VillaMar  
Community Development District ANNUAL FINANCIAL REPORT  
September 30, 2019  

VillaMar Community Development District ANNUAL FINANCIAL REPORT
September 30, 2019

 TABLE OF CONTENTS

Page
 Number
REPORT OF INDEPENDENT AUDITORS	1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-8

BASIC FINANCIAL STATEMENTS:
Government-wide Financial Statements:
Statement of Net Position	9
Statement of Activities	10
Fund Financial Statements:
Balance Sheet – Governmental Funds	11
Reconciliation of Total Governmental Fund Balances
to Net Position of Governmental Activities	12
Statement of Revenues, Expenditures and Changes in Fund
Balances – Governmental Funds	13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities	14
Statement of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – General Fund	15

Notes to Financial Statements	16-27
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS	28-29
MANAGEMENT LETTER	30-31
INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH
SECTION 218.415, FLORIDA STATUTES	32

REPORT OF INDEPENDENT AUDITORS  

To the Board of Supervisors
VillaMar Community Development District City of Winter Haven, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of VillaMar Community Development District as of and for the 10 months ended September 30, 2019, and the related notes to financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Accounting Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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To the Board of Supervisors
VillaMar Community Development District

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of VillaMar Community Development District, as of September 30, 2019, and the respective changes in financial position and the budgetary comparison for the General Fund for the 10 months then ended in conformity with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management Discussion and Analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued a report dated May 9, 2020 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations and contracts. The purpose  of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering VillaMar Community Development District’s internal control over financial reporting and compliance.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida May 9, 2020
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Management’s discussion and analysis of VillaMar Community Development District’s (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities. The analysis provides summary financial information for the District and should be read in conjunction with the District’s financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

The District’s basic financial statements comprise three components; 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to financial statements. The Government-wide financial statements present an overall picture of the District’s financial position and results of operations. The Fund financial statements present financial information for the District’s major funds. The Notes to financial statements provide additional information concerning the District’s finances.

The Government-wide financial statements are the statement of net position and the statement of activities. These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net position of governmental activities  and the change in net position. Governmental activities are primarily supported by special assessments.

The statement of net position presents information on all assets and liabilities of the District, with the difference between assets and liabilities reported as net position. Net position is reported in three categories; 1) net investment in capital assets, 2) restricted, and 3) unrestricted. Assets, liabilities, and net position are reported for all Governmental activities.

The statement of activities presents information on all revenues and expenses of the District and the change in net position. Expenses are reported by major function and program revenues relating to those functions are reported, providing the net cost of all functions provided by the District. To assist in understanding the District’s operations, expenses have been reported as governmental activities. Governmental activities financed by the District include general government, physical environment and debt service.

Fund financial statements present financial information for governmental funds. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances – budget and actual is provided for the District’s General Fund. Fund financial statements provide more detailed information about the District’s activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements.

The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District’s financial standing. These statements are comparable to private-sector companies and give a good understanding of the District’s overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of the District,  including buildings and improvements, and infrastructure are reported in the statement of net position. All liabilities, including principal outstanding on bonds are included.  The statement  of activities includes depreciation on all long lived assets of the District, but transactions between the different functions of the District have been eliminated in order to avoid “doubling up” the revenues and expenses. The fund financial statements provide a picture of the major funds of the District. In the case of governmental activities, outlays for long lived assets are reported as expenditures and long-term liabilities, such as general obligation bonds, are not included in the fund financial statements. To provide a link from the fund financial statements to the government-wide financial statements, reconciliations are provided from the fund financial statements to the government-wide financial statements.

Notes to financial statements provide additional detail concerning the financial activities and financial balances of the District. Additional information about the accounting practices of the District, investments of the District, capital assets and long-term debt are some of the items included in the notes to financial statements.

 Financial Highlights

The following are the highlights of financial activity for the year ended September 30, 2019.

 The District’s total liabilities exceeded total assets by $(394,982) (net position).
Restricted net position was $196,680.

 Governmental activities revenues totaled $120,514 while governmental activities expenses totaled $515,496.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

 Financial Analysis of the District

The following schedule provides a summary of the assets, liabilities and net position of the District and is presented by category for comparison purposes. This is the initial period for the District.

