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RIVERS EDGE COMMUNITY DEVELOPMENT DISTRICT

TABLE  OF CONTENTS

Year  Ended  September  30, 2018

Page

Financial Section:
Independent Auditor's Report	1
Management's Discussion and Analysis	3
Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position	7
Statement of Activities	8
Fund Financial Statements:
Balance Sheet - Governmental Funds	9
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds	10
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities	11
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual - General Fund	12
Notes to Financial Statements	13
Compliance Section:
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	29
Management Comments	31
Independent Auditor's Report on Compliance with the Requirements
of Section 218.415, Florida Statutes	33

INDEPENDENT AUDITOR'S REPORT

To the Board of Supervisors
Rivers Edge Community Development District

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, and each major fund of the Rivers Edge Community Development District (the “District”), as of and for the year ended September 30, 2018, and the related notes to the 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

The District's 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 Auditing 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 of 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 principles 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 opinions.

MCDIRMIT DAVIS & COMPANY, LLC
934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803
T: 407-843-5406  │  F: 407-649-9339  │ WWW.MCDIRMITDAVIS.COM

Opinions

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 the District as of September 30, 2018, and the respective changes in financial position thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance 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’s discussion and analysis starting on page 3, 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 3, 2019, on our consideration of the District’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. 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 the 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 the District’s internal control over financial reporting and compliance.

Orlando, Florida July 3, 2019

MANAGEMENT’S DISCUSSION AND ANALYSIS

Our discussion and analysis of the Rivers Edge Community Development District (the “District”) financial accomplishments provide an overview of the District’s financial activities for the year ended September 30, 2018. Please read it in conjunction with the District’s Independent Auditor’s Report, financial statements and accompanying notes.

This information is being presented to provide additional information regarding the activities of the District and to meet the disclosure requirements of Government Accounting Standards Board Statement (GASB) No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments issued June 1999.

Financial Highlights

The assets of the District  exceeded  its liabilities  at September  30, 2018 by
$57,253,875, a decrease of $909,274 in comparison with the prior year.
At September 30, 2018, the District’s governmental funds reported a combined fund balance of $1,518,739, an increase of $161,457 in comparison with the prior year.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the Rivers Edge Community Development District’s financial statements. The District’s financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements and 3) notes to financial statements.

Government-Wide Financial Statements

The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the District’s assets, deferred outflows and liabilities, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items  that will only result in cash flows in future fiscal periods.

The government-wide financial statements include all governmental activities that are principally supported by special assessment revenues. The District does not have any business-type activities. The governmental activities of the District include general government and maintenance and operations related functions.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has one fund category: Governmental Funds.

Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a District’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government- wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains three individual governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances for the general fund, debt service fund and capital projects fund, all of which are considered to be major funds.

The District adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget.

Notes to Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

Government-Wide Financial Analysis

Statement of Net Position - The District’s net position was $57,253,875 at September 30, 2018. The following analysis focuses on the net position of the District’s governmental activities.

Government-Wide Financial Analysis (Continued):

Rivers Edge Community Development District Statement of Net Position

	September 30,
2018		September 30,
2017	
Assets, excluding capital assets	$	2,003,877		$	1,596,283	
Capital Assets, net of depreciation	 	79,369,804		 	73,782,479	
Total assets	 	81,373,681		 	75,378,762	
Deferred Outflows of Resources	 	430,042		 	452,676	
Liabilities, excluding long-term liabilities	863,256		648,289	
Long-term Liabilities	 	23,686,592		 	17,020,000	
Total liabilities	 	24,549,848		 	17,668,289	

Net Position:				
Net investment in capital assets	55,683,212	57,215,155	
Restricted for capital projects	15,402	32,908	
Restricted for debt service	962,534	843,301	
Unrestricted	 	592,727	 	71,785	
Total net position	  $	57,253,875	  $	58,163,149	

The following is a summary of the District’s governmental activities for the fiscal years ended September 30, 2018 and 2017.

Changes in Net Position Year ended September 30,

	2018		2017	
Revenues:				
Program revenues	$	5,294,474		$	3,216,950	
General revenues	 	28,210		 	21,930	
Total revenues	 	5,322,684		 	3,238,880	

Expenses:				
General government	931,628	659,500	
Maintenance and operations	4,135,439	3,571,373	
Interest on long-term debt	 	1,164,891	 	1,000,256	
Total expenses	6,231,958	5,231,129	
Change in net position	(909,274)	(1,992,249)	
Net position - beginning of year	 	58,163,149	 	60,155,398	
Net position - ending	  $	57,253,875	  $	58,163,149	

As noted above and in the statement of activities, the cost of all governmental activities during the year ended September 30, 2018 was $6,231,958. The majority of these costs are comprised of maintenance and operations expenses.

