Candler Hills East Community Development District

Agenda May 15, 2018

A GENDA

Candler Hills East
Community Development District

135 W. Central Blvd., Suite 320, Orlando, Florida 32801
Phone: 407-841-5524- Fax: 407-839-1526

May 8, 2018

Board of Supervisors
Candler Hills East Community Development District

The Board of Supervisors of the Candler  Hills  East Community  Development  District  will  meet on Tuesday, May 15, 2018 at 9:00 a.m., or as shortly thereafter as reasonably possible, at the Live Oak Hall, 8413 SW 8Qth Street, Suite 7-8, Ocala, FL. Following is the advance  agenda for  the meeting:

I.	Roll Call
IL	Public Comment Period
Notice for Meeting
Approval of Minutes of the February 20, 2018 Meeting
Review and Acceptance of Draft Fiscal Year 2017 Audit Report
Consideration of Resolution 2018-01 Approving the Proposed Budget for Fiscal Year 2019 and Setting a Public Hearing
Staff Reports
Attorney
Engineer
District Manager
Approval of Check Register
Balance Sheet and Income Statement
Presentation of Number of Registered Voters - 930
Presentation of Qualifying Information and Dates
Other Business
Supervisors Requests
Adjournment

The second order of business is the Public Comment Period where the public  has  an opportunity to be heard on propositions coming before the Board as reflected on the  agenda, and any other items.

Enclosed under the third order of business is the affidavit of publication associated with the public notice for this meeting.

The fourth order of business is the approval of the minutes from the February 20, 2018 meeting. The minutes are enclosed for your review.

The fifth order of business is review and acceptance of draft Fiscal Year 2017 audit report. A copy of the report is enclosed for your review.

The sixth order of business is consideration of Resolution 2018-01 approving the proposed budget for Fiscal Year 2019 and setting a public hearing.

The seventh order of business is Staff Reports. Section 1 of the District Managers Report includes the check register for approval and Section 2 includes the balance sheet and income statement for your review. Section 3 is the presentation of number of  registered  voters within the boundaries of the District. A copy of the letter from the Marion County Supervisor of Elections is enclosed for your review. Section 4 is the presentation of the qualifying information and dates. A copy of the information is enclosed for your review.

The balance of the agenda will be discussed at the meeting. In the meantime, if you have any questions, please contact me.

Sincerely,

George S. Flint District Manager

Cc:	Gerald Colen, District Counsel Ken Colen, On Top of the World
Guy Woolbright, On Top of the World Lynette Vermillion, On Top of the World Darrin Mossing, GMS

S ECTION Ill

AFFIDAVIT OF PUBLICATION

NOTICE OFMEETING CANDLER HILLS EAST COMMUNITY
DEVELOPMENT DISTRICT
The.regular meeting of the Board of Su­
- .z;:iors ofhtheoCarntdlferyHIiis;East Com-

Star-Banner

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u  ltln,aner as·reasona­

BOttf°StSSlble, at.Live Oak Hall, 8413 SW

Published - Daily Ocala, Marion County, Florida

STATE OF FLORIDA

Th	r t. u1te 7-8, Ocala, Fl 34481

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be meed0!19 i open lo the public and wili con ucted in accordance with th
visions of Florida law for Co	e pro- velopment  Districts   A    mmunHy De-

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"mies mandeetingla may be continued to a date.

COUNTY OF MARION

" ,	P ce to be specified cord at the meeting.

• 11 the re-

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 		Before  the  d,	a  Notary  Public  of  Said  County  and  State,
who  on oath  says that  they are  an  authorized

e	ey '?e occasions When one or'

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. als will.paper!_ryisolrsb, Staff or other individu- icipa e y telephone.
Pursuarn to the provisions of the Am 11.

cans with Disabilities Act 811	e -
quiri11g special	• Y person re-

employee of the Star-Banner, a daily newspaper published at Ocala, in Marion County, Florida; that the attached copy of advertisement, being a notice in the matter of
NOTICE OF MEETING CANDLER HILLS EAST COMMUNITY DEVELOPMENT
DISTRICT The regular meeting of the Board of Supervisors of the Candler Hills East Community Development District will be held on Tuesday, May 15, 2018 at 9:00 AM, or as shortly thereafter as re

was published in said newspaper in the issues of:

5/4 Ix

ti  ·   t    •      .	acoommodatJOns  to par-
Clpa  i this meeti11g is asked lo advise
DJSlrict Office at least forty-eight (4B)
rs pnor to the meeting by contacti