Net Position	
	Governmental	

Current assets	 		Activities	
 		2019	

$	26,427	
Restricted assets	4,014,417	
Capital assets	 		3,906,566 
 		7,947,410 

1,169,594	
Total Assets		
Current liabilities		
Non-current liabilities	 		7,172,798 
 		8,342,392 	
Total Liabilities		
Net Position		
Restricted	196,680	
Unrestricted
Total Net Position	 		(591,662) 
 $	(394,982) 	

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

 Financial Analysis of the District (Continued)

The following schedule provides a summary of the changes in net position of the District and is presented by category for comparison purposes. This is the initial period for the District.

Change In Net Position	
	Governmental	
	 			Activities		
	 			2019		
Program Revenues		
Contributions	$	100,000	
General Revenues		
Investment earnings	 			20,514 	
Total Revenues	 			120,514 	
Expenses		
General government	86,929	
Interest and other charges	 			428,567 	
Total Expenses	 			515,496 	
Change in Net Position	(394,982)	
Net Position - Beginning of Period

Net Position - End of Period	 			- 	
	 $	(394,982) 	

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

 Capital Assets Activity

The following schedule provides a summary of the District’s capital assets as of September 30, 2019:

	Governmental	
 			Description	 Construction in progress	Activities

 		2019	

 $	3,906,566 	

The activity for the year consisted of additions to construction in progress of $3,906,566.

 General Fund Budgetary Highlights

The final budget exceeded actual expenditures in the current year because attorney fees and dissemination fees were less than anticipated.

The General Fund budget was amended in the current year for higher legal advertising and supervisor fees than were originally anticipated.

 Debt Management

Governmental Activities debt includes the following:

In June 2019, the District issued $7,180,000 Special Assessment Bonds, Series 2019. These bonds were issued to finance a portion of the cost of the planning, financing, acquisition, construction, installation, and equipping of the Series 2019 Project. The balance outstanding on the Series 2019 Bonds at September 30, 2019 was $7,180,000.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

 Economic Factors and Next Year’s Budget

VillaMar Community Development District will complete the capital projects in the fiscal year ended September 30, 2020.

 Request for Information

The financial report is designed to provide a general overview of VillaMar Community Development District’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the VillaMar Community Development District’s Finance Department at c/o Government Management Services, LLC, 219 E Livingston Street Orlando, Florida, 32801.

VillaMar Community Development District STATEMENT OF NET POSITION
September 30, 2019

Governmental Activities

ASSETS
Current Assets
Cash	$	6,427
Due from developer	 		20,000 
Total Current Assets	 		26,427 
Non-Current Assets Restricted Assets
Investments	4,014,417
Capital Assets, Not Being Depreciated
Construction in progress	 		3,906,566 	
Total Non-Current Assets	 		7,920,983 	
Total Assets	 		7,947,410 	

LIABILITIES
Current Liabilities
Accounts payable and accrued expenses	13,356	
Contracts/retainage payable	1,067,803	
Accrued interest	 		88,435 	
Total Current Liabilities Non-Current Liabilities
Bonds payable, net	 		1,169,594 

 		7,172,798 	
Total Liabilities	 		8,342,392 	

NET POSITION
Restricted for debt service		

196,680	
Unrestricted	 		(591,662) 	
Total Net Position	 $	(394,982) 

See accompanying notes to financial statements.

VillaMar Community Development District STATEMENT OF ACTIVITIES
For the 10 Months Ended September 30, 2019

	Net (Expenses)	
	Revenues and	
		Program		Change in	
		   	Revenues	 Operating		  	Net Position		
		Grants and		Governmental	
 Functions/Programs		  	Expenses		Contributions		Activities	
Governmental Activities					
General government	$	(86,929)	$	100,000		$	13,071	
Interest and other charges	 			(428,567) 	 			- 		 		(428,567) 	
Total Governmental Activities	 $	(515,496) 	 $	100,000 		(415,496)	

General Revenues
Investment income	

 		20,514 	
Change in Net Position	(394,982)	
Net Position - November 30, 2018	 		- 	
Net Position - September 30, 2019	$	(394,982)	

See accompanying notes to financial statements.

