b'City of Dover Tuscarawas County, Ohio Managements Discussion and Analysis For the Year Ended December 31, 2018 UnauditedCurrent Financial Issues With the refinancing of the water and electric revenue bonds in 2014, the City will save a significant amount of money over the life of the bonds.This allowed the City to purchase land to further expand our water well footprint and save on our future yearly payments.This has made it possible to forecast debt payments more accurately.Knowing what we will be paying allows us to budget more effectively with the goal of accumulating money to complete capital projects in all funds.TheCityhasbeenactivelypurchasingnewequipmentandvehicles,pavingstreets,expandingand maintainingwaterandsewerlines,andmakingthenecessaryimprovementstotheelectricsystem, without issuing any debt.In 2018, we also broke ground on a $1.6 million fire station that is being paid for out of funds that were set aside.No debt was incurred for this project.A few large purchases of the year involved the water and wastewater funds.They purchased a Mayno sludge pump, an articulating boom lift, and a portable flow meter.One major project started in 2018 was the restoration/replacement of the MBR filters in the wastewater treatment plant.This is an ongoing project and we will be replacing a number of filters each year until they are all replaced. Two sources of funding continue to offer the City flexibility in controlling revenues to the general fund.One is the KWH tax collected by the electric fund.This tax was created by the State as part of the legislation passed for electric deregulation.The tax collected from power sold within City limits is to be receipted in the general fund.Legislation was passed by City Council to allow the tax to be returned to the electric fund.In an effort to keep rates low, it is the Citys intent to use a portion of the money in the electric fund each year unless there are significant revenue shortfalls in the general fund. In 2018, 42 percent of the KWH tax revenue was returned to the electric fund to help maintain the fund balance.The other flexible source of funding is the split of the income tax.The standard practice is for 40 percent of tax collections to be allocated to the master capital fund for capital projects; however, in 2011 that amount was reduced to 20 percent and in 2012 changed to 25 percent.This remained at 25 percent in 2018.The percentage can be adjusted yearly by City Council to aid in keeping adequate operating balances.In 2006, the citizens of Dover passed apercent tax increase which was greatly needed; however, it wasnt long before the economic downturn affected the area leaving revenue estimates falling short.In 2012, the State of Ohios biennial budget made significant cuts to the Local Government Fund subsidies to the City along with an accelerated phase out of the personal property tax reimbursement from the State.These measures reduced 2012 revenue expectations, which were only offset by an increase in income tax collections.This continues to be the case in 2018.The City continues to work short of prior years staffing levels in a few departments in an effort to control costs.With a fiber optic network already in place, allowing time for an extension to their location, businesses can be offered a reliable, affordable and efficient fiber connection through the City of Dovers network.The City has been testing the system with a few business customers, and providing a connection to the local schools, hospital and the City facilities.The City of Dover prides itself on providing reliable, affordable utility services to all its residents and reviews each project with that mission as the top priority.An economic development electric rate as a tool to attract new business to the City is being used by a few qualifying customers.This discounted rate allows the business time to become financially stable and is conditionally offered to any business looking to locate within the City.The City continues to be involved with American Municipal Power (AMP) - 15 - - 15 -'