!':ti1t;9   ;tact the Florida Relai

t h_e   District Manager at (407) 841-5524 "
you  are heali11g  or speech •	. ·

Eacti person who decides to appeal 811

District rnr:;ro, for aid In contacting the action taken at these meetings is advisJ ·
that person will need a record of the r
ceedl11gs a11d that accordingly, the pe may need to ensure that a verbatim re-
rd   t    t !s  fi11g is made, includ­
.which such appeal Is  be	upon

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Govemma•"'"""'' ManagemGeenot rSgeervSic. eFslin_t
Central Florida LLC

May 4, 2018
#AD00932BD8

Affiant further says that the said STAR-BANNER is a daily newspaper published at Ocala, in said Marion County, Florida, and that the said newspaper has heretofore been continuously published in said Marion County,  Florida, daily, and has been entered as second class mail matter at the post office in Ocala in said Marion County, Florida, for a period of one year next preceding the first publication of the attached copy of advertisement; and affiant further says that he has neither paid nor promised any person, firm or corporation any discount, rebate, commission or refund for the person of securing this advertisement for publication in the said newspaper.

Sworn to and subscribed  before me thiis

day of 1!\{),.,	,A D., 20J}f

 	)'Y'V

HARMONY STALTER
Notary Public • State of Florida
Commission # FF 956448
My Comm. Expires Feb 2, 2020

HARMON	\ER

(Print, Type or Stamp Name of Notary Public)

Ad #: A000932808

M INUTES

MINUTES OF MEETING CANDLER HILLS EAST
COMMUNITY DEVELOPMENT DISTRICT

The Regular Meeting of the Board of Supervisors of the Candler Hills East Community Development District was held on Tuesday, February 20, 2018 at 9:00 a.m. at Circle Square Commons Cultural Center, 8395 S.W. 80th Street, Ocala, Florida.

Present and constituting a quorum were:

Philip J. Moherek Elmer Greene Robert Scherff John Bain
Larry Garvin

Also present were:

George Flint Rachel Wagoner Crystal House Bryan Schmalz Philip Hisey Lynette Vermillion Robert Stepp
Guy Woolbright

Chairman
Vice Chairman Assistant Secretary Assistant Secretary Assistant Secretary

District Manager District Counsel BLCCDD BLCCDD OTOW
OTOW OTOW OTOW

FIRST ORDER OF BUSINESS	Roll Call
Mr. Flint called the meeting to order and called the roll. A quorum was present.

SECOND ORDER OF BUSINESS	Public Comment Period
Mr. Flint: Are there any members of the public that want to provide comments to the Board? Hearing none,

THIRD ORDER OF BUSINESS	Notice for Meeting
Mr. Flint: The meeting notice of the February 20, 2018 meeting, was advertised in the Ocala Star Banner on September 21, 2017, and included in the agenda package.

Februal)' 20, 2018	Candler Hills East CDD

FOURTH ORDER OF BUSINESS	Approval  of Minutes of the November 21,
2017 Meeting
Mr. Flint: Does the Board have any changes and comments on the minutes? If not, we need a motion to approve them.

On MOTION by Mr. Garvin, seconded by Mr. Greene, with all in favor, the minutes of the November 21, 2017 meeting were approved.

FIFTH ORDER OF BUSINESS	Discussion	of	Cost	Sharing	with
Homeowner's	Association	Relative	to Maintenance of Storm Water System
Mr. Flint: The background on this is that the Chairman drafted a letter and distributed it  to the Board. When Candler Hills East was created, the stormwater system was constructed  by the Community Development District. It is owned and maintained by the  CDD.  When  the future section of the community was developed, that portion of the stormwater system  was placed under the Homeowner's Association and maintained by the HOA. The HOA has one fee for both the Candler Hills East section and the newer section, so in effect, the CDD is paying for the maintenance of their stormwater system in the Candler Hills East portion; whereas, the newer portions of the development are not sharing the cost of the stormwater system within the COD, because they don't pay COD fees. There are a couple of ways to deal with the issue. Because there' s an equity issue there, one way would be to develop two different HOA rates, one within the CDD and one outside. Apparently the HOA is not in favor of doing that. Another alternative would be to enter into an Easement and Maintenance Agreement with the HOA to allow the HOA to maintain the stormwater system within the CDD, and then add that cost into the HOA fees. That way the entire Candler Hills East community is sharing the maintenance cost in both sections. Mr. Moherek drafted a letter suggesting the COD request of the HOA,  but that  the HOA take over the cost of operating the stormwater system within the CDD. To be able to do that, there are a couple of things that we would need to do. We would need to enter into an Easement Agreement with the HOA that would give them the ability to maintain it, and a Cost Sharing Agreement. There is a timing issue because the HOA and COD are on two different fiscal years. The HOA operates on a calendar and we operate on a fiscal year calendar, from October 1st to September 30th. You are going to be adopting your budget before the HOA adopts