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VillaMar Community Development District BALANCE SHEET –  
GOVERNMENTAL FUNDS  
September 30, 2019  

General	
Debt Service	
Capital Projects	Total
Governmental Funds	
ASSETS
Cash	
$	6,427		 

$	-	$	-	$	6,427	
Due from developer	20,000		-	-	20,000	
Restricted assets						
Investments, at fair value	-		735,984		3,278,433		4,014,417	
Total Assets	$	26,427		$	735,984		$	3,278,433		$ 4,040,844	

LIABILITIES AND FUND BALANCES

LIABILITIES		
Accounts payable and accrued expenses	$	13,356	$	-	$	-	$	13,356	
Contracts and retainage payable	 		- 	 		-      		1,067,803 	 		1,067,803 	
Total Liabilities	 		13,356 	 		-      		1,067,803 	 		1,081,159 	
FUND BALANCES							
Restricted:									
Debt service		-	735,984	-	735,984	
Capital projects		-	-	2,210,630	2,210,630	
Unassigned	 		13,071 	 		- 	 		- 	 		13,071 	
Total Fund Balances	 		13,071 	 		735,984 	 		2,210,630 	 		2,959,685 	
Total Liabilities and Fund Balances	 	$	26,427 	 	$	735,984 	 	$	3,278,433 	 	$ 4,040,844 	

See accompanying notes to financial statements.

VillaMar Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES  
TO NET POSITION OF GOVERNMENTAL ACTIVITIES  
September 30, 2019  

Total Governmental Fund Balances	$	2,959,685	
Amounts reported for governmental activities in the Statement of Net Position are different because:			
Capital assets, construction in progress, used in governmental activities are not current financial resources, and therefore, are not reported at the fund level.		

3,906,566	
Long-term liabilities, bonds payable, are not due and payable in the current period, and therefore, are not reported at the fund level.		
(7,180,000)	
Bond discount being amortized, net of accumulated amortization, used in governmental activities are not current financial resources and, therefore, are not reported at the fund level.		

7,202	
Accrued interest expense for long-term debt is not a current financial use, and therefore, is not reported at the fund level.		
(88,435)	

Net Position of Governmental Activities	
$	
(394,982)	

See accompanying notes to financial statements.

VillaMar Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES – GOVERNMENTAL FUNDS
For the 10 Months Ended September 30, 2019

										Total	
					Debt			Capital		Governmental	
	    	General		   	Service		    	Projects			 			Funds		
REVENUES						
Developer contributions	$	100,000		$	-		$	-		$	100,000	
Investment income	 		- 	 		2,522 	 		17,992 		 			20,514 	
Total Revenues	 		100,000 	 		2,522 	 		17,992 		 			120,514 	
EXPENDITURES											
Current											
General government		86,929			-			-		86,929	
Capital outlay		-			-			3,906,566		3,906,566	
Debt service											
Other debt service costs		-			-			340,132		340,132	
Total Expenditures		86,929			-			4,246,698		4,333,627	

Excess of revenues over/(under) expenditures		
13,071			
2,522			
(4,228,706)		
(4,213,113)	

OTHER FINANCING SOURCES/(USES)											
Issuance of long-term debt		-			733,462			6,446,538		7,180,000	
Bond discount		-			-			(7,202)		(7,202)	
Total other financing sources/(uses)		-			733,462			6,439,336		7,172,798	

Net Change in Fund Balance		
13,071			
735,984			
2,210,630		
2,959,685	
Fund Balances - November 30, 2018

Fund Balances - September 30, 2019		-

13,071			-

735,984			-

2,210,630		-	
	
$			
$			
$			
$	2,959,685	

See accompanying notes to financial statements.

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS  
TO THE STATEMENT OF ACTIVITIES  
For the 10 Months Ended September 30, 2019  

Net Change in Fund Balances - Total Governmental Funds	$	2,959,685	
Amounts reported for governmental activities in the Statement of Activities are different because:			
Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount of capital outlay
in the current period.		

3,906,566	
The issuance of long-term debt is reflected as an other financing source, however, at the government-wide level these amounts increase liabilities.		
(7,180,000)	
Governmental funds report bond discounts as expenditures. However, in the Statement of Activities, the cost is allocated as amortization expense.		
7,202	
In the Statement of Activities, interest is accrued on outstanding bonds; whereas in the governmental funds, interest expenditures are reported when due. This is the change in accrued interest in the current period.		

(88,435)	

Change in Net Position of Governmental Activities	
$	
(394,982)	

See accompanying notes to financial statements.

