section – Transmittal Letter with numerous small to mid-sized office buildings being planned and constructed. As evidenced by abundant development activity and the resultant job creations in several segments of the Dover economy, a considerable inventory of planned projects, and a steadily increasing resident population, the economic condition of Dover appears to be sound and well-positioned for continued growth into fiscal year 2008. FINANCIAL POLICIES AND FINANCIAL PLANNING Unreserved, undesignated fund balances in the general fund (11.6%) fall within the policy guidelines of a minimum of 8% and maximum of 12% as approved by City Council in the City of Dover Financial policies. The water, wastewater, and electric utilities have the same policy requirement for their budget balances. If the balances fall below 8%, the City Manager is required to submit budgets to bring the balances up to minimum within three years. The current budget balances for the utilities are water (47.9%), wastewater (1.5%) (see major initiatives below), and electric (7.9%). The water and wastewater utilities are accounted for in the same fund. The City policies also require non-recurring revenues to be set aside for capital improvements as designated by City Council (reserve accounts) and a 2% contingency reserve in the general fund, water/wastewater fund and 1% contingency in the electric fund to address unforeseeable natural disasters and insurance losses. All major funds meet the contingency reserve requirement. The wastewater utility imposes impact fees, which are reserved by ordinance, on new developments 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 City to maintain a minimum of $10.0 million in each of these reserves, with replenishment over seven years when used to finance projects. In fiscal year 2004, the City established an Electric Rate Stabilization Reserve account to set aside the profit sharing receipts from Duke Energy under the previous contract. The purpose of the reserve is to assist the City with a phase-in of electric rate increases, realizing the city is coming off of a fixed price contract into a market based contract. The reserve will also be maintained in the future to provide for price fluctuations in the power markets through one-time receipts, available budget balances or appropriations. MAJOR INITIATIVES The John W. Pitts Recreation Center, representing approximately $3.0 million in capital investment, is expected to be completed in January, 2008. The City is funding the recreation center through a reserve account for parkland and recreation. For the fiscal year of 2007, construction cost of $926,042 is included in recreation expenditures. The new center will be in addition to our current facilities at a net cost of approximately $260,000, after consideration of user fees. 4 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Introductory Section – Transmittal Letter City Council has another major initiative underway for the construction of a regional library. This project is estimated to cost $18.0 million and is still in the planning and development phase. Construction is expected to begin in fiscal year 2009. City Council has approved funding in the amount of $80,000 for hiring a coordinator to assist with the planning and development. The capital construction is expected to be financed through the library reserve, a state grant (50% matching funds), donations, proceeds from sale of current facility, and general obligation bonds. Once completed, additional annual operating expenses estimated at $200,000 will be budgeted in the general fund. Improving Dover’s water quality is recognized as the water utility’s highest priority. Although the City’s water supply meets all requirements of the State Division of Public Health Office of Drinking Water, Dover has experienced a brown water problem since implementing the State regulation to chlorinate and fluoridate the city’s water supply. The City is continuing its efforts to implement the changes/improvements as recommended by a consulting engineer contracted last year. City Council has made this a high priority on their list of projects. The fiscal year 2008 budget includes $1.1 million in capital projects to address this issue. In the past few years, the City has encountered problems with inflow and infiltration of our wastewater system. In an effort to resolve this problem, the City contracted with a video pipe inspection company to clean, video inspect, smoke test, and provide digital reports of any problems detected in the sanitary sewer system. This phase of the project was completed this fiscal year. The City has started to implement recommended changes based on the findings of the contractor. The fiscal year 2008 budget includes $.4 million in capital projects to address some of the issues of failing sewer mains. In fiscal year 2004 City Council also approved a forty-five cent rate increase over a two-year period to cover the increase in wastewater treatment fees and bring the budget balance in compliance with policy. The City is projecting to issue $11.5 million of revenue bonds in fiscal year 2009 to assist in financing its five year water and wastewater capital improvement programs. The electric utility will begin work on the 69kv feeders #3 & #4 at the Cartanza 230kv substation this upcoming year at an expected cost of $14.9 million. The addition of the transmission lines will provide the City with a redundant line to prevent outages as well as carry the City’s load and capacity requirements over the next twenty years. The electric utility will also be upgrading the College Road Substation ($2.4 million) and St. Jones Substation ($3.5 million). The City’s plant operator, North American Energy Services, will be completing the installation of a Selective Non-Catalytic Reduction (SNCR) pollution control system in order to comply with the Delaware Regulation 1146 on Unit 3 at the McKee Run generating plant at a cost of $3.0 million. The fiscal year 2008 five year capital improvement budget totals $47.5 million to be financed by $22.2 million in revenue bonds, transfers from the operating fund, and reserve accounts for capital improvements as de- scribed above. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 5

Introductory Section – Transmittal Letter 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, 2006. The Certificate of Achievement is a prestigious national award- recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Dover has received a Certificate of Achievement for the last 22 consecutive years. 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. In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document dated July 25, 2006. In order to qualify for the Distinguished Budget Presentation Award, the government’s budget document had to be judged as a policy document, a financial plan, an operations guide, and a communications device. Thank you for your continuing interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. I also express my appreciation to the City employees for their assistance and cooperation during the year and for providing information for this report. My appreciation is extended to Mr. Anthony DePrima, City Manager, and his staff for their continued support of the Finance Department. Special appreciation is extended to the employees of the Finance Department, whose dedicated service made this report and the year a success. Thank you Tracey Lisiecki, Linda Gomes, Ray Cola, Anita Hundzinski, Sharon Daniel, Rhonda McMaster and Peggy Teal. Respectfully submitted, Donna S. Mitchell, CPA Treasurer/Finance Director 6 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Introductory Section 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 7

Introductory Section CITY OF DOVER, DELAWARE List of Elected Officials June 30, 2007 Length of Term Services Expires Mayor Stephen R. Speed * 3 Years May 2008 City Council At-Large Carleton E. Carey, Sr. 10 Years May 2009 Mayor Speed First District Beverly C. Williams ** 4 Years May 2008 Kenneth L. Hogan 3 Years May 2009 Second District _____ William P. McGlumphy*** 1 Year May 2008 Dover's governing body is Eugene B. Ruane 6 Years May 2009 composed of a Mayor and nine Council Members, with one Third District Council Member elected by James G. McGiffin, Jr. 1 Year May 2009 Council to serve as Council Timothy A. Slavin 3 Years May 2008 President. Council members are elected from four districts and serve staggered, two-year terms. Fourth District One member of Council and the Sophia R. Russell 2 Years May 2008 Mayor are elected at-large and Reuben Salters 18 Years May 2009 also serve two-year terms. _____ * Previously served on City Council from May 2002 to May 2004 ** Council President *** Previously served on City Council from May 2000 to May 2004 COUNCIL MEMBERS Bottom Row L-R – Kenneth Hogan, Reuben Salters, James McGiffin, & Sophia Russell Top Row L-R – Eugene Ruane, Beverly Williams, Carleton Carey, Timothy Slavin & William McGlumpy 8 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Introductory Section CITY OF DOVER, DELAWARE List of Appointed Officials June 30, 2007 Length of Length of Time in Time with Position the City City Clerk/Assistant Treasurer – Traci A. McDowell* 1 Year 20 Years City Manager/Civil Defense Director – Anthony J. DePrima** 6 Years 16 Years City Solicitor – Nicholas H. Rodriquez 39 Years 39 Years Deputy City Solicitor – William Pepper 18 Years 18 Years Council President – Beverly C. Williams 3 Years 5 Years Fire Chief – Jason Osika 6 Months 9 Years Fire Marshal – David Truax 11 Years 16 Years Inspections Director/Planner – Ann Marie Townshend 1 Year 1 Year Police Chief – Jeffrey Horvath 6 Years 23 Years Treasurer/Finance Director – Donna Mitchell 7 Years 7 Years * Previously served as Assistant City Clerk 2000-2006 ** Previously served as City Planner 1991-2001 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 9

Introductory Section CITY OF DOVER, DELAWARE List of Commissions & Committees BOARD OF ADJUSTMENT PARKING AUTHORITY Kishor C. Sheth, Chairman Thomas G. Smith, Chairman Arthur G. Ericson Michael J. Ambruso Dr. Edward Goate’ Timothy P. Mullaney, Sr. William Hufnel Ronald G. Poliquin Richard Senato Laura G. Simmons CODE BOARD OF APPEALS PARKS, RECREATION & COMMUNITY ENHANCEMENT Eugene B. Ruane, Eugene B. Ruane, Chairman Chairman William P. McGlumphy, Councilman Anthony J. DePrima, Ann Horsey City Manager David A. Lewis, Jr. William P. McGlumphy, Sophia R. Russell, Councilwoman Councilman PENSION – CIVILIAN ELECTION BOARD Eugene B. Ruane, Chairman Thomas J. Leary, Chairman Kenneth Hogan, Councilman Gerald P. Foss Pat Braun William T. Garfinkel Anthony J. DePrima, City Manager Beulah Gray Chappy Lucas Goldie Legates Donna S. Mitchell, Treasurer/Finance Director Traci McDowell Judy Rigby HISTORIC DISTRICT PENSION – POLICE C. Terry Jackson, President Timothy Mullaney, Chairman Joseph McDaniel Anthony J. DePrima, City Manager James D. McNair, II Larry Gray Ken Robertson Kenneth L. Hogan, Councilman Richard Scrafford Chief Jeffrey Horvath William Knotts HUMAN RELATIONS COMMISSION Eugene B. Ruane, Councilman Dr. Samuel B. Hoff, Chairman Gregory J. Bunkley PLANNING COMMISSION Dr. Phyllis Edamatsu John J. Friedman, Chairman Ivan F. Finney John H. Baldwin, Sr. Paul Fleming William J. DiMondi William H. Franklin, Jr. Thomas Holt Rev. Wayne A. Johnson, Sr. Francis C. Nichols Prameela D. Kaza Michael von Reider Mittie Kelley Fred Tolbert Ellen O. Wasfi Col. Robert D. Welsh Theresa Whalen Frank Zaback Roy Sudler, Jr. SAFETY ADVISORY & TRANSPORTATION LEGISLATIVE, FINANCE & ADMINISTRATION Kenneth L. Hogan, Chairman Reuben Salters, Chairman Carleton E. Carey, Sr, Councilman Kenneth L. Hogan, Councilman Paul Lakeman Bobby C. Jones John Link Daniel Shevock Timothy A. Slavin, UTILITY Councilman Carleton E. Carey, Sr, Chairman Edgar Cregar Eugene B. Ruane, Councilman Timothy A. Slavin, Councilman Richard Snaman 10 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Introductory Section CITY OF DOVER ORGANIZATIONAL CHART JUNE 30, 2007 CITIZENS OF DOVER MAYOR and COUNCIL MAYOR COUNCIL POLICE CITY SOLICITOR CITY MANAGER CITY CLERK FINANCE CENTRAL SERVICES SENIOR CITY ADMINISTRATOR FACILITIES MANAGEMENT CUSTOMER SERVICES FLEET MAINTENANCE METER READING FIRE DEPARTMENT HUMAN RESOURCES INFORMATION TAX ASSESSOR TECHNOLOGY PARKS, RECREATION, and PUBLIC UTILITIES LIBRARY ADMINISTRATION PARKS and RECREATIO N ELECTRIC ENGINEERING LIBRARY ELECTRIC TRANSMISSION and DELAWARE PREVENTION DISTRIBUTION NETWORK SYSTEM OPERATIONS WATER MANAGEMENT WATER CONSTRUCTION WATER TREATMENT PLANT WASTEWATER MANAGEMENT WATER/WASTEWATER ENGINEERING PUBLIC SERVICES ADMINISTRATION PUBLIC WORK OPERATIONS GROUNDS SANITATION STREETS PLANNING and COMMUNITY ENHANCEMENT SERVICES PLANNING FIRE MARSHAL PROPERTY MAINTENANCE COMMUNITY DEVELOPMENT WEED and SEED INSPECTIONS/PERMITTING 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 11

Introductory Section THE CITY OF DOVER, DELAWARE VISION The City of Dover is a place where people want to live! Through the team effort of its elected officials, employees, and citizens, Dover is a clean and safe community, with a future of balanced growth and opportunity where all citizens are heard, enjoy a high quality of life, and diversity is valued. MISSION The City of Dover will, in the next year: ● Establish a Regional Library ● Establish the “Delaware Entertainment and Sports Complex” ● Promote Homeownership ● Promote Affordable Housing 12 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

FINANCIAL SECTION THIS SECTION CONTAINS THE FOLLOWING: PART - A INDEPENDENT AUDITOR’S REPORT 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 Combining Fund Statements Budgetary Schedules

FINANCIAL SECTION PART - A INDEPENDENT AUDITOR’S REPORT

14 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

FINANCIAL SECTION PART - B MANAGEMENT’S DISCUSSION AND ANALYSIS

18 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part B-Management’s Discussion & Analysis The City of Dover Management’s Discussion and Analysis For the Year Ended June 30, 2007 Financial Highlights Total assets of the City exceeded its liabilities by $178.6 million (total net assets). Of this amount, only $28.2 million was reported as “unrestricted net assets” which represents the amount available in order to meet the City’s ongoing obligations to citizens and creditors. The general government reported $13.8 million and the business type activities, Water/Wastewater and Electric funds, reported $14.4 million of unrestricted net assets. The difference between the unrestricted amounts and the total net assets is $150.4 million, $31.4 million is restricted primarily for debt and capital construction purposes and $119.0 million is invested in capital assets net of related debt. • The governmental activities experienced a $2.7 million increase in investments in capital assets net of related debt, a $.7 million increase in restricted net assets, and a $2.2 million increase in unrestricted net assets resulting in a net change of a positive $5.6 million. • The business-type activities saw a negative change in net assets of $1.3 million. • Pension Trust funds experienced an increase in net assets of $4.8 million. Our latest actuarial analysis resulted in an increase in the City’s contribution rate for the General Employees Pension Plan from 27.40% in the current fiscal year to 29.32% budgeted in fiscal year 2008. Overview of the Financial Statements This comprehensive annual financial report (CAFR) consists primarily of three required parts - management’s discussion and analysis (this section), the basic financial statements, and required supplementary information. The CAFR also includes optional supplementary information that provides summary information and detail, and a statistical section. The basic financial statements are of two kinds that present different views of the City: • The first two statements are government-wide financial statements (pages 33-34) that provide both long-term and short-term information about the City’s overall financial status. • The remaining statements (pages 35-43) are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 19

Financial Section, Part B-Management’s Discussion & Analysis − The governmental fund statements (pages 35-38) tell how general government services, like public safety and public works, were financed in the short term as well as what remains for future spending. - Proprietary fund statements (pages 39-41) offer short and long-term financial information about the activities the government operates like businesses, which for the City of Dover are the Electric Revenue, Water/Wastewater funds. − The Fiduciary fund statements (pages 42-43) 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 Pension plans and acts in an agency capacity for the Parking Authority, Library Consortium, Dover Arts Council, Downtown Dover Development Corpora-tion, Main Street Dover, and the 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 Assets and Changes in Fiduciary Net Assets. We exclude these activities from the City’s other financial statements because the City may not use these assets to finance it operations. The City is responsible for insuring that the assets reported in these funds are used for their intended purposes. The financial statements also include notes (pages 47-85) 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 that further explains and supports the information in the financial statements on pages 90 and 91. Other supplementary information includes details on non-major funds and other information that can be found on pages 101through 121. 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: 20 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part B-Management’s Discussion & Analysis 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 City Activities the City Instances in which government (except that are not proprietary operates similar to the City is the trustee fiduciary funds) or fiduciary, such as private businesses, or agent for someone public safety and public such as electric, water else’s resources works and wastewater funds Required • Statement of • Balance sheet • Statement of net • Statement of financial net assets statement of assets fiduciary net statements • Statement of revenues, • Statement of assets activities expenditures, and revenues, • Statement of changes in fund expenses and changes in balances changes in net fiduciary net assets assets • Statement of cash flows Accounting Accrual accounting Modified accrual Accrual accounting and Accrual accounting basis and and economic accounting and current economic resources and economic measurement resources focus financial resources focus resources focus focus focus Type of All assets and Only assets expected to All assets and liabilities, All assets and asset/liability liabilities, both be used up and both financial and liabilities, both short- information financial and capital, liabilities that come due capital, and short-term term and long-term and short-term and during the year or soon and long-term long-term thereafter; no capital assets included Type of All revenues and Revenues for which All revenues and All revenues and inflow/outflow expenses during the cash is received during expenses during the expenses during the information year, regardless of or soon after the end of year, regardless of year, regardless of when cash is the year; expenditures when cash is received when cash is received or paid when goods or services or paid received or paid have been received and payment is due during the year or soon thereafter 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 21

Financial Section, Part B-Management’s Discussion & Analysis 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 assets includes all of the government’s assets and liabilities. All of the current year’s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government-wide statements report the City’s net assets and how they have changed. Net assets—the difference between the City’s assets and liabilities—is one way to measure the City’s financial health or position. Over time, increases or decreases in the City’s net assets are indicators 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 roads. The government-wide financial statements of the City are divided into two categories: • Governmental activities—Most of the City’s basic services are included here, such as general government, public safety, public works, library and recreation, community and economic development, central services and financial administration. Property taxes, non property taxes 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 and 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 money for particular 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. Since this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information on a separate page, which explains the relationship (or differences) between them. 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 22 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part B-Management’s Discussion & Analysis • 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. − 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 assets that 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 of the City’s fiduciary activities are reported in a separate statement of fiduciary net assets and a statement of changes in fiduciary net assets. We exclude these activities from the City’s government-wide financial statements because the City cannot use these assets to finance its operation. 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 City of Dover, Delaware’s Net Assets as of June 30, 2006 and 2007 are as follows (presented in millions of dollars): Governmental Business-Type Activities Activities Total 2006 2007 2006 2007 2006 2007 Assets Non-capital assets $ 17.8 $ 19.8 $ 64.6 $ 63.3 $ 82.4 $ 83.1 Capital assets 30.1 32.4 109.0 108.7 139.1 141.1 Total assets $ 47.9 $ 52.2 $ 173.6 $ 172.0 $ 221.5 $ 224.2 Liabilities Current liabilities 4.2 3.0 $ 11.6 $ 14.5 $ 15.8 $ 17.5 Non-current liabilities 4.2 4.1 27.2 24.0 31.4 28.1 Total liabilities 8.4 7.1 $ 38.8 $ 38.5 $ 47.2 $ 45.6 Net Assets Invested in capital assets, net of related debt $ 27.0 $ 29.7 $ 89.1 $ 89.3 $ 116.1 $ 119.0 Restricted net assets 0.9 1.6 33.8 29.8 34.7 31.4 Unrestricted net assets 11.6 13.8 11.9 14.4 23.5 28.2 Total net assets 39.5 45.1 $ 134.8 $ 133.5 $ 174.3 $ 178.6 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 23

Financial Section, Part B-Management’s Discussion & Analysis The City of Dover, Delaware’s Changes in Net Assets as of June 30, 2006 and 2007 are as follows (presented in millions of dollars): Governmental Business-Type Activities Activities Total 2006 2007 2006 2007 2006 2007 Revenues: Program revenues Charges for services $ 7.7 $ 8.6 $ - $ - $ 7.7 $ 8.6 Water/wastewater charges for services - - 12.5 12.5 12.5 12.5 Electric charges for services - - 68.0 87.0 68.0 87.0 Operating grants and contributions 3.1 3.1 - - 3.1 3.1 Capital grants and contributions 0.5 0.8 - - 0.5 0.8 General revenues Property taxes 8.8 9.0 - - 8.8 9.0 Transfer taxes 3.1 3.0 - - 3.1 3.0 Gain (Loss) on sale of capital assets - - (0.1) (0.5) (0.1) (0.5) Earnings on investments-other 0.6 1.2 1.5 2.6 2.1 3.8 Total revenues $ 23.8 $ 25.7 $ 81.9 $ 101.6 $ 105.7 $ 127.3 Expenses General government $ 1.8 $ 2.3 $ - $ - $ 1.8 $ 2.3 Public safety 13.9 14.6 - - 13.9 14.6 Public works 5.2 5.6 - - 5.2 5.6 Library and recreation 1.3 1.9 - - 1.3 1.9 Community and economic development 0.6 0.6 - - 0.6 0.6 Central services 1.4 1.5 - - 1.4 1.5 Financial administration 3.8 3.6 - - 3.8 3.6 Interest charges 0.1 0.1 - - 0.1 0.1 Plus (less) indirect expense allocation (4.7) (4.7) 4.7 4.7 - - Water/wastewater - - 8.2 8.7 8.2 8.7 Electric - - 55.0 84.1 55.0 84.1 Total expenses $ 23.4 $ 25.5 $ 67.9 $ 97.5 $ 91.3 $ 123.0 Increase in net assets before transfers 0.4 0.2 14.0 4.1 14.4 4.3 Transfers 6.3 5.4 (6.3) (5.4) - - Change in net assets 6.7 5.6 7.7 (1.3) 14.4 4.3 Net assets, beginning of year 32.8 39.5 127.1 134.8 159.9 174.3 Net assets $ 39.5 $ 45.1 $ 134.8 $ 133.5 $ 174.3 $ 178.6 Governmental Activities Governmental net assets increased by $5.6 million. Net revenues were greater than the prior year by $1.9 million. The following sources of revenues increased over the previous fiscal year: business licenses, permits, public safety services, property taxes, investment earnings, Court of Chancery Fees and other miscellaneous services. Also, included in the current fiscal year revenues is a one-time receipt from Kent County for libraries of $.6 million. The revenue increases totaled $2.8 million. Revenue sources that decreased were public safety fines, transfer taxes, public safety grants, and capital grants for a total of $.9 million. 24 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part B-Management’s Discussion & Analysis Expenditure increases of $2.1 million were primarily a result of increases in staffing, and personnel cost across all functions, along with increases in capital outlay. Financial Administration experienced a net decrease as a result of a favorable adjustment to our net pension obligation of $.4 million. The chart that follows allocates revenues to program costs as applicable. It shows that some City functions are in part self-supporting. Expenses and Program Revenues 16 Governmental Activities 14 12 10 Expenses Millions 8 Revenue 6 4 2 0 General Public Safety Public Works Library & Community & Central Services Financial Interest Charges Government Recreation Economic Administration Development The chart below 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 and transfer taxes and transfers from the utilities. Revenues by Source - Governmental Activities Other 3% Transfers from Utilities Charges for 17% service 28% Transfer Taxes 10% Operating grants & contributions 10% Capital grants & Property Taxes contributions 29% 3% 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 25

Financial Section, Part B-Management’s Discussion & Analysis Business-Type Activities As noted earlier, the business-type activities saw a negative change in net assets of $1.3 million. The decrease was a result of increased power supply cost in the electric utility as explained below. The water/wastewater utility had a positive change in net assets of $2.5 million. The utility experienced a decrease in net income over the previous year of $.5 million due to higher personnel and operating expenses. The water/wastewater utility maintained the same level of revenues and non-operating income and expenses as the prior year. The electric utility realized a negative change in net assets of $3.8 million due to the following changes. The City had a long-term power supply/asset management agreement with Duke Energy which expired on June 30, 2006. The Duke Energy agreement was a ten year fixed price contract. The fixed price covered all cost of supply and plant operations as a bundled rate to the City. The Duke agreement provided for a price escalator each year which we passed through to our customers as a power cost adjustment when necessary. The agreement also had a revenue sharing arrangement which the City would be rebated for a portion of positive net results. All market and liability risks were borne by Duke. As fuel prices have increased over the past few years the City has been able to enjoy the benefits of the contract rates that were agreed to in 1996. Effective May 4, 2006 the City entered into a five year Energy Management Agreement with PACE Global Asset Management (Pace), LLC of Fairfax, Virginia to assist the City with its energy procurement, energy sale, purchase of fuels, establishment and management of risk policies, to develop and manage hedging protocols and related energy procurement challenges. Also, effective May 4, 2006 the City entered into an agreement with North American Energy Services Company of Issaquah Washington for generation asset management. The City bears all market risks, credit risks, and liability under the new contracts which is different from the previous agreement. A significant change in both revenues and expenses in the current fiscal year were attributed to the expiration of our power supply/asset management contract with Duke Energy. The cost per kilowatt for power supply and generation increased from $.054 to $.089. The City implemented an overall rate increase of approximately 31% (additional revenue of $19.3 million) to help offset the $28.4 million increase in the cost of power supply and generation. In addition to the rate increase the City reduced the transfer to the General Fund by $1.0 million and used $5.0 million of its rate stabilization reserve in order to phase in the needed rate increase over two years. The utility also experienced increases in non-service revenues of $1.3 million attributed to the sale of emission credits. Operating expenses also increased $.7 million due to personnel, professional fees, material and supply cost increases. Non-Operating revenues and expenses experienced a net increase as a result of greater investment earnings of $.7 million. 26 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part B-Management’s Discussion & Analysis Revenues and Expenses Business Type Activities Electric Revenue Total Operating Expenses & Transfers Water/Wastwater Operating Revenue 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Millions 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 balances of the City’s governmental funds at June 30, 2007, were $14.3 million. This represented an increase of $2.8 million during the year. Approximately 64% of the combined fund balances, $9.1 million, constitutes unreserved, undesignated fund balance, which is available to meet the City’s current and future needs. The remainder of fund balance is reserved or designated to indicate that it is not available for operational spending because it is committed to such matters as contingencies, capital projects and parklands. The General Fund is the primary operating fund of the City, accounting for such activities as general government, public safety, public works, library and recreation, community and economic development, central services and financial administration. The General Fund balance at June 30, 2007, was $9.1 million, which represents an increase of $.4 million from the previous fiscal year. Primary reasons for this increase are increased revenues from Court of Chancery fees, licenses and permits, property taxes, and investment earnings. Capital expenditures are integrated into current expenditures in the General Fund. Included in the capital expenditures is $1.9 million partial cost for construction of a 19,000 square foot recreation facility. The John W. Pitts Recreation Center is expected to be completed in January 2008. The City transferred the one-time receipt from Kent County (as explained on page 24) to the Library Reserve in anticipation of future expansion. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 27

Financial Section, Part B-Management’s Discussion & Analysis Proprietary Funds The City’s proprietary funds provide the same type of information found in the government- wide Financial Statements, but in more detail. As of June 30, 2007, the Water/Wastewater Fund has net assets of $37.7 million, of which $3.6 million is unrestricted. The fund’s net assets increased $2.5 million during the year as explained on page 32. At June 30, 2007, the Electric Fund has net assets of $95.7 million, of which $10.7 million is unrestricted. This fund experienced a decrease in net assets of $3.8 million during the year as explained on page 26. General Fund Budgetary Highlights Revenue and other financing sources slightly exceeded the final budgeted amounts by approximately $.5 million in the General Fund for the current fiscal year. Receipts in excess of budgeted amounts for library revenues, Court of Chancery Fees, transfers and sale of assets were offset by receipts less than budgeted amounts for transfer taxes, interfund service fees, grants and property taxes. Expenditures were less than budgeted by $2,239. The General Fund budget balance carry forward was $.5 million higher than budgeted as a result of the above variances. During this fiscal year, the City Council amended the budget three times. These budget amendments or supplemental appropriation ordinances were primarily for the following purposes: 1. To amend the carried forward budget balances for the actual results of the prior fiscal year and to re-appropriate budget balances for ongoing capital projects. 2. To amend all program revenue and expenses based on the analyses provided by a mid-year review. 3. To amend all program revenues and expenses for the fiscal year as a result of budget reviews conducted while compiling the next fiscal year’s budget. The General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget & Actual is included in Part D-Required Supplementary Information (page 90). Capital Asset and Debt Administration At the end of the current fiscal year, the City’s governmental and proprietary funds had invested $32.4 million and $108.7 million, respectively, in a variety of capital assets and infrastructure, as reflected in the following schedule, which represents a net increase of $2.3 million for governmental activities and a net decrease of $.3 million for the proprietary funds since the end of last fiscal year (presented in millions of dollars): (See Note 5 for detailed information). 28 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part B-Management’s Discussion & Analysis Governmental Business-Type Activities Activities Total 2006 2007 2006 2007 2006 2007 Depreciable Assets, Net Buildings $ 5.2 $ 5.1 $ - $ - $ 5.2 $ 5.1 Equipment 2.1 2.8 - - 2.1 2.8 Vehicles 1.0 1.0 - - 1.0 1.0 General infrastructure 15.8 18.1 - - 15.8 18.1 Utility, plant, buildings, and infrastructure - - 105.6 105.7 105.6 105.7 Other 0.5 0.6 - - 0.5 0.6 Non-depreciable Assets Land 3.9 3.9 1.6 1.6 5.5 5.5 Construction in progress 1.6 0.9 1.8 1.4 3.4 2.3 $ 30.1 $ 32.4 $ 109.0 $ 108.7 $ 139.1 $ 141.1 A summary of debt outstanding at June 30, 2006 and 2007 is as follows which represents a slight change for the governmental funds and a decrease of $3.2 million for the proprietary funds, since the end of last year (presented in millions of dollars): Governmental Business-Type Activities Activities Total 2006 2007 2006 2007 2006 2007 Non-current liabilities Bonds (net of discount/issuance cost) $ 3.0 $ 2.7 $ 26.4 $ 23.5 $ 29.4 $ 26.2 Vehicle and equipment leases 0.1 - 0.1 - 0.2 - Liability for compensated absences 1.1 1.4 0.7 0.5 1.8 1.9 $ 4.2 $ 4.1 $ 27.2 $ 24.0 $ 31.4 $ 28.1 Additional detailed data for all debt of the City is presented in the Notes to the Basic Financial Statements in Note 6. The State limits the amount of general obligation debt the City can issue to 25% of the assessed value of real property within the City. The City has used .5% of its debt limit. Economic Factors and Next Year’s Budgets and Rates The City is expected to complete negotiations on two of the three collective bargaining agreements that expired on June 30, 2007. Projected increases in personnel costs have been budgeted in all of the major funds. Property tax revenue is projected to increase $.2 million primarily due to growth. All other General Fund revenues are projected to remain flat. An increase in rental inspection fees is being proposed for January 1, 2008. Water and Wastewater revenues are projected to remain flat in fiscal year 2008 due to no rate increases or consumption increases, with the exception of wastewater treatment fees. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 29

Financial Section, Part B-Management’s Discussion & Analysis Kent County implemented a fee increase for wastewater treatment resulting in an increase in revenue of $.4 million. The treatment fees are passed on to City customers based on their water usage. Operational expenses are projected to increase by $1.1 million over the prior year as a result of a re-organization of both the water and waterwater utilities and the electric utility. All business type activities have been centralized under one director in order to share resources and information. The water and wastewater utilities picked up the Engineering & Construction Inspection Division that was previously reported in the General Fund as a result of the re-organization. The City has budgeted an additional $2.5 million over prior year for capital improvement projects to address water quality and inflow/infiltration concerns in the water and wastewater utilities as well as system expansion. The water and wastewater utilities five year capital improvement plan totals $25.5 million. The City is expecting to issue approximately $10.0 million in revenue bonds, to assist with financing these projects in fiscal year 2009. The City has proposed a 9.75% rate increase for the electric utility in fiscal year 2008 to complete the phase in of the revenue requirements for the increase in power supply cost. As mentioned earlier on page 26, the City used $5.0 million of the rate stabilization reserve in order to phase in the rate increase over two years. Operational expenses are projected to increase by $.6 million as a result of increased personnel and associated cost. The City is planning to issue $22.2 million in revenue bonds to fund projected $47.5 million in capital improvements or additions over the next five years. The City of Dover is a participating member in the State Employees’ Post-Retirement Health Insurance Premium Fund, which provides medical benefits to active and retired employees and their dependents. The State’s health insurance program is a cost-sharing program. To implement the requirements of GASB 45 - Employer Accounting for Other Post-employment Benefits (OPEB), legislative action was taken during the current fiscal year to create a new irrevocable trust fund for OPEB by the State of Delaware. The City will be implementing its requirements for GASB 45 in fiscal year 2008. The annual budget requirement for OPEB has not been determined at this time. 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 Mrs. Donna Mitchell, Finance Director at 302-736-7018 (TTY/TDD Operator 1-800-855-1155). 30 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

