b'City of Dover Tuscarawas County, Ohio Managements Discussion and Analysis For the Year Ended December 31, 2018 UnauditedThe net pension liability (NPL) is one of the largest liabilities reported by the City at December 31, 2018, and is reported pursuant to GASB Statement 68, Accounting and Financial Reporting for Pensionsan Amendment of GASB Statement 27.For 2018, the City adopted GASB Statement 75, Accounting and FinancialReportingforPostemploymentBenefitsOtherThanPensions,whichsignificantlyrevises accountingforcostsandliabilitiesrelatedtootherpostemploymentbenefits(OPEB).Forreasons discussed as follows, many end users of this financial statement will gain a clearer understanding of the Citys actual financial condition by adding deferred inflows related to pension and OPEB, the net pension liability and the net OPEB liability to the reported net position and subtracting the net pension asset and deferred outflows related to pension and OPEB.Governmental Accounting Standards Board standards are national and apply to all government financial reportspreparedinaccordancewithgenerallyacceptedaccountingprinciples.Prioraccountingfor pensions (GASB 27) and postemployment benefits (GASB 45) focused on a funding approach.This approach limited pension and OPEB costs to contributions annually required by law, which may or may not be sufficient to fully fund each plans net pension liability or net OPEB liability.GASB 68 and GASB 75 take an earnings approach to pension and OPEB accounting; however, the nature of Ohios statewide pension/OPEB plans and state law governing those systems requires additional explanation in order to properly understand the information presented in these statements.GASB 68 and GASB 75 require the net pension liability (asset) and the net OPEB liability to equal the Citys proportionate share of each plans collective:1.Presentvalueofestimatedfuturepension/OPEBbenefitsattributabletoactiveandinactive employees past service 2.Minus plan assets available to pay these benefitsGASBnotesthatpensionandOPEBobligations,whetherfundedorunfunded,arepartofthe employmentexchangethatis,theemployeeistradinghisorherlaborinexchangeforwages, benefits, and the promise of a future pension and other postemployment benefits.GASB noted that the unfunded portion of this promise is a present obligation of the government, part of a bargained-for benefit to the employee, and should accordingly be reported by the government as a liability since they received the benefit of the exchange.However, the City is not responsible for certain key factors affecting the balance of these liabilities.In Ohio, the employee shares the obligation of funding pension benefits with the employer.Both employer and employee contribution rates are capped by State statute.A change in these caps requires action of both Houses of the General Assembly and approval of the Governor.Benefit provisions are also determined by State statute.The Ohio revised Code permits, but does not require the retirementsystemstoprovidehealthcaretoeligiblebenefitrecipients.Theretirementsystemsmay allocate a portion of the employer contributions to provide for these OPEB benefits.Theemployeeenterstheemploymentexchangewiththeknowledgethattheemployerspromiseis limitednot bycontractbutbylaw. Theemployerentersthe exchangealsoknowingthatthereis a specific, legal limit to its contribution to the retirement system.In Ohio, there is no legal means to enforcetheunfundedliabilityofthepension/OPEBplanasagainstthepublicemployer.Statelaw operatestomitigate/lessenthemoralobligationofthepublicemployertotheemployee,becauseall parties enter the employment exchange with notice as to the law.The retirement system is responsible for the administration of the pension and OPEB plans.- 8 8 -'