2

February 20, 2018	Candler Hills East CDD

their budget and we will have through that timing issue. This assumes that the HOA is amenable to doing that. If they attend your May meeting, we will probably have the agreements and talk through the mechanics. Just so there's no confusion, if the HOA agrees to take the stormwater system, the entire operations and maintenance assessment is not going away. Other costs are in place, which are administrative, whether or not we maintain the stormwater system, because the CDD still continues to exist. You still have to carry insurance, still have a Board and must complete an annual audit. You also still must have a Manager. All of those things will not go away. Out of a total budget of $105,000, it appears that about $60,000 is related to the maintenance of the stormwater ponds. You will be looking at a reduction in the annual assessment, but it would not go away altogether. Is there anything else, Mr. Moherek?
Mr. Moherek: That's about it.  I appreciate the detailed explanation.  Many owners came to me and asked me why there was this fee, while the rest of community does not pay. We have been investigating this for a long time to figure out the best way to handle this. Based on my discussion with Mr. Flint, I drafted a letter. When we bought our homes in CHE,  we had  to  come up with a bond issue which, in the bond, covered all of the engineering, attorney, legal and all other expenses. That's the homeowner's responsibility. Any  costs related  to  maintaining those bonds, should be at the homeowner's expense; however, any maintenance costs should be, in my opinion, picked up by the HOA, overall and divided among all of the owners. I had no  idea about the numbers, as I estimated them. Depending  on how the HOA sees it, the numbers are not going to change, but at least I feel that if we work together, it's going to be an equitable situation for all of CHE.
Mr. Flint: We may want to revise this before the letter goes out, just so it includes the entire $105,000 in there, which we would need to change.
Mr. Moherek: Do any of the Board Members have any questions on this?
Mr. Scherff: I attended the annual meeting that Ken Colen posted, and looking at a future five to seven years out, according to the Florida Statutes, when the developer develops 90% of the community, it is turned over to the HOA. It seemed to me that we would want to be in agreement, where if that should happen five to seven years out, we would want to spread out the equal expense to the entire community of CHE. That makes sense to me.
Mr. Moherek: Thanks for that comment. Does anyone have any other comments?

3

February 20, 2018	Candler Hills East CDD

Mr. Greene: I've always wondered. The CDD takes care of the drainage retention areas within Candler Hills East, and I'm wondering if the drainage retention areas in Candler Hills West, Stone Bridge and now Lark Hill are going to be built into ours too, so that we are paying for both East and West; whereas, Candler Hills West is only paying for Candler Hills West. I think there's another issue there too.
Mr. Moherek: That's exactly what I'm talking about. Right now, we are paying two maintenance fees and that's the reason for this letter, which is to try to get an equitable answer to the problem. We are not looking back, we are looking forward. I know as a businessman, when you start a business, it would be done a certain way, based on what is the best thing to do at the time. Sometimes in situations like this, very few people have a handle on it. I think we came up with a good solution to it and I'm hoping that the HOA and CDD can work something out. Is there anyone else?
Mr. Garvin: We are going to get a more detailed letter on this for the next meeting.
Right?
Mr. Moherek: Yes. We are going to have another detail. This was only summary. The
numbers are not correct because I didn't know all the answers to the questions. Mr. Flint and I will work together to prepare the letter. Mr. Flint, do we have to bring it up at the next Board Meeting?
Mr. Flint: Yes. You are going to have the adoption of the Proposed Budget at your May
meeting, so this would impact that. We have to talk about the timing of you reducing  your budget prior to the HOA adopting their budget  for next year.  There are some risks there.  This all depends on the HOA and how they feel about the issue, so we will have to work through the timing of all of that. The concept would be, if the HOA agreed, the CDD assessments would decrease and the HOA fees would increase by something less than that amount, because  it's going to be spread over a larger number of units. That way the entire stormwater system within Candler Hills East would be covered under the HOA and everyone is sharing the cost, versus the way it currently is, where CHE is paying the cost of their system and a portion of the cost of the system for CHW.
Mr. Moherek: I want to thank Mr. Flint, for going into detail on this. We will draft that letter together and have it at the next meeting. Are there any other questions?