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND  
For the 10 Months Ended September 30, 2019  

							Variance with	
							Final Budget	
	Original		Final				Positive	
	Budget		Budget		Actual		(Negative)	
Revenues								
Developer contributions	$	97,707		$	100,000		$	100,000		$	-	

Expenditures								
Current								
General government	97,707		100,000		86,929		13,071	

Net Change in Fund Balances	
-		
-		
13,071		
13,071	
Fund Balances - November 30, 2018	-		-		-			

Fund Balances - September 30, 2019	 	
$	- 		
$	- 	
 	
$	13,071 	
 	
$	13,071 	

 

See accompanying notes to financial statements.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the District have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The District's more significant accounting policies are described below.

Reporting Entity

The District was established on November 30, 2019, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, and City of Winter Haven Ordinance 018-70, as a Community Development District. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is authorized to issue bonds for the purpose, among others, of financing, funding, planning, establishing, acquiring, constructing district roads, landscaping, and other basic infrastructure projects within or outside the boundaries of the VillaMar Community Development District. The District is governed by a Board of Supervisors who are elected by the landowners of the District. The District operates within the criteria established by Chapter 190.

As required by GAAP, these financial statements present the VillaMar Community Development District (the primary government) as a stand-alone government. The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility including, but not limited to, financial interdependency, selection of governing authority, designation of management, significant ability to influence operations and accountability for fiscal matters.

Based upon the application of the above-mentioned criteria as set forth in Governmental Accounting Standards the District has identified no component units.

Measurement Focus and Basis of Accounting

The basic financial statements of the District are composed of the following:

Government-wide financial statements

Fund financial statements

Notes to financial statements

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

Government-wide Financial Statements

Government-wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include all the governmental activities of the primary government. The effect of interfund activity has been removed from these statements.

Governmental activities are supported by developer contributions. Program  revenues are netted with program expenses in the statement of activities to present the net cost of each program.

Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financing source.

Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.

Fund Financial Statements

The underlying accounting system of the District is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Fund financial statements for the primary government’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2. Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Governmental Funds
The District reports fund balance according to Governmental Accounting Standards Board Statement 54 – Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.

The District has various policies governing the fund balance classifications.

Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.

Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.

Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company.

Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance is considered to be utilized first when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.

Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Governmental Funds (Continued)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered to be available when they are collected within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of “available spendable resources”.

Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and  uses of “available spendable resources” during a period.

Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources are expended, rather than as fund assets. The proceeds of long- term debt are recorded as an other financing source rather than as a fund liability.

Debt service expenditures are recorded only when payment is due.

Basis of Presentation

Governmental Major Funds

 General Fund – The General Fund is the District’s  primary  operating  fund.  It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation (Continued)

Governmental Major Funds (Continued)

 Debt Service Fund – The Debt Service Fund accounts for debt service requirements   to retire the Series 2019 Special Assessment Revenue Bonds issued to finance a portion of the cost of acquisition, construction, installation, and equipping of the Series 2019 project.

 Capital Projects Fund – The Capital Projects Fund accounts for acquisition and construction of infrastructure improvements located within the boundaries of the District.

Non-current Governmental Assets/Liabilities

GASB Statement 34 requires that non-current governmental assets, such as construction in progress, and non-current governmental liabilities, such as general obligation bonds be reported in the governmental activities column in the government-wide Statement of Net Position.

Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity a. Cash and Investments
Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral from their deposits of public funds. This pool  is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions, providing full insurance for public deposits.

The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of:

Direct obligations of the United States Treasury;

The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969;

Interest-bearing time deposits or savings accounts in authorized qualified public depositories;

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity (Continued)

Cash and Investments (Continued)

4. Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency.

Cash and cash equivalents include time deposits, certificates of deposit, money market funds, and all highly liquid debt instruments with original maturities of three months or less.

Capital Assets

Capital assets, which includes construction in progress, is reported in the applicable governmental activities column.

The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of two years. The valuation basis for all assets is historical cost. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Budgets

Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to Chapter 190, Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general and debt service funds. As a result, deficits in the budget columns of the accompanying financial statements may occur.

Bond Discounts
Bond discounts are amortized over the life of the bonds.

NOTE	B	–	RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS

Explanation of Differences Between the Governmental Fund  Balance  Sheet  and the Government-wide Statement of Net Position

“Total fund balances” of the District’s governmental funds ($2,959,685) differs from “net position” of governmental activities ($(394,982)) reported in the Statement of Net Position. This difference primarily results from the long-term economic focus of the Statement of Net Position versus the current financial resources focus of the governmental fund balance sheet. The effect of the differences is illustrated below:

 Capital related items

When capital assets (infrastructure that is to be used in governmental activities) are purchased or constructed, the cost of those assets is reported as expenditures in governmental funds. However, the Statement of Net Position included those capital assets among the assets of the District as a whole.

