REGULAR COUNCIL MEETING

The Regular Council Meeting was held on October 1, 2007 at 7:30 p.m. with Council President Salters presiding. Council members present were Mr. Carey, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. Hogan, and Mr. Ruane. Mr. McGiffin was absent.

Council staff members present were Mrs. Mitchell, Mr. DePrima, Mrs. McDowell, and Mayor Williams.

OPEN FORUM

The Open Forum was held at 7:15 p.m., prior to commencement of the Official Council Meeting. Council President 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. Hogan moved for approval of the agenda, seconded by Mr. Carey and unanimously carried.

PRESENTATION - REVENUE PROJECTION MODEL (JAMES L. BUTKIEWICZ - UNIVERSITY OF DELAWARE)

Mr. DePrima, City Manager, advised members that the development of revenue projections has been based on staff’s estimates, utilizing historical trends and forecasts. It was his feeling that this process could be improved upon. As a result, he stated that the City contracted with the University of Delaware to develop revenue modeling.

Mrs. Tieman, Senior City Administrator, introduced Mr. James Butkiewicz, Professor of Economics for the College of Business and Economics at the University of Delaware. She advised members that a graduate student, Mr. Mike Shafer, also worked on this project; however, he was not able to attend the meeting this evening.

Mr. Butkiewicz gave a Power Point Presentation on Revenue Projection and Tracking System (Exhibit #1), explaining economic forecasting and how it can be used as a part of the budget process.

Mr. Butkiewicz advised members that some occurrences are not just driven by the population of the City of Dover but also that of Kent County and surrounding areas, explaining that economic activity in Kent County can have an affect on the City since residents of Kent County come to the City to eat, shop, etc. He stated that Dover is not an isolated entity - it is a part of a larger economy, including the national economy.

Mr. Butkiewicz reviewed the instruction for Forecasting Annual Revenue System (Exhibit #2) and explained the variables used to forecast revenues. The forecasting file consists of 25 spreadsheets (Exhibit #3). He stated that the first computes forecasts of key variables used to forecast revenues and that the second computes the forecasts for construction values from three (3) different equations and requires a manual entry to be entered for the actual prediction. The next 22 sheets compute forecast values for 22 revenue items and the last sheet forecasts general revenue. He noted that the general revenue forecast is a separate forecast, not the sum of the 20 other forecasts; therefore, the general revenue forecast may differ from the forecast obtained by adding the forecasts of the component revenue sources.

Mr. Butkiewicz reviewed the instructions for the Revenue Tracking System (Exhibit #4) and explained that the tracking system consists of two (2) files, a master spreadsheet with 23 separate sheets and a work sheet that updates the limits (percentages of revenue collected) each year as new data becomes available (Exhibit #5). He stated that the Tracking System – Master file consists of 23 spreadsheets; the 22 revenue categories forecast and a sheet for total general revenue (see page 19 of Exhibit #5).

Mr. Butkiewicz advised members that the forecasting system can be useful in helping to determine budgeted amounts and the tracking system will enable the City to keep track of how the revenues are received and if it is normal, and if not, to determine why it may be off pattern.

Responding to Mayor Williams, Mr. Butkiewicz advised members that when there has been an indication of a change in trend, statistical modeling requires decisions to be made by individuals. He explained that in terms of modeling, modelers require data and experience; however, as practical decision makers, members may be required to make decisions before the experience is realized. He stated that decision makers will need to use their individual judgement when there are instances of a change but there is minimal data.

Referring to the worksheets that include the 2007 projections, Mrs. Tieman advised members that since the 2007 actual data is available, that information will be included in the forecasting as well as the 2008 and 2009 projections. When this information is presented to members of Council, they will also be provided the determination factors for the projections. She advised members that staff has already began utilizing the tracking system. These systems require staff to consider other variables such as occurrences in Kent County, and to review issues that may not have otherwise been considered.

Mrs. Tieman advised members that since the electric revenues are analyzed through PACE/NAES on a monthly basis and monitored very closely, the University of Delaware was not requested to analyze electric revenues. Mr. DePrima also stated that Burns & McDonnell has been assisting the City with projections for electric revenues; however, he will be reviewing this matter as a possible inclusion.

Responding to Mr. Ruane, Mr. Butkiewicz stated that he does not have comparable revenue information of other municipalities similar to the City of Dover. He explained the difficulties for using comparables since, although there are similarities, there are many differences. It was his opinion that the most important factor is what the residents feel is acceptable for the City of Dover.

COUNCIL MEMBERS COMMENTS

There were no comments by members of City Council.

Mr. McGlumphy moved for adjournment, seconded by Mr. Carey and unanimously carried.

Meeting Adjourned at 8:55 P.M.

                                                                                    TRACI A. McDOWELL

                                                                                    CITY CLERK

All orders, ordinances, and resolutions adopted by City Council during their Regular Meeting of October 1, 2007, are hereby approved.

                                                                                    BEVERLY C. WILLIAMS

                                                                                    MAYOR

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Exhibits Attached to Original Minutes and File Copy

Exhibit #1 - Power Point Presentation on Revenue Projection and Tracking System

Exhibit #2 - Instruction for Forecasting Annual Revenue System

Exhibit #3 - Revenue Forecasting Worksheets

Exhibit #4 - Instructions for the Revenue Tracking System

Exhibit #5 - Revenue Tracking Worksheets