4

February 20, 2018	Candler Hills East CDD

Mr. Flint: Is the Board comfortable with the concept? If so, I recommend a motion requesting that the HOA consider this change.
Mr. Garvin: Are we approving the concept? Mr. Flint: These numbers are going to change. Mr. Garvin: I understand.
Mr. Flint: The $60,000 would come out of the CDD budget, and then it would go under the HOA budget. You are going to have a larger number of units in the HOA Budget to spread the $60,000 across. There will be some increase in the HOA budget and a larger decrease in the CDDbudget.

Mr. Garvin MOVED to direct staff to negotiate with the Homeowner's Association on maintenance of the District's stormwater system, and the transfer of $60,000 from the CDD budget to the HOA budget, and Mr. Greene seconded the motion.

Mr. Moherek: I believe that there supposed to be 1,400 homes in CHE. Does anyone know for sure?
Mr. Hisey: Thereabouts.
Mr. Moherek: Currently, the CDD has 628 homes.
Mr. Bain: Baring in mind, of course, there will be more retention ponds added, which increases the cost. Do we work on the basis of what's there now or do we work on the basis of the total?
Mr. Flint: The only issue is the $60,000 and whether it is in the CDD budget or HOA budget. The number of ponds within CHE is not going to change.
Mr. Hisey: Correct.
Mr. Flint: The other sections may change. You are going to be paying a part of that anyway, so the question is whether or not everyone shares the cost of the CHE section, so that's what we are talking about.

On VOICE VOTE, with all in favor, directing staff to negotiate with the Homeowner' s Association on maintenance of the District's stormwater system, and transferring $60,000 from the CDD budget to the HOA budget, was approved.

5

February 20, 2018	Candler Hills East CDD

Mr. Flint: The HOA representatives are here and they heard the discussion.

SIXTH ORDER OF BUSINESS	Staff Reports
Attorney
Mr. Flint: Rachel, do you have anything? Ms. Wagoner: No.
Engineer
There being none, the next item followed.
District Manager's Report
Approval of Check Register
Mr. Flint: You have the Check Register from November 15, 2017 through February 9, 2018. Were there any questions?
Mr. Sheriff: Regarding the CHE CDD - US. Bank item, is that money collected by the County?
Mr. Flint: Yes. The CDD gets one check from Marion County  that has the O&M and  debt in it, which we deposit into the operating account in the General Fund. We have to write a check to the Trustee to move the Debt Service Assessment Revenue. That's merely moving the money to the Trust Account to pay Debt Service. Are there any other questions?  If not, we need a motion to approve the Check Register.

On MOTION by Mr. Scherff, seconded by Mr. Moherek,  with all in favor, the Check Register, was approved.

Balance Sheet and Income Statement
Mr. Flint: You have the Unaudited Financial Statements through the end of January. Are there any questions on the Financial Statements?
Mr. Scherff: Is everything on line and there are no unusual or unexpected expenses?
Mr. Flint: No. Our actuals are prorated on the expense side. On the revenue side, we collected $94,000 of the $105,000 in O&M assessments that we levied. The financials  look good.
Consideration of Series 2016 Arbitration Report

6

February 20, 2018	Candler Hills East CDD

Mr. Flint: This is the Arbitrage Rebate Calculation Report for the Series 2016 bonds, indicating that we have a negative rebate requirement of $4,402. There are no arbitrage issues. We need a motion to accept the report.

On MOTION by Mr. Moherek, seconded by Mr. Scherff,  with all in favor, the Arbitrage Rebate Calculation Report for the Series 2016 bonds was accepted.

Mr. Garvin: Because this is tax season, the homeowners that I have spoken to, when they noticed that their COD bond was reduced, were very pleased with what the Board decided to do. It decreased by $100.

SEVENTH ORDER OF BUSINESS
There being none, the next item followed.

EIGHTH ORDER OF BUSINESS
There being none, the next item followed.

NINTH ORDER OF BUSINESS

Other Business

Supervisor's Requests

Adjournment

On MOTION by Mr. Scherff, seconded by Mr. Moherek,  with all in favor, the meeting adjourned.

