North Boulevard Community Development District

FINANCIAL STATEMENTS

September 30, 2019

North Boulevard Community Development District
Table of Contents September 30, 2019

REPORT
Independent Auditors' Report ........................................................................................	1
FINANCIAL STATEMENTS
Management’s Discussion And Analysis (required supplemental information) ............	3
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position .......................................................................................	8
Statement of Activities .............................................................................................	9
Fund Financial Statements
Balance Sheet – Governmental Funds......................................................................	10
Reconciliation of the Balance Sheet of Governmental Funds to the Statement
of Net Position ..........................................................................................................	11
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds ...............................................................................................	12
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities ...................	13
Notes to Financial Statements..................................................................................	14
Required Supplemental Information (other than MD&A)
Budget to Actual Comparison Schedule - General Fund .............................................	24
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..................................	25
Management Letter ........................................................................................................	27
Independent Accountants’ Report on Compliance with Section 218.415 Florida Statutes	29

INDEPENDENT AUDITORS' REPORT

To the Board of Supervisors
North Boulevard Community Development District Polk County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of North Boulevard Community Development District (hereinafter referred to as “District”), as of and for the year ended September 30, 2019, 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

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.

Auditors' Responsibility

Our responsibility is to express opinions 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 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 auditors' 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 opinions.

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, 2019, and the respective changes in financial position 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 and budgetary comparison information, as listed in the table of contents, 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 our report dated June 30, 2020, 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 and grant agreements and other matters. The purpose of that report is solely 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 effectiveness of the District’s 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.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 30, 2020

Management’s Discussion And Analysis

Our discussion and analysis of the North Boulevard Community Development District’s financial performance provides an overview of the District’s financial activities for the fiscal year ended September 30, 2019. Please read it in conjunction with the District’s financial statements, which begin on page 8.

FINANCIAL HIGHLIGHTS

At September 30, 2019, the assets of the District exceed its liabilities by approximately
$105,000.

During the fiscal year ended September 30, 2019, the District incurred approximately $3.5 million of capital expenditures and $253,000 of bond issuance costs. In addition, the District paid interest expenditures of approximately $257,000 and repaid principal of $565,000.

On January 17, 2019, the District issued $4,335,000 of Special Assessment Bonds, Series 2019 to fund the planning, financing, acquisition, construction, equipping and installation of the Series 2019 Project.

USING THE ANNUAL REPORT

This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities on pages 8 – 9 provide information about the activities of the District as a whole and present a longer-term view of the District’s finances. Fund financial statements start on page 9. For governmental activities, these statements tell how these services were financed in the short-term as well as what remains for future spending. Fund financial statements also report the District’s operations in more detail than the government-wide statements by providing information about the District’s most significant funds.

Reporting the District as a Whole

Our analysis of the District as a whole begins on page 4. One of the most important questions asked about the District’s finances is, “Is the District as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the District as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the District’s net position and related changes during the current year. You can think of the District’s net position – the difference between assets and liabilities – as one way to measure the District’s financial health, or financial position. Over time, increases or decreases in the District’s net position is one indicator of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors; however, such as changes in the District’s assessment base and the condition of the District’s infrastructure, to assess the overall health of the District.

Reporting the District’s Most Significant Funds

Our analysis of the District’s major funds begins on page 5. The fund financial statements begin on page 10 and provide detailed information about the most significant funds – not the District as a whole. Some funds are required to be established by State law and by bond covenants. All of the District’s funds are governmental fund-types.

Governmental funds – All of the District’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year- end that are available for spending. The governmental fund statements provide a detailed short-term view of the District’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs. We describe the relationship (or differences) between governmental activities and governmental funds in a reconciliation with the fund financial statements.

THE DISTRICT AS A WHOLE

The following table reflects the condensed Statement of Net Position and is compared to the prior year.

September 30,	2019	2018	Change	
Assets
Current and other assets	
$	1,794,188	
$	749,118	
$	1,045,070	
Capital assets, net	7,458,456	3,938,240	3,520,216	
Total assets	$	9,252,644	$	4,687,358	$	4,565,286	
Liabilities
Current liabilities	
$	1,058,091	
$	196,680	
$	861,411	
Other liabilities	8,089,998	4,314,462	3,775,536	
Total liabilities	9,148,089	4,511,142	4,636,947	
Net position
Net investment in capital assets Restricted for:
Debt service		
(340,750)

-		
(318,342)

275,257		
(22,408)

(275,257)	
Capital projects		422,543		208,530		214,013	
Unrestricted		22,762		10,771		11,991	
Total net position		104,555		176,216		(71,661)	
Total liabilities and net position	$	9,252,644	$	4,687,358	$	4,565,286	

For more detailed information, see the accompanying Statement of Net Position.