FINANCIAL SECTION PART - C BASIC FINANCIAL STATEMENTS S GOVERNMENT-WIDE FINANCIAL STATEMENTS S FUND FINANCIAL STATEMENTS S NOTES TO FINANCIAL STATEMENTS

32 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Net Assets June 30, 2007 Governmental Business-Type Activities Activities Total Assets: Cash and cash equivalents $ 2,291,923 $ 11,997,764 $ 14,289,687 Investments 13,802,798 37,817,658 51,620,456 Receivables, net 1,458,767 8,831,348 10,290,115 Internal balances 484,920 (484,920) - Due from other governments 609,885 - 609,885 Inventory, at cost 197,941 5,086,781 5,284,722 Prepaid items 163,802 45,308 209,110 Other 848,153 - 848,153 Land and construction in progress 4,897,963 3,029,284 7,927,247 Capital assets, net of depreciation 27,514,540 105,623,032 133,137,572 Total assets 52,270,692 171,946,255 224,216,947 Liabilities: Accounts payable and accrued liabilities 2,073,695 12,446,103 14,519,798 Unearned revenue 888,978 158,823 1,047,801 Customer deposits - 1,405,686 1,405,686 Other 86,622 519,509 606,131 Non-current liabilities Due within one year 1,077,263 2,624,897 3,702,160 Due in more than one year 2,994,349 21,367,522 24,361,871 Total liabilities 7,120,907 38,522,540 45,643,447 Net Assets: Invested in capital assets net of related debt 29,709,046 89,289,351 118,998,397 Restricted for: Capital construction 1,247,645 29,756,382 31,004,027 Other purposes Expendable 322,439 - 322,439 Nonexpendable 21,594 6,564 28,158 Unrestricted 13,849,061 14,371,418 28,220,479 Total Net Assets $ 45,149,785 $ 133,423,715 $ 178,573,500 See accompanying notes to financial statements 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 33

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Activities For the Year Ended June 30, 2007 Net (Expenses) Revenue and Changes Program Revenue in Net Assets Indirect Operating Grants Capital Grants Expenses Charges for and and Governmental Business Type Expenses Allocation Services Contributions Contributions Activities Activities Total Functions/Programs Governmental activities General government $ 2,442,446 $ (970,342) $ 1,683,817 $ 16,000 $ - $ 227,713 $ - $ 227,713 Public safety 14,509,849 - 4,499,315 1,207,784 - (8,802,750) - (8,802,750) Public works 5,554,060 (762,825) 1,312,328 656,322 790,612 (2,031,973) - (2,031,973) Library and recreation 1,875,872 - 1,100,412 581,248 - (194,212) - (194,212) Community and economic development 639,545 - - 647,191 - 7,646 - 7,646 Central services 1,536,392 (984,350) - - - (552,042) - (552,042) Financial administration 3,642,278 (2,053,853) - - - (1,588,425) - (1,588,425) Interest charges 106,815 - - - - (106,815) - (106,815) Total governmental activities $ 30,307,257 $ (4,771,370) $ 8,595,872 $ 3,108,545 $ 790,612 $ (13,040,858) $ (13,040,858) Business type activities - Water/wastewater 8,682,241 1,092,328 12,525,215 - - - 2,750,646 2,750,646 Electric 84,134,600 3,679,042 87,014,071 - - - (799,571) (799,571) Total business type activities $ 92,816,841 $ 4,771,370 $ 99,539,286 $ - $ - Total City (13,040,858) 1,951,075 (11,089,783) General revenues Taxes Property taxes 9,032,995 - 9,032,995 Transfer taxes 3,008,371 - 3,008,371 Gain(Loss) on sale of capital assets - (556,547) (556,547) Earnings on investments 1,230,540 2,664,831 3,895,371 Total general revenues 13,271,906 2,108,284 15,380,190 Transfers 5,385,000 (5,385,000) - Total general revenues and transfers 18,656,906 (3,276,716) 15,380,190 Changes in net assets 5,616,048 (1,325,641) 4,290,407 Net assets beginning 39,533,737 134,749,356 174,283,093 Net assets ending $ 45,149,785 $ 133,423,715 $ 178,573,500 See accompanying notes to financial statements 34 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part C – Basic Financial Statements The City of Dover Governmental Funds Balance Sheet June 30, 2007 Other Total General Governmental Governmental Fund Funds Funds Assets: Cash and Cash Equivalents $ 747,089 $ 1,161,748 $ 1,908,837 Investments 8,310,633 4,204,000 12,514,633 Receivables, net Accounts 1,263,457 103,692 1,367,149 Taxes 87,523 - 87,523 Due from Other Funds Charges 646,657 12,612 659,269 Temporary Advances 66,000 - 66,000 Due from Other Governments - 609,885 609,885 Prepaid Items 163,802 - 163,802 Inventory, at cost 197,941 - 197,941 Total Assets $ 11,483,102 $ 6,091,937 $ 17,575,039 Liabilities Vouchers Payable 1,415,634 99,995 1,515,629 Deferred Revenue 888,978 524,532 1,413,510 Due to Other Funds Charges 21,868 152,481 174,349 Temporary advances - 66,000 66,000 Other 86,622 - 86,622 Total liabilities 2,413,102 843,008 3,256,110 Fund Balances Reserved for Parkland and Recreation 1,774,531 - 1,774,531 Encumbrances 226,421 - 226,421 Patronage Stock 16,594 - 16,594 Library Endowment 5,623 - 5,623 Unreserved, designated for Capital Assets 160,404 - 160,404 Contingency 645,254 - 645,254 Library 2,373,776 - 2,373,776 Unreserved, undesignated Reported in general fund 3,867,397 - 3,867,397 Reported in special revenue funds - 5,248,929 5,248,929 Total fund balances 9,070,000 5,248,929 14,318,929 Total liabilities and fund balances $ 11,483,102 $ 6,091,937 $ 17,575,039 See accompanying notes to financial statements 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 35

Financial Section, Part C – Basic Financial Statements The City of Dover Reconciliation of Governmental Fund Balances To Government-Wide Net Assets June 30, 2007 Total fund balances for governmental funds (Page 35) $ 14,318,929 Total net assets reported for governmental activities in the statement of net assets is different because: Capital assets used in governmental activities are not current financial 32,412,503 resources, therefore, are not reported in the funds. Other assets are not available to pay for current period expenditures and 524,532 therefore are deferred in the funds. The net pension asset resulting from contributions in excess of the annual required contribution in 2007 (police) is not a current financial resource, therefore, is not reported in the governmental funds. 848,153 The net pension obligation resulting from contributions less than the annual required contribution in 2007 (general) is not a use of current financial resources, therefore, is not reported in the governmental funds. (329,944) An internal service fund (page 39) is used by the City to charge the cost of 1,447,224 the workers' compensation fund. The net assets of the internal service fund are included in governmental activities in the statement of net assets. 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 assets. (4,071,612) Total net assets of governmental activities (Page 33) $ 45,149,785 See accompanying notes to financial statements 36 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds For the Year Ended June 30, 2007 Other Total General Governmental Governmental Fund Funds Funds Revenue Fines $ 773,680 $ 540,566 $ 1,314,246 Library revenue- general 56,430 - 56,430 Library revenue county reimbursement 932,576 - 932,576 Licenses and permits 2,689,348 - 2,689,348 Sanitation fees and rebates 1,293,399 - 1,293,399 Recreation - 12,793 12,793 Miscellaneous services 1,347,754 20,206 1,367,960 Property taxes 9,032,995 - 9,032,995 Transfer taxes 2,187,811 820,560 3,008,371 Grants received 1,053,887 3,496,720 4,550,607 Court of Chancery fees 929,120 - 929,120 Investment income 547,744 607,085 1,154,829 Total revenue 20,844,744 5,497,930 26,342,674 Expenditures Current: General government 1,000,622 - 1,000,622 Library services 1,005,737 247,563 1,253,300 Public safety and law enforcement 14,753,215 302,531 15,055,746 Public works 1,908,289 643,673 2,551,962 Recreational services 1,452,987 - 1,452,987 Streets and sanitation services 3,018,222 - 3,018,222 Engineering services 314,728 - 314,728 Financial administration 829,002 - 829,002 Garage and stores 402,915 - 402,915 Insurance 165,584 - 165,584 Retiree health care 736,286 - 736,286 Employee pension 402,204 - 402,204 Community and economic development - 639,545 639,545 Street lights 624,243 - 624,243 Debt Service: Principal retirement 368,384 - 368,384 Interest and fiscal charges 96,644 - 96,644 Total expenditures 27,079,062 1,833,312 28,912,374 Excess (deficiency) of revenues over (under) expenditures (6,234,318) 3,664,618 (2,569,700) Other financing sources (uses) Transfers in 7,398,602 918,120 8,316,722 Transfers out (768,120) (2,163,602) (2,931,722) Total other financing sources 6,630,482 (1,245,482) 5,385,000 Net change in fund balances 396,164 2,419,136 2,815,300 Fund balances at beginning of year 8,673,836 2,829,793 11,503,629 Fund balances at end of year $ 9,070,000 $ 5,248,929 $ 14,318,929 See accompanying notes to financial statements 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 37

Financial Section, Part C – Basic Financial Statements The City of Dover 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, 2007 Net change in fund balances--total governmental funds (Page 37) $ 2,815,300 The change in net assets reported for governmental activities in the statement of activities is different because: Governmental fund reported capital outlays as expenditures. However, in the statement of activities the cost of those assets is capitalized and allocated over the estimated useful lives and reported as depreciation in the current period. 2,294,672 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 assets. 345,000 Changes in other assets are not available to pay for current period expenditures and therefore are deferred in the funds. (651,451) Governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Amortization of 2003 bond issuance cost. (10,171) Reduction of liability for capital lease expenditures. 23,384 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. Compensated absences -222814 Prepaid pension asset - police plan 247359 Net pension obligation - general plan 545133 569,678 An internal service fund is used by the City to charge the costs of workers' compensation insurance to individual funds. The change in net assets 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. 229,636 Change in net assets of governmental activities (Page 34) $ 5,616,048 See accompanying notes to financial statements 38 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Net Assets - Proprietary Funds June 30, 2007 Enterprise Funds Governmental Water/ Electric Activities - Wastewater Revenue Internal Fund Fund Total Service Fund Assets Current assets: Cash and cash equivalents $ 3,125,712 $ 5,954,091 $ 9,079,803 $ 383,086 Investments 708,551 6,120,199 6,828,750 1,288,165 Receivables, net 856,580 7,974,768 8,831,348 4,095 Due from other funds-charges 2,955 18,472 21,427 - Inventory 100,060 4,986,721 5,086,781 - Prepaid items - 45,308 45,308 - Total current assets 4,793,858 25,099,559 29,893,417 1,675,346 Non-current assets: Restricted assets Cash 1,528,459 1,389,502 2,917,961 - Investments 4,104,580 26,884,328 30,988,908 - Land and construction in progress 239,566 2,789,718 3,029,284 - Capital assets, net of depreciation 33,616,812 72,006,220 105,623,032 - Total non-current assets 39,489,417 103,069,768 142,559,185 - Total assets 44,283,275 128,169,327 172,452,602 1,675,346 Liabilities Current liabilities: Accounts payable and accrued expenses 795,199 11,650,904 12,446,103 228,122 Due to other funds - charges 135,579 370,768 506,347 - Deferred revenue 25,285 133,538 158,823 - Accrued interest payable 89,985 429,524 519,509 - Customer deposits - 1,405,686 1,405,686 - Revenue bonds payable 653,585 1,780,000 2,433,585 - Liability for compensated absences 43,739 147,573 191,312 - Total current liabilities 1,743,372 15,917,993 17,661,365 228,122 Non-current liabilities: Revenue bonds payable 4,737,735 16,335,568 21,073,303 - Liability for compensated absences 58,403 235,816 294,219 - Total non-current liabilities 4,796,138 16,571,384 21,367,522 - Total liabilities 6,539,510 32,489,377 39,028,887 228,122 Net Assets Invested in capital assets, net of related debt 29,993,517 59,295,834 89,289,351 - Restricted net assets 4,104,580 25,658,366 29,762,946 - Unrestricted 3,645,668 10,725,750 14,371,418 1,447,224 Total net assets $ 37,743,765 $ 95,679,950 $ 133,423,715 $ 1,447,224 See accompanying notes to financial statements 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 39

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Revenues, Expenses and Changes in Fund Net Assets- Proprietary Funds For the Year Ended June 30, 2007 Enterprise Funds Governmental Water/ Electric Activities - Wastewater Revenue Internal Fund Fund Total Service Funds Operating Revenues Charges for services $ 10,723,746 $ 83,109,811 $ 93,833,557 $ - Miscellaneous services/income 1,801,469 3,904,260 5,705,729 573,662 Total operating revenues 12,525,215 87,014,071 99,539,286 573,662 Operating Expenses Water/wastewater services 7,025,090 - 7,025,090 - General administrative 1,092,328 4,370,066 5,462,394 260,429 Purchased power - 70,800,844 70,800,844 - Transmission/distribution - 3,666,515 3,666,515 - Engineering - 1,927,648 1,927,648 - Metering - 281,728 281,728 - Utility tax - 1,461,435 1,461,435 - Depreciation 1,309,538 3,843,097 5,152,635 - Contractual services - - - 84,905 Taxes - - - 46,403 Retirees healthcare 125,480 498,269 623,749 - Self insurance-workers' compensation - - - 28,000 Total operating expenses 9,552,436 86,849,602 96,402,038 419,737 Operating income 2,972,779 164,469 3,137,248 153,925 Non-operating Revenues (Expenses) Interest earned: Operating funds 178,140 592,787 770,927 - Reserve funds 202,477 1,370,291 1,572,768 68,190 Net increase in fair value of investments 26,402 294,734 321,136 7,521 Interest and fiscal charges (190,536) (859,730) (1,050,266) - Bond discount amortized (31,597) (104,310) (135,907) - Gain/(loss) on sale of assets (72,202) (484,345) (556,547) - Total non-operating revenue (expenses) 112,684 809,427 922,111 75,711 Income before transfers 3,085,463 973,896 4,059,359 229,636 Transfers out (585,000) (4,800,000) (5,385,000) - Total transfers (585,000) (4,800,000) (5,385,000) - Change in net assets 2,500,463 (3,826,104) (1,325,641) 229,636 Total net assets--beginning 35,243,302 99,506,054 134,749,356 1,217,588 Total net assets--ending $ 37,743,765 $ 95,679,950 $ 133,423,715 $ 1,447,224 See accompanying notes to financial statements 40 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2007 Enterprise Funds Governmental Water Electric Activities - Wastewater Revenue Internal Fund Fund Total Service Fund Cash Flows from Operating Activities Receipts from customers $ 12,559,453 $ 84,807,083 $ 97,366,536 $ - Payments to suppliers (including purchased power) (6,212,645) (75,135,260) (81,347,905) (148,153) Payments from (to) employees (1,737,311) (4,388,086) (6,125,397) - Payments of personnel related costs (939,936) (2,032,867) (2,972,803) 573,662 Other receipts (payments) including claims paid (24,106) (1,500,758) (1,524,864) (204,838) Net cash provided by operating activities 3,645,455 1,750,112 5,395,567 220,671 Cash Flows from Noncapital Financing Activities Transfers out (585,000) (4,800,000) (5,385,000) - Net cash used by noncapital financing activities (585,000) (4,800,000) (5,385,000) - Cash Flows from Capital and Related Financing Activities Acquisition and construction of capital assets (1,779,901) (3,593,174) (5,373,075) - Principal paid on revenue bond maturities (1,392,407) (1,730,000) (3,122,407) - Interest paid on capital debt (201,368) (885,334) (1,086,702) - Net cash used by capital and related financing activities (3,373,676) (6,208,508) (9,582,184) - Cash Flows from Investing Activities Interest on investments 178,140 592,787 770,927 - Redemption of investment securities - 10,966,203 10,966,203 - Purchase of investment securities (1,077,931) (4,329,387) (5,407,318) (349,781) Interest on restricted cash 202,477 1,370,291 1,572,768 68,190 Net cash provided (used) by investing activities (697,314) 8,599,894 7,902,580 (281,591) - Net increase (decrease) in cash and cash equivalents (1,010,535) (658,502) (1,669,037) (60,920) Balances--beginning of the year 5,664,706 8,002,095 13,666,801 444,006 Balances--end of the year $ 4,654,171 $ 7,343,593 $ 11,997,764 $ 383,086 Reconciliation of operating income to net cash provided (used) by operating activities: Operating income $ 2,972,779 $ 164,469 $ 3,137,248 $ 153,925 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 1,309,538 3,843,097 5,152,635 - Changes in assets and liabilities (Increase)/decrease in receivables 24,774 (2,415,916) (2,391,142) - (Increase)/decrease in due from other funds 8,727 70,846 79,573 - (Increase)/decrease in due from other governments/agencies - 992 992 (95) (Increase)/decrease in inventory (26,231) (3,160,623) (3,186,854) - (Increase)/decrease in prepaid expenses - (45,308) (45,308) 11,250 Increase/(decrease) in accounts payable and accrued expenses (618,143) 3,385,763 2,767,620 55,591 Increase/(decrease) in deferred revenue 737 2,440 3,177 - Increase/(decrease) in due to other funds (24,106) (36,427) (60,533) - Increase/(decrease) in customer deposits - 134,650 134,650 - Increase/(decrease) in liability for compensated absences (2,620) (193,871) (196,491) - Net cash provided (used) by operating activities $ 3,645,455 $ 1,750,112 $ 5,395,567 $ 220,671 Non-cash investing, capital and financing activities: Change in fair value of investments $ 26,402 $ 294,734 $ 321,136 $ 7,521 See accompanying notes to financial statements 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 41

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Fiduciary Net Assets June 30, 2007 Pension Trust Agency Funds Funds Assets Cash and cash equivalents $ 961,063 $ 430,768 Investments at fair value: Mutual Funds 31,699,914 - Total investments: 31,699,914 - Receivables 332,989 226,364 Prepaid items - 590 Due from special revenue fund - 22 Total assets 32,993,966 657,744 Liabilities Accounts payable 40,795 28,829 Due to special revenue fund - 11,303 Due to agencies - 617,612 Total liabilities 40,795 $ 657,744 Net Assets held in trust for pension benefits $ 32,953,171 See accompanying notes to financial statements 42 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part C – Basic Financial Statements The City of Dover Statement of Changes in Fiduciary Net Assets For the Year Ended June 30, 2007 Pension Trust Funds Additions: Net investment income/loss $ 4,686,149 City's contribution- payroll based 2,093,613 City's contribution- lump sum 778,242 Employee contribution 267,819 State insurance premium tax proceeds 429,653 State contribution toward COLA increases 217,500 Other 2,462 Total additions to net assets 8,475,438 Deductions: Benefit payments 3,607,269 General administration 38,600 Refund of pension contribution 26,609 Total deductions from net assets 3,672,478 Changes in net assets 4,802,960 Net assets - beginning 28,150,211 Net assets - ending $ 32,953,171 See accompanying notes to financial statements 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 43

Financial Section, Part C – Basic Financial Statements NOTES: 44 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2007 INDEX 1. FINANCIAL REPORTING ENTITY ............................................................................ 47 A. THE CITY ...............................................................................................................................................47 B. REPORTING ENTITY................................................................................................................................47 2. SIGNIFICANT ACCOUNTING POLICIES.................................................................. 48 A. BASIS OF PRESENTATION .......................................................................................................................48 B. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS ................................................................................50 C. CAPITAL ASSETS AND LONG-TERM LIABILITES .........................................................................................51 D. BUDGET PROCEDURES ...........................................................................................................................52 E. MAJOR TRANSFERS ...............................................................................................................................52 F. INVENTORIES .........................................................................................................................................53 G. CASH AND INVESTMENTS ........................................................................................................................53 H. ACCOUNTS RECEIVABLE .........................................................................................................................53 I. RESTRICTED ASSETS .............................................................................................................................53 J. UNBILLED SERVICE RECEIVABLES ...........................................................................................................54 K. BOND ACCOUNTS/ISSUANCE COSTS .......................................................................................................54 L. FUND EQUITY/NET ASSETS ....................................................................................................................54 M. ESTIMATES ............................................................................................................................................54 3. COMPENSATED ABSENCES................................................................................... 54 4. DEPOSITS AND INVESTMENTS .............................................................................. 55 A. CASH IN BANK AND CASH EQUIVALENTS ..................................................................................................55 B. INVESTMENTS ........................................................................................................................................56 5. CAPITAL ASSETS .................................................................................................... 59 6. LONG-TERM OBLIGATIONS.................................................................................... 60 A. LEASE PAYMENTS ..................................................................................................................................60 B. SUMMARY OF BONDED INDEBTEDNESS BY ISSUE .....................................................................................62 C. STATUS AS OF JUNE 30, 2007 – GENERAL OBLIGATION BONDS ...............................................................62 D. CHANGE IN LONG-TERM DEBT ................................................................................................................62 E. DEBT SERVICE REQUIREMENTS ..............................................................................................................64 F. BOND DISCOUNTS/ISSUANCE COST UNAMORTIZED ..................................................................................65 G. BONDS PAYABLE WITHIN ONE YEAR – DETAIL BY ISSUE ...........................................................................65 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 45

Notes to Financial Statement INDEX - CONTINUED 7. RESTRICTED ASSETS ............................................................................................. 66 8. FUND EQUITY/NET ASSETS.................................................................................... 67 9. PROPERTY TAXES.................................................................................................. 67 10. GRANTS RECEIVED ................................................................................................ 68 11. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS .............................. 68 A. DUE TO/FORM OTHER FUNDS – CHARGES AND ALLOCATIONS ..................................................................69 B. DUE TO/FROM OTHER FUNDS-TEMPORARY ADVANCES ............................................................................69 B. INTERFUND TRANSFERS .........................................................................................................................69 12. RENTAL INCOME..................................................................................................... 70 13. MATERIAL COMMITMENTS .................................................................................... 70 14. FORWARD CONTRACTS ........................................................................................ 71 15. INSURANCE ............................................................................................................. 72 A. HEALTH INSURANCE - STATE OF DELAWARE ............................................................................................72 B. WORKERS’ COMPENSATION FUND - SELF-INSURANCE..............................................................................72 C. OTHER THAN HEALTH OR WORKERS’ COMPENSATION INSURANCE ...........................................................73 16. OTHER POST EMPLOYMENT BENEFITS. ............................................................. 73 17. DEFERRED COMPENSATION PLAN75.................................................................. 73 18. RETIREMENT PLANS .............................................................................................. 74 A. DEFINED CONTRIBUTION PLAN ...............................................................................................................74 B. DEFINED BENEFIT PLANS .......................................................................................................................75 46 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2007 1. FINANCIAL REPORTING ENTITY A. The City The City of Dover 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, 2007. 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 (GAAP). The criterion used is that set forth by Statement of Governmental Accounting Standard 14, 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 has complete financial and operational oversight of the following functions, and, therefore, they are included in this report - 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. 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 Governmental Accounting Standards. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 47

Notes to Financial Statement 2. 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: A. Basis of Presentation Government-wide Statements: The statement of net assets 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. 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 to 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, 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 public safety, library and recreation and community and economic development. 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, 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 govern- mental funds are aggregated and reported as non-major funds. 48 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements 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: Electric Revenue Fund This fund incorporates all transactions related to the generation transmission and distribution of electricity. Pace Global and North American Energy Services have been contracted to manage the City’s power supply and generation assets. 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. 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 triennially to insure sufficient reserves for claims for the Workers’ Compensation Fund. Special Revenue Funds The City has twelve Special Revenue Funds to account for proceeds from specific revenue sources which are legally or administratively restricted to specified expenditure purposes. 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 others. 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. The activity of the plans is accounted for in the Basic Financial Statements. 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 six agency funds. The City acts as the receiving and paying agent for the Dover Parking Authority, Library Consortium, Dover Arts Council, Downtown Dover Development Corporation, Main 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 49

Notes to Financial Statement Street Dover, Inc., and Fourth of July Celebration Committee and the transactions are shown under the Agency Funds category. 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 for which they are levied provided they are “available”- i.e., they are collected in the current period or are expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty (60) days after year-end, except for trash collection, which has a thirty (30) 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. Their revenues are recognized when they are earned and their expenses are recognized when they are incurred. 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. 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 fund. Principal operating revenue for proprietary funds are charges to customers for sales and services. Principal operating expenses are the costs of providing goods and services, which include purchased power, administrative expenses and depreciation of capital 50 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements assets. All revenues and expenses not meeting this definition are reported as non- operating revenues and expenses. As permitted by GASB Statement No. 20, the City has elected to apply all applicable GASB pronouncements and all FASB Statements and interpretations, Accounting Principles Board (APB) Opinions and Accounting Research Bulletins (ARB) issued on or before November 30, 1989, unless they conflict with or contradict GASB pronouncements. C. 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 assets are shown at a fair market value as of the date of donation. Depreciation has been provided on general capital assets and is shown in Note 5. 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 7 - 15 years Long-term liabilities expected to be financed from governmental funds and the long- term estimated liability for compensated absences are accounted for in the government-wide financial statements, but not in the Governmental Funds. Depreciation of all exhaustible capital assets used by Proprietary Funds is charged as an expense against their operations. Accumulated depreciation is shown in Note 5 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 - 50 years Improvements 10 - 20 years Equipment 5 - 15 years Vehicles 5 - 7 years 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 51

Notes to Financial Statement D. 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, Community Development Block Grant, Delaware Prevention Network Grant and State Department of Transportation Grant Funds. The Electric Improvement and Extension Fund and the Water/Wastewater Improve- ment 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 the cash basis, except for property taxes and billable services, which are on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. 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 budget and actual schedule (in the legal budget format (non GAAP) adopted by the City) of the City’s only major governmental fund, the general fund, is presented in the Required Supplementary Information Section of this report. The budget and actual schedules of the other funds are presented in the supplementary information section of this report because they are “not required”. 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 major operating funds of the City are required to maintain an 8% minimum ending budget balance expressed as a percentage of operating revenues excluding the beginning budget balance. E. Major Transfers The Electric Revenue Fund annually transfers a budgeted portion of its revenues to the General Fund. Transfers are also usually made from the Realty Transfer Tax Fund, Municipal Street Aid Fund, ERLSP Fund, Police Grant Fund and Water/Wastewater Fund 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. 52 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements The General Fund, General Fund Contingency Reserve Account, Electric Revenue Fund and the Water/Wastewater Fund are providing for post-retirement benefits other than pensions by transferring to a special revenue fund $250,000, $100,000, $100,000 and $50,000, respectively, during the year ended June 30, 2007. All transfers between the General Fund and the non-major governmental funds are netted in the government-wide financial statements. F. Inventories 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. The warehouse inventories, consisting mostly of parts and supplies, are maintained on a perpetual inventory basis. Inventories of all funds are valued at cost, utilizing a weighted moving average method of valuation. The Electric Revenue Fund maintains fuel inventory on a perpetual basis and utilizes the weighted moving average method of valuation. The balance as of June 30, 2007 is $1,432,371. G. 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 date of acquisition. Investments consist of United States Government and its agencies notes and bonds, corporate bonds and common stocks, open-end mutual funds and an investment pool. All investments are stated at fair value. H. 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. I. Restricted Assets Certain assets are restricted because their use is limited by bond covenants, endowments, or other similar third party restrictions. Restricted assets at June 30, 2007 total $35,090,834 including cash and cash equivalents of $4,079,709 and $31,011,125 in investments. Of this amount, $1,183,965 is attributed to governmental activities and $33,906,869 is attributable to business-type activities. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 53

Notes to Financial Statement J. 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. Billing information which is unreported by June 30, 2007, by the operating departments is billed and accounted for in the month the information is received. K. Bond Accounts/Issuance Costs In governmental funds, bond discounts and issuance costs are recognized in the current period. Bond discounts and issuance costs for Proprietary Funds and in the government-wide financial statements are deferred and amortized over the term of the bonds using the straight-line method. Bond discounts and issuance costs are presented as a reduction of the face amount of bonds payable. L. Fund Equity/Net Assets Governmental funds report reservations of fund balance for amounts that are not available for appropriation or that are legally restricted by third parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Unreserved, undesignated fund balance represents the amount available for appropriation. Proprietary funds report net assets in three categories; 1) invested in capital assets net of related debt; 2) restricted net assets; and 3) unrestricted net assets. Fund equity/net assets is further explained in Note 8. M. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at 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. 3. 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 with the exception of employees covered by the International Brotherhood of Electric Workers (IBEW) contract. The IBEW employees are granted eleven (11) sick days per year. All employees may accumulate sick days, payable upon retirement, at a maximum of 130 days for less than 25 years of service or 150 days for more than 25 years of service. No accrued sick leave is paid when an employee is terminated. 54 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

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 an expenditure 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. 4. DEPOSITS AND INVESTMENTS A. Cash in Bank and Cash Equivalents All bank balances of deposits at year end are insured by federal depository insurance or collateral pledged which is housed at the Federal Reserve Bank of Cleveland in the City’s name. All collateral, including additions thereto and substitutions thereof shall consist of direct obligations of the United States of America. Custodial credit risk – deposits. The bank shall, at its own expense, in all ways service or cause to be serviced and preserve the collateral, to be held by the Federal Reserve Bank of Cleveland. The collateral is required to have a market value of at least 102% of the balance. The bank may substitute for all or any portion of the collateral held by it as security or deposited other collateral having a current market value at least equal to 102% of the balances, after which it shall notify the City of the collateral withdrawn and then substituted within 10 business days. The City’s minimum requirements for its depository are as follows: • Federally or State of Delaware chartered Financial Institution • Qualified depository as defined by the State of Delaware • A member of the Federal Reserve System • Maintain FDIC insurance • Be assigned or maintain a rating of “B” or better by Standard & Poor’s, Moody’s, Fitch Ratings or other such bank rating service. • Collateralize all account balances in accordance with the Collateralization Agreement and provide the City with a certified board resolution of collateralization • Local presence On June 30, 2007, the carrying amount of unrestricted bank deposits was $10,209,978 and the carrying amount of restricted bank deposits totaled $4,079,709. Included in the amount of unrestricted bank deposits is $2,914,598 of cash transferred to the Enterprise Funds operating accounts on June 29, 2007 for availability to pay Bond interest and principal due on July 2, 2007. The restricted deposits are held by the City for bond related transactions, special purpose operating and capital grants. Fiduciary funds deposits of $1,391,831 are excluded. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 55