Secretary/Assistant Secretary	ChairmanNice Chairman

7

S ECTION V

 	

Candler HIiis East Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2017

candler Hills East Community Development Dislrr	I

ANNUAL FINANCIAL REPORT	DRAFT
Fiscal Year Ended September 30, 2017

TABLE OF CONTENTS

Page Number
REPORT OF INDEPENDENT AUDITORS	1-2
MANAGEMENT'S DISCUSSION AND ANALYSIS	3-8
BASIC FINANCIAL STATEMENTS:
Government-wide Financial Statements
Statement of Net Position	9
Statement of Activities	1O
Fund Financial Statements:
Balance Sheet - Governmental Funds	11
Reconciliation of Total Governmental Fund Balances to Net
Position of Governmental Activities	12
Statement of Revenues, Expenditures and Changes in Fund
Balances - Governmental Funds	13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities	14
Statement of Revenues, Expenditures and Changes in Fund
Balances -  Budget and Actual - General Fund	15
Notes to Financial Statements	16-30
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS	31-32

MANAGEMENT LETTER
INDEPENDENT ACCOUNTANTS REPORT/COMPLIANCE WITH SECTION 218.45, FLORIDA STATUTES

33-34
35

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
Candler Hills East Community Development District Marion County, Florida·

Report on the Financial Statements

We have audited the accompanying basic financial statements of Candler Hills East Community Development District as of and for the year ended September 30, 2017, as listed in the table of contents.

Management's Responsibility for the Financlal Statements

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

Auditor's Responsibility

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
- 1 -

"	.. ·•·······" ··-·	--- ----------·------- ··-·-----

To the Board of Supervisors
Candler Hills East Community Development District

jDRAFTj

Opinion

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, and each major fund of Candler Hills East Community Development District as of September 30, 2017, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Other Matters

Management's Discussion and Analysis

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic  financial statements,  is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economical 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 principally 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 the sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated April XX, 2018 on our consideration of the District's internal control over financial reporting and  on our tests of its compliance with certain provisions of laws, regulations and contracts.

The purpose of that report Is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion  on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing standards in considering Candler Hills East Community Development District's Internal control over financial reporting and compliance.

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

April XX, 2018
-2-

MANAGEMENT'S DISCUSSION AND ANALYSIS	DRAFT

Candler HIiis East Community Development Dlatr1•	l
For the Year Ended September 30, 2017

Management's discussion and analysis of Candler Hills East Community Development District (the "District") financial performance provides an objective and easily readable analysis of the District's financial activities. The analysis provides summary financial information for the District and should be read in conjunction with the District's financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

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

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

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

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

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

) '.
[

-3-

MANAGEMENT'S DISCUSSION AND ANALYSIS	DRAFT

Candler HiUs East Community DevelopmentDls  t.r   	I
For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

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

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

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

Financial Highlights

The following are the highlights of financial activity for the year ended September 30, 2017.

The District's total assets exceeded total liabilities by $1,408,721 (net position). Unrestricted net position for Governmental Activities was $41,485. Net Investment in Capital Assets was $1,009,597. Restricted net position was $357,639.

Governmental activities revenues totaled $511,590 while governmental activities expenses totaled $526,998.

-4-

MANAGEMENT'S DISCUSSION AND ANALYSIS	DRAFT

Candler HIiis East Community Development Dlstricl 	I
For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District

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

	Net Position

 	Governmental Activities		

Current assets	2017	2016
$	45,TT7	$	40,450	
Restricted assets	522,085	753,234	
Capital assets	4,135,508	4,313,479	
Total Assets	4,703,370	5,107,163	
Deferred Outflows of Resources	 	25,691  	 		
Current liabilities	230,631	198,034	
Non-current liabilities	3,089,709	3,485,000	
Total Liabilities	3,320,340	3,683,034	
Net investment in capital assets	1,009,597	878,999	
Restricted debt dervice	197,180	350,328	
Restricted capital projects	160,459	158,735	
Net position - unrestricted	 	41,485	36,067	
Total Net Position	$   1,408,721	$ 1,424,129	

The decrease In capital assets is mainly due to current year depreciation.	(
The reduction in restricted assets and the reduction in restricted debt service net position is related use of available funds for the bond refunding In the current year.

The decrease in total liabilities is primarily related to principal payments and the bond refunding in the current year.