Financial Analysis of the Government’s Funds

The District uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At September 30, 2018, the District’s governmental funds reported combined ending fund balances of $1,518,739. Of this total, $14,144 is nonspendable and $148,541 is unassigned and available for spending at the District’s discretion. The remainder of the fund balance $1,356,054 is restricted to pay debt service and capital project costs.

The fund balance of the general fund increased $90,900 due to an increase in revenues. The debt service fund balance increased $88,063 due to bonds issued. The capital projects fund decreased $17,506 due to capital outlay expenditures.

General Fund Budgetary Highlights

An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. There was one amendment to the September 30, 2018 general fund budget. The legal level of budgetary control is at the fund level.

Capital Asset and Debt Administration

Capital Assets - At September 30, 2018, the District had $79,369,804 invested in capital assets, net of accumulated depreciation. More detailed information about the District’s capital  assets is presented in the notes to the financial statements.

Capital Debt - At September 30, 2018, the District had $23,760,000 in bonds outstanding. More detailed information about the District’s capital debt is presented in the notes to the financial statements.

Requests for Information

If you have questions about this report or need additional financial information, contact the Rivers Edge Community Development District’s Finance Department at 475 West Town Place, Suite 114, St. Augustine, Florida 32092.

FINANCIAL  STATEMENTS

STATEMENT  OF  NET  POSITION

September  30,  2018

Assets:	Governmental Activities	
Cash	$	79,417	
Investments	15,974	
Assessments receivable	10,427	
Due from developer	527,861	
Prepaid costs	6,903	
Deposits	7,241	
Restricted assets:		
Temporarily restricted investments	1,356,054	
Capital assets:		
Capital assets not being depreciated	23,918,886	
Capital assets being depreciated, net	 	55,450,918	
Total assets	81,373,681	
Deferred Outflows of Resources:
Deferred charge on refunding	 	430,042

Liabilities:
Accounts payable and accrued expenses	485,138	
Accrued interest payable	378,118	
Noncurrent liabilities:		
Due within one year	400,000	
Due in more than one year	 	23,286,592	
Total liabilities	 	24,549,848

Net Position:
Net investment in capital assets	55,683,212	
Restricted for:		
Capital projects	15,402	
Debt Service	962,534	
Unrestricted	 	592,727	
Total net position	  $	57,253,875	

STATEMENT  OF ACTIVITIES

Year  Ended  September  30, 2018

 		 Program Revenue		                    Charges	Operating Grants	Capital Grants

Net (Expense) Revenue and Changes in Net Position

for		and		and	Governmental Functions/Programs	Expenses	Services	Contributions	Contributions		Activities
Governmental activities:		
General government	$	931,628		$	277,867		$	966,130		$	-	$	312,369	
Maintenance and operations	4,135,439		1,233,434		-		1,419,163	(1,482,842)	
Interest on long-term debt	1,164,891		1,375,668		21,653		559	232,989	

Total governmental activities

$	6,231,958	$

2,886,969	$

987,783	$

1,419,722

(937,484)

General Revenues:
Miscellaneous and investment income	 	28,210	
Total general revenues	 	28,210	
Change in net position	(909,274)	
Net Position - beginning	 	58,163,149	
Net Position - ending	$	57,253,875	

BALANCE SHEET GOVERNMENTAL FUNDS

September  30,  2018

Assets:

     General		Debt Service

Capital Projects

Total Governmental Funds

Cash	$	79,417	$	-	$	-	$	79,417	
Investments	15,974	1,340,652	15,402	1,372,028	
Due from developer	527,861	-	-	527,861	
Assessments receivable	10,427	-	-	10,427	
Prepaid costs	6,903	-	-	6,903	
Deposits	 	7,241	-	-	7,241

Total assets

$ 647,823

$ 1,340,652

$	15,402

$	2,003,877

Liabilities and Fund Balances:
Liabilities:
Accounts payable and accrued expenses	  $ 485,138		$	-	$	-	$	485,138	
Total liabilities	485,138		-	-	485,138	

Fund Balances:
Nonspendable	14,144
Restricted for:	-	-	14,144	
Debt service	-	1,340,652	-	1,340,652	
Capital projects	-	-	15,402	15,402	
Unassigned	 	148,541	-	-	148,541	

Total fund balances	 	162,685	1,340,652	15,402	1,518,739

Total liabilities and fund balances

$ 647,823

$ 1,340,652

$	15,402

Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds.
Deferred charges on refunding, which are expenditures in the funds, are deferred and amortized over the life of the bonds.
Liabilities not due and payable from current available resources are not reported in governmental fund statements. All liabilities, both current and long-term, are reported in the government-wide statements.
Accrued interest payable	(378,118)