During the fiscal year ended September 30, 2019, total assets and liabilities both increased over the prior year by approximately $4.6 million. The increase in both is primarily due to the issuance of Series 2019 bonds and the resulting infrastructure construction.

The following schedule compares the Statement of Activities for the current and previous fiscal year.

Year ended September 30,	2019	2018	Change	
Revenues:
Program revenues: Charges for services	

$	652,543	

$	361,834	

$	290,709	
Operating grants and contributions	11,652	102,667	(91,015)	
Capital grants and contributions	229,806	253,125	(23,319)	
General revenues:				
Developer contributions	482	-	482	
Total revenues	894,483	717,626	176,857	
Expenses:				
General government	137,914	91,523	46,391	
Field operations	17,260	-	17,260	
Bond issue costs	253,079	117,969	135,110	
Developer reimbursment	151,037	-	151,037	
Interest	406,854	216,976	189,878	
Total expenses	966,144	426,468	539,676	
Change in net position	(71,661)	291,158	(362,819)	
Net position (deficit), beginning of year	176,216	(114,942)	291,158	
Net position, ending of year	$	104,555	$	176,216	$	(71,661)	

For more detailed information, see the accompanying Statement of Activities.

Total revenues and expenses increased approximately $177,000 and $540,000, respectively, over the prior year. The increase in revenues is primarily due to debt service assessments and prepayment revenues in the current year related to lot sales. The increase in expenses primarily  due to interest payments, developer reimbursements and bond issue costs related to the Special Assessment Bonds, Series 2019. The overall result was a $71,661 decrease in net position for fiscal year 2019.

THE DISTRICT’S FUNDS

As the District completed the year, its governmental funds (as presented in the balance sheet on page 10) reported a combined fund balance of approximately $1 million, which is an increase over prior year’s fund balance that totaled approximately $713,000. Significant transactions are discussed below.

On January 17, 2019, the District issued $4,335,000 of Special Assessment Bonds, Series 2019 to fund the planning, financing, acquisition, construction, equipping and installation of the Series 2019 Project.

During the fiscal year ended September 30, 2019, the District incurred approximately $3.5 million of capital expenditures and $253,000 of bond issuance costs.

During the fiscal year ended September 30, 2019, the District paid interest expenditures of approximately $257,000 and repaid principal of $565,000.

The overall increase in fund balance for the year ended September 30, 2019 totaled approximately
$328,000.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2019, the District had approximately $7.5 million invested in capital assets. This amount represents an increase of approximately $3.5 million over the fiscal year 2018 total.

A listing of capital assets by major category for the current and prior year follows:
September 30,	2019	2018	Change

Capital assets not being depreciated

$	7,458,456	$

3,938,240	$

3,520,216

More information about the District's capital assets is presented in Note 4 to the financial statements.

Debt

At September 30, 2019, the District had approximately $8.2 million of bonds outstanding. This amount represents an increase of $3.8 million over the fiscal year 2018 total.

A listing of debt amounts outstanding for the current and prior year is as follows:

September 30,	2019	2018	Change
Series 2017 bonds	$	3,840,000	$	4,405,000	$	(565,000)	
Series 2019 bonds	4,335,000	-	4,335,000	
$	8,175,000	$	4,405,000	$	3,770,000	

More information about the District’s long-term debt is presented in Note 5 to the financial statements.

GOVERNMENTAL FUNDS BUDGETARY HIGHLIGHTS

An Operating budget was established by the governing board for the District pursuant to the requirements of Florida Statutes. The budget to actual comparison for the general fund, including the original budget and final adopted budget, is shown at page 24.

The District experienced a favorable variance in revenues and expenditures as compared to budget in the amount of $2,433 and $41,426, respectively. The variance in expenditures occurred primarily due to anticipated operating expenditures, such as engineering and landscape maintenance, that were not incurred during the year.

