Page 31 - Hudson CAFR Report 2018

HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2018

(UNAUDITED)

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 above, changes in benefits, contribution rates, and return on investments
affect the balance of these liabilities but are 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 accordance with GASB 68 and GASB 75, the District’s statements prepared on an accrual basis of accounting include
an annual pension expense and an annual OPEB expense for their proportionate share of each plan’s change in net
pension liability and net OPEB liability, respectively, not accounted for as deferred inflows/outflows.

As a result of implementing GASB 75, the District is reporting a net OPEB liability and deferred inflows/outflows of
resources related to OPEB on the accrual basis of accounting. This implementation also had the effect of restating net
position at June 30, 2017, from $(19,577,544) to $(41,955,448).

As the table on page F 6 illustrates, the most significant changes in net position were related to the District’s net pension
and net OPEB liability and the related deferred inflows/outflows of resources. See Note 12 and Note 13 in the notes to
the basic financial statements for additional information regarding these components of net position. Other than these
components, net position for the business-type activities remained comparable to the prior year.

Other significant changes for the governmental activities include the following:

 An increase in current assets of $97,642,699. This is primarily the result of unspent bond issuance proceeds of
approximately $84.5 million, and an increase in property taxes receivable of approximately $7.1 million, mostly due
to the new debt service levy to pay off the bonds.

 An increase in current liabilities of $2,077,729, due to additional accounts payable and accrued interest payable on
long-term debt.

 An increase in long-term liabilities - other amounts of $80,943,517 due to the aforementioned bond issuance.

A portion of the District’s net position, or $7,341,961, represents resources that are subject to external restriction on how
they may be used. The net investment in capital assets makes up another $39,999,721. The remaining unrestricted
portion of the District’s net position is a deficit of $51,832,286.

The following graphs present the District’s governmental and business-type assets and deferred outflows of resources,
liabilities and deferred inflows of resources, and net position at June 30, 2018 and June 30, 2017. The amounts at June
30, 2017 have been restated as described in Note 2.A.

F 10