79,369,804

430,042

Bonds payable	 (23,686,592)	(24,064,710)
 	
Net Position of Governmental Activities	$	57,253,875

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS

Year  Ended  September  30, 2018

Revenues:

 	General		Debt Service

Capital Projects

Total Governmental Funds

Special assessments	$	1,511,301		$	1,294,173		$	-		$	2,805,474	
Prepaid assessments	-		81,495		-		81,495	
Developer contributions	875,623		-		1,419,163		2,294,786	
Miscellaneous and investment income	 	118,717		21,653		559		140,929	
Total revenues	 	2,505,641		1,397,321		1,419,722		5,322,684	
Expenditures:
Current:
General government	194,969	205,884	530,775	931,628	
Maintenance and operations	2,219,772	-	-	2,219,772	
Debt service:					
Interest	-	1,173,427	-	1,173,427	
Principal	-	6,585,000	-	6,585,000	
Capital outlay	 	-	-	7,502,992	7,502,992	

Total expenditures	 	2,414,741	7,964,311	8,033,767	18,412,819
   
Excess (Deficit) of Revenues Over
Expenditures	 	90,900	(6,566,990)	(6,614,045)	(13,090,135)	

Other Financing Sources (Uses):	
Bonds issued	-		6,275,000		7,050,000		13,325,000	
Bond discount	-		(73,408)		-		(73,408)	
Transfers in	-		453,461		-		453,461	
Transfers out	 	-		-		(453,461)		(453,461)	
Total other financing sources (uses)	 	-		6,655,053		6,596,539		13,251,592	

Net change in fund balances	
90,900		
88,063		
(17,506)		
161,457	
Fund Balances - beginning of year	 	71,785		1,252,589		32,908		1,357,282	
Fund Balances - end of year	$	162,685		$	1,340,652		$	15,402		$	1,518,739	

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

Year  Ended  September  30, 2018

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

Net Change in Fund Balances - total governmental funds (page 10)	$	161,457

Governmental funds report outlays for capital assets as expenditures because such outlays use current financial resources; however, in the statement of net assets the cost of those assets is recorded as capital assets. Depreciation on capital assets is not recognized in the governmental fund statements, however, depreciation is reported as an expense in the statement of activities.

Capital outlay	7,502,992		
Depreciation expense	(1,915,667)	5,587,325	

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal on long-term debt uses current financial resources of governmental funds. Neither transaction however, has any effect on net position.

Bond proceeds	(13,325,000)		
Repayment of bonds payable	6,585,000	(6,740,000)	

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Change in accrued interest	31,170		
Amortization of deferred charges in refunding	 	(22,634)	8,536	

Change in Net Position of Governmental Activities (page 8)	$	(982,682)

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND

Year  Ended  September  30, 2018

	

 	Budgeted Amounts			

Actual Amounts		Variance with Final Budget Positive
(Negative)	
	 	Original		Final					
Revenues:
Special Assessments	

$   1,499,928	$ 1,499,928		
$ 1,511,301		
$	11,373	
Developer Contributions	372,718	888,115		875,623		(12,492)	
Miscellaneous and Investment Income	 	6,000	28,172		118,717		90,545	
Total revenues	 	1,878,646	2,416,215	2,505,641	89,426
   
Expenditures:
Current:
General government	153,072	177,892	194,969	(17,077)	
Operation and maintenance	1,725,574	2,238,323	2,219,772	18,551	
Capital Outlay	 	-	-	-	-	
Total expenditures	 	1,878,646		2,416,215		2,414,741		1,474	

Net change in fund balance	
-		
-		
90,900		
90,900	
Fund Balance - beginning	 	71,785		71,785		71,785		-	
Fund Balance - ending	$	71,785		$	71,785		$	162,685		$	90,900	

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS

Year Ended September 30, 2018

Note 1 - Summary of Significant Accounting Policies:

Reporting Entity

Rivers Edge Community Development District, (the “District”) was established on November 1, 2006 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, as amended (the “Act”) and established by Rule 42FFF- 1.001, et seq. Florida Administrative Code, of the Florida Land and Water Adjudicatory Commission (FLWAC”), effective November 11, 2006, as amended on September 6, 2011, and June 27, 2017. The Act provides, among other things, the power to manage basic services for community development, the power to borrow money and issue bonds, and the power to levy and collect non-ad valorem assessments for the financing and delivery of capital infrastructure. The District was established for the purpose of financing and managing the acquisition, construction, maintenance and operation of a portion of the infrastructure necessary for community development within the District. Effective June 27, 2017, the District contracted the boundaries of the District  and removed approximately  2,500 acres leaving a total of approximately 1,677 acres within the District.