FUTURE FINANCIAL FACTORS

North Boulevard Community Development District is an independent special district that operates under the provisions of Chapter 190, Florida Statutes. The District operates under an elected Board of Supervisors, which establishes policy and sets assessment rates. Assessment rates for fiscal year 2020 were established to provide for the operations of the District as well as the necessary debt service requirements.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide a general overview of the District’s finances. If you have questions about this report or need additional financial information, contact the North Boulevard Community Development District’s management company at 12051 Corporate Blvd., Orlando, Florida 32817.

Basic Financial Statements

September 30,	2019	
	Governmental	
	Activities	
Assets
Cash and cash equivalents	
$	45,826	
Investments	1,624,885	
Assessments receivable, net	108,476	
Interest receivable	2,447	
Prepaid expenses	11,834	
Deposits	720	
Capital Assets:
Not being depreciated	
7,458,456	

Total assets	
9,252,644	

Liabilities		
Accounts payable	734,119	
Retainage payable	19,139	
Accrued interest payable	234,833	
Non-current liabilities:
Due within one year	
70,000	
Due in more than one year	8,089,998	

Total liabilities	
9,148,089	

Net position		
Net investment in capital assets	(340,750)	
Restricted for:
Capital projects	
422,543	
Unrestricted	22,762	

Total net position	$	104,555

The accompanying notes are an integral part of these financial statements.

For the year ended September 30,

2019

Program Revenues Operating	Capital

Net (Expense) Revenue and Changes in Net Position

Functions/Programs	
Expenses	Charges for
Services	Grants and
Contributions	Grants and
Contributions	Governmental
Activities	
Primary government:						
Governmental activities:						
General government	$	(137,914)	$ 176,466	$	-	$	-	$	38,552	
Field operations	(17,260)	22,085	-	-	4,825	
Developer reimbursement	(151,037)	-	-	-	(151,037)	
Bond issue costs	(253,079)	-	-	95,359	(157,720)	
Interest	(406,854)	453,992	11,652	134,447	193,237	

Total governmental						
activities	$	(966,144)	$ 652,543	$	11,652	$	229,806	(72,143)	

General revenues
Interest and other revenues	482	

Change in net position	
(71,661)	
Net position - beginning of year	176,216	

Net position - end of year	
$	104,555	

September 30,		2019		
			Total	
		Capital	Governmental	
	General	Debt Service	Projects	Funds	
Assets
Cash and cash equivalents	
$	45,826	
$	-	$	-	
$	45,826	
Investments	-	638,699	986,186	1,624,885	
Assessments receivable, net	627	-	107,849	108,476	
Interest receivable	-	888	1,559	2,447	
Prepaid expenditures	11,834	-	-	11,834	
Deposits	720	-	-	720	
Due from other funds	-	1,366	-	1,366	

Total assets	
$	59,007	
$	640,953	$ 1,095,594	
$	1,795,554	

Liabilities and Fund Balances
Liabilities
Accounts payable	

$	13,886	

$	-	$	720,233	

$	734,119	
Retainage payable	-	-	19,139	19,139	
Due to other funds	1,366	-	-	1,366	
Total liabilities	15,252	-	739,372	754,624	

Fund balances
Nonspendable		12,554		-		-		12,554	
Restricted for debt service		-		640,953		-		640,953	
Assigned for capital projects		-		-		356,222		356,222	
Unassigned		31,201		-		-		31,201	
Total fund balances		43,755		640,953		356,222		1,040,930	

Total liabilities and fund balances	
$	
59,007	
$	
640,953	
$	
1,095,594	
$	
1,795,554	

September 30,	2019	

Total fund balances, governmental funds	
$	1,040,930	
Capital assets used in governmental activities are not financial resources and therefore are not reported in the fund level statements.	
7,458,456	
Liabilities not due and payable from current resources, including accrued interest, are not reported in the fund level statements.	
(8,394,831)	

Total net position - governmental activities	
$	104,555	

General	

Debt Service	
Capital Projects	Total
Governmental Funds	
Revenues
Assessment revenue	
$ 198,551	
$	453,992	
$	-	
$	652,543	
Developer contributions	-	-	200,014	200,014	
Interest and other revenues	482	11,652	29,792	41,926	
Total revenues	199,033	465,644	229,806	894,483	

Expenditures
Current:
General government	108,759	-	-	108,759	
Field operations	46,415	-	-	46,415	
Developer reimbursement Debt service:
Principal	-	-	151,037

