b'City of Dover Tuscarawas County, Ohio Managements Discussion and Analysis For the Year Ended December 31, 2019 UnauditedThe net pension liability (NPL) is the single largest liability reported by the City at December 31, 2019. GASBnotesthatpensionandOPEBobligations,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.Most long-term liabilities have set repayment schedules or, in the case of compensated absences (i.e. sick and vacation leave), are satisfied through paid time-off or termination payments.There is no repayment schedule for the net pension liability or the net OPEB liability.As explained previously, changes in benefits,contributionrates,andreturnoninvestmentsaffectthebalanceoftheseliabilities,butare outside the control of the local government.In the event that contributions, investment returns, and other changes are insufficient to keep up with required payments, State statute does not assign/identify the responsible party for the unfunded portion.Due to the unique nature of how the net pension liability and the net OPEB liability are satisfied, these liabilities are separately identified within the long-term liability section of the statement of net position.In total, the Citys net position showed an increase for 2019 due to a decrease in expenses, mainly the decrease in security of persons and property expense related to a decrease in OP&F OPEB expense.Although this decrease in expenses caused an increase in the net position of governmental activities, business-type activities had expenses comparable to the prior year, with a small decrease in revenues.The special item recognized for business-type activities in 2019 contributed to the increase in net position.Total capital assets increased in 2019, with current year additions, some of which included finishing the newfirestation,thecontinuationoftheriverfrontrevitalizationandthetrafficsignalizationupgrade projects.Someoftheseprojectswerepartiallyfundedbygrantsanddonations.Forbusiness-type activities, a small decrease was seen in capital assets, despite the sewer and water assets received in the transfer of operations from Tuscarawas County.Total liabilities decreased slightly from 2018, with a decrease for governmental activities and an increase for business-type activities.Governmental activities had a large decrease in the net OPEB liability, which was partly offset by an increase in the net pension liability.The increase in liabilities for business-type activities was due to the large increase in the net pension liability, partly offset by a decrease in other long-term liabilities as debt was paid down.The net pension liability and net OPEB liability changes represent the Citys proportionate share of the unfunded benefits of the OPERS traditional and combined plans and the OP&F plan.As indicated previously, changes in benefits, contribution rates, and return on investments affect the balances of the net pension liability and the net OPEB liability.The City of Dover makes a conscious effort to grow and maintain the Citys services and assets while paying down debt and maintaining balances to help meet current needs. - 8 8 -'