VillaMar
Community Development District ANNUAL FINANCIAL REPORT
September 30, 2020

VillaMar Community Development District ANNUAL FINANCIAL REPORT
September 30, 2020 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	16-28
INDEPENDENT AUDITORS’ 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	29-30
MANAGEMENT LETTER	31-32
INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH
SECTION 218.415, FLORIDA STATUTES	33

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
VillaMar Community Development District 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 year ended September 30, 2020, 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, 2020, and the respective changes in financial position and the budgetary comparison for the General Fund for the year 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 July 14, 2021 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 July 14, 2021

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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, 2020.

The District’s total assets exceeded total liabilities by $1,579,130 (net position). Net investment in capital assets was $1,924,072. Restricted net position was $323,328 and unrestricted net position was $(668,270).

Governmental activities revenues totaled $2,410,570 while governmental activities expenses totaled $436,458.

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.

Net Position

Governmental Activities
	 	2020			2019	

Current assets	
$	70,244		
$	26,427	
Restricted assets	831,825		4,014,417	
Capital assets	 	8,395,946 		 	3,906,566 	
Total Assets	 	9,298,015 		 	7,947,410 	
Current liabilities	1,300,852		1,169,594	
Non-current liabilities	 	6,418,033 		 	7,172,798 	
Total Liabilities	 	7,718,885 		 	8,342,392 	

Net Position				
Net investment in capital assets	1,924,072	-	
Restricted	323,328	196,680	
Unrestricted	 	(668,270)	 	(591,662) 	
Total Net Position	  $	1,579,130 	$	(394,982)	

The decrease in restricted assets and the increase in capital assets is related to the capital additions in the current year.

The decrease in non-current liabilities is related to the principal payment in the current year and the current portion included with current liabilities in the current year.

The increase in net position is the result of revenues exceeding expenses in the current year.

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.

Change In Net Position

Governmental Activities
	 	2020			2019	
Program Revenues				
Charges for services	$	744,225		$	-	
Operating contributions	45,000		100,000	
Capital contributions	1,604,973		-	
General Revenues				
Investment earnings	 	16,372 	 	20,514 	
Total Revenues	 	2,410,570 	 	120,514 	

Expenses				
General government	92,160	86,929	
Physical environment	13,607	-	
Interest and other charges	 	330,691 	 	428,567 	
Total Expenses	 	436,458 	 	515,496 	
Change in Net Position	1,974,112	(394,982)	
Net Position - Beginning of Period	 	(394,982)	 	- 	
Net Position - End of Period	  $	1,579,130 	  $	(394,982)	

The increase in capital contributions is related to the capital project activity in the current year. The decrease in interest and other charges is related to the cost of issuance in the prior year.

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, 2020 and 2019:

Governmental Activities
 	Description		 	2020		 	2019		
Construction in progress	  $	8,395,946 	  $	3,906,566 	

The activity for the year consisted of additions to construction in progress of $4,489,380.

General Fund Budgetary Highlights

The final budget exceeded actual expenditures in the current year because landscape maintenance, engineering and fertilizer expenditures were less than anticipated.

The September 30, 2020 budget was not amended.

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, 2020 was $6,890,000.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Economic Factors and Next Year’s Budget

VillaMar Community Development District does not expect any economic factors to have any significant effect on the financial position or results of operations of the District in fiscal year 2021.

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.

ASSETS	
Current Assets	
Cash	
Special assessments receivable	
Due from developer	
Prepaid expenses	
Total Current Assets	
Non-Current Assets	
Restricted Assets	
Investments	
Capital Assets, Not Being Depreciated	
Construction in progress	
Total Non-Current Assets	
Total Assets	

LIABILITIES	
Current Liabilities	
Accounts payable and accrued expenses	
Contracts/retainage payable	
Bonds payable	
Accrued interest	
Total Current Liabilities	
Non-Current Liabilities	
Bonds payable, net	
Total Liabilities	

NET POSITION	
Net investment in capital assets	
Restricted for debt service	
Unrestricted	
Total Net Position	

See accompanying notes to financial statements.