-5-

I

MANAGEMENT'S DISCUSSION AND ANALYSIS	DRAFT

Candler HIiis East Community Devalapment Dlstril	I
For the Year Ended September 30, 2017 OVERVIEW OF THE FINANCIAL_STATEMENTS(CONTINUED)
Financial Analysis of the District (Continued)

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

Change In Net Position

   Governmental  Activities	
    2017	2016	

Program Revenues
Charges for services	$	509,260	$	553,922
General Revenues
Investment earnings	 	21  330	1 824
Total Revenues	511,590	555,746
Expenses
General government	50,615	55,485
Physical environment	230,372	233,016
Interest on long-term debt	 	2461 011	200,446
Total Expenses	5261 998    	    488,947

Change in Net Position	(15,408)	66,799

Net Position - Beginning of Year	1,424,129    	 11 3571 33    0
Net Position - End of Year	 $	1,408,721      $	1,424,129 

The increase in interest on long-term debt is related to the bond refunding in the current year.

-6-

Candler HIiis East Community Development Dlstlrl	I

MANAGEMENT'S  DISCUSSION AND ANALYSIS	DRAFT
For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Capital Assets Activity

The following schedule provides a summary of the District's capital assets as of September 30, 2017 and 2016.

Governmental Activities
 	Description		2017		2016
Land	$	1,373,401	$	1,373,401	
Improvements	3,986,633	3,986,633	
Infrastructure	555,184	555,184	
Accumulated depreciation	{1,779i710)	{1,601,739)	

Total Capital Assets (Net)	 	$	4,135,508	$ 4,313,47 9

The activity for the year consisted of $177,971 in depreciation.
General Fund Budgetary Highlights

Actual governmental expenditures were less than final budgeted amounts primarily due to lower assessment roll and contingency expenditures than were anticipated in the approved budget.

There were no amendments to the 2017 budget.

Debt Management

Governmental Activities debt includes the following:

In April 2006, Bay Laurel Community Development District ("Bay Laurel") issued conduit debt of $5,675,000 of Special Assessment Bonds, Series 2006 ("Bonds") for Candler Hills East Community Development District. The Bonds are special limited obligations of Bay Laurel, payable solely from and secured by pledge revenues to be collected by Candler Hills East Community Development District. The bond was refunded during the year.

In November 2016, Bay Laurel Community Development District issued conduit debt of
$3,380,000 Series 2016 Special Assessment Revenue Refunding Bonds for Candler Hills East Community Development District. These bonds were issued to refund the Series 2006 Special Assessment Bonds . The Bonds are special limited obligations of
Bay Laurel, payable solely from and secured by pledge revenues to be collected by Candler Hills East Community Development District. The balance outstanding at September 30, 2017 was $3,270,000.

-7-

Candler HIiis East Community Development DlsLr1l   	I

MANAGEMENT'S DISCUSSION AND ANALYSIS	DRAFT
For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Economic Factors and Next Year's Budget

The District is not aware of any circumstances that would have a significant effect on the financial position or results of operations of the District in fiscal year 2018.

Requestfor Information

The financial report is designed to provide a general overview of Candler Hills East Community Development District finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Candler Hills East Community Development District, Governmental Management Services, 135 W. Central Blvd, Suite 320, Orlando, FL 32801.

-8-

-_,.,,..,---...,..,...........,_..._.

---

Candle, Hills East Community Development Di1strf 	I

STATEMENT OF NET POSITION	DRAFT
September 30, 2017

ASSETS
Current Assets

Governmental
 	Activities	

Cash	$	34,735	
Prepaid items	 	11,042	
Total Current Assets	 		45,777	

Non-current Assets Restricted assets
Investments
Capital assets, not being depreciated Land
Capital assets, being depreciated

522,085

1,373,401

Infrastructure	555,184	
Improvements	3,986,633	
Less: accumulated depreciation	 	r1.71s,11ol	
Total Non-current Assets	 	4,657,593 	
Total Assets	 	4,703,370 	

Deferred Outflows of Resources
Deferred amount on refunding
Total Assets and Deferred Outflows of Resources

LIABILITIES
Current Liabilities

 	25,691 
 	4,729,061 

Accounts payable and accrued expenses	4,292	
Accrued interest	46,339	
Bonds payable - current portion	180,000	
Total Current Liabilities	 	230,631 	

Non-current Liabilities Bonds payable
Total Liabilities

3,089,709,

NET POSITION
Net investment in capital assets	1,009,597	
Restricted debt service	197,180	
Restricted capital projects	160,459	
Unrestricted	 	41,485 	
Total Net Position	   $	1,408,721	

See accompanying notes.

