Wynnmere East Community Development District

FINANCIAL STATEMENTS

September 30, 2017

Wynnmere East Community Development District
Table of Contents September 30, 2017

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	23
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	24
Management Letter	26
Attestation Report on Compliance with Section 218.415 Florida Statutes	28

INDEPENDENT AUDITORS’ REPORT

To the Board of Supervisors
Wynnmere East Community Development District Hillsborough County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of Wynnmere East Community Development District (hereinafter referred to as “District”), as of and for the year ended September 30, 2017, 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, 2017, 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 26, 2018, 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 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.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 26, 2018

Management’s Discussion And Analysis

Our discussion and analysis of the Wynnmere East Community Development District’s financial performance provides an overview of the District’s financial activities for the fiscal year ended September 30, 2017. Please read it in conjunction with the District’s financial statements, which begin on page 8.

FINANCIAL HIGHLIGHTS

At September 30, 2017, the assets of the District exceeded its liabilities by approximately $1.2 million.

During the fiscal year ended September 30, 2017, the District incurred approximately $346,000 of interest expenditures and repaid principal of $135,000.

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 10. 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 Districts’ 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.

THE DISTRICT AS A WHOLE

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

September 30,	2017	2016	Change	
Assets				
Current and other assets	$	679,439	$	2,279,364	$ (1,599,925)	
Construction in progress	6,713,770	5,195,339	1,518,431	
Total assets	$	7,393,209	$	7,474,703	$	(81,494)	
Liabilities				
Current liabilities	$	246,473	$	630,518	$	(384,045)	
Other liabilities	5,901,392	6,036,089	(134,697)	
Total liabilities	6,147,865	6,666,607	(518,742)	
Net position				
Net investment in capital assets	1,027,581	541,880	485,701	
Restricted for:				
Debt service	125,075	38,012	87,063	
Unrestricted	92,688	228,204	(135,516)	
Total net position	1,245,344	808,096	437,248

Total liabilities and net position

$	7,393,209	$

7,474,703	$

(81,494)

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

During the fiscal year ended September 30, 2017, total assets and liabilities decreased by $81,494 and
$518,742, respectively. The decrease in assets and liabilities is primarily due to investment funds being used to repay construction payables as well as the retirement of a portion of the outstanding long‐term bond principal in the current year.

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

Year ended September 30,	2017	2016	Change	
Revenues:				
Program revenues:
Grants and contributions	
$	870,257	
$	351,623	
$	518,634	
General revenues:				
Interest and other revenues	84	4	80	
Total revenues	870,341	351,627	518,714	
Expenses:				
General government	75,741	84,777	(9,036)	
Maintenance and operations	43,029	32,748	10,281	
Developer contribution repayment	‐	1,854,753	(1,854,753)	
Bond issue costs	‐	292,514	(292,514)	
Interest	314,323	163,414	150,909	
Total expenses	433,093	2,428,206	(1,995,113)	
Change in net position	437,248	(2,076,579)	2,513,827	
Net position, beginning	808,096	2,884,675	(2,076,579)	
Net position, ending	$	1,245,344	$	808,096	$	437,248	

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

Revenues increased from the prior year by approximately $519,000 and expenses decreased from the prior year by approximately $2 million. The increase in revenues is primarily due to the collection of on‐ roll assessments related to the Series 2016 bonds. The decrease in expenses is primarily due to the repayment to the developer in the prior year. The overall result was a $437,248 increase in net position for fiscal year 2017.

THE DISTRICT’S FUNDS

As the District completed the year, its governmental funds (as presented in the balance sheet on page
reported a combined fund balance of approximately $659,000, which is a decrease from last year’s balance that totaled approximately $1.9 million. Significant transactions are disclosed below.

During the fiscal year ended September 30, 2017, the District collected debt service revenues totaling approximately $696,000 to fund the repayment of the Series 2016 bonds.

The District expended capital outlay amounts of approximately $1.5 million.

During the fiscal year ended September 30, 2017, the District incurred approximately $346,000 of interest expenditures and repaid principal of $135,000.

The overall decrease in fund balance for the year ended September 30, 2017 totaled approximately $1.2 million.

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets

At September 30, 2017, the District had approximately $6.7 million invested in capital assets. This amount represents an increase of approximately $1.5 million from fiscal year 2016.

A listing of capital assets by major category for the current and prior year follows:

September 30,	2017	2016	Change	

Capital assets not being depreciated	
$	6,713,770	
$	5,195,339	
$	1,518,431	

Net capital assets	
$	6,713,770	
$	5,195,339	
$	1,518,431	

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

Debt

At September 30, 2017, the District had approximately $6 million of bonds outstanding. This amount represents a decrease of $135,000 from the fiscal year 2016 total.

