CCW PACKET

CITY OF DOVER, DELAWARE COUNCIL COMMITTEE OF THE WHOLE MEETING Tuesday, February 13, 2024 at 6:00 PM City Hall Council Chambers, 15 Loockerman Plaza, Dover, Delaware AGENDA Public comments are welcomed on any item and will be permitted at the appropriate time. When possible, please notify the City Clerk (302-736-7008 or email at cityclerk@dover.de.us) should you wish to be recognized. VIRTUAL MEETING NOTICE This meeting will be held in City Hall Council Chambers with electronic access via WebEx. Public participation information is as follows: Dial: 1-650-479-3208 Link: https://rb.gy/31asog Event number: 2532 417 2798 Event password: DOVER (if needed) If you are new to WebEx, get the app now at https://www.webex.com/ to be ready when the meeting starts. CALL COUNCIL COMMITTEE OF THE WHOLE MEETING TO ORDER PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE ADOPTION OF THE AGENDA 1. Parks and Recreation Updates (Robin Eaton, Director of Parks and Recreation) (Committee Action Not Required) MAYOR AND COUNCIL REPORTS - JANUARY 2024 2. Council President Hare 3. First District 4. Second District 5. Third District 1

COUNCIL COMMITTEE OF THE WHOLE MEETING - February 13, 2024 PAGE 2 6. Fourth District 7. At-Large 8. Mayor Christiansen ADJOURNMENT OF THE PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE MEETING UTILITY COMMITTEE ADOPTION OF THE AGENDA 1. Carbon Column Replacement - Component 2 (Jason Lyon, Water/Wastewater Director) (Staff Recommendation: Award the contract to Old Dominion Insulation, Inc. for the amount of $120,100.) 2. Stormwater Utility Discussion (Sharon Duca, Assistant City Manager / Mark Nowak, Public Works Director) (Staff Recommendation: Authorize staff to include the Stormwater Utility in the FY25 Budget.) ADJOURNMENT OF THE UTILITY COMMITTEE MEETING LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE ADOPTION OF THE AGENDA 1. Sale and Disposition of Excess Real Property - 312 W. Loockerman Street (David S. Hugg, III, City Manager) (Staff Recommendation: Authorize sale by City Manager.) 2. Proposed Ordinance #2024-06 - Amending Chapter 102 - Taxation, Article VIII - Lodging Tax (David S. Hugg, III, City Manager, Councilman Anderson, and Councilman Neil) (Staff Recommendation: Acceptance of Ordinance #2024-06) 3. Consideration of DSU Offer - City Repurchase of Former City Library (David S. Hugg, III, City Manager) (Staff Recommendation: Reject the DSU Offer - Council action to decline repurchase.) ADJOURNMENT OF THE LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING ADJOURNMENT OF THE COUNCIL COMMITTEE OF THE WHOLE THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. PURSUANT TO 29 DEL. C. §10004(e)(2), THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION 2

COUNCIL COMMITTEE OF THE WHOLE MEETING - February 13, 2024 PAGE 3 OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS, WHICH ARISE AT THE TIME OF THE MEETING 3