The District is governed by the Board of Supervisors (the “Board”), which is composed of five members. Supervisors are elected on an at large basis by the owners of the property within the District. The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2018, three of the Board members are affiliated with Mattamy Jacksonville, LLC (the “Developer”) or an affiliated entity, and two of the Board members are resident electors, elected through the general election cycle.

The Board has the final responsibility for, among other things:

Allocating and levying assessments.

Approving budgets.

Exercising control over facilities and properties.

Controlling the use of funds generated by the District.

Approving the hiring and firing of key personnel.

Financing improvements.

The financial statements were prepared  in accordance with Governmental  Accounting Standards Board (“GASB”)  Statements  14, 39 and 61. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District Board of Supervisors is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District.

Note 1 - Summary of Significant Accounting Policies (Continued): Government-Wide and Fund Financial Statements
The financial statements include both government-wide and fund financial statements.

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants, contributions and investment income that are restricted to meeting the operational or capital requirements of a particular function or segment and 3) operating-type special assessments that are treated as charges for services (including assessments for maintenance and debt service). Other items not included among program revenues are reported instead as general revenues.

Measurement Focus, Basis of Accounting and Financial Statement Presentation

The government-wide financial statements  are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough 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 are recorded when a liability is incurred, as under accrual accounting; however, debt service expenditures are recorded only when payment is due.

Assessments, including debt service assessments and operation and maintenance assessments, are non-ad valorem assessments imposed on all lands located within the District and benefited by the District’s activities. Operation and maintenance assessments are levied by the District prior to the start of the fiscal year which begins October 1st and ends on September 30th. These assessments are imposed upon all benefited lands located in the District. Debt service special assessments are imposed upon certain lots and lands as described in each resolution imposing the special assessment for each series of bonds issued by the District. Certain debt service assessments are collected upon the closing of those lots subject to short term debt and are used to prepay a portion of the bonds outstanding.

Note 1 - Summary of Significant Accounting Policies (Continued):

Measurement Focus, Basis of Accounting  and Financial  Statement  Presentation (Continued):

Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental funds:

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.

Debt Service Fund - accounts for the accumulation of resources for the annual payment of principal and interest on long-term debt.

Capital Projects Fund - accounts for the financial resources to be used for the acquisition or construction of major infrastructure within the District.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. When both restricted and unrestricted resources are available for use, it  is the District’s policy to use restricted resources first, then unrestricted resources as they are needed.

Assets, Liabilities,  Deferred Outflows/Inflows  of Resources and Net Position/Fund Balance

Restricted Assets - These assets represent cash and investments set aside pursuant to bond covenants.

Deposits and Investments - The District’s cash and cash equivalents are considered to be cash on hand and demand deposits.

Investments of the District are reported at fair value and are categorized within the fair value hierarchy established in accordance with GASB Statement No. 72, Fair Value Measurement and Application. The District’s investments consist of investments authorized in accordance with Section 218.415, Florida Statutes.

Prepaid Items - Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Note 1 - Summary of Significant Accounting Policies (Continued):

Assets, Liabilities,  Deferred Outflows/Inflows  of Resources and Net Position/Fund Balance (Continued):

Capital Assets - Capital assets, which include property, plant, equipment and infrastructure assets (e.g., utilities system, stormwater system, landscaping and similar items), are reported in the applicable governmental activities column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition 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 assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant and equipment of the District are depreciated using the straight-line method over the following estimated useful lives:
 	Assets		 Years         
Amenity Center	30
Infrastructure	30
Long Term Obligations - In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of premiums or discounts.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds  received, are reported as expenditures.

Note 1 - Summary of Significant Accounting Policies (Continued):

Assets, Liabilities,  Deferred Outflows/Inflows  of Resources and Net Position/Fund Balance (Continued):

Deferred Outflows/Inflows of Resources - In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial  statement element,  deferred  outflows of resources, represents  a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District has one item that qualifies for reporting in this category, deferred charge on refunding.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District does not have any item that qualifies for reporting in this category for the year ended September 30, 2018.

Net Position Flow Assumption - Sometimes the District will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the District’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.

Fund Balance Flow Assumptions - Sometimes the District will fund outlays for a particular purpose from both restricted and unrestricted resources (total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the District’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted  fund balance. Further,  when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.

Note 1 - Summary of Significant Accounting Policies (Continued):

Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position/Fund Balance (Continued):

Fund Balance Policies - Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The District itself can establish limitations on the use of resources through either commitment (committed fund balance) or an assignment (assigned fund balance).

The committed fund balance classification includes fund balance amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. The Board of Supervisors is the highest level of decision-making authority for the government that can, by adoption of an ordinance or resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance or resolution remains in place until a similar action is taken to remove or revise the limitation.