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

September 30,	2017	2016	Change

Series 2016

$	6,005,000

$	6,140,000	$

(135,000)

 	$	6,005,000	$	6,140,000	$	(135,000) 

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 23.

The District experienced favorable variances in revenues and expenditures as compared to the budget in the amount of $5,016 and $48,430, respectively. The variance in revenues is due to an excess of assessments collected over budgeted amount. The variance in expenditures occurred primarily due to anticipated budgeted operating expenditures that were not incurred during the year such as supervisor fees, engineering, district counsel, electric, aquatic contract, and landscape improvements.

FUTURE FINANCIAL FACTORS

Wynnmere East 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 contribution rates. Assessment rates for fiscal year 2018 have been established to provide for the operations of the District.

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 Wynnmere East Community Development District’s management company at 12051 Corporate Blvd, Orlando, Florida 32817.

Basic Financial Statements

Statement of Net Position

September 30,	2017	
	Governmental	
	Activities	
Assets		
Cash and cash equivalents	$	65,774	
Investments	601,812	
Accounts receivable	3,743	
Deposits receivable	2,825	
Interest receivable	285	
Prepaid expenses	5,000	
Capital Assets:		
Construction in progress	6,713,770	

Total assets	
7,393,209	

Liabilities		
Accounts payable	20,434	
Accrued expenses	131,039	
Non‐current liabilities:		
Due within one year	95,000	
Due in more than one year	5,901,392	

Total liabilities	
6,147,865	

Net position		
Net investment in capital assets
Restricted for:	1,027,581	
Debt service	125,075	
Unrestricted	92,688	

Total net position	$	1,245,344

Statement of Activities

	
Program Revenues	Changes in
Net Position	
	Operating	Capital
Grants and	Grants and	
Governmental	
Functions/Programs	Expenses	Contributions Contributions	Activities	
Primary government:				
Governmental activities:
General government	
$	(75,741)	
$	109,771	$	‐	
$	34,030	
Maintenance and operations	(43,029)	62,361	‐	19,332	
Interest	(314,323)	697,183	942	383,802	

Total governmental activities

$	(433,093) $

869,315	$

942

437,164

General revenues
    Interest and other revenues	84 
 	Total general revenues		84 Change  in net position	437,248
 Net position  ‐ beginning of year	808,096 

 Net position ‐ end of year	$	1,245,344 

Balance Sheet – Governmental Funds

September 30,			2017		
				Total	
	
General	
Debt Service	
Capital Projects	Governmental
Funds	
Assets					
Cash and cash equivalents	$	65,774	$	‐	$	‐	$	65,774	
Investments	‐	460,021	141,791	601,812	
Accounts receivable	3,743	‐	‐	3,743	
Deposits receivable	2,825	‐	‐	2,825	
Interest receivable	‐	212	73	285	
Prepaid expenditures	5,000	‐	‐	5,000	
Total assets	$	77,342	$	460,233	$	141,864	$	679,439	

Liabilities and Fund Balances
Liabilities

Accounts payable	$	2,544	$	‐	$	17,890	$	20,434	
Total liabilities	2,544	‐	17,890	20,434	

Fund balance

Nonspendable	5,000	‐	‐	5,000	
Reserved for debt service	‐	460,233	‐	460,233	
Reserved for capital projects	‐	‐	123,974	123,974	
Unassigned	69,798	‐	‐	69,798	
Total fund balance	74,798	460,233	123,974	659,005	

Total liabilities and fund balance

$	77,342	$

460,233	$

141,864	$

679,439

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of
Net Position

September 30,	2017	

Total fund balances, governmental funds	
$	659,005	
Capital assets used in governmental activities are not financial resources and therefore are not reported in the fund financial statements.	
6,713,770	
Liabilities not due and payable from current resources are not reported in the		
fund level statements.	(6,127,431)	

Total net position ‐ governmental activities	
$	1,245,344	

Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds

Year ended September 30,

2017

Capital

Total Governmental

Revenues

General	Debt Service

Projects

Funds

Assessments	$	172,132	$	695,728	$	‐	$	867,860	
Interest and other revenues	84	1,455	942	2,481	
Total revenues	172,216	697,183	942	870,341	

Expenditures
Current:

General government	72,851	‐	‐	72,851	
Maintenance	45,919	‐	‐	45,919	
Debt Service:					
Principal	‐	135,000	‐	135,000	
Interest	‐	346,218	‐	346,218	
Capital outlay	‐	‐	1,518,431	1,518,431	
Total expenditures	118,770	481,218	1,518,431	2,118,419	