Notes to Financial Statement B. Investments The City Council has adopted an investment policy which is reviewed every two years and updated as needed for best practices. The Pension Boards have their own distinct investment policy over the Pension Trust funds since the objectives differ from those of the City. The City investments are segregated from the Pension Trust investments for clarity. As of June 30, 2007, the City had the following investments: Investment Type Fair Value (Years) Government-Wide: Fixed income securities: U. S. Government Treasuries $ 3,126,096 7.68 U. S. Government Agencies 20,683,316 1.38 Corporate Bonds 20,764,112 0.81 Fair Value of fixed income securities 44,573,524 Portfolio weighted average maturity 1.56 Other investments: Money Market Mutual Funds 2,819,774 Delaware Public Employees Retirement System Pool 4,204,000 Equity Stock 23,158 Total Other Investments 7,046,932 Total Government-Wide Investments $ 51,620,456 Pension Funds (Trustee held): Short-term corporate bond open-end mutual funds $ 6,725,386 2.70 Intermediate-term corporate bond open-end mutual funds 3,502,092 7.50 Fair value of fixed income open-end mutual funds 10,227,478 Portfolio weighted average maturity 4.10 Other investments: Domestic equity open-end mutual funds 16,577,193 International equity open-end mutual funds 4,895,243 Fair value of other investments 21,472,436 Total fair value pension funds $ 31,699,914 Interest rate risk: The City’s investment policy requires the Treasurer to periodically review and analyze its investments for exposure to fluctuating interest rates. Debt securities are held to maturity to further reduce exposure to interest rate fluctuations. The investments are held in the City’s name. Wilmington Trust Company issues monthly statements which the Finance Department reviews for contractual and investment policy compliance. 56 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements Credit risk: The City’s investment policy is to apply 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. As of June 30, 2007, the City’s fixed income and short-term investments had the following risk characteristics as compared to the Standard’s & Poor’s: Portfolio Authorized Investments Policy Characteristics Certificates of Deposit, Time Deposits & Bankers Acceptances B 0% Corporate Debt Commercial Paper A1/P1 Corporate Bonds AA AAA - 59% AA - 27% A1/P1 - 14% Pension Trusts AAA - 74% Short-term Corporate bond open-end mutual funds Avg. AA AA - 8% Min. BB A - 10% BBB - 8% Mid-term Corporate bond open-end mutual funds Avg. AA AAA - 57% Min. BBB AA - 10% A - 16% BBB - 17% Concentration of credit risk: The City has limitations on its investment portfolio as follows: Us Government No Restrictions Certificates of Deposits and Time Deposits 50% of total, max 10% for any one issuer U. S. Government Agency Securities 75% of total, max 40% in any one agency Corporate Equities 50% of total, max 25% in any industry, 10% in any one issuer, and, additionally, 5% of any issuer’s total outstanding securities Repurchase Agreements 50% of total Reverse Repurchase Agreements 25% of total Money market funds 25% of total, 10% in any one fund except for the cash account Municipal Obligations 10% in any one issuer 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 57

Notes to Financial Statement The Pension Trust fund has its investments exclusively in open-end mutual funds, with limits on its investments as follows: General Restriction Domestic: Investment no more than 5% in any one security. May maintain no more than 8% in any one security. International Equities: Maintain limit of 15% of international equity portfolio. Domestic Equity funds Minimum 46% of total Maximum 56% of total Target 51% Benchmark Russell 3000 International Equity Minimum 9% of total Maximum 18% of total Target 14% of total Benchmark MSCI EAFE Fixed Income Minimum 30% of total Maximum 40% of total Target 35% of total Benchmark Lehman Intermediate Government/Credit Custodial credit risk-investments: For an investment, this 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. The City’s policy is to have its investments held in the City’s name by the City’s agents to avoid custodial credit risk. The funds in the amount of $4,204,000 held in the Delaware Public Employees’ Retirement System are held in a pooled fund with no specific identification of any investor’s assets. 58 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements 5. CAPITAL ASSETS A summary of the Capital asset activity for the year ended June 30, 2007 is presented below: Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated Land $ 3,958,887 $ - $ - $ 3,958,887 Construction in progress 1,561,476 1,897,473 2,519,873 939,076 Total capital assets, not being depreciated 5,520,363 1,897,473 2,519,873 4,897,963 Capital assets, being depreciated: Buildings 7,906,384 947 5,793 7,901,538 Furniture and fixtures 314,280 - 61,528 252,752 Equipment 8,613,508 1,182,624 1,143,134 8,652,998 Vehicles 3,095,087 628,424 658,346 3,065,165 Lights 542,435 - - 542,435 Improvements other than buildings 27,074,573 3,645,182 61,412 30,658,343 Books and audio visuals 885,779 - 866,361 19,418 D.R.M.O. police equipment 80,155 - 22,127 58,028 Fully depreciated assets 457,200 - 73,919 383,281 Total capital assets, being depreciated 48,969,401 5,457,177 2,892,620 51,533,958 Less accumulated depreciation for: Buildings (2,565,038) (192,409) 4,433 (2,753,014) Furniture and fixtures (256,399) (10,295) 61,528 (205,166) Equipment (6,449,331) (508,333) 1,161,548 (5,796,116) Vehicles (2,114,824) (301,526) 325,413 (2,090,937) Lights (354,042) (26,956) - (380,998) Improvements other than buildings (11,670,401) (1,092,296) 44,079 (12,718,618) Books and audio visuals (881,743) (1,159) 866,361 (16,541) D.R.M.O. police equipment (80,155) - 22,127 (58,028) Total accumulated depreciation (24,371,933) (2,132,974) 2,485,489 (24,019,418) Total capital assets, being depreciated, net 24,597,468 3,324,203 407,131 27,514,540 Governmental activities capital assets, net $ 30,117,831 $ 5,221,676 $ 2,927,004 $ 32,412,503 (continued) 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 59

Notes to Financial Statement (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 762,121 1,108,018 538,487 1,331,652 Total capital assets, not being depreciated 2,220,187 1,108,018 538,487 2,789,718 Capital assets, being depreciated Buildings 16,037,982 178,162 16,216,144 Production 59,168,466 - 2,279 59,166,187 Transmission 21,367,216 873,500 245,428 21,995,288 Distribution 44,539,971 1,677,041 662,872 45,554,140 Administration 1,533,216 14,120 1,519,096 Vehicles 500,795 293,706 79,154 715,347 Total capital assets, being depreciated 143,147,646 3,022,409 1,003,853 145,166,202 Less accumulated depreciation for: Buildings (8,971,234) (436,228) (9,407,462) Production (33,554,513) (1,323,682) 2,279 (34,875,916) Transmission (7,531,099) (629,121) 98,869 (8,061,351) Distribution (18,590,676) (1,315,756) 310,245 (19,596,187) Administration (746,819) (94,857) 14,120 (827,556) Vehicles (407,064) (43,453) 59,007 (391,510) Total accumulated depreciation (69,801,405) (3,843,097) 484,520 (73,159,982) Total capital assets, being depreciated, net 73,346,241 (820,688) 519,333 72,006,220 Total electric revenue fund capital assets, net $ 75,566,428 $ 287,330 $ 1,057,820 $ 74,795,938 Water/Wastewater Fund Capital assets, not being depreciated Land $ 163,240 $ - $ - $ 163,240 Construction in progress 992,898 928,043 1,844,615 76,326 Total capital assets, not being depreciated 1,156,138 928,043 1,844,615 239,566 Capital assets, being depreciated Plant, wells, pumping stations, and storage 14,161,744 618,240 14,779,984 Distribution mains, hydrants, and accessories 11,820,951 584,400 131,234 12,274,117 Sewage plant mains, and pumping stations 21,671,949 1,473,315 339,085 22,806,179 Vehicles and equipment 3,737,288 110,097 241,799 3,605,586 Total capital assets, being depreciated 51,391,932 2,786,052 712,118 53,465,866 Less accumulated depreciation for: Plant, wells, pumping stations, and storage (4,686,539) (336,307) (5,022,846) Distribution mains, hydrant, and accessories (4,055,695) (225,237) 5,268 (4,275,664) Sewage plant mains, and pumping stations (8,205,607) (455,780) 339,085 (8,322,302) Vehicles and equipment (2,132,725) (292,214) 196,697 (2,228,242) Total accumulated depreciation (19,080,566) (1,309,538) 541,050 (19,849,054) Total capital assets, being depreciated, net 32,311,366 1,476,514 171,068 33,616,812 Total water/wastewater fund capital assets, net $ 33,467,504 $ 2,404,557 $ 2,015,683 $ 33,856,378 Business-type activities capital assets, net $ 109,033,932 $ 2,691,887 $ 3,073,503 $ 108,652,316 60 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements Depreciation expense was charged to functions/ programs of the primary government as follows: Governmental activities: General government $ 15,412 Central services 90,600 Public safety 427,137 Public works 1,397,367 Library and recreation 120,886 Financial administration 81,572 Total depreciation expense - governmental activities $ 2,132,974 Business-type activities: Water/wastewater $ 1,309,538 Electric 3,843,097 Total depreciation expense-business-type activities $ 5,152,635 The decrease in accumulated depreciation for governmental activities is $352,515 comprised of $2,132,974 current depreciation and $2,485,489 accumulated deprecia- tion on fully depreciated assets valued under $5,000 that were written off or disposed of during the fiscal year. The increase in accumulated depreciation for the Electric Fund is $3,358,577 comprised of $3,843,097 current depreciation and $484,520 accumulated depreciation on fully depreciated assets valued under $5,000 that were written off or disposed of during the fiscal year. The increase in accumulated depreciation for the Water/Wastewater Fund is $768,488 comprised of $1,309,538 current depreciation and $541,050 accumulated depreciation on fully depreciated assets valued under $5,000 that were written off or disposed of during the fiscal year. In accordance with generally accepted accounting principles, the interest paid during the construction of projects for enterprise funds is capitalized. This amount is netted against the interest earned on the project funds. 6. LONG -TERM OBLIGATIONS A. Lease Payments The City had certain capital leases on vehicles and construction equipment. The lease payments were budgeted in the applicable department budget as an annual appropriation. All of the City’s leases are expired as of June 30, 2007. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 61

Notes to Financial Statement B. Summary of Bonded Indebtness by Issue Federal Original Remaining Interest Maturity Arbitrage Debt Issue Amount Amount Rate Range Applicable Purpose Governmental Activities 1993 General Obligation Bonds $ 3,340,000 $ 160,000 4.728% 7/1/94 - 7/1/08 No Advance refund 87 & 88 issues and street repaving, storm drainage, and handicap ramp projects 2003 General Obligation Bonds $ 3,430,000 $ 2,635,000 3.870% 7/1/04 - 7/1/16 No Refunding of '92 &'95 issues Business Type Activities Water/Wastewater Bonds State of Delaware - Revolving $ 750,000 $ 545,657 3.600% 10/1/00 - 4/1/20 No Wastewater Pump Station # 7 - Leipsic Loan Fund - Municipal Revenue 2003 Revenue Bonds $ 7,980,000 $ 5,115,000 3.790% 7/1/04 - 7/1/23 Yes Complete refund 1986B Series; partial refunding 1993 and 1993A Series; expansion and upgrades of water and sanitary sewer system (Coverage ratio on Water/Wastewater Bonds requires net revenues to be at least 1.2 times the maximum annual debt service) Electric Revenue Bonds 2004 Taxable Revenue Bonds $ 22,535,000 $ 18,950,000 4.820% 7/1/05 - 7/1/15 No Complete refund 1990 and 1993 Series (Coverage ratio on Electric Bonds requires net revenues to be at least 1.25 times the maximum annual debt service) C. Status as of June 30, 2007 – General Obligation Bonds Long-term indebtedness of the City of Dover consists of the following general purpose General Obligation Bonds: General Obligation General Bonds Purpose 1993 Series $ 160,000 2003 Series 2,635,000 Total $ 2,795,000 The total General Obligation Bonds outstanding amount includes $350,000 payable within one year. D Change in Long-Term Debt The following tables summarize the debt transactions for the year ended June 30, 2007, including bonds and capital leases payable within one year: 62 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements i. General Long-Term Debt Balance Balance Payable within Item 7/01/06 Additions Reductions 6/30/07 one Year Vehicle & Equipment Leases $ 23,384 $ - $ 23,384 $ - $ - Compensated Absences 1,145,341 1,282,826 1,060,012 1,368,155 727,263 General Obligation Bonds 3,140,000 - 345,000 2,795,000 350,000 Sub-total of General Long-Term Debt $ 4,308,725 $ 1,282,826 $ 1,428,396 $ 4,163,155 $ 1,077,263 ii. Enterprise Funds Debt Balance Balance Payable within Item 7/01/06 Additions Reductions 6/30/07 one Year Vehicle & Equipment Leases $ 9,287 $ - $ 9,287 $ - $ - Compensated Absences 104,762 100,840 103,460 102,142 43,739 Revenue Bonds-Water and Wastewater 6,475,000 - 1,360,000 5,115,000 620,000 State of Delaware Municipal Revenue Bond 578,065 - 32,408 545,657 33,585 Sub-total of Water/ Wastewater Fund $ 7,167,114 $ 100,840 $ 1,505,155 $ 5,762,799 $ 697,324 iii. Electric Revenue Fund Balance Balance Payable within Item 7/01/06 Additions Reductions 6/30/07 one Year Vehicle & Equipment Leases $ 36,221 $ - $ 36,221 $ - $ - Compensated Absences 577,260 218,079 411,950 383,389 147,573 Revenue Bonds 20,680,000 - 1,730,000 18,950,000 1,780,000 Sub-total of Electric Revenue Fund $ 21,293,481 $ 218,079 $ 2,178,171 $ 19,333,389 $ 1,927,573 Sub-total of Enterprise Fund Debt $ 28,460,595 $ 318,919 $ 3,683,326 $ 25,096,188 $ 2,624,897 Grand Totals of Long-Term Debt $ 32,769,320 $ 1,601,745 $ 5,111,722 $ 29,259,343 $ 3,702,160 The revenue and general obligation bonds payable for the Water/Wastewater Fund and Electric Revenue Fund, and major funds, shown in the statement of net assets is net of unamortized bond discount and issuance costs as follows: Discount/ As Shown Issuance Balance Fund Above Costs Sheet General $ 2,795,000 $ 91,543 $ 2,703,457 Water/Wastewater 5,660,657 269,337 5,391,320 Electric 18,950,000 834,432 18,115,568 Total $ 27,405,657 $ 1,195,312 $ 26,210,345 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 63

Notes to Financial Statement 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, 2007. E. Debt Service Requirements The following are the debt service requirements to maturity on the City's general obligation bonds, revenue bonds and capital leases. i. Governmental Activities: 1993 General 2003 General Fiscal Obligation Bonds Obligation Bonds Year Principal Interest Principal Interest Total 2008 $ 80,000 $ 6,150 $ 270,000 $ 81,318 $ 437,468 2009 80,000 2,050 285,000 75,269 442,319 2010 - - 260,000 68,410 328,410 2011 - - 270,000 60,850 330,850 2012 - - 275,000 52,262 327,262 2013 - - 285,000 42,738 327,738 2014 - - 295,000 32,440 327,440 2015 - - 220,000 22,950 242,950 2016 - - 230,000 14,285 244,285 2017 - - 245,000 4,900 249,900 Total $ 160,000 $ 8,200 $ 2,635,000 $ 455,422 $ 3,258,622 ii. Business-type Activities Water/Wastewater Fund 2004 Electric Revenue Fund Fiscal 2003 Revenue Bonds Municipal Revenue Bonds Taxable Revenue Bonds Year Principal Interest Principal Interest Principal Interest Total 2008 620,000 157,748 33,585 19,343 1,780,000 797,104 3,407,780 2009 640,000 142,706 34,804 18,124 1,840,000 726,448 3,402,082 2010 655,000 125,022 36,070 16,859 1,905,000 647,580 3,385,531 2011 290,000 116,322 37,379 15,550 1,995,000 560,300 3,014,551 2012 300,000 106,422 38,737 14,192 2,080,000 464,620 3,003,971 2013 310,000 95,572 40,144 12,785 2,180,000 361,070 2,999,571 2014 320,000 84,052 41,601 11,326 2,270,000 248,706 2,975,685 2015 330,000 71,512 43,113 9,815 2,390,000 128,010 2,972,450 2016 155,000 65,468 44,679 8,250 2,510,000 - 2,783,397 2017 160,000 59,068 46,301 6,626 - - 271,995 2018 165,000 52,302 47,984 4,946 - - 270,232 2019 175,000 44,866 49,727 3,202 - - 272,795 2020 180,000 37,126 51,533 1,397 - - 270,056 2021 190,000 28,766 - - - - 218,766 2022 200,000 19,764 - - - - 219,764 2023 210,000 10,106 - - - - 220,106 2024 215,000 - - - - - 215,000 Total $ 5,115,000 $ 1,216,822 $ 545,657 $ 142,415 $ 18,950,000 $ 3,933,838 $ 29,903,732 The preceding tables do not include compensated absences. 64 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements F. Bond Discounts/Issuance Cost Unamortized The following adjustments were made to the deferred interest for the fiscal year ending June 30, 2007: Balance Additions Amortized Balance 7/1/2006 FY 2007 FY 2007 6/30/2007 General Fund GO Bonds $ 101,714 - 10,171 $ 91,543 Discounts/Issuance Cost Water/Wastewater Bonds $ 300,934 - 31,597 $ 269,337 Discounts/Issuance Cost Electric Revenue Bonds $ 938,742 - 104,310 $ 834,432 Discounts/Issuance Cost G. Bonds Payable within One Year – Detail by Issue Principal payments on bonds are due as follows: i. Payable by General Fund – General Obligation Bonds Principal Issue Amount Due Date Due 1993 Series General Obligation $ 80,000 July 1, 2007 2003 Series General Obligation $ 270,000 July 1, 2007 Total General Fund $ 350,000 ii. Payable by Water/Wastewater Fund – Revenue Bonds Principal Issue Amount Due Date Due 2003 Water/Wastewater Revenue $620,000 July 1, 2007 Subtotal - Revenue $620,000 iii. State of Delaware Municipal Revenue Bonds – State Revolving Fund Principal Issue Amount Due Date Due Subordinated Series 2000-SRF $ 16,643 October 1, 2007 Subordinated Series 2000-SRF $ 16,942 April 1, 2008 Subtotal – Revenue SRF $ 33,585 Total Water/Wastewater $653,585 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 65

Notes to Financial Statement iv. Payable by Electric Fund – Revenue Bonds Principal Issue Amount Due Date Due 2004 Electric Revenue $1,780,000 July 1, 2007 Total Electric Fund $1,780,000 Total bond indebtedness principal to be paid in fiscal year 2008 is $2,783,585. 7. RESTRICTED ASSETS In the government-wide financial statements the restricted net assets of the governmental activities and business type activities are as follows: Governmental Activities Grants-capital construction These represent the State DOT, $ 1,247,645 Garrison Oak, and Greenway grants reported in the non-major special revenue funds. Grants-other purposes These represent all other funds reported $ 322,439 Expendable in the special revenue except post- retirement benefit funds, and includes interest income on the Mary Paton library endowment. Stocks Southern States Cooperative Ltd. $ 16,594 patronage stock which cannot be sold to other parties. Mary Paton An endowment from Mary Elizabeth 5,000 Paton of which only interest income can be used for library purposes. A permanent fund was not established because the city follows the principal of establishing the minimum number of separate funds consistent with legal specifications, operational requirements and the principles of fund classification. Other purposes - non-expendable $ 21,594 Total Restricted Net Assets $ 1,591,678 66 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements Business Type Activities Net restricted assets for construction purposes - expendable Water/Wastewater Restrictions on investments $ 4,104,580 imposed by bond covenants Electric Restrictions on investments imposed by 25,651,802 bond covenants $ 29,756,382 Net restricted assets for other purposes - non-expendable Electric Southern States Cooperative Ltd. $ 6,564 patronage stock which cannot be sold to other parties 8. FUND EQUITY/NET ASSETS In the governmental fund financial statements, the stocks, and Mary Paton restricted assets in preceding note are reported as reserved fund balances. Additionally, the following unrestricted net assets are reported as reservations or designations of fund balances as follows: Parkland and A separate account established by ordinance for Recreation the construction and/or development of parklands and recreation facilities. $ 1,774,531 Reserved for Commitments to third parties to be paid in the Encumbrances following fiscal year. $ 226,421 Designated for capital A separate account established in 2003 for the assets acquisition of future capital assets. $ 160,404 Designated for A separate account established by ordinance for contingency emergencies or uninsured capital losses with approval of City Council $ 645,254 Library Reserve- The City established this reserve for the capital construction construction of a new library. $ 2,373,776 9. 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 is in charge of the property assessments 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 67

Notes to Financial Statement 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 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 There are no material delinquent property taxes as of June 30, 2007. 10. GRANTS RECEIVED The total grants received in various non-major Special Revenue Funds are as follows: Police grants $ 503,604 Library related 247,541 Municipal Street Aid 656,322 Housing grants 469,618 Delaware Prevention Network 70,400 DelDOT grant 1,415,503 Substance Abuse Prevention grant 107,173 Greenway grant 26,559 $ 3,496,720 Total grants received directly in the General Fund are as follows: General Government $ 16,000 Public Safety 704,180 Recreation 333,707 Total $ 1,053,887 11. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of June 30, 2007 is as follows: 68 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements A. Due to/from other funds – Charges and Allocations Receivable Fund Payable Fund Amount General Fund Non-major governmental funds $ 150,133 Water/ Wastewater Fund 125,756 Electric Revenue Fund 370,768 Water/ Wastewater Fund General Fund 607 Non-Major Governmental Funds 2,348 Electric Fund General Fund 8,649 Water/Wastewater Fund 9,823 Non-Major Governmental Funds General Fund 12,612 Total $ 680,696 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. B. Due to/from Other Funds-Temporary Advances Receivable Fund Payable Fund Amount General Fund Non-major governmental funds $ 66,000 C. Interfund Transfers Transfers In Non-major Governmental General Fund Funds Total Transfers Out General Fund $ - $ 768,120 $ 768,120 Non-major governmental funds 2,163,602 - 2,163,602 Water/ Wastewater Fund 535,000 50,000 585,000 Electric Revenue Fund 4,700,000 100,000 4,800,000 Total $ 7,398,602 $ 918,120 $ 8,316,722 Transfers are generally made for the purpose of providing operating, capital or debt service subsidies to the receiving fund in accordance with City policy. However, the general fund transfers to the non-major government funds represent the City’s share of street related improvements and appropriations to post-retirement medical benefits. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 69

Notes to Financial Statement 12. RENTAL INCOME The City has a lease agreement with an individual for agricultural use of the Garrison Farm. The lease payment of $35,533 has been recorded as miscellaneous revenue in the General Fund. The City’s Electric Revenue Fund owns an office building which houses the City’s Customer Service and Information Technology Departments. At June 30, 2007, the City had leases with three tenants for the remaining space available. The City started the fiscal year with four tenants and on March 31, 2007 one lease ended. Lease revenue is $205,289 in the Electric Revenue Fund consisting of building rental of $152,695, substation rental of $30,000 and pole rentals of $22,594. The City maintains several water tower leases for a group of telecommunications companies. These are recorded as revenue of the Water/Wastewater Fund and total $287,017 in the current fiscal year. 13. MATERIAL COMMITMENTS A. The City has entered into a written agreement with the volunteer fire company to assist with payments on several pieces of fire fighting equipment. The payments are budgeted as expenditures in the General Fund-Fire Department budget. The schedules of payments are as follows: Annual Equipment Ending Date Appropriation Ladder #1 $70,000 FY 2008 Engine #4 $126,000 FY 2008 Fire Station #2 - Mortgage $60,000 FY 2014 In addition to the appropriations, the City has paid vendors directly for Communications Equipment and radios in the amount of $272,141. B. The City entered into a two year contract for the construction of the John W. Pitts Recreation Center in the amount of $2.7 million. The construction is expected to be completed in January, 2008. C. On May 4, 2006 the City entered into a contract to provide a market-based approach for power supply managed by Pace Global Asset Management, LLC. The five year management contract with Pace covers asset, energy and risk management programs. Pace will manage energy purchases and utilize the City’s generating assets to provide a level of rate stability as necessary to mitigate the effects of rising and volatile energy prices. The contract provides for management fees to be paid monthly with a performance incentive to be paid at the end of the each fiscal year. The average annual cost is approximately $3 million. 70 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements D. On May 4, 2006, the City also entered into a four year management contract with North American Energy Services to operate and maintain the generating assets of the electric utility. The City has incorporated the budgets and financial activity of the plant 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 North American 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 performance incentive based on budget and plant performance. The average annual cost for management and the incentive is approximately $.7 million and is included in the plant operating budget. 14. FORWARD CONTRACTS Pursuant to the May 4, 2006 Energy Management Agreement between the City and Pace Global Asset Management, LLC, 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 Pace Global, the City’s designated provider of energy risk management services conducts its activities. The Procedures authorize Pace 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. Pace is not authorized to enter into financial hedges. Under the Procedures the City will not extend credit to any potential counterparty that has a credit rating below investment grade (defined as BBB as rated by Standard & Poor’s or Baa2 as rated by Moody’s). 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 through the use of 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 mark-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. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 71

Notes to Financial Statement Counterparty Credit Risk ($000’s) Credit Credit Line Counterparty Rating Limit Availability Sempra Energy Trading Baa1 $15,000 $11,007 Constellation Baa1 $40,000 $40,000 BP Energy Aa1 $30,000 $30,000 Conectiv Baa3 $10,000 $9,919 Integrys A3 $15,000 $14,203 15 INSURANCE A. Health Insurance – State of Delaware The City participates in the State of Delaware Health Insurance Program. The State offers five health plan options. The administration of benefits is coordinated with Coventry Health Care of Delaware and Blue Cross Blue Shield of Delaware. Pre- determined premiums consisting of the City and employee contributions are subsequently paid out 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 the records. An actuarial analysis was completed in fiscal year 2005. As of June 30, 2007, there is $228,122 in outstanding claims in this fund. An appropriate umbrella policy for the excess coverage has been purchased and is in effect as of June 30, 2007. The City maintains a fund balance to cover any significant claims or settlements. There have been no significant reductions or settlements exceeding coverage in the past four fiscal years. Workers’ Compensation activity is as follows: 2007 2006 Claims payable beginning of year $ 172,531 $ 224,263 Claims incurred 260,429 176,146 Payment of claims (204,838) (227,878) Claims payable end of year $ 228,122 $ 172,531 72 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements 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 capital losses (See Note 8). There have been no significant reductions or settlements exceeding coverage in the past four fiscal years. 16. OTHER POST EMPLOYMENT BENEFITS The City provides for post-employment benefits other than pensions, as required under a City resolution. This benefit is not paid from the City retirement plans or other trust funds and does not meet the requirements of GASB Statement 43, Post- employment Benefits other than Pensions. These costs are budgeted for each fiscal year in the General Fund, Water/Wastewater Fund, and the Electric Revenue Fund. The City is a participating member of the State of Delaware self-insurance health plan and will be implementing the requirements for a cost-sharing plan in accordance with GASB 45 – Employer Accounting for Other Post-employment Benefits during fiscal year 2008. The State Employees’ Post-Retirement Health Insurance Premium Fund is administered by the State of Delaware. In June 2007, the State Legislature passed and the Governor signed House Bill 136, creating a new irrevocable trust fund for Other Post-Employment Benefits. The bill takes effect July 1, 2007, and the trust fund will be used to accumulate and invest assets to pay the participating members share of future retiree health insurance premiums. The assets of the State Employees’ Post- retirement Health Insurance Premium Fund will be transferred to the newly created trust fund during fiscal year 2008. Currently, 223 retirees are eligible for post-retirement health care benefits and 193 are enrolled. The employer contributions towards health care premiums this fiscal year are as follows: General Government $ 736,286 Water/Wastewater Fund 125,480 Electric Revenue Fund 498,269 Total Benefit Provided $1,360,035 17. 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 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 73

Notes to Financial Statement 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. At the time, employees were eligible to make contributions to the plan not to exceed the ceiling set by federal regulations. In May 1994, the City amended its pension plan to allow employees the choice of the defined benefit plan or the 457 Plan. The City provided a maximum 5% matching contribution to the 457 Plan and added an alternative investment firm with Nationwide Retirement Solutions. The ICMA Plan has assets of $5,202,951 as of June 30, 2007, with 159 employees participating. The Nationwide plan has assets of $2,761,247 as of June 30, 2007 with 50 employees participating. 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. To be eligible for benefit payments the participant must meet the same eligibility requirements as the participants in the defined benefit plan as described in Note 18. 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. Employees who select the defined benefit plan are also eligible for the 457 Deferred Compensation Plan; however, no matching employer contribution is made. As of June 30, 2007, there are 378 employees eligible to enroll in the 457 Deferred Compensation Plan. 18. RETIREMENT PLANS A. Defined Contribution Plan Effective July 1, 2000, the City implemented a self-directed defined contribution money purchase plan. The contribution and funding requirements of the plan are established by the City and may be 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. The City provides a 100% match of the employee’s required contribution of 6% 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 elect 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 74 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements 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, 2007, there were 259 eligible full-time employees of whom 84 are participants in this plan. The City contributed a total of $199,070 on wages of approximately $3,511,397. The plan assets totaled $1,696,189 as of June 30, 2007. B. Defined Benefit Plans The City participates in three defined benefit pension plans: City of Dover Police Pension Plan, State of Delaware Police Pension Plan, and The City of Dover General Employee Pension Plan. The City of Dover Police Pension Plan, a single employee defined benefit plan, covers all uniformed police officers hired prior to September 1, 1982. The State of Delaware 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 of Dover General Employee Pension Plan, a single employer defined benefit plan, covers all full-time permanent employees, other than police officers. The City makes employer contributions to all three plans. The City holds and administers 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. Separate pension fund financial statements for each plan have not been issued; accordingly, they are presented as required by GASB Statement No. 34, as follows: The City of Dover, Delaware Statement of Pension Trust Fund Net Assets June 30, 2007 Police Employee Pension Pension Totals ASSETS: Cash and cash equivalents $ 226,776 $ 734,287 $ 961,063 Investments at fair value Mutual Funds 13,407,931 18,291,983 31,699,914 Receivables 332,989 - 332,989 LIABILITIES: Accounts Payable (17,374) (23,421) (40,795) Net assets held in trust for pension benefits $ 13,950,322 $ 19,002,849 $ 32,953,171 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 75

Notes to Financial Statement The City of Dover, Delaware Statement of Changes in Pension Trust Fund Net Assets For the Year Ended June 30, 2007 Total Police General Pension Pension Pension Trust Funds Additions Net investment income/loss $ 1,997,298 $ 2,688,851 $ 4,686,149 City's contribution - payroll based 320 2,093,293 2,093,613 City's contribution - lump sum 95,000 683,242 778,242 Employee contribution 101 267,718 267,819 State contributions 429,653 - 429,653 State contributions toward COLA increases 217,500 - 217,500 Other 2,462 - 2,462 Total Additions to Net Assets 2,742,334 5,733,104 8,475,438 Deductions Benefit payments 1,246,539 2,360,730 3,607,269 General administration 16,530 22,070 38,600 Refund of pension contribution - 26,609 26,609 Total Deductions From Net Assets 1,263,069 2,409,409 3,672,478 Changes in net assets 1,479,265 3,323,695 4,802,960 Net assets - beginning 12,471,057 15,679,154 28,150,211 Net assets - ending $ 13,950,322 $ 19,002,849 $ 32,953,171 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 with the terms of each plan. Investment management and consultant fees are paid from the Pension Trusts Funds. All actuarial costs are paid from other City funds. The City’s total payroll for all eligible full-time regular employees for the year ended June 30, 2007, was $17,960,553. Of this amount $12,838,801 in total payroll earnings was reported to and covered by the three defined benefit pension plans. Following is further information on each plan. i. City of Dover Police Pension Plan This contributory pension plan began on January 1, 1970 under the authority of the City Code, Chapter 18, Article II. The contribution and funding requirements of the plan are established by the City and may be amended by the City. It is a closed plan. The last active employee retired on June 29, 2006. An officer’s pension right is vested upon the completion of 15 years of continuous service. As of June 30, 2007, there are 47 retirees and benefactors receiving benefits. 76 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements 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 requirement for employer normal cost. For the year ended June 30, 2007, $2,529 in payroll earnings were reported to and covered by this plan. Fully vested employees who have completed 20 to 25 years of continuous service are entitled to annual benefits equal to 2 ½% of their average earnings for each year of continuous service. The maximum benefit is 62 ½% of average earnings. An employee may not work longer than 25 years of continuous service or past the first of the month following his or her attainment of age 55. With the written consent of the participant and the Chief of Police, a participant’s retirement may be deferred on an annual basis beyond his normal retirement to 60 years of age. 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. If an employee terminates before becoming vested in the plan, his/her total contribution is refunded with interest compounded annually. Interest is based on prime. The plan is managed by the City of Dover Police Pension Board established in the City Code. The committee recommends changes and amendments to City Council, which approves changes to the code. The rate of the City’s contribution is determined by the actuarial study. The State contributes to the City of Dover Police Pension Plan on behalf of the City. The State assesses a .25% surcharge on insurance policies issued in the state. Each year this amount is allocated to the municipalities in Delaware in direct ratio to the number of officers employed. For the year ended June 30, 2007, the State contribution was $429,653. The State also provides 75% for the annual cost of living increase (COLA) granted to police retirees on January 1 each year. For 2007, the 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 77