Amounts in the assigned fund balance classification  are intended  to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The Board of Supervisors has authorized the District Manager to assign amounts for specific purposes. The Board of Supervisors may also assign fund balance as it does when  appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for  the removal of an assignment. Conversely, as discussed above an additional action is essential to either remove or revise a commitment.

Other Disclosures

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

Note 2 - Stewardship, Compliance and Accountability:

Budgetary Information

The District is required to establish a budgetary system and an approved annual budget for the General Fund. Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. All annual appropriations lapse  at the fiscal year end. The legal level of budgetary control is at the fund level. Any budget amendments that increase the aggregate budgeted appropriations, at the fund level, must be approved by the Board of Supervisors.

The District follows these procedures in establishing the budgetary data reflected in the  financial statements.

Each year the District Manager submits to the District Board proposed budgets for the fiscal year commencing the following October 1.

A public hearing is conducted to obtain public comments.

Prior to October 1, the budget is legally adopted by the District Board.

Subject to certain limited exceptions set forth in the District’s appropriation resolutions adopted each year, all budget changes must be approved by the District Board.

The budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

Note 3 - Deposits and Investments:

Deposits

The District’s cash balances were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer. Florida Statutes Chapter 280, “Florida Security for Public Deposits Act”, requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral equal to various percentages of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage  of eligible collateral  (generally,  U.S. Governmental  and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository’s financial history and its compliance with Chapter 280. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses.

Note 3 - Deposits and Investments (Continued):

Investments

The District categorizes its fair value measurements within the fair value hierarchy 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.

Under GASB 72, 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.

The District has the following recurring fair value measurements as of September 30, 2018:

Money market mutual funds of $1,371,989 are valued using Level 2 inputs.
The District’s investment policy is governed by State Statutes and the District Trust Indenture. This policy allows investments in any financial institution that is a qualified public depository of the State of Florida as identified by the State Treasurer, in accordance with Chapter 280 of the Florida Statutes. Authorized investments are:

The State Board of Administration Local Government Investment Pool (SBA);

Securities and Exchange Commission Registered Money Market Funds with the highest credit quality rating from a nationally recognized rating agency;

Interest-bearing savings accounts and certificates of deposit in state-certified qualified public depositories;

Direct obligations of the U.S. Treasury.

Note 3 - Deposits and Investments (Continued):

Investments (Continued):

Investments made by the District at September 30, 2018 are summarized below. In accordance with GASB 31, investments are reported at fair value.

 	Investment Type		Fair Value

Credit Rating

Weighted Average Maturity

First American Government Obligation Funds

  $ 1,371,989

AAAm	26 days

Credit Risk:

The District’s investment policy limits credit risk by restricting authorized investments to those described. Investments in U.S. Government securities and agencies must be backed by the full faith and credit of the United States Government. Short term bond funds shall be rated by a nationally recognized ratings agency and shall maintain the highest credit quality rating.

Custodial Credit Risk:

In the case of deposits, this is the risk that, in the event of a bank failure, the District’s deposits may not be returned to it. The District’s investment policy requires that bank deposits be secured as provided by Chapter 280, Florida Statutes. This law requires local governments to deposit funds only in financial institutions designated as qualified public depositories by the Chief Financial Officer of the State of Florida, and creates the Public Deposits Trust Fund, a multiple financial institution pool with the ability to assess its member financial institutions for collateral shortfalls if a default or insolvency has occurred. At September 30, 2018, all of the District’s bank deposits were in qualified public depositories.

For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2018, none of the investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form.

Concentration of Credit Risk:

The District’s investment policy does not specify limits on the amount the District may invest in any one issuer.

Note 3 - Deposits and Investments (Continued): Investments (Continued):
Interest Rate Risk:

The District’s investment policy does not specifically address interest rate risk; however, the general investment policy is to apply the prudent-person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and in general, avoid speculative investments. The District manages its exposure to declines in fair values by investing primarily in pooled investments that have a weighted average maturity of less than three months.

Note 4 - Capital Assets:

Capital asset activity for the year ended September 30, 2018 was as follows:

	Beginning
Balance		
Additions		
Disposals		Ending
Balance	
Governmental Activities:
Capital Assets, not being depreciated:								
Infrastructure under construction	$	4,956,173		$	1,438,410		$ (6,394,583)		$	-	
Land and land improvements	17,854,304		6,064,582		-		23,918,886	
Total capital assets, not being depreciated	22,810,477		7,502,992		(6,394,583)		23,918,886	

Capital Assets Being Depreciated:								
Infrastructure-drainage	20,506,060		1,953,134		-	22,459,194	
Infrastructure-roads	31,529,069		4,441,449		-	35,970,518	
Infrastructure-streetlights	168,635		-		-	168,635	
Infrastructure-other	662,783		-		-	662,783	
Amenity center	4,603,449		-		-	4,603,449	
Total capital assets, being depreciated	57,469,996		6,394,583		
-	63,864,579	