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Governmental Activities

$	5,569	
36,887	
25,000	
 	2,788 	
 	70,244 	

831,825

 	8,395,946 	
 	9,227,771 	
 	9,298,015 	

39,365	
663,531	
465,000	
 	132,956 	
 	1,300,852 	

 	6,418,033 	
 	7,718,885 	

1,924,072	
323,328	
 	(668,270)	
  $	1,579,130 	

VillaMar Community Development District STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2020

$	(92,160)	
(13,607)	
 	(330,691)	
  $	(436,458)	

$	36,325	
5,363	
 	702,537 	
  $	744,225 	

$	39,211	
5,789	
 	- 	
  $	45,000 	

$	-	
1,604,973	
 	- 	
  $	1,604,973 	

$	(16,624)	
1,602,518	
 	371,846 	
1,957,740	

Functions/Programs	
Governmental Activities	
General government	
Physical environment	
Interest and other charges	
Total Governmental Activities	

Program Revenues	

Charges for Services	Operating Grants and Contributions	Capital Grants and   Contributions	

Net (Expenses)	
Revenues and	
Change in	
Net Position	

Governmental Activities	

Expenses

General Revenues	
Investment income	

 	16,372 

Change in Net Position	1,974,112	
Net Position - October 1, 2019	 	(394,982)	
Net Position - September 30, 2020	  $	1,579,130 	

See accompanying notes to financial statements.

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VillaMar Community Development District BALANCE SHEET –
GOVERNMENTAL FUNDS
September 30, 2020

Total	
Governmental	
Funds	

Debt	Capital
General	Service	Projects

ASSETS		
Cash	$	5,569	
Assessments receivable	-	
Due from developer	25,000	
Prepaid expenses	2,788	

 

$	-	
36,887	
-	
-	

 

$	-	
-	
-	
-	

 
$	5,569	
36,887	
25,000	
2,788	

-		830,556		1,269	
  $	33,357 		   $	867,443 		   $	1,269 	

831,825	
   $	902,069 	

Restricted assets Investments, at fair value
Total Assets

LIABILITIES, DEFERRED INFLOWS OF	
RESOURCES AND FUND BALANCES	

LIABILITIES		
Accounts payable and accrued expenses	$	39,365	$	-	$	-	
Contracts and retainage payable	-	-	663,531	
Total Liabilities	39,365	-	663,531	

$	39,365	
663,531	
702,896	

DEFERRED INFLOWS OF RESOURCES	
Unavailable revenues	

FUND BALANCES		
Nonspendable-prepaid expenses	2,788	-	-	
Restricted:		
Debt service	-	867,443	-	
Unassigned	(33,796)	-	(662,262)	
Total Fund Balances	(31,008)	867,443	(662,262)	
Total Liabilities, Deferred Inflows of		
Resources and Fund Balances	  $	33,357       $	867,443       $	1,269 	

25,000	-	-	25,000

867,443	
(696,058)	
174,173	

2,788

 

   $	902,069 

See accompanying notes to financial statements.

VillaMar Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES
TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2020

Total Governmental Fund Balances

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.	

Long-term liabilities, bonds payable, are not due and payable in the	
current period, and therefore, are not reported at the fund level.	

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.	

$	174,173

8,395,946

(6,890,000)

6,967

Unavailable revenues are recognized as deferred inflows at the fund level, but	
this amount is recognized as revenues at the government-wide level.	

25,000

Accrued interest expense for long-term debt is not a current financial use, and	
therefore, is not reported at the fund level.	

 	(132,956)

Net Position of Governmental Activities	 $	1,579,130 

See accompanying notes to financial statements.