Item 1. CITY OF DOVER, DELAWARE ACTION FORM PROCEEDING: Council Committee of the Whole - Utility DEPARTMENT OF ORIGIN: Water & Wastewater SUBMITTED ON: February 2, 2024 PREPARED BY: Jason A. Lyon, P.E., Director of Water & Wastewater / Engineering Services REVIEWED BY: David S. Hugg, III, City Manager, Patricia M. Marney, Interim Controller / Treasurer SUBJECT: Carbon Column Media Replacement – Component 2 TIMETABLE: Notice to Proceed to be issued within seven (7) days of Council approval. Project anticipated to be completed within thirty (30) calendar days from issuance of Notice to Proceed. RELATED PROJECT: X REFERENCE: CIP- Water Projects EXPENDITURE REQUIRED: $120,100 BUDGET REMAINING: $59,000 FUNDING SOURCE (Dept./Page in CIP & Budget): Department of Water & Wastewater, Water Division – CIP page 136, WD2404 Carbon Column Media Replacement, account no.: 401- 40-68-99-000-54031. Shortfall to be supplemented by WD2401 Portable Emergency Generator, account no.: 401-40-68-99-000- 54025 STAFF RECOMMENDATION: Award the contract to Old Dominion Insulation, Inc, for the amount of $120,100. BACKGROUND AND ANALYSIS: The Fiscal Year 2024 Capital Improvement Plan includes funding to renovate the existing carbon columns that are used as part of the water treatment process at our water treatment plant. The carbon columns have heat tracing and insulation (equipment) installed to provide freeze protection. This equipment is original to the water treatment plant and is in need of replacement. A Request for Quote was sent out in accordance with the City’s purchasing policy by the Department of Water & Wastewater under RFQ 2024-004DWW. The Department of Water & Wastewater received two (2) quotes as shown in the table below: 4

Item 1. QUOTE PRICE EVALUATED CONTRACTOR LOCATION PRICE LYWOOD ELECTRIC INC FEDERALSBURG, MD $123,650.00 $123,650.00 OLD DOMINION INSULATION, INC NEWARK, DE $120,100.00 $116,497.00 *Old Dominion Insulation, Inc. was awarded a three percent (3%) reduction due to local vendor preference. City staff reviewed the submission and found that the Old Dominion Insulation, Inc quote met all requirements for the project. Staff recommends awarding the contract to Old Dominion Insulation, Inc in the amount of $120,100 for the Carbon Column Media Replacement – Component 2. The shortfall will be covered by the following breakdown: Funding Description Current Spent / Savings / Requested Proposed Source Budget Encumbered Remaining Change Budget Remaining Water WD2404 – $280,000 $221,000 $59,000 $61,100 $120,100 Fund Carbon Column Media Replacement Water WD2401 $78,000 $9,500 $68,500 ($61,100) $7,400 Portable Emergency Generator 5

Item 2. Stormwater Utility Proposal Discussion 6 1

Item 2. 7 2

Item 2. Address increasing NPDES compliance*, personnel, Decrease reliance on the Encourage stormwater operations and capital* costs General Fund management Exploring a Stormwater Utility 8 3 *State & federal requirements / conciliation order (VCP)

Item 2. Constraints of the General Fund ❖Current projections indicate that the FY25 General Fund budget has a deficit of $10M. ❖FY25 Stormwater expenses, currently paid for through the General Fund, are estimated at $4.5M. ❖A Stormwater Utility would reduce the deficit by diverting expenses from the General Fund, and taxpayers, to all contributors. 9 4

Item 2. ❖Everything! What will a ❖NPDES Compliance Stormwater ❖Personnel Costs Utility cover? ❖Operating Expenses ❖Vehicles ❖Capital Projects 10 5

Item 2. Stormwater Utility Rates ❖Established based upon the impervious surfaces on parcels. Residential calculations are correlated to zoning. 11 6

Item 2. ERUs (Equivalent Runoff Unit) 1 ERU= 1,700ft2 of impervious surface 12 7

Item 2. ❖Tier 1 ❖RG-1, RG-2, RG-3, and RM-1 zoning districts Residential ❖1.0 Equivalent Runoff Unit (ERU) Rates Will be ❖Tier 2 Established ❖RM-2, R-7, and R-8 zoning districts ❖1.4 ERUs on a Tier- ❖Tier 3 based ❖R-10, R-15, and R-20 zoning districts System ❖2.2 ERUs 13 8

Item 2. Example Calculations (Residential) Tier 1 Tier 2 Tier 3 ERU factor: 1.0 ERU factor: 1.4 ERU factor: 2.2 Stormwater charge: $7.20 Stormwater charge: $7.20 Stormwater charge: $7.20 Monthly Charge: 1.0 ERU × Monthly charge: 1.4 ERU × Monthly charge: 2.2 ERU $7.20= $7.20 $7.20= $10.08 × $7.20= $15.84 14 9

Item 2. Dover International Speedway* ❖Impervious area: 5,443,171 ft2 Example ❖Capped impervious area: 1,000,000 ft2 Calculations ❖ERU size= 1,700 ft2 (Commercial) ❖ERUs: 588 ❖Stormwater charge: $7.20 ❖Monthly payment: $4,233.60 * This example is for demonstration purposes and is not meant to accurately show 15 10 Dover International Speedway’s monthly payment.