Notes to Financial Statement State’s contribution was $217,500. The total on-behalf contributions by the State the Plan was $647,153. This amount is included as Grants received revenue and Public Safety and Law Enforcement expenditures in the General Fund. The legally defined liability for the City of Dover Police Pension Plan is the full amount required to pay the current year’s total benefits. The City has met this liability for the current fiscal year. An actuarial study as of July 1, 2006 in accordance with GASB Statement 25 and 27 has been completed. The City’s actuary is Pike Associates of Potomac, Maryland. The annual required contribution (ARC) conforms to the entry age normal cost method as defined in Statement 25. During the past year, the City contributions combined with the State insurance tax proceeds (excluding COLA contributions not part of the actuarial valuation) have exceeded the calculated annual pension cost and have resulted in a net pension asset (NPA), defined as the accumulated value of contributions, deficiencies, or excesses over required contributions, of $848,153 as follows: Annual required contribution $ 485,055 Interest on net pension asset (45,060) Adjustment to annual required contribution 57,581 Annual pension cost 497,576 Contributions (744,935) (Increase)/decrease in net pension asset (247,359) Net pension obligation (asset) at beginning of year (600,794) Net pension obligation (asset) at end of year $ (848,153) There have been no significant changes affecting benefits during the valuation periods shown in the preceding table. The following summarizes activity for this plan for the past three years: Annual Percentage NPO (Asset) Pension Cost Contributed End of Year 2005 $ 535,722 159% $ (453,977) 2006 $ 568,994 126% $ (600,794) 2007 $ 497,576 150% $ (848,153) The funding requirement for fiscal year 2006-2007 for this plan is presented below: 1. Employee Contribution 4% of payroll As required by the City Code and the plan provisions ($101) 78 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements 2. Employer’s Contribution 12.66% Actuarially determined July 2006 – June 2007 percent of payroll for current normal cost ($320) 3. Employer’s Contribution $95,000 Lump sum contribution Additional Lump Sum as actuarially determined to fund the unfunded liability 4. State of Delaware Contributions $647,153 Surcharge on insurance premiums and COLA 5. Annual Pension Cost $497,576 Actuarially computed using entry age cost method 6. Net Pension Asset $848,153 As of June 30, 2007 The net pension asset is a result of matching funds that the State of Delaware provides (75%) for the annual cost of living increase granted to police retirees on January 1 of each year. The increase on January 1, 2007 is not included in the liability calculation that was performed on July 1, 2006. The July 1, 2007 valuation will take into account the January 1, 2007 COLA and the State contribution. Actuarial methods and significant assumptions: Valuation date July 1, 2006 Actuarial cost method Entry age cost method Amortization method Level percentage of projected payroll Remaining amortization period 18 years Amortization Period Closed Asset valuation method Current market value Actuarial Assumptions: Investment rate of return 7.5% Projected salary increases 4.5% Includes inflation at 3.5% Automatic Cost of Living (retirees) 2.0% ii. State of Delaware Police Pension Plan The City participates in the State of Delaware “County and Municipal Police Pension Plan” for uniformed police officers whose employment with the City started on or after September 1, 1982 per the City of Dover Code, Chapter 18 (Police Department) Article II (Pension Plan). This is a cost–sharing multiple-employer defined benefit pension plan. The State of Delaware enacted legislation to provide for the plan and 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 79

Notes to Financial Statement is responsible for setting benefits, contributions and amending plan provisions. This is a contributory plan with the employee contributing 7% of gross salary, exclusive of overtime. For the year ended June 30, 2007, $5,208,970 in payroll earnings were reported to and covered by this plan. The City’s actuarially determined contributions as the employer were 12.36%, 13.84% and 13.97% for the fiscal years ended June 30, 2005, 2006 and 2007, respectively. The City’s contributions to the plan for years ending June 30, 2005, 2006 and 2007 were $567,244, $678,889, and $727,573 and were equal to the required contributions for each year. These contributions cover the City’s total liability for funding, as determined by the State of Delaware. The City does not have any unfunded liability in this plan. The pension plan is managed by the State of Delaware Board of Pension Trustees. The Comprehensive Annual Financial Report of the Delaware Public Employee’s Retirement System can be obtained from the Office of Pensions, 680 Silver Lake Boulevard, Dover, Delaware, 19904-2402 or their www.delawarepensions.com website. As of June 30, 2007 city membership in this plan is comprised of the following: Retired and beneficiaries currently receiving benefits 13 Active employees: Fully Vested 10 years 52 Non Vested 38 The State of Delaware County and Municipal Police Pension Plan provides benefits equal to 2½% of final average monthly compensation multiplied by years of service up to 20 years inclusive, plus 3.5 % of final average monthly compensation multiplied by years of service above 20 years. Vesting occurs after 10 years of credited service. Retirement is at age 62 with 10 years of service, when age plus credited service (but not less than 10 years) equals 75, or 20 years of service. Disability benefits paid to a participant who is totally disabled in the performance of duty are 75% of final average compensation plus 10% for each dependent not to exceed 25% for all dependents. Partial disability benefits for duty-related or ordinary disability are calculated the same as a service pension (subject to maximum and minimum limitations). If a retired participant dies, the eligible survivor receives 50% of the monthly benefit. If an active employee dies, the survivor receives 50% of the monthly benefit that the employee would have received at age 62. The City of Dover’s employer contribution was 12.36%, 13.84% and 13.97% of the total employer contributions to the plan for each fiscal year 2005, 2006 and 2007. 80 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements The State of Delaware passed legislation in 2006 to amend the plan provisions eliminating the FICA adjustment and increasing the employee contribution from 5% to 7%. Assets of the plan are managed by many investment firms approved by the State Pension Board. Details are available from the State Pension Office, Dover, Delaware at www.delawarepensions.com. iii. City of Dover General Employee Pension Plan The City of Dover General Employee Pension Plan started on July 1, 1967, under the authority of the City Code, Article IX, General Employee Pension Plan, Sections 2-176 through 2-215, and was made contributory on July 1, 1983. The contribution and funding requirements of the plan are established by the City and may be amended by the City. 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. Participation in the plan became mandatory for employees hired after July 1, 1991. At the present time, 189 employees and 169 retirees participate in the plan, while 84 employees have chosen to participate in the deferred contribution money purchase option, which began May 1, 1994. Current membership in the General Employee Pension Plan as of June 30, 2007, is comprised of the following: Retired and beneficiaries currently receiving benefits 167 Active employees: Fully Vested 92 Non Vested 97 Deferred Vested 32 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 requirement for employer normal cost. For the year ended June 30, 2007, payroll earnings of $7,627,303 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 he/she attains 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 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 benefit continues to the eligible survivor. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 81

Notes to Financial Statement 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, reduced by one-half of one percent for each month the benefit commences prior to the age 65. 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. If an employee terminated before becoming vested in the plan, they are eligible to withdraw this total contribution with interest compounded annually. Interest is based on prime. The plan is managed by the City of Dover Employees’ Pension Board established in the Code, which may make recommendations for changes and amendments to the plan to the City Council. The City Council must authorize changes to the City Code. The rate of the City contribution is determined by the actuarial study. The Pension Board of Trustees does not issue a separate comprehensive annual financial report, and the City of Dover General Employee Pension Plan is included in the City’s Comprehensive Annual Financial Report as a Pension Trust. The legally defined liability for the City of Dover General Employee Pension Plan is the full amount required to pay the current year's total benefits. The City has met this liability for the current fiscal year. An actuarial study as of July 1, 2006 has been completed in accordance with GASB Statements No. 25 and 27. The City's actuary is Pike Associates of Potomac, Maryland. The annual required contribution (ARC) conforms to the aggregate entry age cost method as defined in Statement 25. The net pension obligation (NPO), which is defined as a liability equal to the accumulated value of deficiencies of required contributions at June 30, 2007 is $329,944, as follows: Annual required contribution $ 2,231,594 Interest on net pension obligation 65,631 Adjustment to annual required contribution (65,823) Annual pension cost 2,231,402 Contributions made 2,776,535 Increase (decrease) in net pension obligation (545,133) Net pension obligation (asset) at beginning of year 875,077 Net pension obligation (asset) at end of year $ 329,944 82 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Notes to Financial Statements There have been no significant changes affecting benefits provided by the Plan during the valuation periods shown in the preceding table. The following summarizes activity for this plan for the past three years: Annual Percentage NPO End Pension Cost Contributed of Year 2005 $1,729,127 91% $589,650 2006 $2,024,109 86% $875,077 2007 $2,231,402 124% $329,944 On May 1, 1994, a deferred compensation option was offered to employees in lieu of participation in the General Employee Pension Plan, and 41 employees elected to switch to the deferred compensation plan. (See Note 17 - Deferred Compensation Plan) The funding requirement for fiscal year 2006-2007 for this plan is as follows: 1. Employee Contribution 3.5% of As required by the City payroll Code and the plan provisions ($267,718) 2. Employer’s Contribution 27.4% Actuarially determined July 2006– June 2007 percent of payroll for current normal cost ($2,093,293) 3. Employer’s Contribution $683,242 Lump Sum Contribution to Additional Lump Sum reduce unfunded liability 4. Annual Pension Cost $2,231,40 Actuarially computed using 2 entry age cost method 5. Net Pension Obligation $329,944 As of June 30, 2007 Actuarial Methods and significant assumptions: Valuation date July 1, 2006 Actuarial cost method Aggregate entry age cost method Amortization method Level percentage of projected payroll Remaining amortization period 18 years Amortization Period Closed Asset valuation method Current market value 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 83

Notes to Financial Statement Actuarial Assumptions: Investment rate of return 7.5% Projected salary increases 4.5% Includes inflation at 3.5% 84 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

FINANCIAL SECTION PART - D REQUIRED SUPPLEMENTARY INFORMATION

86 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part D-Required Supplementary Information Services to Our Residents and Customers Police Protection Community Policing Fire Protection Animal Control Enforcement Building Inspections Planning & Zoning City Elections Community Development/Housing Library Parks Recreation Beautification Tree Maintenance & Management Emergency Preparedness Street Maintenance/Cleaning Snow Removal Leaf Collection Trash Collection Bulk Trash Collection Water/Sewage Service Electricity The City also Offers Parking Downtown Development Historic Preservation 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 87

Financial Section, Part D-Required Supplementary Information CITY OF DOVER GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget & Actual (Non-GAAP Basis) For the Year Ended June 30, 2007 GENERAL FUND VARIANCE ORIGINAL FINAL ACTUAL POSITIVE BUDGET BUDGET AMOUNTS (NEGATIVE) REVENUES: Beginning Balance $ 4,232,792 $ 5,437,696 $ 5,437,696 $ - Fines and Other Police Revenue 760,000 706,020 717,310 11,290 911 Fees 64,000 64,000 56,370 (7,630) Investment Income 290,000 290,000 307,698 17,698 Library Revenue 399,500 379,900 989,005 609,105 Licenses and Permits 2,310,000 2,691,500 2,689,348 (2,152) Miscellaneous Service Charges 93,054 253,054 236,646 (16,408) Police Extra Duty Fees 350,000 350,000 358,756 8,756 Property Taxes 9,148,680 9,254,909 9,032,995 (221,914) Recreation Revenues 95,500 102,200 98,613 (3,587) Sanitation Fees & Rebate 1,258,540 1,282,540 1,283,358 818 Rent Revenue 28,213 28,213 35,533 7,320 Court of Chancery Fees 710,000 761,000 929,120 168,120 Internet Revenue 10,000 10,000 7,483 (2,517) Curbside Recycling 24,000 24,000 10,041 (13,959) Electric Fund Appropriation 5,700,000 4,700,000 4,700,000 - Water/Wastewater Fund Appropriation 535,000 535,000 535,000 - Franchise Fee 410,000 422,000 440,745 18,745 Transfer Tax 2,900,000 2,900,000 3,009,539 109,539 Sale of Assets - - 169,900 169,900 Interfund Service Receipts Water/Wastewater 1,176,357 1,112,461 1,092,328 (20,133) Interfund Service Receipts Electric 3,869,378 3,732,641 3,679,042 (53,599) Grants: Police Related 149,285 192,753 140,833 (51,920) Homeland Security 69,650 169,650 87,351 (82,299) State Grant- Trail Maintenance - - 1,100 1,100 Recreation 300,000 335,000 332,607 (2,393) Misc Grant Revenue 5,500 5,500 18,000 12,500 Transfer from Civil Traffic Penalties 950,000 500,000 540,566 40,566 Transfer from Capital Asset Reserve - 324,824 324,824 - Transfer from Municipal Street Aid 660,000 656,504 657,474 970 Transfer from Delaware Prevention Network - - 3,000 3,000 Transfer from Parkland Reserve 964,800 974,800 781,538 (193,262) TOTAL REVENUES $ 37,464,249 $ 38,196,165 $ 38,703,819 $ 507,654 EXPENDITURES: Tax Assessor $ 273,777 $ 221,612 $ 224,895 $ (3,283) Fire 1,299,787 1,137,347 1,188,173 (50,826) Library 1,087,627 1,012,635 1,005,737 6,898 Recreation 1,728,179 1,813,458 1,452,987 360,471 Planning Commission 338,564 297,362 295,426 1,936 Public Inspections 1,191,003 1,223,379 1,167,072 56,307 Police 12,064,643 11,930,056 11,695,791 234,265 Streets 1,009,197 885,866 868,910 16,956 Sanitation 2,453,231 2,246,285 2,163,486 82,799 Public Works-Engineering 312,126 302,068 314,729 (12,661) (continued) 88 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part D-Required Supplementary Information GENERAL FUND VARIANCE ORIGINAL FINAL ACTUAL POSITIVE BUDGET BUDGET AMOUNTS (NEGATIVE) Allocated Expenditures: Human Resources $ 399,475 $ 354,997 $ 349,509 $ 5,488 Administrative Services 1,036,712 1,039,318 1,048,692 (9,374) City Manager 642,239 630,607 629,503 1,104 Information Technology 941,400 942,129 892,449 49,680 Finance 715,733 669,261 654,883 14,378 Public Works-Administration 317,485 237,276 235,183 2,093 Facilities Management 1,402,610 1,355,050 1,330,499 24,551 Central Services 759,832 727,860 733,291 (5,431) Vehicle Maintenance 676,695 675,762 649,012 26,750 City Clerk 308,362 244,689 236,271 8,418 Mayor 114,661 114,841 106,908 7,933 Council 119,218 117,494 110,404 7,090 Grounds Maintenance 1,168,150 1,098,239 1,105,432 (7,193) Insurance 465,980 465,980 452,414 13,566 Retiree Benefits 763,982 763,982 736,286 27,696 Subtotal $ 31,590,668 $ 30,507,553 $ 29,647,942 $ 859,611 Debt Service: Principal and Interest 441,232 441,232 441,232 - Transfer to Post Retirement Benefit 250,000 250,000 250,000 - Transfer to Contingency 8,007 - - - Transfer to Street Program 350,000 418,120 418,120 - Transfer to Parkland Reserve 350,000 360,000 361,375 (1,375) Transfer to Capital Asset Reserve - - 159,810 (159,810) DSWA Recycling Program 24,000 24,000 9,622 14,378 Inventory Write Offs - - 13,010 (13,010) I/T Emergency Preparedness Plan - 100,000 87,351 12,649 Appropriation to Pension Fund 402,204 402,204 402,204 - Transfer to Library Escrow 583,500 1,620,970 2,226,932 (605,962) Provision for Uncollectible 10,000 10,000 10,000 - Street Lights 746,200 520,000 624,242 (104,242) TOTAL EXPENDITURES $ 34,755,811 $ 34,654,079 $ 34,651,840 $ 2,239 Budget Balance-Carry Forward $ 2,708,438 $ 3,542,086 $ 4,051,979 $ 509,893 Perspective and GAAP (Non-GAAP) Differences: Escrows not included in fund balance $ 48,796 Fair value of investment adjustment (6,957) Reserve for Encumbrances (226,421) Unreserved Fund Balance $ 3,867,397 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 89

Financial Section, Part D-Required Supplementary Information Notes to Required Supplementary Information A. Budgetary Basis of Accounting The City prepares its budget for the General Fund on the cash basis, except for property taxes and billable service changes, which are on 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. 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. The City considers the beginning fund balance an item of revenue for budgetary purposes. B. Explanation of Excess Expenditures over Appropriations Actual revenues exceeded the final appropriation by $507,654 mainly as a result of a one-time receipt from Kent County for Libraries. Expenditures were lower than budget by $2,239 across several functions. Several purchases/projects were not able to be completed in fiscal year 2007 and will be rebudgeted in fiscal year 2008. Transfers to reserves were greater than budget as a result of non-recurring unexpected receipts. Transfer from the Parkland Reserve is for funding the capital expenditures included in Recreation for the construction of the John W. Pitts Recreation Center. Both the transfer in and expenditure are less than budget due to construction delays. The net result is an increase of $509,893 to the General Fund ending fund balance. 90 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part D-Required Supplementary Information Police Pension Fund Supporting Schedule – Required Supplementary Information Schedule of Funding Progress Actuarial Unfunded Unfunded as a Valuation Plan Accrued Accrued Funded Percent of Date Assets Liability Liability Ratio Payroll Payroll 7/1/98 $ 14,704,970 $ 15,310,072 $ 605,102 96.1% $ 462,976 130.7% 7/1/00 $ 17,148,623 $ 16,659,729 $ (488,894) 102.9% $ 298,678 163.7% 7/1/02 $ 16,640,675 $ 17,480,732 $ 840,057 95.2% $ 138,353 607.2% 7/1/03 $ 11,660,850 $ 17,492,167 $ 5,831,317 66.7% $ 138,353 4214.8% 7/1/04 $ 11,829,963 $ 17,587,922 $ 5,757,959 67.3% $ 63,830 9020.8% 7/1/05 $ 11,944,213 $ 17,850,795 $ 5,906,582 66.9% $ 65,673 8993.9% 7/1/06 $ 12,471,057 $ 17,532,104 $ 5,061,047 71.1% $ 65,745 7698.0% Plan costs reflect a change in the method used to value plan assets. Investment gains or losses under the revised method are spread over five years. The City will continue amortizing the unfunded actuarial accrued liability over 18 years with payments increasing at 3 1/2% per year utilizing the level percentage of projected payroll method. The amortization period is closed. Police Pension Fund Required Supplementary Information Schedule of Employers’ Contribution Annual Year Ended Required Percentage June 30 Contribution Contributed 1998 $ 129,073 100% 1999 $ 120,188 100% 2000 $ 117,721 100% 2001 $ 92,435 100% 2002 $ 80,553 100% 2003 $ 91,373 595% 2004 $ 538,271 87% 2005 $ 533,486 159% 2006 $ 560,638 128% 2007 $ 485,055 154% 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 91

Financial Section, Part D-Required Supplementary Information General Employee Pension Fund Required Supplementary Information Schedule of Funding Progress Actuarial Unfunded Unfunded as a Valuation Plan Accrued Accrued Funded Percent of Date Assets Liability Liability Ratio Payroll Payroll 7/1/98 $ 18,792,809 $ 22,096,611 $ 3,303,802 85.0% $ 6,592,117 50.1% 7/1/00 $ 22,095,632 $ 27,497,493 $ 5,401,861 80.4% $ 6,559,611 82.4% 7/1/02 $ 20,638,445 $ 32,013,030 $ 11,374,585 64.5% $ 6,774,554 167.9% 7/1/03 $ 19,133,025 $ 36,131,839 $ 16,998,814 53.0% $ 6,661,757 255.2% 7/1/04 $ 17,531,096 $ 37,764,973 $ 20,233,877 46.4% $ 7,320,938 276.4% 7/1/05 $ 16,277,640 $ 39,860,241 $ 23,582,601 40.8% $ 7,370,418 320.0% 7/1/06 $ 15,712,605 $ 41,103,526 $ 25,390,921 38.2% $ 7,627,303 332.9% The unfunded actuarial accrued liability for this plan is being amortized over 30 years beginning July 1, 1994, 18 of which remain as of June 30, 2007, with payments increasing at 3 1/2% per year as of July 1, 2002. Plan costs reflect a change in the method used to value plan assets. Investment gains or losses under the revised method are spread over five years. The change has significantly reduced the impact of investment losses on the July 1, 2002 valuation. The unfunded accrued liability increased due to the recognition of these deferred losses and due to the fact the City granted retirees a 2% COLA. The amortization period is closed. The City utilizes the level percentage of projected payroll method to amortize the unfunded liabilities, currently 29.32%. Employee Pension Plan Required Supplementary Information Schedule of Employer’s Contribution Annual Year Ended Required Percentage June 30 Contribution Contributed 1998 $ 501,624 100% 1999 $ 512,143 100% 2000 $ 478,016 100% 2001 $ 487,736 100% 2002 $ 591,311 100% 2003 $ 941,910 100% 2004 $ 1,433,298 73% 2005 $ 1,726,989 91% 2006 $ 2,022,614 86% 2007 $ 2,231,594 124% 92 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

FINANCIAL SECTION PART - E SUPPLEMENTARY INFORMATION S COMBINING FUND STATEMENTS S BUDGETARY SCHEDULES

94 2007 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, post-retirement benefits and a recently created 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 also, 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 maintenance and repairs. CDBG HOUSING GRANTS The City receives a U.S. Department of Housing and Urban Development Entitlement Grant for the Community Development Block Grant Program. This provides housing to low or moderate-income persons as well as public housing rehabilitation and community policing. DPN GRANTS The Delaware Prevention Network grant provides comprehensive and coordinated strategies to prevent substance abuse. The grant is administered by the State of Delaware, Office of Prevention. STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS 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 districts. The City receives these funds for designated street projects and records all transactions for this fund. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 95

Financial Section, Part E – Supplementary Information FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS (continued) GREENWAY GRANT The State of Delaware, Department of Transportation, provides Suburban Street Funds to the City as a Project Sponsor for the planning and development of the St. Jones River Greenway. The grant is administered by the State Division of Parks and Recreation. All grant transactions are recorded in 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. POST-RETIREMENT BENEFITS The City is currently accumulating funds for future benefits, other than pensions for retirees and future retirees, by transferring contributions from the General, Water/Wastewater and Electric Revenue Funds specifically for such benefits. ELECTRONIC RED LIGHT SAFETY PROGRAM (ERLSP) The State of Delaware Department of Transportation provides a grant to municipalities that implement the Electronic Red Light 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. GARRISON OAK TECHNOLOGY PARK The State of Delaware Economic Development office appropriated funds to the City for infrastructure improvement to the Garrison Oak property. 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, economics development programs, public works services, capital projects and improvements, infrastructure projects and improvements and debt reduction. 96 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information CITY OF DOVER SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET JUNE 30, 2007 MUNICIPAL CDBG STATE SUBSTANCE POST GARRISON REALTY POLICE LIBRARY STREET HOUSING DPN D.O.T. GREENWAY ABUSE RETIREMENT ERLSP OAK TECH. TRANSFER GRANTS GRANTS AID GRANTS GRANT GRANTS GRANT PREV. GRANT BENEFITS PARK TAX TOTALS ASSETS: Cash $ 321,854 $ 30,062 $ 146 $ 55,248 $ 6,009 $ 314,634 $ 11 $ 8,903 $ - $ 1,227 $ 375,545 $ 48,109 $ 1,161,748 Receivables 76,540 - - - - 381 - 15,012 - - - 11,759 103,692 Investments - - - - - - - - 4,204,000 - - - 4,204,000 Due from other funds-charges 4,712 436 - - - 7,464 - - - - - - 12,612 Due from other governments - - - 6,850 5,568 552,521 26,559 - - 18,387 - - 609,885 TOTAL ASSETS $ 403,106 $ 30,498 $ 146 $ 62,098 $ 11,577 $ 875,000 $ 26,570 $ 23,915 $ 4,204,000 $ 19,614 $ 375,545 $ 59,868 $ 6,091,937 LIABILITIES AND FUND BALANCE: Liabilities: Vouchers Payable $ 62,292 $ 14,295 $ - $ 6,825 $ 5,318 $ 4,470 $ - $ 6,773 $ - $ - $ - $ 22 $ 99,995 Deferred Revenue - - - - - 524,532 - - - - - - 524,532 Due to other funds-charges 74,257 - - 108 259 - - - - 18,567 - 59,290 152,481 Due to other funds-temporary advances - - - 30,000 6,000 - 25,000 5,000 - - - - 66,000 Total Liabilities $ 136,549 $ 14,295 $ - $ 36,933 $ 11,577 $ 529,002 $ 25,000 $ 11,773 $ - $ 18,567 $ - $ 59,312 $ 843,008 Fund Balances: Unreserved $ 266,557 $ 16,203 $ 146 $ 25,165 $ - $ 345,998 $ 1,570 $ 12,142 $ 4,204,000 $ 1,047 $ 375,545 $ 556 $ 5,248,929 Total Fund Balances $ 266,557 $ 16,203 $ 146 $ 25,165 $ - $ 345,998 $ 1,570 $ 12,142 $ 4,204,000 $ 1,047 $ 375,545 $ 556 $ 5,248,929 TOTAL LIABILITIES AND FUND BALANCES $ 403,106 $ 30,498 $ 146 $ 62,098 $ 11,577 $ 875,000 $ 26,570 $ 23,915 $ 4,204,000 $ 19,614 $ 375,545 $ 59,868 $ 6,091,937 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 97

Financial Section, Part E – Supplementary Information CITY OF DOVER SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCES YEAR ENDED JUNE 30, 2007 MUNICIPAL CDBG STATE SUBSTANCE POST GARRISON REALTY POLICE LIBRARY STREET HOUSING DPN D.O.T. GREENWAY ABUSE PREV. RETIREMENT ERLSP OAK TECH. TRANSFER GRANTS GRANTS AID GRANTS GRANT GRANTS GRANT GRANT BENEFITS PARK TAX TOTALS REVENUES: Grant received $ 503,604 $ 247,541 $ 656,322 $ 469,618 $ 70,400 $ 1,415,503 $ 26,559 $ 107,173 $ - $ - $ - $ - $ 3,496,720 Recreation revenue - - - - - - - 12,793 - - - - 12,793 Police Fines - - - - - - - - - 540,566 - - 540,566 Revenue from General Fund - - - - - - - - - - - 820,560 820,560 Miscellaneous revenue 1,277 - - - - 18,929 - - - - - - 20,206 Investment income (loss) 11,173 - 1,198 1,646 - 9,119 55 30 563,487 197 18,456 1,724 607,085 TOTAL REVENUES $ 516,054 $ 247,541 $ 657,520 $ 471,264 $ 70,400 $ 1,443,551 $ 26,614 $ 119,996 $ 563,487 $ 540,763 $ 18,456 $ 822,284 $ 5,497,930 EXPENDITURES: Program expenditures $ 302,531 $ 247,563 $ - $ 464,326 $ 67,409 $ 617,114 $ 26,559 $ 107,810 $ - $ - $ - $ - $ 1,833,312 TOTAL EXPENDITURES $ 302,531 $ 247,563 $ - $ 464,326 $ 67,409 $ 617,114 $ 26,559 $ 107,810 $ - $ - $ - $ - $ 1,833,312 Excess (deficiency) of revenues over expenditures $ 213,523 $ (22) $ 657,520 $ 6,938 $ 2,991 $ 826,437 $ 55 $ 12,186 $ 563,487 $ 540,763 $ 18,456 $ 822,284 $ 3,664,618 Other financing sources (uses): Operating transfers-in - - - - - 418,120 - - 500,000 - - - 918,120 Operating transfers-out (136,720) - (657,474) (4,114) (3,000) - - - - (540,566) - (821,728) (2,163,602) Excess (deficiency) of revenues and other financing sources over expenditures & other uses $ 76,803 $ (22) $ 46 $ 2,824 $ (9) $ 1,244,557 $ 55 $ 12,186 $ 1,063,487 $ 197 $ 18,456 $ 556 $ 2,419,136 UNRESERVED FUND BALANCE AT BEGINNING OF YEAR $ 189,754 $ 16,225 $ 100 $ 22,341 $ 9 $ (898,559) $ 1,515 $ (44) $ 3,140,513 $ 850 $ 357,089 $ - $ 2,829,793 UNRESERVED FUND BALANCE AT END OF YEAR $ 266,557 $ 16,203 $ 146 $ 25,165 $ - $ 345,998 $ 1,570 $ 12,142 $ 4,204,000 $ 1,047 $ 375,545 $ 556 $ 5,248,929 98 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information CITY OF DOVER MUNICIPAL STREET AID FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2007 VARIANCE ORIGINAL REVISED POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 221 $ 100 $ 100 $ - Grant received 660,000 656,504 656,322 (182) Interest earned 100 300 1,198 898 TOTAL REVENUES $ 660,321 $ 656,904 $ 657,620 $ 716 OTHER FINANCING USES: Operating transfer-out $ 660,000 $ 656,504 $ 657,474 $ (970) BALANCE CARRIED TO NEXT YEAR $ 321 $ 400 $ 146 $ (254) 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 99

Financial Section, Part E – Supplementary Information CITY OF DOVER HOUSING GRANTS - CDBG SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2007 VARIANCE ORIGINAL REVISED POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ - $ 22,341 $ 22,341 Federal grant received 314,371 574,965 469,618 (105,347) Interest earned-State CDBG - - 1,646 1,646 TOTAL REVENUES $ 314,371 $ 574,965 $ 493,605 $ (81,360) EXPENDITURES: Federal program expenditures $ 314,371 $ 574,965 $ 464,326 $ 110,639 TOTAL EXPENDITURES $ 314,371 $ 574,965 $ 464,326 $ 110,639 OTHER FINANCING USES: Operating transfer-out $ - $ - $ (4,113) $ (4,113) Balance Carried to Next Year $ - $ - $ 25,166 $ (25,166) 100 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information CITY OF DOVER DELAWARE PREVENTION NETWORK GRANT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE-BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED June 30, 2007 VARIANCE ORIGINAL REVISED POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ - $ 9 $ 9 Grant received 70,000 70,400 70,400 - TOTAL REVENUES $ 70,000 $ 70,400 $ 70,409 $ 9 EXPENDITURES: Program expenditures $ 70,000 $ 70,400 $ 70,409 $ (9) TOTAL EXPENDITURES $ 70,000 $ 70,400 $ 70,409 $ (9) BALANCE CARRIED TO NEXT YEAR $ - $ - $ - $ - 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 101

Financial Section, Part E – Supplementary Information CITY OF DOVER STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2007 VARIANCE ORIGINAL REVISED POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 3,940 $ (898,559) $ (898,559) $ - Grants received: State 1,000,000 1,326,420 1,269,288 (57,132) Interest earned - 7,000 7,361 361 TOTAL REVENUES $ 1,003,940 $ 434,861 $ 378,090 $ (56,771) EXPENDITURES: Program expenditures $ 1,350,000 $ 311,165 $ 493,536 $ (182,371) TOTAL EXPENDITURES $ 1,350,000 $ 311,165 $ 493,536 $ (182,371) Other financing sources (uses): Operating transfers-in $ 350,000 $ 418,120 $ 418,120 $ - BALANCE CARRIED TO NEXT YEAR $ 3,940 $ 541,816 $ 302,674 $ (239,142) 102 2007 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 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 103

