b"City of Dover Tuscarawas County, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2018 Sensitivity of the Citys Proportionate Share of the Net OPEB Liability to Changes in the Health Care Cost Trend RateChanges in the health care cost trend rate may also have a significant impact on the net OPEBliability.ThefollowingtablepresentstheCitysproportionateshareofthenetOPEBliability calculatedusingtheassumedtrendrates,andtheCitysproportionateshareoftheexpectednetOPEB liability if it were calculated using a health care cost trend rate that is 1.0 percent lower or 1.0 percent higher than the current rate.Retiree health care valuations use a health care cost trend assumption that changes over several years built into the assumption.The near-term rates reflect increases in the current cost of health care; the trend starting in 2018 is 7.50 percent.If this trend continues for future years, the projection indicates that years from now virtually all expenditures will be for health care.A more reasonable alternative is that in the not-too-distant future, the health plan cost trend will decrease to a level at, or near, wage inflation.On this basis, the actuaries project premium rate increases will continue to exceed wage inflation for approximately the next decade, but by less each year, until leveling off at an ultimate rate, assumed to be 3.25 percent in the most recent valuation.Current Health CareCost Trend Rate1% Decrease Assumption 1% IncreaseCity's proportionate share of the net OPEB liability $5,187,727 $5,422,030 $5,664,059 Changes between Measurement Date and Report Date In October 2018, the OPERS Board adopted a change in the investment return assumption, reducing it from 6.5 percent to 6.0 percent.This change will be effective for the 2018 valuation.The exact amount of the impact to the Citys net OPEB liability is not known.Actuarial AssumptionsOP&FOP&Fs total OPEB liability as of December 31, 2017, is based on the results of an actuarial valuation date ofJanuary1,2017,androlled-forwardusinggenerallyacceptedactuarialprocedures.ThetotalOPEB liability is determined by OP&Fs actuaries in accordance with GASB Statement No. 74, as part of their annualvaluation.Actuarialvaluationsofanongoingplaninvolveestimatesofreportedamountsand assumptions about probability of occurrence of events far into the future.Examples include assumptions about future employment mortality, salary increases, disabilities, retirements and employment terminations.Actuarially determined amounts are subject to continual review and potential modifications, as actual results are compared with past expectations and new estimates are made about the future. Projectionsofbenefitsforfinancialreportingpurposesarebasedonthesubstantiveplan(theplanas understood by the employers and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employers and plan members to that point.The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations.Actuarial calculations reflect a long-term perspective.For a newly hired employee, actuarial calculations will take into account the employees entire career with the employer and also take into consideration the benefits, if any, paid to the employee after termination of employment until the death of the employee and any applicable contingent annuitant.In many cases, actuarial calculations reflect several decades of service with the employer and the payment of benefits after termination. - 72 73 -"