Item 2. Lowes* ❖ Impervious area: 504,753 ft2 Example ❖ERU size: 1,700 ft2 Calculations (Commercial) ❖ERUs: 297 ❖Stormwater charge: $7.20 ❖Monthly payment: $2,138.40 * This example is for demonstration purposes and is not meant to accurately show Lowes’ 16 11 monthly payment.

Item 2. Quality Credits Quantity Credits ❖Available to properties ❖Available to properties that pay into the that control the rate of maintenance of and/or stormwater runoff directly own a contributed to the City’s stormwater stormwater system or management facility surface water system Credits ❖Grassed swales, ❖Dry detention infiltration basins, ponds, wet ponds, permeable stormwater pavements wetlands 17 12

Item 2. Quality Credits Quantity Credits ❖ Up to 15% ❖Up to 10% ❖ Stormwater ❖ Post-development peak management stormwater discharges practices that are managed to pre- infiltrate between development peak Credits (cont.) 1 and 2.5 inches of discharge rates runoff Properties can have both quality and quantity credits for a maximum of 25% 18 13

Item 2. Example Calculations with Credits Tier 1 Tier 2 Tier 3 Previous monthly charge: Previous monthly charge: 1.4 Previous monthly charge: 1.0 ERU × $7.20= $7.20 ERU × $7.20= $10.08 2.2 ERU × $7.20= $15.84 Credit adjustment: $7.20- Credit adjustment: $10.08- Credit adjustment: $15.84- (10% × $7.20)= $6.48/mo. (10% × $10.08)= $9.07/mo. (10% × $15.84)= $14.26/mo. Commercial Previous monthly charge: 588 ERU × $7.20= $4,233.60 Credit adjustment: $4,233.60- (10% × $4,233.60)= $3,810.24/mo. Previous monthly charge: 297 ERU × $7.20= $2,138.40 Credit adjustment: $2,138.40- (10% × $2,138.40)= $1,924.56/mo. 19 14

Item 2. Where will I see the ❖Stormwater charges will be issued Stormwater as a general bill. They will not appear on your utility bill or tax bill. Charge? 20 15

Item 2. ❖The proposed Stormwater Utility is Program based on a 5-yr financial model, but Plan rates will be evaluated after 2 years. 21 16

Item 2. ❖Development of a Stormwater Other Utility will require the approval of an Requirements ordinance as well as an associated manual. 22 17

Item 2. A Stormwater Utility will… ❖ Address increasing NPDES Compliance, personnel, operations and capital costs ❖Costs will go up each permit term Wrapping Up ❖Decrease reliance on the General Fund A Summary ❖Create dedicated and sustainable funding ❖Encourage stormwater management ❖Manage the quantity and quality of runoff 23 18