-	565,000	-	151,037

565,000	
Interest	-	256,867	-	256,867	
Bond issue costs	-	-	253,079	253,079	
Capital outlay	-	-	3,520,216	3,520,216	
Total expenditures	155,174	821,867	3,924,332	4,901,373	

Excess (deficit) of revenues over expenditures	

43,859	

(356,223)	

(3,694,526)	

(4,006,890)	

Other financing sources (uses)					
Transfers in	-	1,977	8,898	10,875	
Transfers out	(10,875)	-	-	(10,875)	
Bond issuance proceeds	-	476,989	3,858,011	4,335,000	
Total other financing sources (uses)	(10,875)	478,966	3,866,909	4,335,000	

Net change in fund balances	
32,984	
122,743	
172,383	
328,110	
Fund balances, beginning of year	10,771	518,210	183,839	712,820	

Fund balances, end of year	
$	43,755	
$	640,953	
$	356,222	
$	1,040,930	

Net change in fund balances - governmental funds	$	328,110

Capital outlay, reported as expenditures in the governmental funds, is
shown as capital assets on the Statement of Net Position.	3,520,216

Governmental funds report principal payments on bonds when debt is paid, whereas these payments are eliminated in the Statement of Activities and recognized as a decrease in bonds payable in the Statement
of Net Position.	565,000

Amortization of the original issue discount, premium, and defeased interest on bonds is not recognized in the governmental fund statements
but is reported as an expense in the Statement of Activities.	(536)

The change in accrued interest between the current and prior year is recorded on the Statement of Activities but not on the fund level
statements.	(149,451)

Bond proceeds and original issue discount which are reported as other financing sources (uses) in the governmental funds are recognized as
components of long-term liabilities in the Statement of Net Assets.	(4,335,000)

Change in net position of governmental activities	$	(71,661)

The North Boulevard Community Development District (the “District”) was established on April 6, 2017 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, by Board of City Commissioners of the City of Haines City Ordinance 17-1555. The Act provides among other things, the power to manage basic services for community development, power to borrow money and issue bonds, and to levy and assess non-ad valorem assessments for the financing and delivery of capital infrastructure.

The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of a portion of the infrastructure necessary for community development within the District.

The District is governed by a Board of Supervisors (“Board”), which is comprised of five members. The 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, 2019, certain Board members were affiliated with HH CR 547 Investors I, LLC. (“the Developer”).

The Board has the final responsibility for:
Assessing 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.

In evaluating how to define the government, for financial reporting purposes, management has considered all potential component units. The decision to include or exclude a potential component unit in the reporting entity was made by applying the criteria set forth by Generally Accepted Accounting Principles (GAAP) as defined by the Governmental Accounting Standards Board (GASB). Based on the foregoing criteria, no potential component units were found.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the District conform to GAAP as applicable to governments in accordance with those promulgated by GASB. The following is a summary of the more significant policies:

Government-wide and Fund Financial Statements

The basic 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 the non-fiduciary activities of the primary government. Governmental activities, which normally are supported by assessments, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The business-type activities are reported separately in government-wide financial statements; however, at September 30, 2019, the District did not have any significant business-type activities. Therefore, no business-type activities are reported. Assessments and other items not properly included as program revenues (i.e., charges to customers or applicants who purchase, use, or directly benefit from goods or services) are reported as general revenues.

Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting and Basis of 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 the related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and other similar items are to be recognized as revenue 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 within60 days of the end of the current fiscal period. Expenditures generally 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 along with operation and maintenance assessments, are non-ad valorem special assessments imposed on all lands located within the District and benefited by the District’s activities. Assessments are levied and certified for collection by the District prior to the start of the fiscal year which begins October 1st and ends September 30th. Operation and maintenance special 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.

Assessments, developer contributions and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal 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 – The General Fund is the primary operating fund of the District. It is used to account for all financial resources except those required to be accounted for in other funds.

Debt Service Fund – The Debt Service Fund is used to account for the accumulation of resources for the annual payment of principal and interest on long-term debt.

Capital Projects Fund – The Capital Projects fund is used to account for the financial resources  to be used for the acquisition or construction of major infrastructure within the District.

For the year ended September 30, 2019, the District does not report any proprietary funds.

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. When committed, assigned, or unassigned resources are available for use in the governmental fund financial statements, it is the government’s policy to use committed resources first, followed by assigned resources, then unassigned resources as needed.