Construction in progress	 $	3,906,566

 Long-term debt transactions

Long-term liabilities applicable to the District’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position. Balances at September 30, 2019 were:
Bonds payable	 $	(7,180,000)

Bond discount	 $	7,202

 Accrued interest
Accrued liabilities in the statement of net position differ from the amount reported in governmental funds due to accrued interest on bonds.

Accrued interest on bonds payable	$	(88,435)

NOTE	B	–   RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS (CONTINUED)

Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities

The “net change in fund balances” for government funds ($2,959,685) differs from the “change in net position” for governmental activities ($(394,982)) reported in the Statement of Activities. The differences arise primarily from the long-term economic focus of the Statement of Activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below:

 Capital related items

When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the costs of those assets  is allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balances decrease by the amount of financial resources expended, whereas net position increases by the amount of capital outlay for the year.

Capital outlay	$	3,906,566

 Long-term debt transactions

When long-term debt is issued for governmental activities, the resources obtained are recognized as an other financing source at the fund level. At the government-wide level, however, the new debt increases non-current liabilities. Also, interest is recognized when due at the fund level, but is accrued at the government-wide level.

Issuance of long-term debt	$	(7,180,000)	
Bond discount	 $	7,202	
Accrued interest	 $	(88,435)	

NOTE C – CASH AND INVESTMENTS

All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash.

 Custodial Credit Risk – Deposits

Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not have a formal deposit policy for custodial credit risk, however, they follow the provisions of Chapter 280, Florida Statutes regarding deposits and investments. As of September 30, 2019, the District's bank balance and carrying value were
$6,427. Exposure to custodial credit risk was as follows. The District maintains all deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes.

 		Investment	 	Maturities	 	Fair Value	
First American Treasury Obligation	26 days*	$	4,014,417

* Weighted Maturity

The District categorizes its fair value measurements within the fair value hierarchy recently established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The District uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities, or groups of assets and liabilities.

Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable and uses significant unobservable inputs that uses the best information available under the circumstances, which includes the District’s own data in measuring unobservable inputs.

Based on the criteria in the preceding paragraph, the investment listed above is a Level 1 asset.

NOTE C – CASH AND INVESTMENTS (CONTINUED)

 Interest Rate Risk

The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. However, the District follows Florida Statutes Chapter 190 for their investments.

 Credit Risk

The District's investments in treasury funds, money markets, and government loans are limited by state statutory requirements and bond compliance. The District has no investment policy  that would further limit its investment choices. The District's investments in government loans are limited by state statutory requirements and bond compliance. As of September 30, 2019, the District's investments in the First American Treasury Obligation Funds were rated AAAm by Standard & Poor's.

 Concentration of Credit Risk

The District places no limit on the amount it may invest in any one fund. The investments in the First American Treasury Obligation represents 100% of the district’s total investments.

The types of deposits and investments and their level of risk exposure as of September 30, 2019 were typical.

NOTE D – CAPITAL ASSETS

Capital Asset activity for the year ended September 30, 2019 was as follows:

	Balance			Balance	
	November 30,		September 30,	
	 			2018		   	Additions		   	Deletions	   		2019		
 Governmental activities:				
Capital assets, not being depreciated:	
Construction in progress	 $	-   $	3,906,566 	 $	-   $	3,906,566 	

NOTE E – LONG-TERM DEBT

The following is a summary of activity for long-term debt of the District for the year ended September 30, 2019:

Long-term debt at November 30, 2018	$			- Bond proceeds	 		7,180,000
Long-term debt at September 30, 2019		7,180,000 Less: Bond Discount	 			(7,202)
Long-term debt, net at September 30, 2019	$	7,172,798

In June 2019, the District issued $7,180,000 Special Assessment Bonds, Series 2019, due in annual principal installments beginning May 2021, maturing May 2050. Interest is due semi- annually on May 1 and November 1, beginning November 2019, at a rate of 3.75% on the $510,000 bonds, with a maturity date of May 1, 2024, 4.00% on the $750,000 bonds, with a maturity date of May 1, 2029, 4.625% on the $2,105,000 bonds, with a maturity date of May 1, 2039, and 4.87% on the $3,815,000 bonds, with a
maturity date of May 1, 2050.	$ 7,180,000