Less Accumulated Depreciation for: Infrastructure-drainage	

(2,369,845)		

(683,535)		

-		

(3,053,380)	
Infrastructure-roads	(3,714,760)		(1,050,969)		-		(4,765,729)	
Infrastructure-streetlights	(33,607)		(5,621)		-		(39,228)	
Infrastructure-other	(72,886)		(22,093)		-		(94,979)	
Amenity center	(306,896)		(153,449)		-		(460,345)	
Total accumulated depreciation	(6,497,994)		(1,915,667)		-		(8,413,661)	

Total capital assets being depreciated, net	
50,972,002		
4,478,916		
-		
55,450,918	
Governmental activities capital assets, net	$ 73,782,479		$ 11,981,908		$ (6,394,583)		$ 79,369,804	

Depreciation expense for 2018 in the amount of $1,915,667 was charged to maintenance and operations. District improvements are substantially complete.

Note 5 - Interfund Transactions:

Interfund transfers for the year ended September 30, 2018 are as follows:

Transfers In

Debt
Transfers Out:	Service	Total
Capital Projects	$	453,461		$	453,461	
	$	453,461		$	453,461	

Transfers were to move bond proceeds to the correct fund.				

Note 6 - Long-Term Liabilities:

Capital Improvement Revenue Bonds, Series 2008

On March 1, 2008, the Series 2008 Bonds were issued pursuant to the Master Indenture, as supplemented by that certain Second Supplemental Trust Indenture (together with the Master Indenture, the “2008 Indenture”), between Main Street Community Development District (“Main Street”) and the Trustee, Main Street previously issued its $13,980,000 Capital Improvement Revenue Bonds, Series 2008A Bonds (the “Series 2008A Bonds”) and its $19,350,000 Main Street Community Development District Capital Improvement Revenue Bonds, Series 2008B (the “Series 2008B Bonds, the “Series 2008 Bonds”). Pursuant to that certain Merger Agreement and that certain Assumption Agreement, the District assumed the obligations of Main Street with respect to the Series 2008 Bonds. The Bonds were issued to benefit the District’s residents and landowners. The 2008A Bonds are due May 1, 2038 with a fixed interest rate of 6.8% and the Series 2008B Bonds are due May 1, 2017 with a fixed interest rate of 6.9%. The Bonds were issued to finance the acquisition and construction of certain  improvements for the benefit of the District. Interest is paid semiannually on each May 1 and November 1. Principal on the Series 2008A Bonds is to be paid serially, commencing May 1, 2009 through May 1, 2038 and the principal on the Series 2008B Bonds is to be paid in one lump sum on May 1, 2017. During a prior fiscal year, the District prepaid the entire balance of the Series 2008B Bonds and they are no longer due or outstanding.

The Series 2008A Bonds are subject to redemption at the option of the District, in whole or in part at a redemption price set forth in the Bond Indenture. The Series 2008A Bonds are subject to optional and extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. This requirement has  been met at September 30, 2018.

Note 6 - Long-Term Liabilities (Continued):

Capital Improvement Revenue Bonds, Series 2008 (Continued)

The Bond 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 agreed to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. Payment of principal and interest on the 2008A Bonds is secured by a pledge of and a first lien upon the pledged special assessment revenue. The District is in compliance with the requirements of the Bond Indenture.

The Series 2008A Bonds were refunded in the current year. For the year ended September  30, 2018, principal and interest paid was $7,043,377 and total special assessment revenue pledged was $663,690.

Current Refunding of Bonds Payable

The District issued Capital Improvement Revenue and Refunding Bonds, Series 2018A-1 and 2018A-2 to refund $6,225,000 of 2008A Capital Improvement Revenue Bonds and finance cost of certain improvements and pay issuance costs. The refunding was undertaken  to reduce  total future debt service payments. The transaction resulted in an economic gain of
$1,049,0089 and a reduction of $2,456,023 in future debt service payments.

Capital Improvement Revenue and Refunding Bonds, Series 2016

In October 2016, the District issued $10,765,000 of Capital  Improvement Revenue  and Refunding Bonds, Series 2016 (the “Series 2016 Bonds”). The Series 2016 Bonds consist of
$1,805,000 Term Bonds due May 1, 2026 with an interest rate of 4.5%, $3,735,000 Term Bonds due May 1, 2038 with an interest rate of 5.2%, and $5,225,000 Term Bonds due May 1, 2046 with an interest rate of 5.3%. The Bonds were issued to refund the Series 2008 Bonds, finance the acquisition and construction of certain improvements  and pay certain bond issuance costs for the benefit of the District. Interest is paid semiannually on each May 1 and November 1. Principal on the Series 2016 Bonds is to be paid serially, commencing May 1, 2017 through May 1, 2046.