VillaMar Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES – GOVERNMENTAL FUNDS
For the Year Ended September 30, 2020

REVENUES	
Special assessments	
Developer contributions	
Investment income	
Total Revenues	

$	41,688	$	702,537	$	-	
20,000	-	1,604,973	
 	- 	 	4,752 	 	11,620 	
 	61,688 	 	707,289 	 	1,616,593 	

$	744,225	
1,624,973	
 	16,372 	
 	2,385,570 	

Total	
Governmental	
 	Funds		

Debt	
 	Service		

Capital	
 	Projects		

 	General	

EXPENDITURES	
Current	
General government	
Physical environment	
Capital outlay	
Debt service	
Principal	
Interest	
Total Expenditures	

92,160	
13,607	
-	

-	
-	
-	

92,160	
13,607	
4,489,380	

-
- 4,489,380

-	
 	- 	
 	105,767 	

290,000	
 	285,935 	
 	575,935 	

-	
 	- 	
 	4,489,380 	

290,000	
 	285,935 	
 	5,171,082 	

 	(2,872,787)    		(2,785,512)	

Excess of revenues over/(under) expenditures 	(44,079) 	131,354 

OTHER FINANCING SOURCES/(USES)	
Transfer in	
Transfer out	
Total other financing sources/(uses)	

-	
 	- 	
 	- 	

105	
 	- 	
 	105 	

-	
 	(105)	
 	(105)	

105	
 	(105)	
 	- 	

Net Change in Fund Balance	(44,079)	131,459	(2,872,892)	(2,785,512)	
Fund Balances - October 1, 2019	 	13,071 	 	735,984 	 	2,210,630 	 	2,959,685 	
Fund Balances - September 30, 2020	  $	(31,008)	  $	867,443 	  $	(662,262)	  $	174,173 	

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 Year Ended September 30, 2020

Net Change in Fund Balances - Total Governmental Funds

Amounts reported for governmental activities in the Statement of Activities are	
different because:	

Repayment of bond principal is an expenditure in the governmental funds,	
but the repayment reduces long-term liabilities at the government-wide level.	

Governmental funds report bond discounts as expenditures. However, in the	
Statement of Activities, the cost is allocated as amortization expense.	

$	(2,785,512)

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.	

4,489,380

290,000

(235)

At the fund level, revenues are recognized when they become available,	
however, revenues are recognized when they are earned at the	
government-wide level. This is the amount of the change in earned	
revenue that was not available.	25,000	

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.	 	(44,521)	

Change in Net Position of Governmental Activities	 $	1,974,112 

See accompanying notes to financial statements.

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
For the Year Ended September 30, 2020

Variance with	
Final Budget	
Positive	
(Negative)	

Original	Final

Revenues	
Special assessments	
Developer contributions	
Total Revenues	

$	-		
$	-		
$	41,688	
 	260,126 		 	260,126 		 	20,000 	
260,126		260,126		61,688	

$	41,688	
 	(240,126)	
(198,438)	

Expenditures	
Current	
General government	
Physical environment	
Culture/recreation	
Total Expenditures	

130,875	
116,064	
 	13,187 	
 	260,126 	

130,875	
116,064	
 	13,187 	
 	260,126 	

92,160	
13,607	
 	- 	
 	105,767 	

38,715	
102,457	
 	13,187 	
 	154,359 	

Budget	Budget	Actual

-	-	13,071	13,071	

  $		
-     $		
-      $		
(31,008)    $		
(31,008)	

Net Change in Fund Balances	-	-	(44,079)	(44,079) Fund Balances - October 1, 2019
Fund Balances - September 30, 2020

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, 2018, 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

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. 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

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.
Deferred Inflows of Resources
Deferred inflows of resources represent an acquisition of net position that applies to a future reporting period(s) and so will not be recognized as an inflow of resources (revenue) until then. The District only has one time that qualifies for reporting in the category. Unavailable revenues are reported only in the governmental funds balance sheet. This amount is deferred and recognized as an inflow of resources in the period that amounts become available.