Financial Section, Part E – Supplementary Information CITY OF DOVER WATER/WASTEWATER FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2007 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance-water $ 2,065,305 $ 2,041,746 $ 2,041,746 $ - Beginning balance-wastewater 968,218 808,997 808,997 - Beginning balance-wastewater adjustment (1,642,113) (1,349,486) (1,349,486) - Water fees 4,222,500 4,222,500 4,250,634 28,134 Wastewater fees 2,618,250 2,618,250 2,619,013 763 Wastewater adjustment 3,761,010 3,904,341 3,854,100 (50,241) Miscellaneous services 98,750 98,750 83,760 (14,990) Water tank space rent 303,000 303,000 287,017 (15,983) Interest earnings 78,000 100,000 108,274 8,274 Impact fees 750,000 750,000 725,120 (24,880) TOTAL REVENUES $ 13,222,920 $ 13,498,098 $ 13,429,175 $ (68,923) EXPENSES: Water services $ 962,106 $ 947,688 $ 814,930 $ 132,758 Water construction 569,216 567,475 516,610 50,865 Water treatment plant 796,627 796,218 805,524 (9,306) Water meter reading 67,077 66,277 62,525 3,752 Wastewater services 835,162 838,567 739,840 98,727 Kent County sewer fees 3,853,000 3,664,336 3,702,815 (38,479) Intrafund service fee 1,176,357 1,112,461 1,092,328 20,133 Retirees health care 151,220 151,220 125,480 25,740 Debt service-water 922,832 276,275 276,231 44 Debt Service-wastewater 660,244 232,447 232,417 30 Transfer to Capital Asset Reserve 300,000 895,557 895,557 - Transfer to Impact Fee Reserve 89,756 89,756 408,508 (318,752) Transfer to General Fund from Water 267,500 267,500 267,500 - Transfer to General Fund from Wastewater 267,500 267,500 267,500 - Transfer to Water Imp and Ext 551,701 576,701 576,701 - Transfer to Wastewater I & E 115,272 389,642 389,642 - Transfer to Post-Retirement Benefits Reserve 50,000 50,000 50,000 - Transfer to Pension Unfunded liability 50,225 50,225 50,225 - Transfer to Pension Cola 39,850 39,850 39,850 - TOTAL EXPENSES $ 11,725,645 $ 11,279,695 $ 11,314,183 $ (34,488) BUDGET BALANCE-WATER $ 1,976,441 $ 2,037,928 $ 2,220,461 $ 182,533 BUDGET BALANCE-WASTEWATER $ 1,254,937 $ 1,289,956 $ 1,092,732 $ (197,224) BUDGET BALANCE - WASTEWATER ADJUSTMENT $ (1,734,103) $ (1,109,481) $ (1,198,201) $ (88,720) 104 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information CITY OF DOVER WATER/WASTEWATER IMPROVEMENT & EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL JUNE 30,2007 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance restated-water $ 44,148 $ 142,798 $ 160,692 $ 17,894 Beginning balance restated-wastewater 258,767 135,206 186,230 51,024 Prior year bond proceeds restated-wastewater - 240,083 240,083 - Interest earnings 20,000 24,000 30,006 6,006 Transfer from Water Fund 551,701 576,701 576,701 - Transfer from Wastewater Fund 115,272 389,642 389,642 - Transfer from Impact Fee Reserve 850,000 428,979 426,494 (2,485) TOTAL REVENUES $ 1,839,888 $ 1,937,409 $ 2,009,848 $ 72,439 EXPENSES: Water $ 562,025 $ 699,672 $ 447,201 $ 252,471 Wastewater 1,221,215 1,189,408 972,483 216,925 Water meter reading 5,648 - - - Water treatment plant 31,000 31,000 30,061 939 TOTAL EXPENSES $ 1,819,888 $ 1,920,080 $ 1,449,745 $ 470,335 BUDGET BALANCE-WATER $ 10,000 $ 827 $ 275,134 $ 274,307 BUDGET BALANCE-WASTEWATER $ 10,000 $ 16,502 $ 284,969 $ 268,467 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 105

Financial Section, Part E – Supplementary Information CITY OF DOVER ELECTRIC REVENUE FUND SCHEDULE OF REVENUE AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL JUNE 30, 2007 VARIANCE ORIGINAL REVISED POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance-operating $ 4,974,107 $ 5,455,085 $ 5,455,085 $ - Direct base sales 81,578,240 80,281,040 79,505,603 (775,437) Purchased power adjustment - 2,655,400 2,142,773 (512,627) Rental income 145,505 204,467 205,289 822 Miscellaneous services 584,900 2,424,900 2,420,949 (3,951) Utility tax 1,937,446 1,428,100 1,461,435 33,335 Green Energy - 134,350 133,852 (498) Interest earned-operating 420,000 419,000 427,328 8,328 Trf from Rate Stabilization Reserve 5,000,000 5,000,000 5,000,000 - Duke contract revenue - - 1,079,000 1,079,000 TOTAL REVENUES $ 94,640,198 $ 98,002,342 $ 97,831,314 $ (171,028) EXPENSES: Plant Operations $ 6,126,384 $ 5,483,923 $ 5,084,842 $ 399,081 Power Supply 65,154,000 63,753,400 57,926,074 5,827,326 PJM Charges - Load - - 5,054,477 (5,054,477) Power Supply Management/Incentive 2,175,000 3,056,200 3,153,000 (96,800) PJM Credits (6,126,384) (1,520,923) (4,517,569) 2,996,646 Generation Fuels - - 3,879,167 (3,879,167) Transmission/Distribution 3,282,637 3,344,777 3,168,037 176,740 Transition Costs - 92,000 87,001 4,999 Electrical Engineering 2,001,295 2,029,626 1,826,367 203,259 Administration 562,322 590,202 654,609 (64,407) Meter Reading 323,111 312,553 281,728 30,825 Utility Tax 1,937,446 1,428,100 1,461,435 (33,335) Provision for Uncollectible 125,000 - - - Retirees Health Care 526,400 526,400 498,269 28,131 Green Energy Payment to DEMEC - 134,350 133,852 498 Interest on Deposits 25,000 25,000 39,323 (14,323) Intrafund Service Fees 3,869,378 3,732,641 3,679,042 53,599 Other Appropriations: - OPEB Reserve 100,000 100,000 100,000 - Pension Cola 101,692 101,692 101,692 - Pension Unfunded Liability 89,271 89,271 89,271 - General Fund 5,700,000 4,700,000 4,700,000 - Debt Service 2,149,048 2,200,257 2,149,044 51,213 Rate Stabilization Fund 500,000 - - - TOTAL EXPENSES $ 88,621,600 $ 90,179,469 $ 89,549,661 $ 629,808 BUDGET BALANCE - CARRY FORWARD $ 6,018,598 $ 7,822,873 $ 8,281,653 $ 458,780 106 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information CITY OF DOVER ELECTRIC IMPROVEMENT AND EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2007 VARIANCE ORIGINAL REVISED POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 2,471,378 $ 2,709,730 $ 2,709,730 $ - General Service Billing 645,749 - - - Transfer from Depreciation Reserve 3,374,792 2,620,238 2,620,238 - Interest earnings 214,000 157,000 165,459 8,459 DEMA Grant - 39,500 39,500 - TOTAL REVENUES $ 6,705,919 $ 5,526,468 $ 5,534,927 $ 8,459 EXPENSES: Transmission/Distribution $ 1,656,654 $ 1,970,654 $ 1,938,515 $ 32,139 Engineering 4,972,724 3,436,360 2,142,930 1,293,430 Meter Reading 60,241 32,000 30,228 1,772 Administration 16,300 73,500 56,271 17,229 TOTAL EXPENSES $ 6,705,919 $ 5,512,514 $ 4,167,944 $ 1,344,570 BUDGET BALANCE- CARRY FORWARD $ - $ 13,954 $ 1,366,983 $ 1,353,029 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 107

Financial Section, Part E – Supplementary Information 108 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information FINANCIAL STATEMENTS 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 assessed 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 schedules are included for public review of budgetary compliance. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 109

Financial Section, Part E – Supplementary Information CITY OF DOVER INTERNAL SERVICE FUND - WORKERS' COMPENSATION SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2007 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) OPERATING REVENUES: Beginning balance $ 1,000,507 $ 1,211,478 $ 1,211,478 $ - Interest earned 33,613 55,000 39,793 (15,207) City contribution 593,497 593,188 573,462 (19,726) TOTAL REVENUES $ 1,627,617 $ 1,859,666 $ 1,824,733 $ (34,933) OPERATING EXPENSES: Program expenses $ 350,000 $ 325,000 $ 260,429 $ 64,571 Contractual services 28,000 28,000 28,000 - Insurance 109,000 89,000 84,905 4,095 Bank fees - 1,250 1,603 (353) State of Del. - Self-Insurance Tax - 45,000 46,403 (1,403) TOTAL EXPENSES $ 487,000 $ 488,250 $ 421,340 $ 66,910 BUDGET BALANCE - CARRY FORWARD $ 1,140,617 $ 1,371,416 $ 1,403,393 $ 31,977 Note: The above schedule is not required under GAAP, but is included for public review of budgetary compliance. Accordingly, no reconciliation to the GAAP financial statements is provided. GASB 31 Adjustment $7,521. 110 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information FINANCIAL STATEMENTS FIDUCIARY FUND TYPES AGENCIES PARKING AUTHORITY The City acts as the receiving and disbursing agent for the Dover Parking Authority. The transactions are recorded in this fund with respect to the City's agency capacity. LIBRARY CONSORTIUM The Library Consortium is an Agency Fund, which incorporates the transactions of three libraries. They are the City of Dover Public Library, Harrington Public Library, and Smyrna Public Library. Receipts from these libraries are for services to provide a book catalogue system. Disbursements are for the cost of the book catalogue system. DOVER ARTS COUNCIL The Dover Arts Council is an organization, which promotes the arts and cultural activities in the City. The City acts as the receiving and disbursing agent for the Dover Arts Council. The relevant transactions of Dover Arts Council are presented in this section. DOWNTOWN DEVELOPMENT The City established the Downtown Dover Development Corporation as an agency for the development of the downtown urban area. MAIN STREET PROJECT The Main Street Program is designed to encourage economic development and the preservation of historic resources in Downtown Dover and neighboring business districts. The relevant transactions pertaining to the Main Street Project are presented in this section. The funding for Main Street comes from Business Improvement District tax, membership dues, donations, and special purpose grants directly received by this agency. 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. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 111

Financial Section, Part E – Supplementary Information CITY OF DOVER COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2007 BALANCE BALANCE JUNE 30, 2006 ADDITIONS DEDUCTIONS JUNE 30, 2007 PARKING AUTHORITY ASSETS: Cash $ 82,150 $ 320,291 $ 140,426 $ 262,015 Investments 225,299 2,824 228,123 - Due from special revenue - 22 - 22 Receivables 9,182 19,820 17,646 11,356 Total Assets $ 316,631 $ 342,957 $ 386,195 $ 273,393 LIABILITIES: Vouchers payable $ 83 $ 32,012 $ 27,887 $ 4,208 Due to special revenue fund - 11,303 - 11,303 Due to agencies $ 316,548 39,410 98,076 $ 257,882 Total Liabilities $ 316,631 $ 82,725 $ 125,963 $ 273,393 LIBRARY CONSORTIUM ASSETS: Cash $ 537 $ 43 $ - $ 580 Total Assets $ 537 $ 43 $ - $ 580 LIABILITIES: Due to agencies $ 537 $ 43 $ - $ 580 Total Liabilities $ 537 $ 43 $ - $ 580 DOVER ARTS COUNCIL ASSETS: Cash $ 2,350 $ - $ - $ 2,350 Total Assets $ 2,350 $ - $ - $ 2,350 LIABILITIES: Due to agencies $ 2,350 $ - $ - $ 2,350 Total Liabilities $ 2,350 $ - $ - $ 2,350 DOVER DOWNTOWN DEVELOPMENT CORPORATION ASSETS: Cash $ 124,173 $ 514,458 $ 550,828 $ 87,803 Investments 301,632 3,781 305,413 - Receivables 203,084 38,355 27,302 214,137 Total Assets $ 628,889 $ 556,594 $ 883,543 $ 301,940 LIABILITIES: Vouchers payable $ 56,216 $ 530,280 $ 570,683 $ 15,813 Due to General Fund - 20,000 20,000 - Due to agencies 572,673 - 286,546 286,127 Total Liabilities $ 628,889 $ 550,280 $ 877,229 $ 301,940 (Continued) 112 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Financial Section, Part E – Supplementary Information (Continued) BALANCE BALANCE JUNE 30, 2006 ADDITIONS DEDUCTIONS JUNE 30, 2007 MAIN STREET ASSETS: Cash $ 56,560 $ 116,680 $ 111,745 $ 61,495 Receivables 1,331 57,221 57,681 871 Prepaid items 590 - - 590 Due from other governments 4,144 - 4,144 - Total Assets $ 62,625 $ 173,901 $ 173,570 $ 62,956 LIABILITIES: Vouchers payable $ 6,317 $ 62,328 $ 60,503 $ 8,142 Due to agencies 56,062 2,700 3,953 54,809 Due to General Fund 246 8,068 8,309 5 Total Liabilities $ 62,625 $ 73,096 $ 72,765 $ 62,956 4TH JULY CELEBRATION COMMITTEE ASSETS: Cash $ 9,315 $ 24,188 $ 16,978 $ 16,525 Total Assets $ 9,315 $ 24,188 $ 16,978 $ 16,525 LIABILITIES: Vouchers payable $ - $ 16,825 $ 16,450 $ 375 Due to agencies 9,315 6,549 - 15,864 Due to General Fund - 815 529 286 Total Liabilities $ 9,315 $ 24,189 $ 16,979 $ 16,525 TOTAL - ALL AGENCY FUNDS ASSETS: Cash $ 275,085 $ 975,660 $ 819,977 $ 430,768 Investments 526,931 6,605 533,536 - Receivables 213,597 115,396 102,629 226,364 Prepaid items 590 - - 590 Due from special revenue - 22 - 22 Due from General Fund 4,144 - 4,144 - Total Assets $ 1,020,347 $ 1,097,683 $ 1,460,286 $ 657,744 LIABILITIES: Vouchers payable $ 62,616 $ 641,445 $ 675,523 $ 28,538 Due to General Fund 246 28,883 28,838 291 Due to special revenue - 11,303 - 11,303 Due to agencies 957,485 48,702 388,575 617,612 Total Liabilities $ 1,020,347 $ 730,333 $ 1,092,936 $ 657,744 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 113

Financial Section, Part E – Supplementary Information NOTES: 114 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

STATISTICAL SECTION T H I S SECTION 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.

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. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 115

Statistical Section Table 1 City of Dover Net Assets by Component Last Five Fiscal Years (Accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 Governmental Activities Invested in capital assets, net of related debt $ 19,554,571 $ 21,824,685 $ 23,343,787 $ 27,056,161 $ 29,709,046 Restricted 1,002,363 1,852,754 2,023,096 887,235 1,591,678 Unrestricted 5,423,283 4,067,810 7,431,716 11,590,341 13,849,061 Total governmental activities net assets $ 25,980,217 $ 27,745,249 $ 32,798,599 $ 39,533,737 $ 45,149,785 Business-type activities Invested in capital assets, net of related debt $ 73,946,422 $ 81,968,635 $ 82,878,764 $ 89,089,027 $ 89,289,351 Restricted 39,568,228 36,010,001 32,620,056 33,801,000 29,762,946 Unrestricted 8,253,229 4,831,263 11,569,305 11,859,329 14,371,418 Total business-type activities net assets $ 121,767,879 $ 122,809,899 $ 127,068,125 $ 134,749,356 $ 133,423,715 Primary government Invested in capital assets, net of related debt $ 93,500,993 $ 103,793,320 $ 106,222,551 $ 116,145,188 $ 118,998,397 Restricted 40,570,591 37,862,755 34,643,152 34,688,235 31,354,624 Unrestricted 13,676,512 8,899,073 19,001,021 23,449,670 28,220,479 Total primary government net assets $ 147,748,096 $ 150,555,148 $ 159,866,724 $ 174,283,093 $ 178,573,500 NOTE Five years worth of trend data is shown here instead of ten, due to data not available prior to fiscal year 2003. 116 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 2 City of Dover Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) Fiscal Property Transfer Year Tax Tax Total 1998 $ 5,687,602 $ 931,731 $ 6,619,333 1999 5,698,657 1,163,148 6,861,805 2000 6,081,831 1,205,779 7,287,610 2001 6,021,821 987,753 7,009,574 2002 6,190,763 1,207,241 7,398,004 2003 7,076,050 2,663,963 9,740,013 2004 7,183,124 1,627,172 8,810,296 2005 7,370,318 2,379,548 9,749,866 2006 8,792,652 3,048,064 11,840,716 2007 9,032,995 3,008,371 12,041,366 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 117

Statistical Section Table 3 City of Dover Changes in Net Assets Last Five Fiscal Years (Accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 Expenses Governmental activities: General government $ 1,710,749 $ 1,426,396 $ 905,382 $ 836,668 $ 1,472,104 Public safety 11,131,850 12,319,713 12,533,566 13,879,609 14,509,849 Public Works 4,029,404 4,536,928 4,563,747 4,493,296 4,791,235 Library and recreation 1,512,396 1,371,944 1,706,743 1,309,601 1,875,872 Community and economic development 392,101 545,899 711,743 600,907 639,545 Central services 48,032 297,857 236,451 447,877 552,042 Financial administration 241,609 1,902,719 1,566,911 1,774,380 1,588,425 Interest on long-term debt 249,661 224,155 129,352 118,130 106,815 Total governmental activities expenses 19,315,802 22,625,611 22,353,895 23,460,468 25,535,887 Business-type activities Water and Sewer 8,789,932 9,291,404 8,678,186 9,263,236 9,774,569 Electric 52,380,785 53,387,490 56,384,796 58,620,196 87,813,642 Total business-type activities 61,170,717 62,678,894 65,062,982 67,883,432 97,588,211 Total primary government expenses 80,486,519 85,304,505 87,416,877 91,343,900 123,124,098 Program Revenues Governmental activities: Charges for services: General government 524,342 1,117,648 1,209,067 1,428,996 1,683,817 Public safety 3,000,136 2,956,135 3,684,792 4,487,028 4,499,315 Public works 1,080,356 1,083,894 1,081,064 1,253,313 1,312,328 Library and recreation 434,149 443,925 447,948 549,959 1,100,412 Operating grants and contributions 1,683,806 2,090,106 2,267,722 3,156,369 3,108,545 Capital grants and contributions 717,603 1,154,728 544,360 500,103 790,612 Total governmental activities program revenues 7,440,392 8,846,436 9,234,953 11,375,768 12,495,029 Business-type activities Charges for services: Water and Sewer 10,541,804 10,454,520 11,173,425 12,496,877 12,525,215 Electric 59,578,543 59,476,870 63,303,032 68,005,332 87,014,071 Total business-type activities program revenues 70,120,347 69,931,390 74,476,457 80,502,209 99,539,286 Total primary government program revenues 77,560,739 78,777,826 83,711,410 91,877,977 112,034,315 Net (expense)/revenue: Governmental activities (11,875,410) (13,779,175) (13,118,942) (12,084,700) (13,040,858) Business-type activities 8,949,630 7,252,496 9,413,475 12,618,777 1,951,075 Total primary government net revenue (expense) (2,925,780) (6,526,679) (3,705,467) 534,077 (11,089,783) General Revenues and Other Changes in Net Assets Governmental activities: Property taxes 7,076,050 7,183,124 7,370,318 8,792,652 9,032,995 Transfer taxes 2,663,963 1,627,172 2,379,548 3,048,064 3,008,371 Gain (loss) on sale of capital assets - - 3,750 - - Investment earnings 254,510 97,171 332,853 640,381 1,230,540 Transfers 5,440,923 6,636,740 6,611,024 6,338,741 5,385,000 Total governmental activities 15,435,446 15,544,207 16,697,493 18,819,838 18,656,906 Business-type activities: Gain (loss) on sale of capital assets - 16,213 (13,264) (127,477) (556,547) Investment earnings 2,152,263 198,661 1,312,098 1,528,672 2,664,831 Capital contributions - 211,390 - - - Transfers (5,440,923) (6,636,740) (6,611,024) (6,338,741) (5,385,000) Total business-type activities (3,288,660) (6,210,476) (5,312,190) (4,937,546) (3,276,716) Total primary government 12,146,786 9,333,731 11,385,303 13,882,292 15,380,190 Change in Net Assets Government activities 3,560,036 1,765,032 3,578,551 6,735,138 5,616,048 Business-type activities 5,660,970 1,042,020 4,101,285 7,681,231 (1,325,641) Total primary government $ 9,221,006 $ 2,807,052 $ 7,679,836 $ 14,416,369 $ 4,290,407 NOTE Five years worth of trend data is shown here instead of ten, due to data not available prior to fiscal year 2003. 118 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 4 City of Dover Fund Balances of Governmental Funds Last Five Fiscal Years (Modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 General Fund Reserved $ 689,233 $ 720,698 $ 1,099,450 $ 2,158,007 $ 2,023,169 Unreserved 4,682,483 3,729,125 4,156,574 6,515,829 7,046,831 Total General Fund 5,371,716 4,449,823 5,256,024 8,673,836 9,070,000 All other governmental funds Unreserved, reported in: Special revenue funds 805,171 2,119,882 2,984,929 2,829,793 5,248,929 Total all other governmental funds 805,171 2,119,882 2,984,929 2,829,793 5,248,929 Total fund balances $ 6,176,887 $ 6,569,705 $ 8,240,953 $ 11,503,629 $ 14,318,929 NOTE Five years worth of trend data is shown here instead of ten, due to data not available prior to fiscal year 2003. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 119

Statistical Section Table 5 Changes in Fund Balances of Governmental Funds Last Five Fiscal Years (Modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 Revenues Fines $ 650,004 $ 619,493 $ 1,117,440 $ 1,759,979 $ 1,314,246 Library revenue 334,702 333,157 346,652 451,705 989,006 Licenses and permits 1,934,820 2,017,287 2,251,091 2,465,845 2,689,348 Sanitation fees and rebates 1,080,356 1,083,894 1,081,064 1,253,313 1,293,399 Recreation - - - - 12,793 Miscellaneous services 1,039,303 988,511 916,244 996,174 1,367,960 Taxes 9,740,013 8,810,296 9,749,866 11,840,716 12,041,366 Grants 2,396,409 3,244,834 2,812,082 3,919,800 4,550,607 Court of Chancery fees - 559,260 710,380 792,280 929,120 Investment income 226,165 95,127 315,642 603,451 1,154,829 Total revenues 17,401,772 17,751,859 19,300,461 24,083,263 26,342,674 Expenditures General government 698,081 693,874 902,139 836,419 1,000,622 Library services 1,021,282 1,132,413 1,144,289 1,162,301 1,253,300 Public safety 10,671,475 11,755,081 12,432,257 13,922,271 15,055,746 Public works 1,696,969 2,864,345 2,478,911 3,340,643 2,551,962 Recreational services 482,936 486,789 617,624 705,241 1,452,987 Streets and sanitation services 2,971,180 2,957,758 2,711,775 3,242,649 3,018,222 Engineering services 56,703 225,658 253,299 289,208 314,728 Financial administration 391,721 597,973 687,450 725,963 829,002 Garage and stores 545,371 382,851 418,710 417,202 402,915 Insurance 128,127 203,997 168,430 153,202 165,584 Retiree health care 456,025 541,715 590,587 645,457 736,286 Employee pension - - - - 402,204 Street lights 465,923 470,110 550,682 545,426 624,243 Community and economic development 392,101 545,899 711,743 600,906 639,545 Miscellaneous 437,824 - - - - Debt service Principal 637,960 668,341 490,171 464,480 368,384 Interest 249,661 217,374 121,350 107,959 96,644 Other charges (Issuance of debt) - 122,387 - - - Total expenditures 21,303,339 23,866,565 24,279,417 27,159,327 28,912,374 Excess of revenues over(under) expenditures (3,901,567) (6,114,706) (4,978,956) (3,076,064) (2,569,700) Other financing sources (uses) Transfers in 6,499,751 8,249,757 8,965,067 8,850,767 8,316,722 Transfers out (1,053,828) (1,928,012) (2,354,043) (2,512,026) (2,931,722) Refunding bonds issued - 3,430,000 - - - Payments to refunded bond escrow agent - (3,244,281) - - - Capital leases 84,377 - - - - Sale of capital assets - - 3,750 - - Total other financing sources (uses) 5,530,300 6,507,464 6,614,774 6,338,741 5,385,000 Net change in fund balances $ 1,628,733 $ 392,758 $ 1,635,818 $ 3,262,677 $ 2,815,300 Debt service as a percentage of noncapital expenditures 4.17% 4.22% 2.52% 2.11% 1.61% NOTE Five years worth of trend data is shown here instead of ten, due to data not available prior to fiscal year 2003. 120 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 6a CITY OF DOVER GENERAL FUND REVENUES AND OTHER FINANCING TREND DATA LAST TEN FISCAL YEARS REVENUES: 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Beginning Balance $1,973,939 $2,252,671 $2,810,398 $2,827,370 $380,166 $2,266,936 $2,890,843 $2,865,516 $ 3,223,548 $ 5,437,696 Fines and Other Police Revenue 538,272 644,025 593,272 635,711 658,869 650,004 619,493 858,604 823,439 773,680 Franchise fees 254,889 182,093 - - - 331,515 462,859 395,821 416,595 440,745 Right-of-Way Revenue - - 57,763 169,262 56,339 - - - - - Court of Chancery Fees - - - - - - 559,260 710,380 792,280 929,120 Internet Revenue - - - - 10,613 17,903 20,779 17,205 12,951 7,483 Interest Earnings & Transfers 367,927 319,866 346,200 336,533 217,917 146,113 164,686 139,444 263,223 307,698 Library Revenue - General 42,645 47,375 36,332 34,601 33,536 42,251 37,357 50,852 58,905 53,634 Library Revenue - County Reimbursement 264,786 264,786 285,745 286,090 290,607 292,451 295,800 295,800 392,800 935,371 Library Trust Receipt - - - - 105,410 - - - - - Licenses and Permits 1,403,271 1,595,404 1,514,171 2,141,937 1,888,673 1,934,820 2,017,287 2,251,092 2,465,845 2,689,348 Miscellaneous Service Charges 124,221 192,292 128,749 215,266 49,991 77,276 83,572 55,310 120,433 236,646 Police Extra Duty Fees 115,130 173,977 194,381 345,324 389,503 393,601 307,426 303,195 250,985 358,756 Property Taxes 5,687,602 5,698,657 6,081,831 6,021,821 6,190,763 7,076,050 7,183,124 7,370,318 8,792,652 9,032,995 Recreation Revenue 85,115 89,115 94,181 88,460 88,865 92,699 102,483 101,296 98,254 98,613 Rent Revenue - - - 65,610 15,250 28,214 28,214 28,213 35,533 35,533 Electric Fund Appropriation 3,975,000 3,975,000 3,975,000 3,975,000 3,975,000 4,525,000 4,701,664 5,463,008 5,716,956 4,700,000 Electric Improvement & Extension Fund Approp. - - - - 1,887,950 - - - - - Water/Sewer Fund Appropriation 225,000 - 225,000 - 900,000 450,000 831,000 848,016 535,785 535,000 Transfer Tax 931,731 1,163,148 1,205,779 987,753 1,207,241 2,663,963 1,627,172 2,379,548 3,048,064 3,009,539 Curbside Recycling 8,869 10,041 Sanitation Fees - - 207,084 920,115 1,059,007 1,080,356 1,083,894 1,081,064 1,244,444 1,283,358 Transfer from Reserve 159,000 112,454 - - - - 859,816 1,040 124,504 1,106,362 Sale of Land - - - - - 21,371 2,800 13,000 59,850 169,900 Interfund Service Receipts- Water/Wastewater - - - - - - 846,864 932,708 1,045,326 1,092,328 Interfund Service Receipts- Electric - - - - - - 3,151,045 3,536,040 3,652,063 3,679,042 Grants: Emergency Related - - - - - 66,263 48,655 - - - Homeland Security 164,872 87,351 Municipal Street Aid 560,950 705,936 848,294 845,221 822,385 803,446 794,301 792,242 659,910 657,474 Police Department 201,212 194,208 369,219 114,270 96,611 124,360 248,070 611,801 1,279,116 681,399 Recreation Related 92,839 54,597 - 74,865 3,007 - 20,000 25,000 300,000 332,607 State Revenue Sharing/Other 455,682 5,119 337,964 - - 21,203 - - - - Misc Grant Revenue - - - - - - 1,258 9,900 19,700 22,100 Delaware River & Bay Authority - 15,910 - - - - - - - - Downtown Amenities - - - 253,983 - - - - - - DelDot Enhancements - - - - 57,056 - - - - - TOTAL REVENUES $17,459,211 $17,686,633 $19,311,363 $20,339,192 $20,384,759 $23,105,795 $28,989,722 $31,136,413 $35,606,902 $38,703,819 Source: City of Dover Financial Reports. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 121