Cash, Deposits and Investments

The District maintains deposits with "Qualified Public Depositories" as defined in Chapter 280, Florida Statutes. All Qualified Public Depositories must place with the Treasurer of the State of Florida securities in accordance with collateral requirements determined by the State’s Chief Financial Officer. In the event of default by a Qualified Public Depository, the State Treasurer will pay public depositors all losses. Losses in excess of insurance and collateral will be paid through assessments between all Qualified Public Depositories.

Under this method, all the District's deposits are fully insured or collateralized at the highest level of security as defined by GASB, Statement Number 40, Deposits and Investment Disclosures (An Amendment of GASB, Statement Number 3).

The District is authorized to invest in financial instruments as established by Section 218.415, Florida Statutes. The authorized investments include among others direct obligations of the United States Treasury; the Local Government Surplus Trust Funds as created by Section 218.405, Florida Statutes; SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency; and interest-bearing time deposits or savings accounts in authorized financial institutions.

Prepaid Expenses

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses on the Statement of Net Position. These items will be expensed over the applicable usage period.

Capital Assets

Capital assets, which include primarily infrastructure assets (e.g., roads, sidewalks, water management systems and similar items), are reported in the governmental activities column in the government-wide financial statements. Capital assets are defined by the District 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 and estimated historical cost if purchased or constructed. Donated 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 asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant and equipment of the primary government will be depreciated using the straight- line method over the estimated useful lives. Estimated useful lives for financial reporting purposes are as follows: infrastructure: 20-30 years.

In the governmental fund financial statements, amounts incurred for the acquisition of capital assets are reported as fund expenditures. Depreciation expense is not reported in the  governmental fund financial statements.

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 or effective interest method. Bonds payable are reported net of these premiums or discounts. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as current period expenses.

In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of the 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 current period expenditures.

Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net 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 does not have any of this type of item at September 30, 2019.

In addition to liabilities, the Statement of Net Position and Balance Sheet - Gov't Funds 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 of this type of item at September 30, 2019.

Fund Equity

Net position in the government-wide financial statements represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources and is categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents assets related to infrastructure and property, plant and equipment, net of any related debt. Restricted net position represents the assets restricted by creditors, grantors or contributors.

Governmental fund equity is classified as fund balance. Fund balance is further classified as nonspendable, restricted, committed, assigned, or unassigned. Nonspendable fund balance cannot be spent because of its form. Restricted fund balance has limitations imposed by creditors,  grantors, or contributors or by enabling legislation or constitutional provisions. Committed fund balance is a limitation imposed by the District board through approval of resolutions. Assigned fund balance is a limitation imposed by a designee of the District board. Unassigned fund balance in the General Fund is the net resources in excess of what can be properly classified in one of the above four categories. Negative unassigned fund balance in other governmental funds represents excess expenditures incurred over the amounts restricted, committed, or assigned to those purposes.

Budgets

The District is required to establish a budgetary system and an approved annual budget. Annual budgets are legally adopted on a basis consistent with GAAP for the General Fund. Any revision to the budget must be approved by the District Board. The budgets are compared to actual expenditures. In instances where budget appropriations and estimated revenues have been revised during the year, budget data presented in the financial statements represent final authorization amounts.

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 a proposed operating budget for the fiscal year commencing the following October 1.
A public hearing is conducted to obtain comments.
Prior to October 1, the budget is legally adopted by the District Board.
All budget changes must be approved by the District Board.
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

Estimates

The preparation of financial statements in accordance with accounting principles generally  accepted in the U.S. requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

NOTE 3: INVESTMENTS

The District’s investments consist of money market funds and similar instruments in which shares are owned in the fund rather than the underlying investments. In accordance with GASB 72, Fair Value Measurement and Application, these amounts are reported at amortized cost.

The following is a summary of the District’s investments:

September 30,	2019	Credit Risk	Maturities	
Short-term Money Market Funds	$	1,624,885	S&P AAAm	36 days	
	$	1,624,885			
Custodial credit risk – For an investment, custodial credit risk is the risk that the District will not be able to recover the value of the investments or collateral securities that are in the possession of an outside party. The District has no formal policy for custodial risk. At September 30, 2019, the money market funds are not exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form.

Concentration risk – The District’s investment policy requires diversification, but does not specify limits on types of investments.

Interest rate risk  –  The  District  does  not  have  a  formal  policy  for  addressing  interest  rate  risk; however, investments are made with discretion, to seek reasonable returns, preserve capital, and in general, avoid speculative investments. The District manages its exposure to declines in fair values from interest rate changes by reviewing the portfolio on an ongoing basis for changes in effective yield amounts.