-9-

Candler Hills East Community Development DisTll 	I

STATEMENT OF ACTIVITIES	DRAFT
For the year ended September 30, 2017

Net (Expense) Revenues and
Program	Changes in

Functions/Programs	
Expenses	Charges for
Services	Governmental
Activities	
Governmental Activities
General government	
$	(50,615)	
$	66,204	
$	15,589	
Physical environment	(230,372)	213,889	(16,483)	
Interest on long-term debt	{246,011 )	229 ,167	{16,844}	

 	Revenues	Net Position	

Total Governmental Activities	 	$	cs2e9, 9Bl	 $	   509,260	(17,738)

	General revenues:
Investment earnings	
2,330	
	Change in Net Position	(15,408)	
	Net Position - October 1, 2016	1,424,129	
	Net Position - September 30, 2017	   $	1,408 ,721 	

See accompanying notes.
-10  -

Candler HIiis East Community Development DistrIict 	I

BALANCE SHEET	DRAFT
GOVERNMENTAL FUNDS

September 30, 2017

Total
Debt	Capital	Governmental
ASSETS	General	Service	Projects	 	Funds		
Cash	$   34,735	$	$	$	34,735	
Prepaid items	11,042	11,042	
Restricted assets		
Investments, at fair value	361,626	160,459	522,085	
Total Assets	$    45.777	$	361,626	$  160,459	$	567,862	
LIABILITIES AND FUND BALANCES		
LIABILITIES		
Accounts payable and accrued expenses	$	4,292	 $	$	$	4,292	
FUND BALANCES		
Nonspendable		
Prepaid items	11,402	11,402	
Restricted		
Debt service	361,626	361,626	
Capital projects	160,459	160,459	
Unassigned	    30,083	30,083	
Total Fund Balances	41,485	 361,626	160,459	 	563,570	
Total Liabilities and Fund Balances	$   45,777	$	361,626	$ 160.459	$	567,862	

See accompanying notes.
- 11 -

VTI

Candler HIiis East Community Development Dlstrl
RECONCILIATION OF TOTAL GOVERNMENTAL FUND BA	.'IW) ...
TO NET POSITION OF GOVERNMENTAL ACTIVITIE	J.1
September 30, 2017

Total Governmental Fund Balances	$	563,570

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

Capital assets consisting of land, $1,373,401, improvements, $3,986,633, and Infrastructure, $555,184, net of accumulated depreciation, $(1,779,710), used In governmental activities are not current financial resources
and, therefore, are not reported at the fund level.

Long-term liabilities, $(3,270,000} net of bond discount, net, $291, are not due and payable in the current period and, therefore, are not reported at the fund level.

Deferred amounts on refunding are recognized as other debt service costs
in the funds, however, at the government-wide level these costs are amortized over the life of the loan. This is the net deferred amount on refunding.

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

Net Po ition of Governmental Activities

4,135,508

(3,269,709)

25,691

(46,339)

$	1,408,721

See accompanying notes.

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Candler Hills East Community Development Dist ICt		   STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN ™'	'
GOVERNMENTAL FUNDS
For the Year Ended September 30, 2017

General	
Debt Service	
Capital Projects	Totals Governmental
Funds	
Revenues
Special assessments	
$ 105,478	
$ 403,782	
$	
$	509,260		
Investment earnings	29	570	1,731	2,330		
Total Revenues	 	105,507	404,352	1,731 	511,590

General government	47,690	2,925	50,615	
Physical environment	52,401		52,401	
Debt service				
Principal	3,695,000		3,695,000	
Interest	174,841		174,841	
Other debt service		131,919	131,919	
Total Expenditures	 	100,091	3,869,841		134,844	 	4,104,776	
Excess of revenues over/(under)				
expenditures	 	5,416	(3,465,48 9)	(133 ,113)	(3,593,186)	
Other financing sources/(uses)				
Issuance of refunding debt	3,238,400	141,600	3,380,000	
Bond discount		(304)	(304)	
Transfers in	2	6,457		6,459	
Transfers out	 		(6,459 )	 		(6,459)	

Total Other Financing Sources/(Uses)	
 	2	3,244,857	134,837		3,379,696	
Net change in fund balances	5,418	(220,632)	1,724	(213,490)	
Fund Balances - October 1, 2016	36,067	582,258	158,735	777,060	

Fund Balances - September 30, 2017	
   $	41,485 	
    $ 361,626 	
   $ 160,459 	
$	563,570	

Expenditures Current

(i
t

See accompanying notes.
- 13-

I"
I

!