Statistical Section Table 6b CITY OF DOVER GENERAL FUND EXPENDITURES AND OTHER USES TREND DATA LAST TEN FISCAL YEARS EXPENDITURES: 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Customer Services/Admin Services $ 37,017 $ 39,779 $ 38,139 $ 39,744 $ 41,327 $ 38,759 $ 849,620 $ 1,072,083 $ 951,557 $ 1,048,692 Central Services 29,274 34,256 37,271 37,061 48,152 38,109 659,788 755,866 678,110 733,291 City Clerk 106,051 76,918 80,892 96,564 105,075 103,961 243,852 301,129 333,612 236,271 City Manager 84,224 89,555 117,662 111,332 91,399 101,439 310,272 358,401 563,970 629,503 Community Services - Admin. 491 - - - - - - - - - Construction 106,651 90,587 112,622 138,867 78,830 85,304 - - - - Engineering 40,446 45,023 44,359 48,286 47,030 56,703 225,658 253,299 289,208 314,729 Facilities Management 244,256 232,706 249,224 251,784 338,644 388,957 871,691 958,764 824,260 1,330,499 Finance 137,125 147,273 140,523 181,055 157,672 172,862 526,973 598,639 649,802 654,883 Fire 575,037 579,802 631,868 765,747 582,435 775,129 858,193 911,534 948,785 1,188,173 Grounds Maintenance 197,941 196,315 229,654 246,111 267,376 295,385 952,009 989,042 1,054,767 1,105,432 Human Resources 60,879 61,903 67,628 68,297 88,830 102,472 236,467 271,823 306,782 349,509 Information Technology 194,556 146,747 128,127 132,062 135,569 180,100 675,002 741,812 859,120 892,449 Insurance 116,043 83,535 123,649 113,220 105,400 128,127 523,069 431,871 429,139 452,414 Library 698,001 765,926 742,208 779,665 759,169 791,726 908,656 909,005 953,761 1,005,737 Mayor & Council 36,327 72,738 69,261 79,580 87,893 111,910 223,890 221,958 225,071 217,312 Parks and Recreation 389,207 365,043 380,175 394,915 413,409 482,936 486,789 617,624 705,241 1,452,987 Planning Commission 70,305 82,768 105,011 123,374 96,863 123,716 196,907 202,516 201,563 295,426 Police 7,111,440 7,084,608 7,504,239 8,082,681 8,646,777 9,016,043 9,952,938 10,472,023 11,205,497 11,695,791 Public Inspections 506,594 528,968 562,472 752,168 729,450 769,831 811,805 898,687 957,385 1,167,072 Public Works - Admin. 65,086 68,108 71,091 74,125 81,657 78,312 273,982 306,773 318,900 235,183 Sanitation 1,580,601 1,419,315 1,602,953 1,807,335 1,657,753 2,025,888 2,202,051 1,940,866 2,257,821 2,163,486 Streets 585,706 1,035,061 983,226 1,293,463 1,020,123 1,046,294 1,122,311 1,237,428 1,081,869 868,910 Tax Assessor 107,321 109,297 161,067 114,360 164,012 120,745 154,792 301,445 195,383 224,895 Vehicle Maintenance 506,702 552,450 492,592 667,421 449,159 502,044 533,699 581,689 672,608 649,012 Other Charges: Other Appropriations 56,500 56,500 75,013 126,282 79,352 183,831 1,456 - 500,000 668,120 Park Construction 57,006 54,822 73,895 - - - - - 1,193,323 361,375 Approp. to Street Lights - - - - - - 470,110 534,682 545,426 624,242 Approp. to Capital Outlays 40,000 20,000 60,000 60,000 20,000 - - - 150,000 159,810 Internet Service - - - 10,493 7,622 - - - - - Copier Expense - - - - - - - 4,863 - - N. Dover Athletic Complex - - - 40,000 - - - - - - Transfer to Contingency Fund 50,000 50,000 50,000 50,000 - 250,000 - - - - Transfers to Reserves - - - - 105,410 796,372 634,774 974,970 - - Transfer to Grant Funds - - - - - - 867 - - - Appropriations to Other Funds 400,000 269,331 243,810 329,234 - 6,515 - - - - Environmental Related Expense 14,196 3,494 35,568 61,227 30,000 - - - - - I/T Emergency Preparedness Plan - - - - - - - - - 87,351 Accounts Receivable Uncollectibles - - - - - - - 10,000 10,000 10,000 Inventory Write Offs - - - - - - 14,636 7,114 12,176 13,010 Retiree Benefits 198,607 218,417 243,187 306,106 375,173 456,025 541,715 590,587 645,457 736,286 Employee Pension - - - - - - - - - 402,204 Police Pension - - - 226,863 - - - - - - Workers Compensation Fund - - - - 616,449 296,914 - 16,000 - - Library Escrow - - - - - - - - - 2,226,932 DSWA Recycling Program - - - - - - - - 9,894 9,622 Trash Container Expense 43,360 47,246 - - - - - - - - Consulting 68,627 11,099 51,561 150,000 - - - - - - Debt Service: Principal 375,000 390,000 405,000 425,000 445,000 465,000 485,000 330,000 335,000 345,000 Debt Service: Interest 322,100 304,514 282,905 301,625 244,813 223,543 198,509 110,372 103,719 96,232 Debt. Service: Bond Issue Costs - - - - - - 122,387 - - - Debt Service: Bond Proceeds - - - - - - (3,430,000) - - - Debt Service: Payment to Bond Agent - - - - - - 3,244,281 - - - TOTAL EXPENDITURES $ 15,212,677 $ 15,334,104 $ 16,198,852 $ 18,486,047 $ 18,117,823 $ 20,214,952 $ 26,084,149 $ 27,912,865 $ 30,169,206 $ 34,651,840 Source: City of Dover Financial Reports. 122 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section General Fund Revenues, Expenditures & Other Financing Trends Last Ten Fiscal Years Table 6a – continued General Fund Revenues & Other Financing Trend Data $45 $40 2007 2006 $35 2005 2004 $30 2003 Millions $25 2001 2002 2000 $20 1998 1999 $15 $10 $5 $0 Table 6b - continued General Fund Expenditures & Other Uses Trend Data $40 2007 $35 2006 $30 2005 2004 $25 Millions 2003 $20 2001 2002 2000 1998 1999 $15 $10 $5 $0 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 123

Statistical Section Table 7 City of Dover, Delaware Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years REAL PROPERTY Ratio of Less: Total Taxable Direct Fiscal Total Assessed Exempt Total Taxable Estimated Value to Total Tax Year Value Properties Assessed Value Actual Value Assessed Value Rate 1998 $ 1,225,566,600 $ 415,424,700 $ 810,141,900 $ 2,042,611,000 39.66% 0.685 1999 1,254,742,300 419,460,500 835,281,800 2,091,237,167 39.94% 0.685 2000 1,583,051,400 723,466,300 859,585,100 2,638,419,000 32.58% 0.685 2001 1,342,023,600 465,530,500 876,493,100 2,236,706,000 39.19% 0.685 2002 1,687,672,100 784,466,500 903,205,600 2,812,786,833 32.11% 0.685 2003 2,209,978,500 504,226,700 1,705,751,800 2,209,978,500 77.18% 0.411 2004 2,576,251,900 841,436,800 1,734,815,100 2,576,251,900 67.34% 0.411 2005 2,605,638,000 841,290,300 1,764,347,700 2,605,638,000 67.71% 0.411 2006 3,146,043,800 618,735,300 2,527,308,500 3,146,043,800 80.33% 0.330 2007 3,516,580,775 618,433,400 2,898,147,375 3,516,580,775 82.41% 0.330 Source: Tax Assessor's Office, City of Dover. NOTES 1. There is no tax on personal properties. Therefore, no figures are presented. 2. In 2003 the City changed assessed values to 100% of estimated actual values from 60%. In doing so, the tax rate was lowered from $.685 to $.4110 to stay revenue neutral. 3. In 2005, the City property values were reassessed, effective for tax year 2006. The tax rate was lowered from $.411 to $.330. 124 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 8 City of Dover, Delaware Property Tax Rates - All Direct and Overlapping Governments with the Capital School District (Per $100 of Assessed Value) Last Ten Fiscal Years NOTES 1. Dover charter provides City that the amount of to be raised through Dover Capital Vo-Tech property taxes shall not Fiscal General Kent School School exceed 2% of the total Year Fund County District District Total taxable assessment. 1998 0.685 0.260 0.871 0.107 1.923 2. Kent County Property 1999 0.685 0.250 0.879 0.105 1.919 tax rates reflect the 1987 2000 0.685 0.250 0.936 0.073 1.944 reappraisal of properties 2001 0.685 0.250 0.936 0.073 1.944 in Kent County. 2002 0.685 0.250 1.022 0.095 2.052 2003 0.411 0.250 1.120 0.087 1.868 3. The City of Dover changed 2004 0.411 0.250 1.173 0.087 1.921 from 60% of assessed value 2005 0.411 0.250 1.173 0.087 1.921 to 100% and accordingly 2006 0.330 0.250 1.075 0.118 1.773 lowered the tax rate in 2003. 2007 0.330 0.250 1.459 0.118 2.157 Sources: Tax Assessor's Office - City Property Tax Rates-FY 2007 All Direct & Overlapping Governments 0.118 0.330 0.250 1.459 City of Dover Kent County Capital School Vo-Tech School 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 125

Statistical Section TABLE 9 City of Dover, Delaware NOTES Property Tax Rates - All Direct and Overlapping Governments with the Caesar Rodney School District 1. Section 48 of the City of (Per $100 of Assessed Value) Dover charter provides Last Ten Fiscal Years that the amount of money to be raised through City property taxes shall not of Caesar exceed 2% of the total Dover Rodney Vo-Tech taxable assessment. Fiscal General Kent School School Year Fund County District District Total 2. Kent County Property tax rates reflect the 1987 1998 0.685 0.260 0.860 0.107 1.912 reappraisal of properties 1999 0.685 0.250 0.860 0.105 1.900 in Kent County. 2000 0.685 0.250 0.884 0.073 1.892 2001 0.685 0.250 0.986 0.073 1.994 3. The City of Dover changed 2002 0.685 0.250 1.030 0.095 2.060 from 60% of assessed value 2003 0.411 0.250 1.030 0.087 1.778 to 100% and accordingly 2004 0.411 0.250 1.161 0.087 1.909 lowered the tax rate in 2003. 2005 0.411 0.250 1.161 0.087 1.909 2006 0.330 0.250 1.459 0.087 2.126 4. The City of Dover reassessed 2007 0.330 0.250 1.480 0.118 2.178 property values and "rolled back" the tax rate in 2006. Sources: Tax Assessor's Office - City Property Tax Rates-FY 2007 All Direct & Overlapping Governments 0.118 0.330 0.250 1.480 City of Dover Kent County Caesar Rodney School Vo-Tech School 126 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 10 City of Dover, Delaware Principal Tax Payers Current Year and Nine Years Ago PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL 2007 TAXABLE 1998 TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAX PAYERS TYPE OF BUSINESS VALUATION RANK VALUATION VALUATION RANK VALUATION Dover Downs Prop, Inc. Race Track/Video Lottery/Hotel $ 98,824,600 1 3.41% $ 17,314,000 3 2.14% Dover Mall LP Dover Commons/Dover Mall Shopping Ctr 68,301,000 2 2.36% 23,671,400 1 2.92% Kraft-General Foods Corp. Food Manufacturer 20,624,800 3 0.71% 13,920,000 2 1.72% Robino Bay Court Plaza Shopping Center 19,087,300 4 0.66% 2,587,200 - 0.32% Berks City Real Estate Assoc Boscov's 18,034,400 5 0.62% 5,004,400 - 0.62% Country Village Association Apartments 15,691,800 6 0.54% 3,086,600 - 0.38% Millers Dover Downs Shopping Center 14,528,900 7 0.50% 1,951,200 - 0.24% Dover South Coast Partnership North Dover Shopping Center 14,470,300 8 0.50% 5,626,300 10 0.69% Dover East Estates LP Mobile Home Park 11,647,200 9 0.40% 599,600 - 0.07% K.W. Lands GP Hotels 11,382,100 10 0.39% 4,959,500 11 0.61% TOTAL $ 292,592,400 10.10% $ 78,720,200 9.72% Source: Tax Assessor's Office, City of Dover NOTE Total taxable assessed valuation for current year is $ 2,898,147,375 Total taxable assessed valuation for 1998 was $ 810,141,900 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 127

Statistical Section Table 11 City of Dover, Delaware Property Tax Levies and Collections Last Ten Fiscal Years Total Collected Within Collected in Total Collection Fiscal Tax the Fiscal Year Subsequent Collections as Percentage Year Levy of the Levy Years to Date of Levy 1998 $ 5,738,198 $ 5,586,429 $ 149,442 $ 5,735,871 99.96% 1999 5,578,321 5,494,225 81,470 5,575,695 99.95% 2000 5,894,545 5,734,142 157,776 5,891,917 99.96% 2001 5,866,188 5,747,774 115,764 5,863,538 99.95% 2002 5,974,417 5,828,062 143,705 5,971,767 99.96% 2003 6,842,874 6,724,009 115,699 6,839,708 99.95% 2004 7,011,906 6,941,843 60,044 7,001,887 99.86% 2005 7,109,977 6,941,217 94,993 7,036,210 98.96% 2006 8,287,536 8,081,411 177,050 8,258,461 99.65% 2007 8,448,462 8,274,237 Not Available 8,274,237 97.94% Source: City of Dover Financial Reports. PROPERTY TAXES LEVIED LAST TEN FISCAL YEARS 9 8 7 Millions 6 5 4 3 2 1 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 NOTES 1. Section 48 of the City of Dover chapter provides that the amount of money to be raised through property taxes shall not exceed 2% of the total taxable assessment. 2. The table above includes receipt of property taxes and penalties. It excludes payments in lieu of taxes and farm land roll back taxes. 128 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 12 City of Dover, Delaware Special Assessment Collections Last Ten Fiscal Years Fiscal Assessment Assessments Year Billings Collected 1998 $4,060 $23,038 1999 -0- 16,885 2000 2,300 12,527 2001 8,675 11,965 2002 4,240 5,611 2003 2,925 4,066 2004 2,241 3,398 2005 1,960 2,358 2006 1,252 929 2007 1,562 1,280 Source: City of Dover Financial Records. NOTE 1. Interest billed in 2007 was $1,222. This is not included in the $1,562 figure. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 129

Statistical Section Table 13 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 Year Principal Interest Service(1) Expenditures(2) Expenditures 1998 $ 375,000 $ 322,100 $ 697,100 $ 15,212,677 4.58% 1999 390,000 304,514 694,514 15,334,104 4.53% 2000 405,000 282,904 687,904 16,196,852 4.25% 2001 425,000 301,625 726,625 18,486,047 3.93% 2002 445,000 244,813 689,813 18,117,823 3.81% 2003 465,000 223,543 688,543 20,214,952 3.41% 2004 485,000 200,740 685,740 26,085,239 2.63% 2005 330,000 110,371 440,371 27,912,865 1.58% 2006 335,000 103,718 438,718 30,169,206 1.45% 2007 345,000 96,232 441,232 34,651,840 1.27% Source: City of Dover Financial Records. NOTES 1. The debt service figures include the General Obligation Bonds payable from the General Fund only. 2. The General Expenditures include all operating items, capital items and debt service. (See Table 6b) 130 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 14 City of Dover Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-type Activities General General Water/Sewer Electric Obligation Total Percentage Fiscal Obligation Capital Revenue Revenue Bonds Capital Primary of Personal Per Year Bonds Leases Bonds Bonds Water/Sewer Leases Government Income Capita Population 1998 $ 6,230,000 $ - $ 12,740,000 $ 29,235,000 $ 750,000 $ - $ 48,955,000 12.6% $ 1,772 27,630 1999 5,840,000 - 11,920,000 28,335,000 600,000 - 46,695,000 12.0% $ 1,690 27,630 2000 5,435,000 - 11,805,000 27,375,000 450,000 - 45,065,000 7.2% $ 1,631 27,630 2001 5,010,000 - 10,863,838 26,350,000 300,000 - 42,523,838 6.7% $ 1,318 32,271 2002 4,565,000 90,143 9,861,726 26,164,844 150,000 399,613 41,231,326 6.5% $ 1,266 32,562 2003 4,100,000 554,217 8,803,629 24,085,000 - 393,030 37,935,876 5.9% $ 1,154 32,860 2004 3,805,000 313,035 9,759,511 22,830,000 - 309,915 37,017,461 5.7% $ 1,116 33,179 2005 3,475,000 152,864 8,429,336 22,535,000 - 161,836 34,754,036 5.3% $ 1,037 33,511 2006 3,140,000 - 7,053,065 20,680,000 - 68,892 30,941,957 4.7% $ 914 33,858 2007 2,795,000 - 5,660,657 18,950,000 - - 27,405,657 4.1% $ 807 33,962 Source: City of Dover Financial Records Population Source 1997-1999: U. S. Census Population Source 2003-2006: Delaware Population Consortium 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 131

Statistical Section Table 15 City of Dover, Delaware Ratio of Net General Obligation Bonded Debt To Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Ratio Debt of Net Net Payable Bonded Bonded Gross From Net Debt To Debt Fiscal Assessed Bonded Enterprise Bonded Assessed Per Year Population Value Debt Revenues Debt Value Capita 1998 27,630 $ 810,141,900 $ 6,980,000 $ 750,000 $ 6,230,000 0.77% $ 225.48 1999 27,630 835,281,800 6,440,000 600,000 5,840,000 0.70% 211.36 2000 27,630 859,585,100 5,885,000 450,000 5,435,000 0.63% 196.71 2001 32,135 876,493,100 5,310,000 300,000 5,010,000 0.57% 155.90 2002 32,135 903,205,600 4,715,000 150,000 4,565,000 0.51% 142.06 2003 (2) 32,043 1,705,751,800 4,100,000 - 4,100,000 0.24% 138.95 2004 (2) 32,043 1,734,815,100 3,805,000 - 3,805,000 0.22% 118.75 2005 (2) 32,043 (3) 1,764,347,700 3,475,000 - 3,475,000 0.20% 108.45 2006 (2) 32,043 (3) 2,527,308,500 3,140,000 - 3,140,000 0.12% 97.99 2007 (2) 32,043 (3) 3,516,580,775 2,795,000 - 2,795,000 0.08% 87.23 Source: City of Dover Financial Records and Tax Assessor’s Office. NOTES 1. This table includes all long-term general obligation bonded debt only. 2. As a result of Count Question Resolution Process, the Census Bureau revised the 2000 population for the City of Dover to 32,043 people. 3. Assessed value reflects the net billable tax base and does not include the exempt value of $599,135,900 and exemption for Senior Citizens of $19,297,500. 4. In 2003 the City changed assessed values to 100% of estimated actual values from 60%. In doing so, the tax rate was lowered from $.685 to $.411 to stay revenue neutral. 5. In 2005 the City property values were reassessed, effective for tax year 2006. The tax rate was lowered from $.411 to $.330. 132 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 16 City of Dover, Delaware Computation of Direct and Overlapping Debt with the Capital School District June 30, 2007 Percentage Amount Net Debt Applicable to Applicable to Jurisdiction Outstanding City of Dover City of Dover City of Dover $ 2,703,457 100% $ 2,703,457 Kent County (1) 5,930,468 35% 2,075,664 Capital School District (2) 17,571,220 - TOTAL $ 26,205,145 $ 4,779,121 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 $22,894,771 at June 30, 2007. Although, Kent County's bonds are general obligation bonds, $16,964,303 is payable from the Kent County Sewer Fund(s) or other committed sources. 2. Capital School District: As of June 30, 2007 the net outstanding debt was $17,571,220. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 133

Statistical Section Table 17 City of Dover, Delaware Computation of Direct and Overlapping Debt with the Caesar Rodney School District June 30, 2007 Percentage Amount Net Debt Applicable to Applicable to Jurisdiction Outstanding City of Dover City of Dover City of Dover $ 2,703,457 100% $ 2,703,457 Kent County (1) 5,930,468 35% 2,075,664 Caesar Rodney School District (2) $ 9,934,690 - TOTAL $ 18,568,615 $ 4,779,121 Sources: City of Dover Financial Records, Kent County Levy Court - Accounting Department and Caesar Rodney School District - Administration Department. NOTES 1. Kent County: Total debt for Kent County is $22,894,771 at June 30, 2007. Although, Kent County's bonds are general obligation bonds, $16,964,303 is payable from the Kent County Sewer Fund (s), or other committed sources. 2. Caesar Rodney School District: As of June 30, 2007 the net outstanding debt was $9,934,690. 134 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 18 City of Dover, Delaware Computation of Legal Debt Margin Last Ten Fiscal Years 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Debt Limit $ 202,535,475 $ 207,732,675 $ 214,896,275 $ 219,123,275 $ 225,801,400 $ 426,473,950 $ 433,703,775 $ 441,086,925 $ 632,988,025 $ 724,536,844 Total Net Debt applicable to limit 2,980,000 6,440,000 5,885,000 5,310,000 4,715,000 4,100,000 3,805,000 3,475,000 3,140,000 2,795,000 Legal debt margin $ 199,555,475 $ 201,292,675 $ 209,011,275 $ 213,813,275 $ 221,086,400 $ 422,373,950 $ 429,898,775 $ 437,611,925 $ 629,848,025 $ 721,741,844 Total Net Debt applicable to limit as a percentage of debt limit 1.49% 3.20% 2.82% 2.48% 2.13% 0.97% 0.89% 0.79% 0.50% 0.39% Legal Debt Margin Calculation for Fiscal Year 2007 Net (Taxable) Assessed Value on Books $ 2,898,147,375 Debt Limit - 25 Percent of Total Assessed Value $ 724,536,844 DEBT (For which the City's full faith and credit has been pledged) Gross Bonded Debt 2,795,000 LEGAL DEBT MARGIN $ 721,741,844 Source: City of Dover Financial Reports, City of Dover Charter, Section 50(b), and Tax Assessor's Office 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 135

Statistical Section Table 19 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 1998 $ 46,834,241 $ 34,918,906 $ 11,915,335 $ 845,000 $ 1,815,765 $ 2,660,765 4.48% 1999 49,354,963 37,160,994 12,193,969 900,000 1,755,363 2,655,363 4.59% 2000 52,264,065 40,153,523 12,110,542 960,000 1,690,922 2,650,922 4.57% 2001 51,765,524 41,007,889 10,757,635 1,025,000 1,620,938 2,645,938 4.07% 2002 54,903,340 44,315,614 10,587,726 1,095,000 1,549,344 2,644,344 4.00% 2003 59,737,571 46,611,778 13,125,793 1,170,000 1,480,203 2,650,203 4.95% 2004 59,611,552 47,393,103 12,218,449 1,255,000 1,380,002 2,635,002 5.01% 2005 63,467,514 51,505,300 11,962,214 1,335,000 1,115,728 2,450,728 4.88% 2006 68,377,892 53,839,945 14,537,947 1,855,000 910,256 2,765,256 5.26% 2007 87,606,858 83,006,505 4,600,353 1,730,000 859,048 2,589,048 1.78% Source: City of Dover Financial Records. NOTES 1. Coverage required by the bond resolution is 1.25%. debt service on 1985 Electric Revenue Refunding Bonds as no amount was paid on the 1990 issue. The debt 2. Calculation of gross revenue for fiscal year 2007 is as service for the fiscal year 1991-92 includes the debt follows: service on unrefunded 1985 Series and full year debt service on 1990 Series. Gross Revenue: Operating Revenues $ 87,014,071 6. In January 1993, the City issued Electric Revenue Refunding Interest Earned-Operating Funds 592,787 Bonds in the amount of $20,985,000 to partially refund the Total Gross Revenue $ 87,606,858 1990 Series. 3. Direct operating expenses do not include depreciation expense. 7. Up to the fiscal year 1996, the total debt service includes payments on the Series 1985, 1990 and 1993 bonds. 4. Figures presented in this table compare the net revenue The debt service for the fiscal years 1996, 1997 and available for debt service to the debt service 1998 includes the City's payments on unrefunded requirements of the same fiscal year. series 1990 bonds and Series 1993 bonds. 5. In June 1990, the City issued Electric Revenue Bonds 8. In August 2004, the City issued Electric Revenue refunding in the amount of $29,830,000 for partial defeasance of bonds in the amount of $22,535,000 to refund the 1985 Electric Revenue Refunding Bonds and for outstanding Electric Revenue Bonds Series 1990 and financing the Combustion Turbine Project. The debt Electric Revenue Refunding Bonds Series 1993. service for fiscal year 1991 reflects only the actual 136 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 20 City of Dover, Delaware Water/Wastewater Bond Coverage Revenue bonds Last Ten Fiscal Years Maximum Requirements Net Revenue Maximum Direct Available Debt Fiscal Gross Operating For Debt Service Actual Coverage Year Revenue Expenses Service Requirement Coverage Required 1998 $ 7,554,016 $ 6,059,855 $ 1,494,161 $ 1,484,797 1.01% 1.20% 1999 7,772,228 5,124,037 2,648,191 1,484,797 1.78% 1.20% 2000 8,236,506 5,777,844 2,458,662 1,484,310 1.66% 1.20% 2001 8,932,763 6,620,732 2,312,031 1,524,280 1.52% 1.20% 2002 9,639,256 6,185,232 3,454,024 1,524,380 2.27% 1.20% 2003 10,604,052 7,180,175 3,423,877 1,472,412 2.33% 1.20% 2004 10,101,660 7,608,196 2,493,464 1,553,713 1.60% 1.20% 2005 10,619,688 7,223,283 3,396,405 1,553,713 2.19% 1.20% 2006 12,372,563 7,805,396 4,567,167 1,551,228 2.94% 1.20% 2007 12,294,847 8,242,898 4,051,949 797,748 5.08% 1.20% Source: City of Dover Financial Records. NOTES 1. In January 1993 the City issued Water and Wastewater Revenue Refunding Bonds in the amount of $7,745,000. These bonds were issued to partially defease Water and Wastewater Revenue Bonds 1986 Series A, 1986 Series B, and fully defease all outstanding bonds of Series 1989. 2. In September 1993, the City issued Water and Sewer Revenue bonds in the amount of $4,595,000 through 1993 Series A. 3. The maximum debt service requirement presented above includes all outstanding revenue bonds including non-refunded Series 1993 ,1993 A and 2003. 4. Direct operating expenses do not include depreciation expense for coverage purposes as per the bond indenture. 5. The operating expenses for fiscal year 1997 include 18 months of Kent County Sewer fees. This was due to a change in the County's billing system. This extraordinary item is for this one year only. 6. In October 2003, the City issued Water and Sewer Revenue Bonds in the amount of $7,980,000. These bonds were issued to fully defease Water and Wastewater Revenue Bond Series 1986 B and to partially defease Water and Wastewater Revenue Bond Series 1993 and Series 1993 A and to provide approximately $1,600,000 for future capital projects. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 137

Statistical Section Table 21 City of Dover Demographic and Economic Statistics Last Ten Years Per Capita Personal Personal Median School Unemployment Year Population Income Income Age Enrollment Rate 1997 27,630 $ 389,721,150 $ 14,105 29.6 6,382 4.3% 1998 27,630 $ 389,721,150 $ 14,105 29.6 6,315 3.9% 1999 27,630 $ 389,721,150 $ 14,105 29.6 6,293 3.6% 2000 32,271 $ 627,509,595 $ 19,445 32.9 6,204 3.9% 2001 32,562 $ 633,168,090 $ 19,445 32.9 6,185 4.0% 2002 32,860 $ 638,962,700 $ 19,445 32.9 6,255 4.0% 2003 33,179 $ 645,165,655 $ 19,445 32.9 6,091 4.3% 2004 33,511 $ 651,621,395 $ 19,445 32.9 6,439 3.9% 2005 33,858 $ 658,368,810 $ 19,445 32.9 6,315 3.2% 2006 33,962 $ 660,391,090 $ 19,445 32.9 6,432 2.9% Population Source 1997-2000: U. S. Census Population Source 2003-2006: Delaware Population Consortium Per Capital Personal Income and Median Age Sources: 1990 and 2000 U. S. Census Personal Income Source: Estimation based on Population times Per Capita Personal Income School Enrollment Source: School Districts' Administrations based on census at start of school year Unemployment Rate Source: Delaware Department of Labor Statistics adjusted yearly average 138 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 22 City of Dover, Delaware Major Employers Current Year and Nine Years Ago NUMBER OF NUMBER OF NAME ACTIVITY EMPLOYEES EMPLOYEES 6/30/2007 06/30/1997 (1) Dover Air Force Base Government 8,000 8,610 (3) (4) State of Delaware Government 4,819 3,577 (2) Dover Mall LP Shopping Center 3,200 1,500 (5) Bayhealth Medical Center Health Care 2,008 1,246 Dover Downs Co., Inc. Race Track, Video Lottery & Hotel 1,061 410 Delaware State University Education 600 727 Capital School District Education 898 805 Playtex Products, Inc. Personal Care 720 972 Kraft Foods Inc. Food Manufacturer 520 924 City of Dover Government 391 352 Source: City of Dover Finance Department NOTES 1. Dover Air Force Base total includes active duty, reservists and civilian employees. 2. Figures from 2006 Central Delaware Economic Development Council report. 3. Some figures were estimated. 4. Number of employees in Kent County 5. Bayhealth Medical Center was previously listed as Kent General Hospital. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 139

Statistical Section Table 23 City of Dover Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007* Customer Services 16.5 16.5 16.0 16.0 16.0 16.0 16.0 16.0 14.0 16.0 Community Services - - - - - - - - - - Central Services 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 8.0 8.0 Facilities Management 8.0 9.0 9.0 11.0 11.0 12.0 13.0 13.0 12.0 12.0 Fleet Maintenance - 4.0 4.0 5.0 5.0 5.0 5.0 6.0 6.0 6.0 City Clerk 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 4.0 4.0 Mayor 1.5 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 City Manager 2.0 2.0 2.0 3.0 3.0 3.0 3.0 3.0 5.0 5.0 Finance 7.0 6.5 6.5 6.5 7.0 7.0 7.0 8.0 8.0 8.0 Fire 5.0 6.0 5.5 5.5 5.5 5.5 5.5 5.5 6.0 6.0 Human Resources 3.0 3.0 3.0 3.0 3.0 3.0 3.5 3.5 3.5 4.0 Information Technology 7.0 7.0 7.0 7.0 6.0 7.0 7.0 8.0 8.0 8.0 Parks and Recreation 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 Library 17.5 17.5 18.0 17.0 17.0 17.0 17.0 17.0 17.0 17.0 Delaware Prevention Network 1.0 1.0 1.0 1.0 2.0 2.0 2.0 1.0 - - Public Services, Weed and Seed - - - - 1.0 1.0 1.0 1.0 1.0 - Public Services, Planning 2.0 2.0 2.0 2.0 2.0 2.0 3.0 3.0 4.0 5.0 Public Services, Inspections 11.0 11.0 11.0 11.0 14.0 14.0 14.5 14.5 15.0 15.0 Pub. Serv., Community Development 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Police Civilian 25.0 26.0 31.0 31.0 31.0 30.0 29.0 29.0 29.0 29.0 Police Law Enforcement 81.0 81.0 81.0 81.0 81.0 81.0 85.0 87.0 90.0 91.0 Public Services, Administration 3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 4.0 Public Works E & I 2.0 2.0 2.0 2.0 2.0 2.0 3.0 3.0 - - Public Services, Grounds Maintenance 11.0 12.0 14.0 14.0 15.0 15.0 15.0 15.0 16.0 16.0 Public Services, Sanitation 12.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 Public Services, Streets 12.0 12.0 11.0 11.0 13.0 13.0 11.0 11.0 11.0 11.0 Tax Assessor 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 3.0 General Fund Total 245.5 253.5 259.0 262.0 269.5 271.5 277.5 281.5 283.5 288.0 Public Utilities, Electric Administration 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Public Utilities, Electric Engineering 20.0 21.0 19.0 19.5 20.5 21.5 18.5 19.5 20.5 20.5 Public Utilities, Transmission and Distribution 31.0 27.0 31.0 31.0 31.0 31.0 29.0 29.0 29.0 27.0 Public Utilities, Electric Meter Reading 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 Emergency Preparedness 4.0 4.0 1.0 1.0 1.0 1.0 - - - - Electric Tree Trimmers 5.0 5.0 5.0 5.0 5.0 5.0 - - - - Electric Fund Total 68.0 65.0 64.0 64.5 65.5 66.5 55.5 56.5 57.5 55.5 Public Utilities, Construction 12.0 12.0 14.5 18.0 12.0 10.0 8.0 8.0 8.0 8.0 Public Utilities, Wastewater Engineering - - - - - - - - 3.0 3.0 Public Utilities, Wastewater T & D 10.0 8.5 9.0 9.0 9.5 9.5 9.5 9.5 11.0 11.0 Public Utilities, Water T & D 10.0 8.5 9.0 9.0 9.5 9.5 4.5 4.5 5.0 5.0 Public Utilities, Water Treatment Plant 4.0 4.0 4.0 5.0 5.0 8.0 8.0 8.0 8.0 9.0 Water Meter Reading 2.0 2.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Water/Wastewater Fund Total 38.0 35.0 37.5 42.0 37.0 38.0 31.0 31.0 36.0 37.0 Total Full-Time Equivalents 351.5 353.5 360.5 368.5 372.0 376.0 364.0 369.0 377.0 380.5 Source: City of Dover Budget * Per Revised Budget 140 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 24 City of Dover, Delaware Operating Indicators and Capital Assets Used in Operations Last Ten Fiscal Years June 30, 1998 June 30, 1999 June 30, 2000 June 30, 2001 June 30, 2002 June 30, 2003 June 30, 2004 June 30, 2005 June 30, 2006 June 30, 2007 Date of Incorporation Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Feb. 16, 1829 Land area - Acres 14,344.30 14,355.30 14,379.04 14,382.79 14,382.79 14,406.68 14,571.35 14,714.60 14,674.58 14,914.27 Land area - Square Miles 22.413 22.430 22.467 22.473 22.473 22.5104 22.7677 22.991 22.929 23.303 Total Miles of Street 147.21 147.75 147.79 148.81 148.81 149.1 150.69 152.96 153.76 155.62 City Maintained Miles of Streets 87.86 88.4 88.44 89.46 89.46 89.75 91.34 93.61 94.41 96.27 State Maintained Miles of Streets 59.35 59.35 59.35 59.35 59.35 59.35 59.35 59.35 59.35 59.35 Population-U. S. Census data 27,630 27,630 27,630 32,135 32,135 32,043 32,043 32,043 32,043 32,043 Population-City Count 33,881 34,120 34,120 34,120 33,169 33,829 33,829 33,829 34,288 35,197 Registered Voters 18,516 18,637 22,076 20,387 20,381 19,850 18,259 18,714 19,502 19,084 Electric Utility: Generating Units 4 4 4 4 4 4 4 4 4 4 Co-Generating Unit 1 1 1 1 1 0 0 1 5 5 5 5 5 4 4 4 4 5 Generating Capacity 175 mw 175 mw 175 mw 175 mw 175 mw 175 mw 175 mw 175 mw 175 mw 176 mw Co-Generating Capactiy 16 mw 16 mw 16 mw 16 mw 16 mw 0 mw 0 mw 16mw 191 mw 191 mw 191 mw 191 mw 191 mw 175 mw 175 mw 175 mw 175 mw 191 mw Area of Service 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. 68 sq. mi. Substations 18 18 14 14 14 16 16 16 16 15 High Peak Load 149 mw 150 mw 157 mw 158 mw 171 mw 165 mw 163 mw 160 160 176 mw Customers: Residential 16,597 16,640 16,797 16,819 17,246 17,636 17,757 17,867 18,297 18,807 Commercial 2,452 2,499 2,468 2,488 2,626 2,836 2,915 2,813 3,280 3,535 Primary 41 39 32 32 32 30 33 32 32 38 Vapor Lights Only 821 854 853 858 865 874 874 867 867 872 69 KV Industrial 3 3 3 3 3 4 4 4 4 3 Municipal- Total number of meters 138 145 147 213 149 149 148 149 149 0 Total Customers Sales $ $45,270,583 $47,461,261 $50,028,090 $49,408,410 $52,555,412 $56,599,722 $57,151,810 $60,170,424 $63,844,353 $83,109,810 Total Customers Sales kWh 643,784,000 672,283,973 714,629,252 711,570,587 722,908,715 748,260,252 741,523,091 731,635,019 736,810,231 734,072,008 Purchased Power: From Duke Louis Dreyfus $ $26,999,365 $28,834,983 $31,664,769 $32,455,247 $34,377,595 $36,222,102 $37,675,178 $39,628,388 $41,871,486 $0 From Duke Louis Dreyfus kWh 641,917,409 708,299,000 758,626,663 744,657,254 774,177,780 778,715,700 780,677,900 767,750,050 781,466,220 0 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 (Volunteer 80 80 80 80 80 100 100 100 100 100 Equipment 16 16 16 16 13 15 15 11 14 14 (Continued) 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 141