Year Ending							
September 30,		    	Principal		 		Interest		 		Total		
2020	$	-	$	282,593	$	282,593	
2021		120,000		332,463		452,463	
2022		125,000		327,963		452,963	
2023		130,000		323,275		453,275	
2024		135,000		318,400		453,400	
2025-2029		750,000		1,508,688		2,258,688	
2030-2034		930,000		1,334,824		2,264,824	
2035-2039		1,175,000		1,097,562		2,272,562	
2040-2044		1,480,000		792,430		2,272,430	
2045-2049		1,895,000		392,926		2,287,926	
2050
Totals	 		440,000 	 		21,450 	 		461,450 	
	   $		7,180,000 	   $		6,732,574 	   $ 	13,912,574  	

The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2019 are as follows:

 

NOTE E – LONG-TERM DEBT (CONTINUED)

 Significant Bond Provisions

The Series 2019 Bonds are subject to redemption at the option of the District prior to their maturity, in whole or in part, at any time on or after May 1, 2029 at a redemption price equal to the principal amount of the Series 2019 Bonds to be redeemed, together with accrued interest to the date of redemption. The Series 2019 Bonds are subject to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Trust Indenture.

The Trust Indenture established certain amounts be maintained in a reserve account. In addition, the Trust Indenture has certain restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements.

 Depository Funds

The bond resolution establishes certain funds and determines the order in which revenues are to be deposited into these funds. A description of the significant funds, including their purposes, is as follows:

1. Reserve Fund – The 2019 Reserve Account is funded from the proceeds of the Series 2019 Bonds and initially is an amount equal to the maximum annual debt service requirement for all outstanding Series 2019 Bonds. Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture.

Reserve	Reserve	
Balance	Requirement

Series 2019 Special Assessment Bonds	 $	452,419       $	450,869 	

NOTE F – ECONOMIC DEPENDENCY

The Developers own a significant portion of land within the District. The District’s activity is dependent upon the continued involvement of the Developers, the loss of which could have a material adverse effect on the District’s operations. At September 30, 2019, all board members are affiliated with the Developers.

NOTE G – RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. There were no claims or settled claims from these risks have not exceeded commercial insurance coverage.

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Supervisors
VillaMar Community Development District City of Winter Haven, Florida

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of VillaMar Community Development District, as of and for the 10 months ended September 30, 2019, and the related notes to the financial statements, and have issued our report thereon dated May 9, 2020.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered VillaMar Community Development District's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of VillaMar Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of VillaMar Community Development District's internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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To the Board of Supervisors
VillaMar Community Development District

Compliance and Other Matters

As part of obtaining reasonable assurance about whether VillaMar Community Development District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida May 9, 2020

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MANAGEMENT LETTER  

To the Board of Supervisors
VillaMar Community Development District City of Winter Haven, Florida

Report on the Financial Statements

We have audited the financial statements of the VillaMar Community Development District as of and for the 10 months ended September 30, 2019, and have issued our report thereon dated May 9, 2020.

Auditor’s Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Chapter 10.550, Rules of the Florida Auditor General.

Other Reporting Requirements

We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, which is dated  May 9, 2020, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding financial audit report. This is the initial financial audit report.

Financial Condition and Management

Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not VillaMar Community Development District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific conditions met. In connection with our audit, we determined that VillaMar Community Development District did not meet any of the conditions described in Section 218.503(1) Florida Statutes.

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To the Board of Supervisors
VillaMar Community Development District

Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for VillaMar Community Development District. It is management’s responsibility to monitor the VillaMar Community Development District’s financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same as of September 30, 2019.

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.

Additional Matters

Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but warrants the attention of those charged with governance. In connection with our audit, we did not note any such findings.

Purpose of this Letter

Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida May 9, 2020

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INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES  

To the Board of Supervisors
VillaMar Community Development District City of Winter Haven, Florida County, FL

We have examined VillaMar Community Development District's compliance with Section 218.415, Florida Statutes during the 10 months ended September 30, 2019. Management is responsible for VillaMar Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on VillaMar Community Development District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about VillaMar Community Development District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on VillaMar Community Development District’s compliance with the specified requirements.

In our opinion, VillaMar Community Development District complied, in all material respects, with the aforementioned requirements during the 10 months ended September 30, 2019.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida May 9, 2020

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