Net change in fund balances	
53,446	
215,965	
(1,517,489)	
(1,248,078)	
Other Financing Sources (Uses)
Transfer in	
-	
385	
810	
1,195	
Transfer out	(1,195)	-	-	(1,195)	
Total other financing sources (uses)	(1,195)	385	810	‐	

Net change in fund balances	
52,251	
216,350	
(1,516,679)	
(1,248,078)	
Fund balance, beginning of year	22,547	243,883	1,640,653	1,907,083	

Fund balance, end of year	
$	74,798	
$	460,233	
$	123,974	
$	659,005	

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Year ended September 30,	2017	

Net change in fund balances ‐ governmental funds	
$	(1,248,078)	
Capital outlay is an expenditure in the governmental funds but the amounts are treated as an increase in capital assets in the Statement of Net Position.	
1,518,431	
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	135,000	
Amortization of original issue discount is not recognized in the governmental		
fund statements but is reported as an expense in the Statement of Activities	(303)	
The change in accrued interest between the current and prior year is recorded		
on the Statement of Activities but not on the fund financial statements.	32,198	

Change in net position of governmental activities	
$	437,248	

NOTE 1: NATURE OF ORGANIZATION

The Wynnmere East Community Development District (the “District”) was established on January 13, 2015 pursuant to Chapter 190, Florida Statutes, by Ordinance No. 14‐21, Laws of Florida. The District has among other things, the power to manage basic services for community development, power to borrow money and issue bonds, and the power to levy ad valorem taxes 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. At September 30, 2017, certain supervisors were affiliated with the original developer of the District, Wyn Group, LLC (“Original Developer”). During 2016, a significant portion of the land located within the District was purchased by Lennar Homes, LLC, which effectively made them the new developer of the project (the “Developer”). The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes.

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, 2017, 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  within  60 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 on October 1st and ends on 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 on bonds issued by the District.

Assessments 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 accounts for the financial resources to be used in the acquisition or construction of major infrastructure within the District financed with the bonds previously issued or other means.

For the year ended September 30, 2017, 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 U.S. 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.

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 at the time the assets are completed and placed in service.

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.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes include 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, 2017.

In addition to liabilities, the accompanying statements 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, 2017.

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 the District’s bond covenants.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

Estimates

The preparation of financial statements in conformity 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.

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.

NOTE 3: INVESTMENTS

As shown below, the District’s investments held at September 30, 2017 consist of short‐term money market funds. In accordance with GASB 72, Fair Value Measurement and Application, the money market amounts are reported in the financial statements at amortized cost.

NOTE 3: INVESTMENTS (Continued)

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

September 30,	2016	Credit Risk	Maturities

Short‐term Money Market Funds

$	601,812

S&P AAAm	23 days

$	601,812

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, 2017, 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.

NOTE 4: CAPITAL ASSETS

The following is a summary of changes in the capital assets for the year ended September 30, 2017:

	Beginning
Balance	
Additions	Transfers and
Conveyances	Ending
Balance	
Governmental Activities:
Capital assets  not being depreciated
Infrastructure  under construction	

$ 5,195,339	

$ 1,518,431	

$	‐	

$ 6,713,770	
Total capital assets, not being depreciated	5,195,339	1,518,431	‐	6,713,770	

Governmental activities capital assets, net	
$ 5,195,339	
$ 1,518,431	
$	‐	
$ 6,713,770	

NOTE 4: CAPITAL ASSETS (Continued)

The total projected cost of the infrastructure improvements has been estimated at $8 million and will be completed in phases. A portion of the proceeds from the Series 2016 Bonds will be used to purchase the project from the Developer and finance a portion of the project.

NOTE 5: BONDS PAYABLE

On March 9, 2016, the District issued $6,140,000 of Special Assessment Bonds, Series 2016 consisting of
$620,000 Term Bonds due on May 1, 2022 with a fixed interest rate of 4.00%, $975,000 Term Bonds due on May 1, 2029 with a fixed interest rate of 5%, $1,395,000 Term Bonds due on May 1, 2036 with a fixed interest rate of 5.125%, and $3,150,000 Term Bond due on May 1, 2046 with a fixed interest rate of 5.5%. The Bonds were issued to provide funding to pay all or a portion of the costs of the planning, financing, acquisition, construction, equipping and installation of the Series 2016 project. Interest is to be paid semiannually on each May 1 and November 1, commencing November 1, 2016. Principal is to be paid annually on each May 1, commencing May 1, 2017. The Series 2016 Bonds are subject to redemption at the option of the District prior to their maturity.

The Bond Indenture requires that the District maintain adequate funds in the reserve account to meet the debt service reserve requirement as defined in the Indenture. The reserve requirement has been met for the fiscal year ended September 30, 2017.