The Series 2016 Bonds are subject to redemption at the option of the District, in whole or in part at a redemption price set forth in the Bond Indenture. The Series 2016 Bonds are subject to optional and extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. This requirement has  been met at September 30, 2018.

Note 6 - Long-Term Liabilities (Continued):

Capital Improvement Revenue Bonds, Series 2016 (Continued)

The Bond 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 agreed to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. Payment of principal and interest on the 2016 Bonds is secured by a pledge of and a first lien upon the pledged special assessment revenue. The District is in compliance with the requirements of the Bond Indenture.

Total principal and interest remaining on the Series 2016 Bonds at September 30, 2018 is
$20,136,530.     For  the  year  ended  September  30,  2018,  principal  and  interest  paid  was
$715,050 and total special assessment revenue pledged was $711,978.

Capital Improvement Revenue Bonds, Series 2018

In May 2018, the District issued $7,050,000 of Capital Improvement Revenue Bonds, Series 2018 (the “Series 2018 Bonds”). The Series 2018 Bonds consist of $450,000 Term Bonds due May 1, 2023 with an interest rate of 4.1%, $685,000 Term Bonds due May 1, 2028 with an interest rate of 4.8%, $2,025,000 Term Bonds due May 1, 2038 with an interest rate of 5.2%, and $3,890,000 Term Bonds due May 1, 2049 with an interest rate of 5.35%. The Bonds were issued to finance the acquisition and construction of certain improvements. Interest is paid semiannually on each May 1 and November 1. Principal on the Series 2018 Bonds is to be paid serially, commencing May 1, 2020 through May 1, 2049.

The Series 2018 Bonds are subject to redemption at the option of the District, in whole or in part at a redemption price set forth in the Bond Indenture. The Series 2018 Bonds are subject to optional and extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. This requirement has  been met at September 30, 2018.

The Bond 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 agreed to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. Payment of principal and interest on the 2018 Bonds is secured by a pledge of and a first lien upon the pledged special assessment revenue. The District is in compliance with the requirements of the Bond Indenture.

Total principal and interest remaining on the Series 2018 Bonds at September 30, 2018 is
$14,565,867. For the year ended September 30, 2018, no principal or interest was paid and no special assessment revenue was pledged.

Note 6 - Long-Term Liabilities (Continued):

Capital Improvement Revenue Bonds, Series 2018A-1 and 2018A-2

In July 2018, the District issued $3,940,000 of Capital Improvement Revenue  Refunding Bonds, Series 2018A-1 (the “Series 2018A-1 Bonds”) and $2,335,000 of Capital Improvement Revenue Refunding Bonds, Series 2018A-2 (the “Series 2018A-2 Bonds”). The Series 2018A- 1 Bonds consist of $1,850,000 Serial Bonds due annually from May 1, 2019 to May 1, 2029 with interest rates between 2.0% and 3.375%, $840,000 Term Bonds due May 1, 2033 with an interest rate of 3.5% and $1,250,000 Term Bonds due May 1, 2038 with an interest rate of 3.75%. The Series 2018A-2 Bonds consist of $900,000 Term Bonds due May 1, 2028 with an interest rate of 4.375% and $1,435,000 Term Bonds due May 1, 2038 with an interest rate of 5.0%.

The Series 2018A-1 and Series 2018A-2 Bonds are subject to redemption at the option of the District, in whole or in part at a redemption price set forth in the Bond Indenture. The Series 2018A Bonds are subject to optional and extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. This requirement has  been met at September 30, 2018.

The Bond 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 agreed to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. Payment of principal and interest on the 2018A-1 and 2018A-2 Bonds is secured by a pledge of and a first lien upon the pledged special assessment revenue. The District is in compliance with the requirements of the Bond Indenture.

Total principal and interest remaining on the Series 2018 Bonds at September 30, 2018 is
$9,141,997. For the year ended September 30, 2018, no principal or interest was paid and no special assessment revenue was pledged.

