b'City of Dover Tuscarawas County, Ohio Managements Discussion and Analysis For the Year Ended December 31, 2018 UnauditedThe Citys FundsInformation about the Citys governmental funds begins on page 20.These funds are accounted for using the modified accrual method of accounting.For 2018, the general fund had a decrease in fund balance.As compared to 2017, revenues decreased and expenditures increased.The decrease in revenues was primarily due to a decrease in income taxes collected in 2018.The increase in expenditures is primarily due to the increase in expenditures for security of persons and property, mainly resulting from an increase in salaries and wages and fringe benefits for fire prevention.The master capital fund had a decrease in fund balance, primarily due to decreases in intergovernmental and income tax revenues.Expenditures also increased primarily due to capital outlay for the new fire station begun in 2018.The income tax allocated to the master capital fund has always been the source of revenue for many projects such as the purchase of land and equipment and improvements to infrastructure.In 2018, the master capital fund received25percentofincometaxcollections,allowingmanyprojectstobefundedandcompleted.Intergovernmental revenue decreased from 2017 in the master capital fund due to the receipt in 2017 of a large portion of an ODOT grant for the signalization project, as well as grants received for the riverfront project.It is a practice of the City to pay cash for items such as fire trucks.Sinking funds are only utilized when necessary.The Citys funds are monitored consistently with adjustments made throughout the year in budgets to accommodate yearly revenues.The one fund that consistently exceeds our expense expectations is our employee health insurance fund.Ourmedical/surgicalanddentalbenefitplanshavebeenself-fundedsince1988.Anordinancewas passed in 2012 to increase the premium by $100 monthly for family coverage and by $50 for single coverage and allow for an additional $500 per employee per month to be contributed to the fund on an as-needed basis, and this has helped maintain the fund.In 2018, the fund had an operating gain due to a decrease in claims expense and an increase in charges for services revenue.The decrease in claims expense was due to a decrease in the claims payable.Charges for services increased in 2018 due to additional City contributions paid into the fund in response to a low carryover balance from the prior year, theadditionofseveralnewemployeeselectingtheCityshealthinsurance,andanincreaseinthe employee share for administration and police and fire employees.We are consistently negotiating with all our unions for plan modifications and increased employee contributions to help control plan costs.Information about the proprietary funds starts on page 25.These funds are accounted for on an accrual basis.The sewer fund had a decrease in net position due to an increase in expenses, primarily an increase in materials and supplies expenses related to the restoration/replacement of the MBR filters.The electric fundhadanincreaseinnetpositionduetoanincreaseinchargesforservicesrevenues,despitean increase in expenses and a decrease in transfers in.The water fund also had an increase in net position, primarily due to increases in other revenue and capital contributions, despite an increase in operating expenses. The City consistently monitors these funds and takes the required actions to ensure strength in our enterprise funds.In 2008, the City found it necessary to pass along a 25 percent water rate increase effective in January of 2009.In an effort to avoid large percentage increases in the future, a 3 percent increase will be effective in January of every year to come.This increase will allow the City to properly maintain and grow the water system for the future.Budgeting HighlightsThe Citys budget is prepared according to the laws of the State of Ohio and is based on accounting for certain transactions on a cash basis for receipts, expenditures, and encumbrances.The City of Dover is somewhat different than many other Ohio cities its size in that the general fund is not our most significant fund.Our budget is adopted at the object level within each department.Any budgetary modifications at that level may only be made by Council action. - 13 - - 13 -'