The following is a summary of changes in the capital assets for the year ended September 30, 2019:

Governmental Activities:
Capital assets not being depreciated

Beginning
Balance	Additions

Transfers and Conveyances

Ending Balance

Infrastructure under construction

$ 3,938,240

$ 3,520,216	$

-	$ 7,458,456

Total capital assets, not being depreciated	3,938,240	3,520,216	-	7,458,456

Governmental activities capital assets, net $ 3,938,240

$ 3,520,216	$

-	$ 7,458,456

The total projected cost of the infrastructure has been estimated at approximately $10 million over two phases, of which approximately $8.2 million is expected to be financed with the proceeds from the issuance of Bonds with the remainder to be funded by the Developer.

NOTE 5: LONG-TERM DEBT

On October 16, 2017, the District issued $4,965,000 of Special Assessment Bonds, Series 2017 consisting of $445,000 2017 Term Bonds due May 1, 2023 with a fixed interest rate of 3.50%,
$545,000 2017 Term Bonds due May 1, 2028 with a fixed interest rate of 4.13%, $1,515,000 2017 Term Bonds due May 1, 2038 with a fixed interest rate of 4.70%, and $2,460,000 2017 Term Bonds due May 1, 2048 with a fixed interest rate of 5.00%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1.

Principal on the Series 2017 Bonds is to be paid serially commencing May 1, 2018 through May 1, 2048. The Series 2017 Bonds are subject to optional redemption beginning May 1, 2028 and to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occur as outlined in the Bond Indenture.

On January 17, 2019, the District issued $4,335,000 of Special Assessment Bonds, Series 2019 consisting of $355,000 2019 Term Bonds due November 1, 2024 with a fixed interest rate of 4.25%,
$440,000 2019 Term Bonds due November 1, 2029 with a fixed interest rate of 4.75%, $1,300,000 2019 Term Bonds due November 1, 2039 with a fixed interest rate of 5.50%, and $2,240,000 2019 Term Bonds due November 1, 2049 with a fixed interest rate of 5.625%. The bonds were issued to fund the construction of infrastructure and the District’s portions of amenities as set forth in an Interlocal Agreement with Holly Hill Road East Community Development District. Interest is to be paid semiannually on each May 1 and November 1.

Principal on the Series 2019 Bonds is to be paid serially commencing November 1, 2020 through November 1, 2049. The Series 2019 Bonds are subject to optional redemption beginning November 1, 2029 and to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occur as outlined in the Bond Indenture.

The balance of the bonds at September 30, 2019 is summarized as follows:
September 30,	2019
Bond principal balance	$ 8,175,000
Less unamortized bond discount	(15,002)
$ 8,159,998
Long-term liability activity for the year ended September 30, 2019, was as follows:

Governmental Activities

Beginning
Balance	Additions	Reductions	Ending Balance

Due Within One Year

Bonds Payable:		
Series 2017	$ 4,405,000	$	-	$	(565,000)	$	3,840,000	$	70,000	
Series 2019	-	4,335,000	-	4,335,000	-	

$	
4,405,000	
$	
4,335,000	$	
(565,000)	
$	
8,175,000	
$	
70,000	

At September 30, 2019, the scheduled debt service requirements on long-term debt were as follows:

For the year Ending September 30,	
Principal	
Interest	Total Debt
Service	

2020	
$	70,000	
$	478,678	
$	548,678	
2021	140,000	415,826	555,826	
2022	145,000	410,333	555,333	
2023	145,000	404,733	549,733	
2024	160,000	399,026	559,026	
2025 -2029	880,000	1,886,550	2,766,550	
2030 - 2034	1,115,000	1,657,281	2,772,281	
2035 - 2039	1,410,000	1,342,450	2,752,450	
2040 - 2044	1,840,000	927,553	2,767,553	
2045 - 2049	1,990,000	376,078	2,366,078	
2050	280,000	7,875	287,875	
	
$	8,175,000	
$	8,306,383	
$	16,481,383	

The Bond indenture requires that the District maintain adequate funds in the reserve accounts to meet the debt service reserve requirements as defined in the Indentures. The requirements have been met for fiscal year ended September 30, 2019.