!

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPEND	FT

Candler Hills East Community Development District fiiii	I
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2017

Net Change in Fund Balances- Total Governmental Funds

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

$	(213,490)	l
I

Governmental funds report capital outlays as expenditures. However,
in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation.

The issuance of new debt, $(3,380,000), net of bond discount, $304, is reflected as an other financing source at the fund level, but increase long-term liabilities at the government-wide level.

The deferred amount on refunding is recognized as other debt service costs at the fund level, but are reflected as a deferred outflows of resources at the government-wide level.

Bond discount and the deferred amount on refunding are amortized over the
life of the loan at the government-wide level. This is the amount of current year amortization.

In the Statement of Activities, interest is accrued on outstanding bonds; whereas in governmental funds, interest expenditures are reported when due. This is the net amount between the prior year and the current year accruals.

Repayment of bond principal is an expenditure in the governmental funds,
but the repayment reduces long-term liabilities in the Statement of Net Position.

Change in Net Position of Governmental Activities

(177,971)

(3,379,696)

26,839

(1,161)

35,071

3,695,000

$	(15,408)

I:·

r

1.·

Ii n r
,;:

See accompanying notes.	-14-

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RAFTI

Candler Hills East Community Development Dis t c
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES • BUDGET AND ACT
GENERAL FUND
For the Year Ended September 30, 2017

Revenues

Original Budget

Flnal Budget

Actual

Variance Favorable (Unfavorable)

Special assessments	$ 105,046	$ 105,046	$105,478	$	432	
Investment earnings	 	100 	 	100 	 	29 	(71)	
Total Revenues	105,146	105,146	105,507	 	361 	

Expenditures Current
General government	45,151	45,151	47,690	{2,539)	
Physical environment	 	59,995 	59,995	52,401	 	7,594 	
Total Expenditures	105,146	105,146	100,091	 	5,055 	
Excess of revenues over/(under) expenditures	

 	5,416 	
 	5,416 	

Other financing sources/(uses)
Transfers in	 	 	 	2 	2 

Net change in fund balances

Fund Balances• October 1, 2016	 	   	

5,418

36,067

5,418

 	36,067 

Fund Balances - September 30, 2017

    $	 $	

$ 41,485

=$==4=1=,48=5

See accompanying notes.
-15-

Candler Hills East Community Development Dl• tr1l   	I

NOTES TO FINANCIAL STATEMENTS	DRAFT
September 30, 2017

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Reporting Entity

The District was established .on November 19, 2002 by an ordinance of Marion County, Florida, under the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the "Act"), as a Community Development  District.  The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is governed by a five-member Board of Supervisors, who are elected for terms of four years. The District operates within the criteria established by Chapter 190. The Board has the 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, and financing improvements.

The reporting entity for the District includes all functions of government in which the District's Board exercises oversight responsibility. Oversight responsibility includes, but is not limited to, financial interdependency, designation of management, significant ability to influence operations and accountability for fiscal matters. As required by GAAP, these financial statements present the Candler Hills East Community Development District (the primary government} as a stand-alone government.

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

Measurement Focus and Basis of Accounting

The basic financial statements of the District are composed of the following:
Government-wide financial statements
Fund financial statements
Notes to financial statements

-16 -

Candler HIiis East Community Development Dlstrlt	I

NOTES TO FINANCIAL STATEMENTS	DRAFT
September 30, 2017

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED}

Measurement Focus and Basis of Accounting (Continued)

Government-wide Financial Statements

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

Governmental activities are supported by special assessments, miscellaneous revenues and interest. Program revenues include charges for services, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program.

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

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

Fund Financial Statements

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

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

NOTES TO FINANCIAL STATEMENTS	DRAFT

candler HIiis East Community Development D181 	I
September 30, 2017

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTrNUED)

2. Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Governmental Funds
The District has implemented the Governmental Accounting Standards Board Statement 54 - Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
The District has various policies governing the fund balance classifications. Nonspendable Fund Balance -  This classification consists of amounts that cannot be
spent because they are either not in spendable form or are legally or contractually
required to be maintained intact.

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

I

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

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

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

- 18 -

I '.

 

S	ECTION 4