Item 1. ACTION FORM PROCEEDING: Council Committee of the Whole - Legislative, Finance and Administration Committee DEPARTMENT OF ORIGIN: City Manager DATE SUBMITTED: 2/5/24 PREPARED BY: David S. Hugg III, City Manager SUBJECT: Sale and Disposition of Excess Real Property - 312 W. Loockerman Street REFERENCE: Sec. 2-425 of City Code RELATED PROJECT: REVIEWED BY: David S. Hugg III EXHIBITS: Location Map Parcel No. ED05-077.09-01-70.00 EXPENDITURE REQUIRED: AMOUNT BUDGETED: n/a FUNDING SOURCE (Dept./Page in CIP & Budget): TIMETABLE: Urgent STAFF RECOMMENDATION: Authorize Sale by City Manager BACKGROUND AND ANALYSIS 312 W. Loockerman Street is a city-owned parcel of approximately 0.14 acres zoned C-2 commercial. It abuts the property on which the Family Dollar store is located. It was in my earlier list of excess properties to be disposed of by standard notice and bid process. It is excess to any city need and by virtue of its configuration is unlikely to be used as a free-standing commercial lot. Charles Rodrequez of R&R Realty believes the adjacent owner (RO-Z LLC) would be interested and that it would allow space for Family Donner to expand (and hopefully remain downtown as they have indicated that they might close the store when the current lease expires due to low volume and limited space for additional retail sales.). The Code provides in Section 2-425: (e) Exceptions to standard method of disposition. (1) Exception A—Sale to an abutting owner. When, in the opinion of city council, a public sale would be detrimental to the lands of an abutter, and/or that a public sale would place the abutter at undue risk; or that the combination of abutter's land and city's land would be substantially greater in value than that of the sum of the parcels considered individually, city council may direct the city assessor to have prepared one or more unbiased fee appraisals of the parcel. Thereafter, the subject land will be offered for sale to the said abutter at the appraisal price, plus the appraisal fees, plus the legal costs. In the event the offer is not accepted, a public sale may be ordered. I believe this property meets those criteria as the size and shape of the parcel are of little value for development as a separate property. Combined with the adjacent parcel this parcel adds value as it allows for expansion of a needed retail operation downtown. I would like to get this on the next Council agenda as time is of the essence. Staff recommends authorization by the City Council for the City Manager to offer the property at 312 W. Loockerman for sale to the adjacent property owner. 24

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Item 2. ACTION FORM PROCEEDING: Council Committee of the Whole – Legislative, Finance, and Administration DEPARTMENT OF ORIGIN: City Manager DATE SUBMITTED: 2/8/2024 PREPARED BY: David S. Hugg III, City Manager SUBJECT: Code Revision: Chapter 102 – Taxation, Article VIII – Lodging Tax REFERENCE: N/A RELATED PROJECT: N/A REVIEWED BY: EXHIBITS: Proposed Ordinance #2024-06 EXPENDITURE REQUIRED: N/A AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): N/A TIMETABLE: Review of ordinance language February 13, 2024; First Reading February 26, 2024; Final Reading March 11, 2024. STAFF RECOMMENDATION: Adoption of Ordinance #2024-06. BACKGROUND AND ANALYSIS The amendment increases the local lodging tax of up to 3% of the cost of the rent, in addition to the amount imposed by the State and the County, for any room or rooms in a hotel, motel, or tourist home, as defined in 30 Del. C. §6101, within the boundaries of the City of Dover. The ordinance adds provisions addressing failure to remit and authorizes the City Manager to engage the Delaware Division of Revenue to collect and remit lodging tax proceeds if desired. The first 1 ½% will continue to be dedicated to the infrastructure fund. Any additional amount will be budgeted as normal general fund revenue. Note: The lodging tax at 1.5% generated about $500,000 in FY 2023. Estimated revenue at the 3% level is approximately $1.0 million. The city bills and processes over 100 lodging tax statements each month, but there are a few facilities whose operators do not remit the required tax. Whether these operators collect and pocket the tax or simply ignore the requirement is unknown. The city has contacted the Division of Revenue to compare lists of operators (the state can impose penalties based on audit for failure to file a tax return and failure to pay an amount due – we do not have that provision in the Code). The increase in the burden on the person renting a room, based on rates quoted on local websites which show hotel/motel rooms in Dover falling within a $99-$180 range, is an additional $1.50 to $2.70, likely not a significant increase. 26