The Bond Indenture has established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District is in compliance with those requirements of the Bond Indenture at September 30, 2017

Long‐term liability activity for the year ended September 30, 2017, was as follows:

Governmental Activities
Bonds Payable:

Beginning
Balance	Additions	Reductions	Ending Balance

Due Within One Year

Series 2016

$ 6,140,000	$

−	$ (135,000) $

6,005,000	$

95,000

$ 6,140,000	$

−	$ (135,000) $

6,005,000	$

95,000

NOTE 5: BONDS PAYABLE (Continued)

The balance of the long‐term bonds at September 30, 2017 is summarized as follows:
September 30,	2016

Bond principal balance	$	6,005,000	
Less unamortized bond discount	(8,608)	

Net balance	
$	5,996,392	

At September 30, 2017, the scheduled debt service requirements on long‐term debt were as follows:
Total Debt

Year Ending September 30,	Principal	Interest	Service	

2018	
$	95,000	
$	314,494	
$	409,494	
2019	100,000	310,694	410,694	
2020	105,000	306,694	411,694	
2021	110,000	302,494	412,494	
2022	115,000	298,094	413,094	
2023‐2027	660,000	1,404,719	2,064,719	
2028‐2032	855,000	1,220,819	2,075,819	
2033‐2037	1,100,000	978,744	2,078,744	
2038‐2042	1,435,000	650,100	2,085,100	
2043‐2046	1,430,000	207,625	1,637,625	
	
$	6,005,000	
$	5,994,477	
$	11,999,477	

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. Settled claims have not exceeded this commercial coverage since 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: CONCENTRATION

At September 30, 2017, the Developer owned a majority of the property within the District. As such, a significant portion of the District’s future activity is dependent upon the continued involvement of the Developer, the loss of which could have a materially adverse effect on the District’s operations. During the current year, the Developer was assessed approximately $444,127 for O&M and debt service of the District.

Required Supplemental Information (Other Than MD&A)

Wynnmere East Community Development District Budget to Actual Comparison Schedule – General Fund

Year ended September 30,

Original and

2017

Variance with

 	Final Budget	Actual Amounts	Final Budget	 Revenues
Assessments	$	167,200	$	172,132	$	4,932	
Interest and other revenues	‐	84	84	
Total revenues	167,200	172,216	5,016	

Expenditures
General government	

105,500	

72,851	

32,649	
Maintenance and operations	61,700	45,919	15,781	
Total expenditures	167,200	118,770	48,430	

Excess of revenues over expenditures	
$	‐	
$	53,446	
$	53,446	

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
Wynnmere East Community Development District Hillsborough 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 Wynnmere East Community Development District (hereinafter referred to as the “District”), as of and for the year ended September 30, 2017, 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 26, 2018.

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 have not been identified. We did identify a deficiency in internal control, described as IC2017‐001 on the following page that we consider to be a material weakness.

IC2017‐001: Engineering Expenses and Accounts Payable

Condition: Approximately $9,400 of engineering expenses were not accrued on the District’s financial statements as of September 30, 2017 although the engineering work was performed prior to the fiscal year‐end.

Criteria: Generally Accepted Accounting Principles for governmental entities require that “a government should accrue a governmental fund liability and expenditure in the period in which the government incurs the liability.”

Cause: The engineering expenditures were incurred in April 2017 and were paid subsequent to fiscal year‐end. The District appears to have overlooked the expenditure when preparing its annual financial report.

Effect: Accounts payable and engineering expenditures on the financial statements were understated by approximately $9,400.

Recommendation: We recommend the District review vendor activity within a reasonable timeframe from year‐end to ensure that all applicable contract liabilities are identified and recorded.

Management Response: The District has already taken further steps to ensure that this oversight is avoided in the future.

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

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 26, 2018

MANAGEMENT LETTER

To the Board of Supervisors
Wynnmere East Community Development District Hillsborough County, Florida

Report on the Financial Statements

We have audited the financial statements of the Wynnmere East Community Development District (“District”) as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated June 26, 2018.

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 these reports, which are dated June 26, 2018, 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. Corrective actions have been taken to address findings and recommendations made in the preceding 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. The information required is disclosed in the notes to the financial statements.

Financial Condition

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. 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.

Annual Financial Report

Section 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, requires us to apply appropriate procedures and communicate the results of our determination as to whether the annual financial report for the District for the fiscal year ended September 30, 2017, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2017. In connection with our audit, we determined that these two reports were in agreement.

Other 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 have 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.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 26, 2018

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Supervisors
Wynnmere East Community Development District Hillsborough County, Florida

We have examined Wynnmere East Community Development District’s compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2017. Management of the District is responsible for the District’s compliance with the specified requirements. Our responsibility is to express an opinion on the District’s compliance with the specified requirements 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 perform 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, 2017.

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 26, 2018