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, $174,173, differs from “net position” of governmental activities, $1,579,130, 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	$	8,395,946

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, 2020 were:
Bonds payable	$	(6,890,000)

Bond discount, net	$	6,967

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	$	(132,956)

Deferred inflows of resources

Deferred inflows of resources in the Statement of Net Position differ from the amount reported in the governmental funds due to unavailable revenues. Governmental fund financial statements report revenues which are not available as deferred inflows of resources. However, unavailable revenues in governmental funds are susceptible to full accrual in the government-wide financial statements.
Unavailable revenues	$	25,000

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, $(2,785,512), differs from the “change in net position” for governmental activities, $1,974,112, 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	$	4,489,380

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.

Principal payments on long-term debt	$	290,000	
Bond discount amortization	$	(235)	
Accrued interest	$	(44,521)	
Deferred inflows of resources		

Deferred inflows of resources reported at the fund level are recognized as revenues in the Statement of Activities.

Net change in deferred inflows of resources	$	25,000

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, 2020, the District's bank balance was $6,330 and the  carrying value was $5,569. 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	46 days*	 $	831,825 

* Weighted Average 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, 2020, 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, 2020 were typical.

NOTE D – CAPITAL ASSETS

Capital Asset activity for the year ended September 30, 2020 was as follows:

Governmental activities:
Capital assets, not being depreciated:

Balance	Balance
October 1,	September 30,
 	2019	 	Additions	 	Deletions	 	2020	

Construction in progress

  $	3,906,566 

  $	4,489,380 

  $	- 

  $	8,395,946 

   

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, 2020:

Long-term debt at October 1, 2019	$	7,180,000 Principal payments	 		(290,000)
Long-term debt at September 30, 2020	$	6,890,000 

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. Current portion is $465,000.	$	6,890,000

The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2020 are as follows:

Year Ending
    September 30,		
 	Principal		
 	Interest		
 	Total		
2021	$	465,000	$	326,786	$	791,786	
2022	110,000	298,631	408,631	
2023	115,000	294,506	409,506	
2024	120,000	290,194	410,194	
2025	125,000	285,694	410,694	
2026-2030	705,000	1,349,469	2,054,469	
2031-2035	885,000	1,179,694	2,064,694	
2036-2040	1,125,000	953,531	2,078,531	
2041-2045	1,425,000	658,125	2,083,125	
2046-2050	 	1,815,000 	 	273,975 	 	2,088,975 	
Totals	  $	6,890,000 	  $	5,910,605 	  $ 12,800,605 	

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 Balance

Reserve Requirement

 
Series 2019 Special Assessment Bonds	 $	418,359	 $	411,159 

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, 2020, 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. The District has not filed any claims under this commercial coverage since inception.

NOTE H – SUBSEQUENT EVENTS

In November 2020, the District issued $6,500,000 Special Assessment Bonds, Series 2020 to finance all or a portion of the costs of the planning, financing, acquisition, construction, equipping, and installation of the Series 2020 Project.

In addition, the District made prepayments on the Series 2019 Bonds in November 2020, February 2021, and May 2021 of $280,000, $45,000, and $30,000, respectively.

In April 2021, the District boundary was expanded to include an additional 236.07 acres.

INDEPENDENT AUDITORS’ 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 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 year ended September 30, 2020, and the related notes to the financial statements, and have issued our report thereon dated July 14, 2021.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered VillaMar Community Development District's internal control over financial reporting (internal control) as a basis for designing 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.

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 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 July 14, 2021

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MANAGEMENT LETTER

To the Board of Supervisors
VillaMar Community Development District 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 year ended September 30, 2020, and have issued our report thereon dated July 14, 2021.

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  July 14, 2021, 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. There were no findings or recommendations in the preceding 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.b. 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, 2020.

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 July 14, 2021

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INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES

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

We have examined VillaMar Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2020. 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 year ended September 30, 2020.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida July 14, 2021

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