NOTE 6: 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. The District maintains commercial insurance coverage to mitigate the risk of loss. Coverage may not extend to all situations. Management believes such coverage is sufficient to preclude any significant uninsured losses to the District. The District has not settled any claims in the time since its inception.

NOTE 7: MANAGEMENT COMPANY

The District has contracted with a management company to perform management advisory services, which include financial and accounting advisory 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 8: DEVELOPER TRANSACTIONS

A significant portion of the District’s activity is dependent upon the continued involvement of the Developer, HH CR 547 Investors I, LLC. The loss of significant involvement could have a material adverse effect on the District’s operations.

For the year ended September 30, 2019, the Developer contributed $200,014 to the Capital Project Funds. In addition, the District collected approximately $23,000 from the Developer in off-roll general fund assessments.

Interfund transfers during the year ended September 30, 2019 were as follows:
Interfund
Funds	Transfers in	Transfers out	
General	$	-	$	10,875	
Debt Service	1,977	-	
Capital Projects	8,898	-	
Total	$	10,875	$	10,875	

The interfund transfers are primarily to fund current year infrastructure construction.

NOTE 10: SUBSEQUENT EVENTS

In March 2020, the World Health Organization made the assessment that the outbreak of a novel coronavirus (COVID-19) can be characterized as a pandemic. As a result, uncertainties have arisen that may have significant negative impact on the operating activities and results of the District. The occurrence and extent of such an impact will depend on future developments, including (i) the duration and spread of the virus, (ii) government quarantine measures, (iii) voluntary and precautionary restrictions on travel or meetings, (iv) the effects on the financial markets, and (v) the effects on the economy overall, all of which are uncertain.

Required Supplemental Information (Other Than MD&A)

North Boulevard Community Development District Budget to Actual Comparison Schedule – General Fund

For the year ended September 30,		2019		
	Original and		Variance with	
	Final Budget	Actual Amounts	Final Budget	
Revenues
Developer contributions	
$	44,968	
$	-	
$	(44,968)	
Assessment revenue	151,632	198,551	46,919	
Interest and other revenues	-	482	482	
Total revenues	196,600	199,033	2,433	

Expenditures
General government	

124,968	

108,759	

16,209	
Field operations	71,632	46,415	25,217	
Total expenditures	196,600	155,174	41,426	

Excess of revenues over expenditures	
$	-	
$	43,859	
$	43,859	

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
North Boulevard Community Development District Polk County, 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 the governmental activities and each major fund of North Boulevard Community Development District (hereinafter referred to as the “District”), as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated June 30, 2020.

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 our 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 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify a deficiency in internal control, described on the following page as IC2019-01, which we consider to be a material weakness.

IC2019-01: Financial Statement Closing Procedures
Condition: As part of our audit procedures, we identified approximately $167,000 of bond issue costs that were over stated on the District’s financial statements as of September 30, 2019.
Criteria: Internal controls should be in place to provide reasonable assurance that all accounting transactions, including those items that do not directly impact cash, are properly recorded as part of the financial statement close process.
Cause: The District's staff made errors when recording certain noncash related items when preparing its annual financial report.
Effect: Bond issuance costs and long-term debt proceeds on the financial statements were overstated by approximately $167,000.
Recommendation: We recommend the District review its financial statement closing procedures to ensure all noncash items are properly recorded.
Management response: The District will take steps to implement the aforementioned recommendation.
Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’s financial statements are free from 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.

CARR, RIGGS & INGRAM, LLC
Miramar Beach, Florida June 30, 2020

MANAGEMENT LETTER

To the Board of Supervisors
North Boulevard Community Development District Polk County, Florida

Report on the Financial Statements

We have audited the financial statements of the North Boulevard Community Development District (“District”) as of and for the fiscal year ended September 30, 2019, and have issued our report thereon dated June 30, 2020.

Auditors' 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 Reports and Schedule

We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards and Independent Accountants' 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 those report, which are dated June 30, 2020, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Finding 2018-01 was partially resolved and a similar finding was reported in the current year 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. The information required is disclosed in the notes to the financial statements.

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 to identify 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.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. 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 that we address 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 have any such findings.

Purpose of this Letter

Our management letter is intended solely for the information and use of 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.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 30, 2020

INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Supervisors
North Boulevard Community Development District Polk County, Florida

We have examined North Boulevard Community Development District’s compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2019. Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on the 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. Those standards require that we plan and performed the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide 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, 2019.

This report is intended solely for the information and use of management and the State of Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 30, 2020