Statistical Section Table 24 (Continued) June 30, 1998 June 30, 1999 June 30, 2000 June 30, 2001 June 30, 2002 June 30, 2003 June 30, 2004 June 30, 2005 June 30, 2006 June 30, 2007 Parks and Recreation: Major Parks 3 3 3 3 2 3 3 3 3 3 Small Parks 18 18 22 23 23 23 23 22 22 22 Police Department: Station 1 1 1 1 1 1 1 1 1 1 Substation 1 1 1 1 1 1 0 0 0 0 Uniformed Personnel 81 78 81 81 81 81 85 87 88 90 Automobiles 62 58 65 69 65 60 74 79 71 66 Motorcycles 5 5 5 5 5 5 5 5 5 5 Motor Boats 1 1 1 1 1 1 1 1 1 1 Bicycles 5 5 5 5 5 5 5 4 4 4 Specialty Vehicles 10 7 7 7 7 7 5 5 6 6 Trailers 5 5 5 5 4 3 3 3 4 4 Public Library: Books 84,541 90,673 96,017 101,609 85,594 93,340 97,820 101,631 111,496 120,203 Audiovisual Materials (VCRs, DVD 4,380 5,280 6,116 8,751 12,578 6,725 9,823 10,138 7,171 11,507 CDs, Cassettes, Recorded Books) Members 25,347 28,680 33,511 35,824 38,898 43,185 46,318 48,626 39,202 37,036 Magazines Subscriptions 310 306 285 285 285 289 359 359 359 359 Newspapers 24 24 12 12 12 10 12 12 12 15 Circulation of Books 308,639 307,412 295,298 305,809 307,533 327,310 348,269 398,842 398,666 400,336 Water Utility: Supply - Wells 21 21 21 13 15 22 22 22 22 22 Storage Tanks 6 6 6 6 6 6 6 6 6 6 Total Storage Capacity (gallons) 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 3,750,000 Water Mains (miles) 156 156 157 160 162 165 175 185 miles 176 miles 176 miles Average Daily Gallons Pumped 5,144,000 5,300,000 5,130,000 5,133,000 5,260,000 5,168,536 5,149,613 4,898,000 5,218,000 4,721,174 Peak Daily Gallons 8,191,000 8,456,000 8,645,000 7,847,000 8,770,000 8,194,800 7,400,000 8,421,000 8,358,000 8,672,000 Water Gallons - Pumped 1,877,000,000 1,935,000,000 1,847,000,000 1,816,000,000 1,898,129,650 1,890,466,700 1,879,000,000 1,788,000,000 1,904,666,300 1,869,585,000 Number of Metered Customers 10,818 11,004 11,126 11,407 11,670 10,999 11,150 11,625 11,764 11,962 Number of New Connections 263 173 298 475 139 198 Wastewater Utility: Pumping Stations 34 32 33 33 34 34 34 34 38 42 Wastewater Mains 140 miles 140 miles 140 miles 150 miles 150 miles 152 miles 155 miles 160 miles 185 miles 185 miles Average Daily Gallons 4,344,000 3,800,000 4,134,000 4,283,000 4,190,000 5,131,076 5,708,000 5,127,000 4,241,798 4,631,172 Peak Daily Gallons 5,238,000 4,600,000 5,228,000 5,170,000 4,530,000 7,000,000 7,000,000 5,983,000 Not Measured Not Measured Total Annual Gallons 1,585,000,000 1,387,000,000 1,509,000,000 1,564,000,000 1,530,000,000 1,872,843,000 2,083,000,000 1,871,000,000 1,548,256,115 1,722,795,930 Number of New Connections - - - - 236 133 250 350 Not Available Not Available Water Treatment Plant: Capacity 5.0 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 $3,103,642 $3,079,779 $3,070,128 $3,033,403 $3,145,235 $3,803,967 $3,769,635 $3,791,254 $4,289,413 $4,250,634 Wastewater Fees $1,935,520 $1,956,149 $2,224,211 $2,345,141 $2,227,758 $2,532,802 $2,521,499 $2,719,577 $2,605,428 $2,619,013 Wastewater Adjustment $2,436,182 $2,452,087 $2,512,562 $2,686,790 $2,814,587 $2,778,521 $2,743,359 $2,611,290 $3,865,683 $3,854,100 Sources: Various City departments 142 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 25 City of Dover, Delaware Population and Housing Summary Statistics For 2000 Dover Dover City Division Population 32,043 126,697 MSA Land area 22.4 Sq. Mi. 154.5 Sq. Mi. Median age 32.9 Yrs. 34.4 Yrs. Male 15,122 61,070 Female 17,013 65,627 White 17,655 93,106 Black 11,961 26,180 Native American 146 806 Asian 1,016 2,137 Other race 1,357 1,611 Hispanic origin 1,327 4,069 Family households 7,500 33,615 Non-family households 4,840 13,609 Married couple households 4,983 24,994 Female householders, no husband 2,061 6,530 Persons per household 2 3 Number of dwelling units 13,195 50,481 Single family dwelling units 5,982 12,029 Semi-detached dwelling units 1,960 2,389 Mobile homes 770 3,166 Owner occupied dwelling units 6,454 33,040 Median unit value $111,300 $114,100 Renter occupied dwelling units 5,886 14,184 Median contract rent $599 $375 Source: As a result of Count Question Resolution Process, the Census Bureau revised the 2000 population count for the City of Dover to 32,043 people. 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 143

Statistical Section Table 26 City of Dover, Delaware Property Value and Construction Last Ten Fiscal Years Fiscal Year Fiscal Year Number of Value of Building Building Assessed Property Value Year Permits Permits Taxable Non-taxable 1998 1,011 52,313,548 810,141,900 415,424,700 1999 1,100 69,820,835 835,281,800 415,109,400 2000 1,128 71,171,067 859,585,100 429,870,200 2001 1,239 106,469,263 876,493,100 465,530,500 2002 1,089 55,718,018 903,205,600 470,679,900 (2) 2003 1,021 65,556,895 1,705,751,800 504,226,700 2004 912 96,736,792 1,734,815,100 841,436,800 2005 2,760 69,102,159 1,764,347,700 841,290,300 (1) (3) 2006 2,653 91,769,464 2,527,308,500 618,435,300 2007 2,647 109,287,040 3,516,580,775 618,433,400 Sources: Permit Data - Inspection Department, City of Dover & Property Value - Tax Assessor, City of Dover NOTE 1. Total non-taxable of $618,433,400 for the fiscal year 2007, includes assessed value of $19,297,500 Senior Citizen exempt and $599,135,900 exempt properties. 2. In 2003 the City changed assessed values to 100% of estimated actual values from 60%. In doing so, the tax rate was lowered from $.685 to $.411 to stay revenue neutral. 3. In 2005, the City property values were reassessed, effective for tax year 2006. The tax rate was lowered from $.411 to $.330. 144 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 27 City of Dover, Delaware Number of Various Businesses Licensed Ten Calendar Years BUSINESS 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Attorneys 91 57 63 66 65 65 67 70 77 85 Barber Shops 7 1 5 5 4 4 4 5 5 6 Beauty Shops 46 47 53 37 37 40 41 43 46 49 Certified Public Accountants & Accountants 19 6 8 9 11 14 15 16 18 19 Contractors 777 475 483 589 604 670 673 795 903 833 Dentists 28 12 20 20 23 23 25 25 24 28 Eating Establishments 181 33 71 79 83 93 99 111 134 156 Merchants 506 203 215 236 237 257 279 301 325 361 Physicians & Surgeons 87 37 63 68 75 85 90 96 99 122 Real Estate Broker of Record 31 7 7 8 8 8 9 9 9 9 Other Categories 1,190 1,365 1,332 1,453 1,563 2,535 2,778 3,004 3,288 3,760 Totals 2,963 2,243 2,320 2,570 2,710 3,794 4,080 4,475 4,928 5,428 Source: City of Dover, Department of Inspections. “Other” category includes: Consulting and Customary Home Occupations 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 145

Statistical Section Table 28 City of Dover, Delaware Analysis of Development Projects, Permits, and Inspections Last Ten Fiscal Years The following types of units were approved: Type FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 Apartments 215 101 --- 204 77 240 492 72 288 168 Single Family 207 106 7 89 113 250 271 439 453 335 Single Family Duplexes 190 --- --- --- --- 74 68 72 190 --- Town Homes 323 --- 20 4 --- 256 169 227 160 --- Mobile Homes --- --- 5 12 --- --- --- --- --- --- Total 935 207 32 309 190 820 1000 810 1091 503 (1) The Planning Commission approved the following estimated square footage of projects: Sq. Feet Sq. Feet Sq. Feet Sq. Feet Sq. Feet Sq. Feet Sq. Feet Sq. Feet Sq. Feet Sq. Feet Type FY 1998 (1) FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 Office --- 44,985 50,022 101,719 35,983 77,641 147,484 133,936 69,395 139,378 Retail 302,460 23,773 141,644 275,131 26,195 89507 --- 3,420 127,018 206,589 Industrial 31,600 407,760 356,260 18,054 --- 17,771 161,800 13,176 --- 158,876 Institutional 167,740 322,004 279,314 192,260 188,835 149,463 508,729 55,309 52,854 478,124 Total 560,540 798,522 827,240 1,073,164 286,753 340,382 818,013 283,589 345,361 1,189,556 Source: City of Dover, Department of Inspections. 146 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 29 City of Dover, Delaware Crime Clearance Comparison National Average vs Dover Police Department Last Ten Calendar Years Cities with Population 25,000 to 49,999 Dover Dover Dover Dover Dover % % Actual % % Actual % % Actual % % Actual % % Actual Dover National Incidences Dover National Incidences Dover National Incidences Dover National Incidences Dover National Incidences 1997 1997 1997 1998 1998 1998 1999 1999 1999 2000 2000 2000 2001 2001 2001 Violent crime (total) 62.7% 49.8% 244 60.0% 50.0% 314 68.4% 49.2% 285 62.3% 48.7% 223 65.4% 51.0% 208 Murder None 69.8% - None 70.9% - 100.0% 72.8% 1 None 62.5% None 100.0% 77.9% 1 Aggravated Assault 74.7% 58.2% 158 74.9% 57.7% 187 82.0% 57.4% 150 73.6% 56.8% 140 76.6% 60.4% 128 Forcible Rape 62.5% 44.6% 16 80.0% 45.0% 29 73.7% 42.2% 40 81.3% 41.7% 16 62.5% 41.2% 16 Robbery 35.7% 29.5% 70 35.7% 30.4% 98 45.7% 29.8% 94 34.3% 30.0% 67 42.9% 31.3% 63 Property crime (total) 28.8% 19.8% 2,523 30.1% 19.1% 2,748 31.1% 19.3% 2,383 28.7% 18.6% 2,118 33.5% 18.6% 1,891 Burglary 28.6% 13.5% 224 29.4% 13.3% 218 32.6% 13.3% 227 23.9% 12.8% 176 40.5% 13.4% 153 Theft 30.8% 22.1% 2,097 31.4% 21.2% 2,299 32.7% 21.4% 1,979 29.8% 20.4% 1,750 34.1% 20.2% 1,621 Motor Vehicle Theft 8.2% 15.2% 170 16.7% 15.1% 209 7.9% 14.8% 152 15.6% 15.2% 160 11.0% 15.8% 100 Arson 6.3% 18.5% 32 27.3% 19.1% 22 36.0% 20.3% 25 56.3% 19.5% 32 41.2% 19.1% 17 Dover Dover Dover Dover Dover % % Actual % % Actual % % Actual % % Actual % Actual Dover National Incidences Dover National Incidences Dover National Incidences Dover National Incidences Dover Incidences 2002 2002 2002 2003 2003 2003 2004 2004 2004 2005 2005 2005 2006 2006 Violent crime (total) 63.8% 49.8% 229 70.6% 49.0% 278 62.0% 49.0% 273 71.0% 49.7% 226 77.2% 300 Murder 0.0% 72.3% 1 0.0% 66.4% 1 100.0% 69.3% 3 100.0% 69.2% 4 50.0% 2 Aggravated Assault 68.7% 58.7% 134 73.8% 57.8% 187 66.7% 57.9% 186 68.6% 59.0% 156 78.6% 229 Forcible Rape 58.3% 40.4% 24 76.7% 40.2% 29 80.0% 38.6% 17 86.3% 38.9% 22 90.9% 17 Robbery 57.1% 30.9% 70 59.0% 30.7% 61 41.8% 31.1% 67 59.1% 31.2% 44 63.5% 52 Property crime (total) 31.2% 18.8% 1,886 33.5% 18.7% 2,052 34.3% 19.8% 1,892 37.1% 18.7% 1,684 42.1% 1,764 Burglary 39.7% 12.8% 121 46.5% 12.7% 185 45.6% 12.8% 136 54.4% 12.7% 103 68.5% 149 Theft 32.0% 20.8% 1,643 33.0% 20.8% 1,751 34.6% 20.8% 1,628 37.0% 20.6% 1,460 41.3% 1,477 Motor Vehicle Theft 12.0% 15.4% 108 20.2% 14.7% 109 15.5% 15.3% 116 19.5% 15.5% 113 21.4% 126 Arson 21.4% 19.1% 14 21.4% 19.3% 7 41.7% 22.2% 12 87.5% 20.0% 8 25.0% 12 Source: City of Dover Police Department Annual Reports In 2004 Dover switched from the Uniform Crime Reporting (UCF) Program to the National Incident Based Reporting System (NIBRS) 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 147

Statistical Section Table 30 City of Dover, Delaware Number of Service Requests - Dover Police Department Last Ten Calendar Years SERVICE REQUESTS 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Alarms 2,390 2,559 2,749 2,490 2,345 2,632 2,394 2,299 2,253 2,359 Animal - - 793 961 1,081 1,026 952 1,254 1,213 1,034 Assist Other Agencies 230 235 370 357 413 468 502 555 537 454 Causalities 24 29 - - - - - - - - City Ordinance Violation Complaints - - - - - 33 43 121 77 120 Community Service Requests 249 672 462 164 774 1,104 1,140 695 418 213 Drug Overdose - - 15 15 30 33 23 26 24 36 Escorts, including City Hall- 2003 forward 34 11 11 - - - 422 419 441 384 Fire/Rescue Assists 434 459 - - - - - - - - Lock Jocks 2,392 2,282 2,400 2,293 2,157 2,241 2,435 2,480 2,467 1,964 Lost and Found Property 203 239 263 239 254 297 326 418 447 460 Loud Music - - - - - - 825 867 895 411 Megan’s Law (sex offender registration) - - 5 18 39 34 60 94 157 401 Mental Patients 141 178 175 148 122 221 263 261 198 221 Missing Persons 180 206 - - - - 470 303 330 343 Noise - - 827 237 410 433 461 440 435 973 No Parking Signs/Barricades 84 66 - - - - - - - - Property Check 142 141 172 112 564 417 365 163 115 128 Property Retrieval - - 113 72 160 157 175 181 223 177 Protection from Abuse Order Violations - - - - - - 46 58 70 60 Public Assistance - - 29 104 104 199 338 375 258 223 Sudden Death 22 25 39 17 19 36 27 23 28 19 Suicide (and attempts) 29 33 58 67 55 58 52 54 60 82 Traffic Request - - 229 207 177 123 130 133 226 244 Unsecured Buildings 76 81 71 68 74 53 92 81 63 102 Source: City of Dover Police Department Annual Reports 148 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

Statistical Section Table 31 City of Dover, Delaware Schedule of Insurance as of June 30, 2007 TYPE OF COVERAGE PROTECTION LIMIT IN DOLLARS 1. Property- Blanket coverage based on replacement cost of Real and Personal Property (all risks of physical loss or damage) including property of other City Departments. $81,550,327 Only fire, extended coverage, vandalism, and malicious mischief applicable to storage building on South State Street. $10,000 Deductible each loss applicable to all Real and Personal Property. Flood (all scheduled locations except if located in Flood Zones: A, B/shaded X, V & D) $2,000,000 $50,000 Deductible 2. Inland Marine- Miscellaneous Scheduled and Unscheduled Equipment Computer Equipment - $1,000 Deductible $500,000 Police Equipment - $1,000 Deductible $16,000 Unscheduled Equipment - $1,000 Deductible (Maximum any one item $5,000) $100,000 Employee Tools - $250 Deductible $62,500 3. General Liability- Each Event $1,000,000 General Total Limit $3,000,000 Personal Injury Each Person $1,000,000 Advertising Injury Each Person $1,000,000 Medical Expenses $0 Sexual Abuse Coverage $incl Sewer Back-Up - $0 Deductible $100,000 4. Automobile- Liability $1,000,000 Personal Injury Protection $300,000 Uninsured Motorist $1,000,000 Comprehensive - $500 Deductible-Specified Vehicles Collision - $1,000 Deductible-Specified Vehicles (Physical Damage Applies to Police & Specified Electric & Sanitation Trucks) Non-owned Liability $1,000,000 Hired Auto Liability $1,000,000 5. Employee Benefit Plans Administration Liability - Claims Made Retroactive Date: 7/1/1996 Total Limit $3,000,000 Each Wrongful Act Limit $1,000,000 Deductible $1,000 6. Law Enforcement Liability - Occurrence Total Limit $3,000,000 Each Wrongful Act $1,000,000 Deductible $5,000 7. Public Entity Management Liability - Claims Made Retroactive Date: 7/1/96 Total Limit $3,000,000 Each Wrongful Act Limit $1,000,000 Deductible $25,000 8. Employment Practices Liability - Claims Made Retroactive Date: 7/1/96 Total Limit $3,000,000 Each Wrongful Employment Practice Offense Limit $1,000,000 Deductible $25,000 (Continued) 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware 149

Statistical Section Table 31 (Continued) TYPE OF COVERAGE PROTECTION LIMIT IN DOLLARS 9. Crime Employee Theft Per Loss ($500 Deductible) $1,000,000 Forgery or Alteration ($1,000 Deductible) $100,000 Inside the Premises- Theft of Money & Securities ($500 Deductible) $25,000 Outside the Premises ($500 Deductible) $25,000 Computer Fraud ($1,000 Deductible) $100,000 Money Orders and Counterfeit Paper Currency $100,000 10. Boiler and Machinery Insurance (Excluding Power Plants) Coverage Limit Property Limit Deductible $10,000 Expediting Expenses $250,000 Pollution Cleanup & Removal $250,000 Spoilage $250,000 11. Umbrella General Total Limit $2,000,000 Products & Completed Work: Total Limit $2,000,000 Personal Injury $2,000,000 Advertising Injury $2,000,000 Law Enforcement Liability $2,000,000 Each Event Limit $2,000,000 Deductible Per Event $10,000 a. Umbrella Underlying Policies: General Liability $1,000,000/$3,000,000 Auto Liability $1,000,000 Law Enforcement Liability $1,000,000/$3,000,000 12. Excess Errors & Omissions Liability Protection - Claims Made Total Limit $2,000,000 Underlying Policies: Employee Benefit Plans Administration Liability: Each Wrongful Act Limit $1,000,000 Total Limit $3,000,000 Public Entity Management Liability: Each Wrongful Act Limit $1,000,000 Total Limit $3,000,000 13. POLLUTION LIABILITY: Includes: 2 underground storage tanks-710 Williams Street, Dover DE Claims Made Retroactive Date: 4/1/97 Limit-Each Claim $5,000,000 Limit -Aggregate $5,000,000 Deductible on underground storae tanks $5,000 Deductible on McKee Run & Van Sant Power Plants $25,000 14. EXCESS WORKER'S COMPENSATION Employers Liability Limit $1,000,000 Specific Limit: ($500,000 Retention) Statutory Aggregate Limit: $1,000,000 15. WORKER'S COMPENSATION - TPA SERVICES N/A 16. TRAVEL ACCIDENT POLICY Principal Sum $100,000 Deductible $0 17. BOND-SELF INSURED WORKER'S COMPENSATION STATE OF DELAWARE LIMIT $750,000 18. BOND PUBLIC OFFICIALS BOND City Clerk-Assistant Treasurer - Limit $100,000 Treasurer - Limit $100,000 Assistant City Clerk - Limit N/A 150 2007 Comprehensive Annual Financial Report for the City of Dover, Delaware

ACTION FORM PROCEEDING: Legislative, Finance, & Administration Committee AGENDA ITEM NO.: 12/10/2007 DEPARTMENT OF ORIGIN: Fire DATE SUBMITTED: 11/27/2007 PREPARED BY: Carter Knotts SUBJECT: Evaluation of Bids – Red Alert Computer Aided Fire Dispatching System Upgrade REFERENCE: N/A RELATED PROJECT: Alarm Room Renovation Project APPROVALS: City Manager and Finance Director EXHIBITS: N/A EXPENDITURE REQUIRED: $29,800 AMOUNT BUDGETED: $30,000.00 FUNDING SOURCE (Dept./Page in CIP & Budget): General Fund – Fire – Page 83 CIP TIMETABLE: N/A RECOMMENDED ACTION: Approve the contract with Alpine Software for Red Alert Computer Aided Fire Dispatching System Upgrade and GIS mapping module in the amount of $29,800. BACKGROUND AND ANALYSIS During the Emergency Communication Center upgrade, it was identified that the RedAlert Computer Aided Fire Dispatching System was in need of a system upgrade. This was budgeted during the Emergency Communications Center upgrade in FY 06/07; however, after the City Manager and Fire Chief met, it was decided that this project could be done in FY 07/08. The current software is outdated and does not comply with current NFPA requirements. The Fire Chief solicited a contract proposal from the current vendor. Alpine Software is the developer and exclusive vendor for Red Alert Software. Alpine quoted $25,605 for Red Alert upgrade and $4195 for GIS Module. Because this is an exclusive vendor no bids or proposals were solicited in accordance with Purchasing Policy. All sole vender contracts must be approved by City Council. The upgrade will provide the following: 1) Upgrading the current system to the newest system, which will be NFPA compliant. 2) A GIS mapping system to be utilized in the fire station and on the fire apparatus. Licenses 3) Custom Reporting 4) Training for the Fire Dispatchers 5) Complete data conversion This project is essential for dispatching during emergency calls.

ACTION FORM PROCEEDING: Legislative, Finance, & Administration Committee AGENDA ITEM NO.: 12/10/2007 DEPARTMENT OF ORIGIN: Fire DATE SUBMITTED: 11/28/2007 PREPARED BY: Carter Knotts, Fire Department SUBJECT: Evaluation of Bids - Firefighting Turnout Gear REFERENCE: N/A RELATED PROJECT: APPROVALS: City Manager/Finance Director EXHIBITS: N/A EXPENDITURE REQUIRED: $16,650 AMOUNT BUDGETED: $18,000 FUNDING SOURCE (Dept./Page in CIP & Budget): Fire – 110-1400-514.20-29 General page 306 TIMETABLE: N/A RECOMMENDED ACTION: Award Firefighting Turnout Gear purchase to Maryland Fire Equipment at $33,000, one-half of which will be paid by the City of Dover. BACKGROUND AND ANALYSIS The Fire Department requested bids under Bid #08-0044FD for the purchase of 20 sets of turnout gear (20 coats and 20 pants) for structural fire fighting through Central Services. The specification was provided by Chief Osika. It was the same specification used last year with some minor modifications due to new NFPA requirements. Three vendors submitted bids. Two vendors qualified, a third vendor was disqualified after consultations with the Assistant City Solicitor. The low bidder was Maryland Fire Equipment at $33,300.00; DP Fire & Safety’s bid was $35,820.00. The Fire Chief is satisfied with the low bidder. The City and the fire company split these cost with each paying half. The City budget will be charged $16,650 when payment is made to the vendor.

ACTION FORM PROCEEDING: Legislative, Finance, & Administration AGENDA ITEM NO.: 12/10/2007 DEPARTMENT OF ORIGIN: Public Services / Public Works DATE SUBMITTED: 11/27/2007 PREPARED BY: Scott D. Koenig, P.E., Public Services Manager SUBJECT: Evaluation of Bids – 70 Foot Aerial Truck – Bid Number 08-0045DPS REFERENCE: N/A RELATED PROJECT: N/A APPROVALS: City Manager, Finance Director EXHIBITS: N/A EXPENDITURE REQUIRED: $129,992.00 AMOUNT BUDGETED: $129,913.00 FUNDING SOURCE (Dept./Page of the Budget): Public Services Grounds Division / Page 252 . TIMETABLE: Issue award letter on Tuesday, December 11, 2007, pending Council approval. Delivery expected no later than 240 days from receipt of the purchase order by the vendor. Target delivery is July 2008. RECOMMENDED ACTION: Award a purchase order to Altec Industries, Inc. in the amount of $129,992.00 for the purchase of a 70 Foot Aerial Truck. Staff will prepare a budget adjustment to cover the $79.00 shortfall. BACKGROUND AND ANALYSIS Staff from the Public Services Group prepared a bid package and solicited sealed bids through the City’s Purchasing Agent to replace the aerial truck (Vehicle # 556) in the City Grounds Division fleet. Vehicle #556 is a 1992 International Aerial Truck which failed the last safety inspection because of cracks in the boom assembly and the truck has been removed from the fleet due to safety issues. Bids were opened on Tuesday, October 23, 2007, at 2:00 p.m. The following vendors submitted bids: Company Location Model Bid Amount Trade-In Net Price Altec Industries, Inc. Creedmoor, NC Altec LRV60-E70 $137,992.00 $8,000.00 $129,992.00 Morse Mfg. Inc. Sterling, MA Lift All LSS60-70-S $152,258.00 $13,500.00 $138,758.00 Dueco Waukesha, WI XT60/70 $156,092.00 none $156,092.00 The budgeted amount did not contemplate using a trade in, nor did the revenue budget include any revenue from the sale of the 1992 truck. The 1992 truck is fully depreciated. Using the trade in value will bring the truck very close to the budgeted amount. If the truck is sold at auction it may or may not yield $8000.00. Public Services staff recommends the low bidder Altec with trade-in of the old unit in the amount of $8,000.00.

CIP October 2007 Highlights General Fund All but two projects have started. The Pitts Center is moving along nicely; although we did experience some rain delays this past month. Carpeting in the Police Department has started. After many years of delays and patchwork the Police Department steps have been demolished and new steps are under construction. Water/Wastewater Fund All but three projects have started. Most are in some phase of design work or ordering material. I continue to list the Dover East Force Main as being “on hold.” We believe the necessity of this project has been satisfied through county and private improvements. We are progressing on installations of contact chambers; we are currently working on the well at the Dover Police Station. Electric Fund All but one project has started. The McKee Run Oil Tank was inspected and serious problems were detected. After many years of delay, serious work has started at the Mayfair Substation. The station has been taken out of service, and demolition work has begun in preparation of the Spring construction schedule. The College Road transformer has been ordered, but we are concerned that long lead times for delivery will delay completion of this project this fiscal year.