Item 2. 1 CITY OF DOVER ORDINANCE #2024-06 2 3 4 BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN 5 COUNCIL MET: 6 7 That Chapter 102 - Taxation of the Dover Code Lodging Tax be amended, as follows: 8 9 ARTICLE VII - Lodging Tax 10 11 Sec. 102-190. - Local lodging tax. 12 13 (a) A local lodging tax is hereby levied of up to three percent of the cost of the rent, in addition to 14 the amount imposed by the state and the county, for any room or rooms in a hotel, motel or tourist 15 home, as defined in 30 Del. C. §6101, within the boundaries of the city. The tax will be 16 implemented beginning July 1, 2020, at the rate of one-half of one percent for 2020; one percent 17 for 2021; and one and one-half percent for subsequent years ending upon the effective date of 18 this ordinance. The tax shall be set at three percent effective 30 days after the adoption of 19 this ordinance. 20 21 (b) The local lodging tax, pursuant to this article, is the responsibility of the occupant of the room 22 and shall be collected at the time the rental is paid. Operators of the hotel, motel or tourist home 23 are responsible for the collection of the local lodging tax and the remittance of the taxes to the city 24 within 20 days after the end of each calendar month, in accordance with procedures established by 25 the city manager and using forms designated by the city finance department. The tax imposed shall 26 be shown on the billing to the occupant as a separate and distinct item. 27 28 (c)Lodging tax receipts will be accounted for in a committed fund balance account to be used only 29 for infrastructure. 30 31 (c) Failure to remit the lodging tax due, shall result in an overdue balance statement from 32 the city finance department, based upon records of lodging tax paid to the State of Delaware 33 for such period, and subject to penalty, license, or tax lien in accordance with city policies. 34 35 (d)No local lodging tax pursuant to this article shall be collected for reservations or contracts for 36 lodging executed or completed before July 1, 2020. 37 38 (d) Alternatively, the city manager is authorized to engage the Delaware Division of Revenue 39 to collect the city’s portion of the lodging tax simultaneously with the receipt of the state tax, 40 to seek collection from operators, enforce rules relating to failure to file and failure to pay, 41 and remit funds to the city. 42 43 (e) The first one and one-half percent of lodging tax receipts will be accounted for in a 44 committed fund balance account to be used only for infrastructure. 45 27

Item 2. Proposed Ordinance #2024-06 – Amending Chapter 102 – Taxation, Article VII – Lodging Tax, Section 102-190 – Local Lodging Tax 46 (f) No local lodging tax pursuant to this article shall be collected for reservations or contracts 47 for lodging executed or completed before July 1, 2020. 48 49 50 SYNOPSIS 51 The amendment increases the local lodging tax of up to 3% of the cost of the rent, in addition to 52 the amount imposed by the State and the County, for any room or rooms in a hotel, motel, or tourist 53 home, as defined in 30 Del. C. §6101, within the boundaries of the City of Dover. The ordinance 54 adds provisions addressing failure to remit and authorizes the City Manager to engage the 55 Delaware Division of Revenue to collect and remit lodging tax proceeds if desired. The first 1 56 ½% will continue to be dedicated to the infrastructure fund. Any additional amount will be 57 budgeted as normal general fund revenue. 58 59 60 Note: The lodging tax at 1.5% generated about $500,000 in FY 2023. Estimated revenue at the 3% 61 level is approximately $1.0 million. The city bills and processes over 100 lodging tax statements 62 each month, but there are a few facilities whose operators do not remit the required tax. Whether 63 these operators collect and pocket the tax or simply ignore the requirement is unknown. The city 64 has contacted the Division of Revenue to compare lists of operators (the state can impose penalties 65 based on audit for failure to file a tax return and failure to pay an amount due – we do not have 66 that provision in the Code). 67 68 The increase in the burden on the person renting a room, based on rates quoted on local websites 69 which show hotel/motel rooms in Dover falling within a $99-$180 range, is an additional $1.50 to 70 $2.70, likely not a significant increase. 71 72 Millsboro, one of the previous holdouts, is considering adopting a lodging tax. 73 74 (SPONSORS: COUNCILMAN ANDERSON, COUNCILMAN NEIL) 75 76 77 Actions History: 78 02/13/24 - Introduced at Council Committee of the Whole/Legislative Finance, and Administration 79 Committee 28

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