Long-term debt activity for the year ended September 30, 2018 was as follows:

	Beginning
Balance		
Increases		
Decreases		Ending
Balance		Due Within
One Year	
Governmental activities:
Bonds Payable:										
Series 2008	$	6,415,000		$	-		$	(6,415,000)		$	-		$	-	
Series 2016	10,605,000		-		(170,000)		10,435,000		175,000	
Series 2018	-		7,050,000		-		7,050,000		-	
Series 2018A-1/A-2	-		6,275,000		-		6,275,000		225,000	
Less: discount	-		(73,408)		-		(73,408)		-	
Governmental activity long- term liabilities	
$ 17,020,000		
$ 13,251,592		
$	(6,585,000)		
$ 23,686,592		
$ 400,000	

Note 6 - Long-Term Liabilities (Continued):

At September 30, 2018, the scheduled debt service requirements on the bonds payable were as follows:

Governmental Activities
Year Ending
September 30,		
Principal		
Interest	
2019		$	400,000		$	1,035,760	
2020		515,000		1,124,505	
2021		540,000		1,105,434	
2022		560,000		1,085,195	
2023		580,000		1,064,041	
2024 - 2028		3,280,000		4,949,200	
2029 - 2033		4,125,000		4,137,691	
2034 - 2038		5,245,000		3,051,560	
2039 - 2043		4,145,000		1,849,278	
2044 - 2048		3,915,000		657,388	
2049		 	455,000		24,343	
		  $	23,760,000		  $	20,084,395	

Note 7 - Developer Transactions:

Assessments from Developer

The Developer owns a significant portion of the developed and undeveloped property within the District; therefore, assessment revenue in the general and debt service funds include the assessments levied on those lots and property owned by the Developer. The Developer’s portion of special assessment revenue and Developer contributions for the year ended September 30, 2018 totaled $2,990,253, which is 78% of total special assessment revenue. Of this amount, $527,861 is due from the Developer at year end and was received by the District subsequent to year end.

Concentrations

A significant portion of the District’s activity is dependent upon the continued involvement of the Developer, the loss of which could have a material adverse effect on the District’s operations.

Note 8 - Tri-Party Funding Agreement:

During a prior year, the District entered into a tri-party agreement for certain landscaping services with the Developer and Rivertown Community Association, Inc. (the “Association”). The agreement requires the District to provide funding for services on land areas located within the boundaries of the District and owned by each of the three parties to the agreement, and to reimburse the District for their proportionate share of those costs. For the fiscal year ended September 30, 2018, the reimbursements from this agreement with the District was $90,507 from the Developer. No funding was received from the Association because there were no costs incurred for the year ended September 30, 2018.

Note 9 - Management Company:

The District has contracted with a management company to perform management services, which include financial consulting  and accounting  services. Certain employees of the management company also serve as officers (Board appointed non-voting positions) of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting and other administrative costs.

Note 10 - 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. These risks are covered by commercial insurance from independent third parties. The District has not filed any claims under this commercial coverage during the last three years.

In a prior year, the District was served notice of a complaint filed against the District claiming premises liability for alleged injuries of an individual stemming from an alleged bike accident within the District boundaries. The District has referred the matter to their insurance company and is defending this claim. However, the final outcome cannot be determined and, therefore, no amounts related to this matter have been recorded in the financial statements.

COMPLIANCE SECTION

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING 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
Rivers Edge Community Development District

We have audited, in accordance with 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 the governmental activities and each major fund of the Rivers Edge Community Development District (the “District”) as of and for the year ended September 30, 2018, which collectively comprise the District’s financial statements and have issued our report thereon dated July 3, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the 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 a 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 over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

MCDIRMIT DAVIS & COMPANY, LLC
934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803
T: 407-843-5406  │  F: 407-649-9339  │ WWW.MCDIRMITDAVIS.COM

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the 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 District’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 District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Orlando, Florida July 3, 2019

MANAGEMENT COMMENTS

Board of Supervisors
Rivers Edge Community Development District

We have audited the financial statements of the Rivers Edge Community Development District (the “District”), as of and for the fiscal year ended September 30, 2018, and have issued our report thereon dated July 3, 2019.

Auditor’s Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; 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 Auditor General.

Other Reporting Requirements

We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and Independent Auditor’s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in these reports, which are dated July 3, 2019, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i.)1., Rules of the Auditor General, require that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no such findings in the preceding annual financial audit report.

Official Title and Legal Authority

Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial  statements. This information has been disclosed in the notes to the financial statements.
MCDIRMIT DAVIS & COMPANY, LLC
934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803
T: 407-843-5406  │  F: 407-649-9339  │ WWW.MCDIRMITDAVIS.COM

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 the District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the District did not meet any of the conditions described in Section 218.503(1), Florida Statutes.

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 the District. It is management’s responsibility to monitor the District’s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same.

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 which 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.

Orlando, Florida July 3, 2019

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES

To the Board of Supervisors
Rivers Edge Community Development District

We have examined Rivers Edge Community Development District’s (the “District”) compliance with the requirements of Section 218.415, Florida Statutes, during the year ended September 30, 2018. Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on 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 the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States, and, accordingly, included examining, on a test basis, evidence about the 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 the District’s compliance with specified requirements.

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2018.

Orlando, Florida July 3, 2019

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