City of Dover General Fund - Major CIP Projects Oct-07 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Revised Project Project Current Fiscal Project Project To Date Budget % Budget Fiscal Yr. YTD Budget % Budget Type Description Budget Budget Expenses Balance Spent Budget Expenses Balance Spent Status Comments FY 2004 Exterior finish, interior walls under M Pitts Recreation Center $ 3,000,000 $ 3,000,000 $ 1,775,047 $ 1,224,953 59.2% $ 1,987,200 $ 849,005 $ 1,138,195 42.7% Started construction Totals $ 3,000,000 $ 3,000,000 $ 1,775,047 $ 1,224,953 59.2% $ 1,987,200 $ 849,005 $ 1,138,195 42.7% FY 2005 Dover Park Enhancements $ 60,000 $ 60,000 $ 13,330 $ 46,670 22.2% $ 46,670 $ - $ 46,670 0.0% Started First coat of paving done; finish in spring. Totals $ 60,000 $ 60,000 $ 13,330 $ 46,670 22.2% $ 46,670 $ - $ 46,670 0.0% FY 2008 CAMA (Orion) System Upgrade $ 45,000 $ 45,000 $ 5,254 $ 39,746 11.7% $ 45,000 $ 5,254 $ 39,746 11.7% Started Software being scheduled for installation Phone System Upgrade Fire 55,000 55,000 - 55,000 0.0% 55,000 - 55,000 0.0% Started December\January installation Red Alert Dispatching System Upgrade 30,000 30,000 - 30,000 0.0% 30,000 - 30,000 0.0% Started Contract going to Council in December JWP Center office equipment & furniture 78,500 78,500 - 78,500 0.0% 78,500 - 78,500 0.0% Not Started Millcreek\Schutte Playgrounds 40,000 40,000 - 40,000 0.0% 40,000 - 40,000 0.0% Started $20,000 grant approved New Street & Kirkwood Park Improvements 30,000 30,000 - 30,000 0.0% 30,000 - 30,000 0.0% Started Spring paving of BB courts 6 wheel box truck fire investigation unit 70,000 70,000 - 70,000 0.0% 70,000 - 70,000 0.0% Started Truck ordered Concrete Construction & Replacement 65,000 65,000 53,129 11,871 81.7% 65,000 53,129 11,871 81.7% Started Contracted work is done. Carpet Replacement 15,300 15,300 - 15,300 0.0% 15,300 - 15,300 0.0% Completed Done Police Front Steps 30,000 65,000 - 65,000 0.0% 65,000 65,000 0.0% Started Construction started Internet/Intranet expansion of online services 70,000 70,000 - 70,000 0.0% 70,000 - 70,000 0.0% Started Server installed; staff trainng on-going Citywide document imaging system 80,000 80,000 - 80,000 0.0% 80,000 - 80,000 0.0% Started Negotiating with vendor Citywide fleet management system 41,400 41,400 - 41,400 0.0% 41,400 - 41,400 0.0% Started Meeting with staff; designing RFP Replace ISeries system 40,000 40,000 22,877 17,123 57.2% 40,000 22,877 17,123 57.2% Completed Done Upgrade/replacement of inner city fiber optic loo 122,000 122,000 - 122,000 0.0% 122,000 - 122,000 0.0% Started Construction started Fire Suppression System in IT 27,000 27,000 - 27,000 0.0% 27,000 - 27,000 0.0% Started Vendor selected Space needs study Implementation 32,800 32,800 11,104 21,696 33.9% 32,800 11,104 21,696 33.9% Started Finance done; conference room started Exhaust extraction system 25,000 25,000 - 25,000 0.0% 25,000 - 25,000 0.0% Not Started Seeking vendors Totals $ 897,000 $ 932,000 $ 92,364 $ 839,636 9.9% $ 932,000 $ 92,364 $ 839,636 9.9% Grand Totals $ 3,957,000 $ 3,992,000 $ 1,880,741 $ 2,111,259 47.1% $ 2,965,870 $ 941,369 $ 2,024,501 31.7% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is rebudgeted to start over each fiscal year. CIP Report - Oct. 2007 147 12/5/2007

City of Dover Streets Funds - Major CIP Projects October 2007 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Revised Project Project Current Revised Fiscal Project Project To Date Budget % Budget Fiscal Yr. Fiscal Yr. YTD Budget % Budget Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Balance Spent Status Comments FY 2002 North Street Sidewalk $ 654,629 $ 819,120 $ 738,704 $ 80,416 90.2% $ 80,416 $ 80,416 $ - $ 80,416 0.0% Not started Work on hold pending Collegiate decision Clara Street turn lane 170,916 187,949 134,997 52,952 71.8% 52,952 52,952 - 52,952 0.0% Not started (1) See below. Totals $ 825,545 $ 1,007,069 $ 873,701 $ 133,368 86.8% $ 133,368 $ 133,368 $ - $ 133,368 0.0% FY 2005 Dover Little League Awaiting staff decision on re-appropriation of Parking Lot Phase II $ 134,000 $ 134,000 $ 123,215 $ 10,785 92.0% $ 10,785 $ 10,785 $ - $ 10,785 0.0% Done available funds The signs for Fox Hall & Woodlands of Fox Fox Hall signs/Lincoln Park Hall are complete. Work not started for sign 20,340 20,340 10,340 10,000 50.8% 10,000 10,000 - 10,000 0.0% Done Lincoln Park. Totals $ 154,340 $ 154,340 $ 133,555 $ 20,785 86.5% $ 20,785 $ 20,785 $ - $ 20,785 0.0% - FY 2006 Silver Lake Park Sign $ 16,400 $ 16,400 $ - $ 16,400 0.0% $ 16,400 $ 16,400 $ - $ 16,400 0.0% Not started 10% received from State. Work not started. Capitol Park/ Rodney Village Signs 20,000 19,205 19,206 (1) 100.0% 8,244 8,244 8,245 (1) 100.0% Done Done Heatherfield Sign./ Voshells 20,000 20,000 7,611 12,389 38.1% 15,380 15,380 2,991 12,389 19.4% Done Done Cowgill St. 25,000 25,000 - 25,000 0.0% 25,000 25,000 - 25,000 0.0% Not started 10% received from State. Work not started. Morris Dr. 79,000 79,000 - 79,000 0.0% 79,000 79,000 - 79,000 0.0% Not started 10% received from State. Work not started. M Lincoln Park Center (317) 400,000 400,000 238,358 161,642 59.6% 161,642 161,642 - 161,642 0.0% Totals $ 560,400 $ 559,605 $ 265,175 $ 294,430 47.4% $ 305,666 $ 305,666 $ 11,235 $ 294,431 3.7% - - FY 2007 E. Water St. brick sidewalk $ 65,000 $ 65,000 $ - $ 65,000 0.0% $ 65,000 $ 65,000 $ - $ 65,000 0.0% Not started 10% received from State. Work not started. Dover Fire Company Received 10% on orig. agreement; awaiting parking lot 80,000 100,000 - 100,000 0.0% 100,000 100,000 - 100,000 0.0% Not started decision on funding reallocation. Andrew Dr./ G. Washington Dr./ Maple Dale Ave. 200,600 200,600 - 200,600 0.0% 200,600 200,600 - 200,600 0.0% Started 10% received from State. Work not started. Penn. Ave./ West St. Alleys 36,900 36,900 - 36,900 0.0% 36,900 36,900 - 36,900 0.0% Not started 10% received from State. Work not started. Maryland Ave. 25,000 25,000 - 25,000 0.0% 25,000 25,000 - 25,000 0.0% Not started 10% received from State. Work not started. Bedford Drive 1,580 1,580 - 1,580 0.0% 1,580 1,580 - 1,580 0.0% Not started $ 409,080 $ 429,080 $ - $ 429,080 0.0% $ 429,080 $ 429,080 $ - $ 429,080 0.0% FY 2008 Wesley College Parking lot improvements $ 169,424 $ 169,424 $ 152,677 $ 16,747 90.1% $ 169,424 $ 169,424 $ 152,677 $ 16,747 90.1% Done Done Totals $ 169,424 $ 169,424 $ 152,677 $ 16,747 90.1% $ 169,424 $ 169,424 $ 152,677 $ 16,747 90.1% Grand Totals $ 2,118,789 $ 2,319,518 $ 1,425,108 $ 894,410 61.4% $ 1,058,323 $ 1,058,323 $ 163,913 $ 894,410 15.5% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is rebudgeted to start over each fiscal year. CC = Construction complete. (1) Improvements complete except for Clara Street. This agreement was revised to $187,949 from 170,916 with the General Fund covering overage on Oakmont Drive for $16,915 and $118 for Dover Little League Parking lot. Since the other 2 streets came in under, suggest redistribution of funds to reduce General Fund appropriation from $17,033 to $4,081. That will leave $52,951.70 for Clara Street turn lane. PW staff is considering options for FY 08 street program. CIP Report - Oct. 2007

City of Dover Water/Wastewater Improvement & Extension Fund - Major CIP Projects October 2007 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Revised Project Project Current Fiscal Project Project To Date Budget % Budget Fiscal Yr. YTD % Budget Type Description Budget Budget Expenses Balance Spent Budget Expenses Spent Status Comments FY 2005 M Inflow/Infiltration Removal Investigation $ 375,000 $ 650,000 $ 120,049 $ 529,951 18.5% $ - $ - 0.0% Started Study done; project design Totals $ 375,000 $ 650,000 $ 120,049 $ 529,951 18.5% $ - $ - 0.0% FY 2006 M Scarborough Road Interconnection Ph II $ 120,000 $ 122,500 $ 51,159 $ 71,341 41.8% $ 72,500 $ - 0.0% Started Phase I done; Phase II in design. Totals $ 120,000 $ 122,500 $ 51,159 $ 71,341 41.8% $ 72,500 $ - 0.0% FY 2007 M Cheswold Well (#8) Replacement $ 175,000 $ 175,000 $ 17,085 $ 157,915 9.8% $ - $ 11,802 0.0% Started Awaiting permits Bayard Avenue Contact Chamber - 76,044 79,843 (3,799) 105.0% 9,800 8,799 89.8% Done Done Totals $ 175,000 $ 251,044 $ 96,928 $ 154,116 38.6% $ 9,800 $ 20,601 210.2% FY 2008 Wellhead Redevelopment $ 45,000 $ 45,000 $ - $ 45,000 0.0% $ 45,000 $ - 0.0% Started Proceeding to RFP Remote Control & Monitor Wells 139,700 139,700 2,428 137,272 1.7% 139,700 2,428 1.7% Started One of seven wells done Emergency Generators (Wells) 140,000 140,000 - 140,000 0.0% 140,000 - 0.0% Not Started 1.0 MG Elevated Water Storage Tower 55,000 55,000 450 54,550 0.8% 55,000 450 0.8% Not Started Piney Point Well 10,000 10,000 - 10,000 0.0% 10,000 - 0.0% Not Started Misc. Distribution System Improvements 55,000 55,000 19,412 35,588 35.3% 55,000 19,412 35.3% Started On-going improvements South Gov. Ave Water Main Upgrade 200,000 200,000 - 200,000 0.0% 200,000 - 0.0% Started In Office of Drinking Water review Wellhead VFD Upgrades 126,000 126,000 - 126,000 0.0% 122,000 - 0.0% Started Going out to bid in November Meter Reading Tech Upgrade 366,300 366,300 83,028 283,272 22.7% 366,300 83,028 22.7% Started On-going replacement Inflow/Infiltration Removal 100,000 100,000 - 100,000 0.0% 100,000 - 0.0% Started In design Scada System Tech Upgrade 74,000 74,000 - 74,000 0.0% 74,000 - 0.0% Started Equipment ordered Lafferty Lane Package P/S Replacement 230,000 230,000 3,052 226,948 1.3% 230,000 3,052 1.3% Started In design with KSI White Oak Farms PS VFD's 66,000 66,000 - 66,000 0.0% 66,000 - 0.0% Started Design spec's to purchasing Dover East P/S & Force Main Replace 335,000 335,000 - 335,000 0.0% 335,000 - 0.0% On Hold May be dropped; no longer necessary. Misc. Sewer System Improvements 30,000 30,000 - 30,000 0.0% 30,000 - 0.0% Started On-going improvements South Governors Ave Sewer Main 300,000 300,000 825 299,175 0.3% 300,000 825 0.3% Started In DNREC review US 13 East Sanitary Sewer Interceptor 85,000 85,000 2,389 82,611 2.8% 85,000 2,389 2.8% Started Working with Mall on easements. Water Quality Improve FY 08 915,000 910,000 18,032 891,968 2.0% 905,200 18,032 2.0% Started Working on third contact chamber Totals $ 3,272,000 $ 3,267,000 $ 129,616 $ 3,137,384 4.0% $ 3,258,200 $ 129,616 4.0% - - Grand Totals $ 3,942,000 $ 4,290,544 $ 397,750 $ 3,892,794 9.3% $ 3,340,500 $ 150,217 4.5% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is rebudgeted to start over each fiscal year. CIP Report - Oct. 2007 417 12/5/2007

City of Dover Electric Improvement & Extension Fund - Major CIP Projects October 2007 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Revised Project Project Current Fiscal Project Project To Date Budget % Budget Fiscal Yr. YTD % Budget Type Description Budget Budget Expenses Balance Spent Budget Expenses Spent Status Comments FY 2003 Material ordered; demoliton started; M Mayfair 69kv/12kv SS Upgrade $ 555,000 $ 617,965 $ 562,178 $ 55,787 91.0% $ 65,000 $ 196,655 302.5% Started project end first quarter 08 Totals $ 555,000 $ 617,965 $ 562,178 $ 55,787 91.0% $ 65,000 $ 196,655 302.5% FY 2005 All materials purchased; ongoing M Radio Read Meter replacement Prog. $ 1,830,000 $ 1,830,000 $ 1,782,004 $ 47,996 97.4% $ 545,000 $ 498,342 91.4% Started installation. Construction on-going; completion end of Mayfair to Mid-City 69 kv 650,000 723,200 443,323 279,877 61.3% - - 0.0% Started fiscal year. Totals $ 2,480,000 $ 2,553,200 $ 2,225,327 $ 327,873 87.2% $ 545,000 $ 498,342 91.4% FY 2006 M 69 KV feeders 3 and 4 $ 11,060,000 $ 14,747,500 $ 707,794 $ 14,039,706 4.8% $ 9,077,500 $ 510,462 5.6% Started Material ordered; preparing labor spec's. Governor's Avenue Rebuild 1,268,450 2,068,260 52,866 2,015,394 2.6% 2,068,260 52,866 2.6% Started Material being drawn by contractor College Road Capacitor 155,000 119,995 5 119,990 0.0% - - 0.0% Dropped Changed to Distribution Capacitors Replacement of 69 KV line breakers - M North Street 150,000 230,000 188,003 41,997 81.7% - 39,343 0.0% Started 3 of 4 done Totals $ 12,633,450 $ 17,165,755 $ 948,667 $ 16,217,088 5.5% $ 11,145,760 $ 602,670 5.4% FY 2007 M Lebanon Transformer $ 620,000 $ 851,850 $ 217,170 $ 634,680 25.5% $ 637,950 $ 3,270 0.5% Started In design; secondary material ordered. R Lighting Project & Rehab (Gov Ave) 50,000 50,000 6,361 43,639 12.7% - - 0.0% Done Lights done at Wesley Blue Light Security System Call box 25,000 25,000 22,142 2,858 88.6% - 13,755 0.0% Started 2 of 3 installed McKee Run Transformer 350,000 350,000 301,011 48,989 86.0% - 5,074 0.0% Done Completed Bid awarded; may be longer delivery than M College Road Substation 2,960,000 2,960,000 90,979 2,869,021 3.1% 2,435,000 26,149 0.0% Started planned. M Transmission Relaying Upgrades Ph I 100,000 100,000 66,964 33,036 67.0% - 39,935 0.0% Sarted Installation started Totals $ 4,105,000 $ 4,336,850 $ 704,628 $ 3,632,222 16.2% $ 3,072,950 $ 88,184 2.9% FY 2008 Unit 3 Turb Bearing Fire Protect Deluge $ 50,000 $ 50,000 $ - $ 50,000 0.0% $ 50,000 $ - 0.0% Not Started Tank Inspections SPCC/AST 300,000 300,000 117,124 182,876 39.0% 300,000 117,124 39.0% Started Inspection done; repairs planned. VS COMS replacement 27,000 27,000 24,280 2,720 89.9% 27,000 24,280 89.9% Started Installation started M Horsepond Transformer 1,020,000 1,020,000 - 1,020,000 0.0% 325,000 - 0.0% Started Material ordered R Distribution Capacitors OH/UG 225,000 225,000 - 225,000 0.0% 225,000 - 0.0% Started Capacitors on order; design on-going. M Transmission Relay Upgrade FY 08 520,000 520,000 207,444 312,556 39.9% 520,000 207,444 39.9% Started Installation started R New Developments 1,015,000 1,015,000 173,746 841,254 17.1% 1,015,000 173,746 17.1% Started On-going R Replacement of 69 KV line breakers 183,000 183,000 - 183,000 0.0% 183,000 - 0.0% Started Material in; waiting to schedule work. Survey work complete; material to R Lighting Project & Rehab 100,000 100,000 597 99,403 0.6% 100,000 597 0.6% Started Council. M St Jones Substation Transformer 2,166,039 2,166,039 16,429 2,149,610 0.8% - 16,429 0.0% Started Currently in Kent Acres; Woodmill R Distribution Upgrades FY 08 300,000 300,000 221,400 78,600 73.8% 300,000 221,400 73.8% Started complete. $ 5,906,039 $ 5,906,039 $ 761,020 $ 5,145,019 12.9% $ 3,045,000 $ 761,020 25.0% Grand Totals $ 25,679,489 $ 30,579,809 $ 5,201,821 $ 25,377,988 17.0% $ 17,873,710 $ 2,146,871 12.0% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is rebudgeted to start over each fiscal year. \\Dover_1\public docs\Council Action Forms\2007\CIP Report - Oct. 2007 487 12/5/2007

ACTION FORM PROCEEDING: City Council AGENDA ITEM NO.: 12/10/2007 DEPARTMENT OF ORIGIN: Public Utilities – Electric Division DATE SUBMITTED: 11/29/2007 PREPARED BY: Ronald H. Lunt, Public Utilities Director SUBJECT: Evaluation of Bids - Fiber Optic Splicing Contract REFERENCE: N/A RELATED PROJECT: N/A APPROVALS: City Manager, Finance Director EXHIBITS: N/A EXPENDITURE REQUIRED: As Needed AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): Possibly both Electric Eng. and T&D Division “Contractual Services” operation budgets such as 480-8200-562-30-31 (Electric T&D); 480-8300-563-30-31 (Electric Eng.); or Capital project funding if applicable. TIMETABLE: Contract to be issued upon final approval. RECOMMENDED ACTION: Staff recommends awarding a one year blanket Fiber Optic contract, with a City option to extend it an additional two years (three years total), to Goldhorn Electrical Construction, Inc. BACKGROUND AND ANALYSIS The Public Utilities Department maintains blanket contracts with potential contractors to ensure that the bidding rules are adhered to for any contractors that might be hired to perform work for the Utility Department. These contracts are priced as a “time and material” contract and may exceed $25,000 annually. This bid is for fiber optic splicing which includes splicing, terminating, and related equipment. Staff does not have the equipment to perform the splicing and because of the limited amount of splicing required it is not feasible to purchase the equipment. Bids were solicited and advertised according to City Policy by the City’s Contract and Procurement Manager under Bid #08-0040DPU and bids were received from three potential vendors. One vendor submitted an unacceptable bid form and was deemed nonresponsive. The two remaining vendors were evaluated assuming a two day splicing job to determine the low bidder; the specifics of this analysis are below. The duration of the bid is a one (1) year contract with the possibility of the City extending it for a second (2nd) and third (3rd) year. Henkles & McCoy, Inc. Goldhorn Electrical Construction, Inc. $per Hr $per Hr Cable Splicer $62.07 $73.50 Splicing Van/Trailer $21.43 Included w/ Splicer Splicing Equipment $16.78 Included w/ Splicer OTDR $19.58 Included w/ Splicer Power Meter $19.58 Included w/ Splicer Total cost per hour $139.44 $73.50 Total project cost based on a 16 hour project $2,231.04 $1,176.00

ACTION FORM PROCEEDING: City Council AGENDA ITEM NO.: 12/10/2007 DEPARTMENT OF ORIGIN: Public Utilities – Electric Eng. DATE SUBMITTED: 10/26/2007 PREPARED BY: Ron Lunt, Public Utilities Director SUBJECT: Evaluation of Bids – Line Hardware - Feeders 3 & 4 REFERENCE: N/A RELATED PROJECT: N/A APPROVALS: City Manager, Finance Director EXHIBITS: Bid Submission and Tracking Report EXPENDITURE REQUIRED: $289,305.26 AMOUNT BUDGETED: $9,457,788 FUNDING SOURCE (Dept./Page in CIP & Budget): Public Utilities – Electric Engineering, 69 Kv Feeders 3 and 4, CIP page 227R, Account 487-8300-563-90-26, Project EE0601. TIMETABLE: Materials to be ordered upon Council approval. RECOMMENDED ACTION: Staff recommends awarding the bid to National Electrical Systems, Inc., for the amount of $289,305.26. BACKGROUND AND ANALYSIS The materials to be ordered are non-stock transmission and distribution materials for Phase I of the project. These materials will be installed on the overhead and underground line from Cartanza Substation to St. Jones Substation. Bids were advertised according to City Policy by the City’s Purchasing Agent under Bid # 08-0041DPU. The City received two (2) bid responses; however, one bid was received after the 2:00 p.m. deadline and could not be accepted. The one responsive bid was evaluated by staff and appeared to be fair and reasonable; therefore, staff recommends that the bid be awarded to the sole bidder, National Electrical Systems, Inc. Furthermore, there were a few minor changes to the line design after the material list was issued for bid. This will result in an escalation of the quantities of a few of the bid items, which in compliance with the purchasing policy, can be accomplished after bid award with the approval of the City Manager. This adjustment would be approximately $7,500; this expense is not included in the bid award price.

TRACKING REPORT PROJECT: 69 FEEDERS 3 & 4 Account Number - 487-8300-563.90-26 Project Number - EE0601 Budgeted Amount for FY 07/08 $9,457,788 2008-2012 Capital Investment Plan Page 227R Name of Action Form/ Date Approved Council/Committee Vendor Expenditure Amount 06/11/07 Approved by Council Authorization to Purchase Cartanza Right-of-Way - Includes $17,649 $17,649.28 for the easement and $32,350.72 for the woodland clearance and all future spraying. Remainder of $32,350.72 will be when the woodland area is cleared. 08/13/07 Approved by Council Eval.of Bid - 69KV Underground Cable - Purchased 3,732' of 69KV $240,950 underground cable and 2,940' of 5KV underground cable. Awarded to HD Supply. Engineering Service Fees Incurred To Date $245,040 10/22/07 Approved by Council Eval. of Bid - Tapered Steel Structures - To purchase poles and $1,078,747 caisson bases in order to construct the transmission lines for Feeders 3 & 4. Staffs estimated cost for this item was $1,051,000. Bid awared to low bidder, Pelco Structual. 10/22/07 Approved by Council Eval. of Bid - Cartanza Relay Panels - To purchase (2) relay panels, $33,654 misc. connecting materials, and freight expense. Relay cables have not yet been purchased which are estmated to be less than $10,000. Staffs estimated cost for these items was $65,000. Bid awarded to low bidder, Schweitzer Engineering Laboratories, Inc. 11/13/07 Approved by Council Eval. Of Bid - 795 ACSR - The purchase of 207,396' of aerial $310,679 conductors for Phase I (Cartanza Sub. To St. Jones Sub.) Staff estimated the total cost of wire to be $607,000. An additional $12,358 was incurred via a purchase order. Recommendation is to award to low bidder, American Wire Group. 11/13/07 Approved by Council Eval. Of Bid - Laminated Wood Poles - Puchase thirty-three $260,297 (33) wooden poles (N. Little Creek Rd. to St. Jones Substation) for Phase I. Staff estimated this cost at $272,000. Recommendation is to award to low bidder, Laminated Wood Systems. 11/13/07 Approved by Council Eval. Of Bid - Insulators - 126 Suspension Insulators and 528 $98,880 Horizontal Post Insulators for Phase I. Recommendation is to award to low bidder, Paresuorces, Inc. Pending Council Approval Eval. Of Bid - Substation Structures - Materials needed to $99,957 modify the substation; structural steel, switches, breaker, buswork, and related ground materials. Pending Council Approval Eval. Of Bid - Line Hardware - These are non-stock materials $289,305 for Phase I and will be installed on the overhead & underground line from Cartanza Sub. to St. Jones Sub. AMOUNT APPROVED FOR EXPENDITURE FOR 07/08 $2,675,159

ACTION FORM PROCEEDING: City Council AGENDA ITEM NO.: 12/10/2007 DEPARTMENT OF ORIGIN: Public Utilities – Electric Division DATE SUBMITTED: 11/30/2007 PREPARED BY: Ronald H. Lunt, Public Utilities Director SUBJECT: Evaluation of Bid – Cartanza Substation Structures REFERENCE: NA RELATED PROJECT: 69 KV Feeders 3 & 4 APPROVALS: City Manager, Finance Director EXHIBITS: Tracking Report EXPENDITURE REQUIRED: $99,956.76 AMOUNT BUDGETED: $9,457,788 FUNDING SOURCE (Dept./Page in CIP & Budget): Public Utilities – Electric Engineering, 69 Kv Feeders 3 and 4, CIP page 227 R, Account 487-8300-563-90-26, Project EE0601 TIMETABLE: Material to be ordered upon Council approval. RECOMMENDED ACTION: Staff recommends awarding the bid to the low bidder, HD Supply Utilities, for the amount of $99,956.76. BACKGROUND AND ANALYSIS These materials were originally bid under Bid #08-0023DPU and approved by Council on 10-22-07; however, prior to the bid award it was discovered that one bid submission originally declared nonresponsive did meet the bid specifications and should have been evaluated. Due to an oversight it was not considered or evaluated. In fairness to the bidders it was decided to reject all bids, which is allowed under the bid documents, and rebid the materials. The materials to be ordered are the structural steel, switches, breaker, buswork, and related grounding materials needed to modify Cartanza Substation for the operation of Feeders 3 & 4. This equipment will be installed as part of the 69 Kv Feeders 3 & 4 project. Bids were advertised according to City Policy by the City’s Purchasing Agent under Bid # 08-0051DPU. The City received three (3) bid responses that were evaluated by staff and Shaw Engineering. Below is the summary of the three (3) bids. Bidder Price HD Supply Utilities $99,956.76 Associated Substation Engineering $102,750.00 V&S Clark Substations $110,185.00

TRACKING REPORT PROJECT: 69 FEEDERS 3 & 4 Account Number - 487-8300-563.90-26 Project Number - EE0601 Budgeted Amount for FY 07/08 $9,457,788 2008-2012 Capital Investment Plan Page 227R Name of Action Form/ Date Approved Council/Committee Vendor Expenditure Amount 06/11/07 Approved by Council Authorization to Purchase Cartanza Right-of-Way - Includes $17,649 $17,649.28 for the easement and $32,350.72 for the woodland clearance and all future spraying. Remainder of $32,350.72 will be when the woodland area is cleared. 08/13/07 Approved by Council Eval.of Bid - 69KV Underground Cable - Purchased 3,732' of 69KV $240,950 underground cable and 2,940' of 5KV underground cable. Awarded to HD Supply. Engineering Service Fees Incurred To Date $245,040 10/22/07 Approved by Council Eval. of Bid - Tapered Steel Structures - To purchase poles and $1,078,747 caisson bases in order to construct the transmission lines for Feeders 3 & 4. Staffs estimated cost for this item was $1,051,000. Bid awared to low bidder, Pelco Structual. 10/22/07 Approved by Council Eval. of Bid - Cartanza Relay Panels - To purchase (2) relay panels, $33,654 misc. connecting materials, and freight expense. Relay cables have not yet been purchased which are estmated to be less than $10,000. Staffs estimated cost for these items was $65,000. Bid awarded to low bidder, Schweitzer Engineering Laboratories, Inc. 11/13/07 Approved by Council Eval. Of Bid - 795 ACSR - The purchase of 207,396' of aerial $310,679 conductors for Phase I (Cartanza Sub. To St. Jones Sub.) Staff estimated the total cost of wire to be $607,000. An additional $12,358 was incurred via a purchase order. Recommendation is to award to low bidder, American Wire Group. 11/13/07 Approved by Council Eval. Of Bid - Laminated Wood Poles - Puchase thirty-three $260,297 (33) wooden poles (N. Little Creek Rd. to St. Jones Substation) for Phase I. Staff estimated this cost at $272,000. Recommendation is to award to low bidder, Laminated Wood Systems. 11/13/07 Approved by Council Eval. Of Bid - Insulators - 126 Suspension Insulators and 528 $98,880 Horizontal Post Insulators for Phase I. Recommendation is to award to low bidder, Paresuorces, Inc. Pending Council Approval Eval. Of Bid - Substation Structures - Materials needed to $99,957 modify the substation; structural steel, switches, breaker, buswork, and related ground materials. Pending Council Approval Eval. Of Bid - Line Hardware - These are non-stock materials $289,305 for Phase I and will be installed on the overhead & underground line from Cartanza Sub. to St. Jones Sub. AMOUNT APPROVED FOR EXPENDITURE FOR 07/08 $2,675,159

ACTION FORM PROCEEDING: City Council AGENDA ITEM NO.: 12/10/2007 DEPARTMENT OF ORIGIN: Public Utilities – Electric T&D DATE SUBMITTED: 11/29/2007 PREPARED BY: Ronald H. Lunt, Public Utilities Director SUBJECT: Request for Proposals - Flame Resistant Clothing Rental Contract REFERENCE: N/A RELATED PROJECT: N/A APPROVALS: City Manager, Finance Director EXHIBITS: N/A EXPENDITURE REQUIRED: $18,465 AMOUNT BUDGETED: $34,658 FUNDING SOURCE: FY 08 Operation Budgets - Uniforms: (480-8200-562-20-29) (480-8300-563-20-29) (480-8500-565-20-29) TIMETABLE: Contract to be executed upon Council approval. RECOMMENDED ACTION: Staff recommends awarding a 4 year contract with option to extend 2 additional years to Uni-First for $18.21 per eligible employee. BACKGROUND AND ANALYSIS The Electric Division operates and maintains the substations, transmission and distribution electrical system. In doing such, management is responsible for the safety of the workers and is required to provide proper Personal Protection Equipment (PPE). The APPA Safety Manual mandates that employers ensure that employees wear clothing that does not increase the extent of injury during an electric arc or flash. The only way to comply with this is to provide Fire Resistant (FR) clothing, which has been an industry standard for many years. Additionally, the National Fire Protection Association has passed new regulations (NEC 70 E) that will result in citations for companies that do not provide proper FR clothing. The Request for Proposals for vendors that provide FR clothing was solicited and advertised according to City Policy by the City’s Contract and Procurement Manager under Bid #08-0009DPU. Four vendors responded to this request; two were either incomplete or in noncompliance to the required specifications or bid instructions and not considered. An employee/management committee was formed and interviewed the two remaining companies. Both were considered responsive and could provide quality, conforming products. They were asked to provide their best and final offer. Staff recommends that the contract be awarded to Uni-First as they had the lowest cost offer. The vendor will supply 11 shirts and pants, 2 unlined jackets, 2 lined jackets and 2 pairs of bibs overalls and cleaning service. All electric employees that could be exposed to an electrical arc will be required to wear these uniforms. This includes the Line Crew, Meter Technicians, Meter Readers, and Substation Technicians which will typically include 39 employees. Vendor Unit Price/Weekly Uni-First Corporation $18.21 Clean Rental Services’ $20.00

FIRST READING AN ORDINANCE AMENDING THE ZONING ORDINANCE AND ZONING MAP OF THE CITY OF DOVER BY CHANGING THE ZONING DESIGNATION OF PROPERTY LOCATED AT 988-990 FOREST STREET WHEREAS, the City of Dover has enacted a zoning ordinance regulating the use of property within the limits of the City of Dover; and WHEREAS, it is deemed in the best interest of zoning and planning to change the permitted use of property described below from C-3 (Service Commercial Zone) and CPO (Commercial Professional Office Zone), subject to COZ-1 (Corridor Overlay Zone) to C-2A (Limited Central Commercial Zone) subject to COZ-1 (Corridor Overlay Zone). NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. That from and after the passage and approval of this ordinance the Zoning Map and Zoning Ordinance of the City of Dover have been amended by changing the zoning designation of two (2) parcels consisting of 0.95 +/- acres from C-3 (Service Commercial Zone) to C-2A (Limited Central Commercial Zone), subject to COZ-1 (Corridor Overlay Zone) and the northern portion of two parcels (0.38 acres) from CPO (Commercial Professional Office) subject to COZ-1 (Corridor Overlay Zone). The residual portion of two parcels will remain zoned as CPO (Commercial Professional Office) and subject to COZ-1 (Corridor Overlay Zone). ADOPTED: * S:\ClerksOffice\Rezonings\2007\Forest Street\Ordinance - 1st Reading.wpd

City of Dover Application No.: Z-08-01 Department of Planning & Inspections R-8 CPO RGO CARVE R ROAD IO IO C-3 CPO C-2A CPO FOREST STR SAU LSBURY ROA D EET HARTLY ROAD FORREST AVENUE C-3 CPO RG- RG-1 1 RG- CPO GIBBS DRIV 1 RG-1 Site RG-1 RG- RG-1 BERTR AND DRIVE CPO 1 RG-1 E ET SC-2 LINCOLN STRE R-8 RG-1 R- CPO RE ECE STREET 8 R-8 RG-1 RG- RG- 1 1 PAUL STREET JAWD DRIVE RG-1 RG-1 RG-1 ET T RE RG- IRM A S 1 HAYE S DRIV E RG-1 IPM IPM RG- IPM 1 Plan Title: Lands of Cypress Development Co, LLC Location: Southeast corner of Forest Street and Saulsbury Rd. Plan Type: Rezoning Legend Current Zoning: C-3 and CPO Proposed Zoning: C-2A Dover Parcels Owner: Cypress Development Co, LLC Zoning Date: 12-6-07 Corridor Overlay Zone « 0 200 400 800 Feet