Parker Road Community Development District

FINANCIAL STATEMENTS

September 30, 2018

Parker Road Community Development District
Table of Contents September 30, 2018

REPORT	PAGE
Independent Auditors' Report	1
FINANCIAL STATEMENTS
Management’s Discussion And Analysis (required supplemental information)	3
Basic Financial Statements Government‐Wide Financial Statements
Statement of Net Position	8
Statement of Activities	9
Fund Financial Statements
Balance Sheet – Governmental Funds	10
Reconciliation of the Balance Sheet of Governmental Funds to the Statement
of Net Position	11
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds	12
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities	13
Notes to Financial Statements	14
Required Supplemental Information (other than MD&A)
Budget to Actual Comparison Schedule ‐ General Fund	24
Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards	25
Management Letter	28
Independent Accountants’ Report on Compliance with Section 218.415 Florida Statutes	30

INDEPENDENT AUDITORS' REPORT

To the Board of Supervisors
Parker Road Community Development District Alachua, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of Parker Road Community Development District (hereinafter referred to as “District”), as of and for the year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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, 2018, 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 25, 2019, on our consideration of the District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

CARR, RIGGS & INGRAM, LLC
Miramar Beach, Florida June 25, 2019

Management’s Discussion And Analysis

Our discussion and analysis of the Parker Road Community Development District’s financial performance provides an overview of the District’s financial activities for the fiscal year ended September 30, 2018. Please read it in conjunction with the District’s financial statements, which begin on page 8.
FINANCIAL HIGHLIGHTS
At September 30, 2018, the assets of the District exceed its liabilities by approximately $3.7 million.
During the fiscal year ended September 30, 2018, the District repaid approximately $1.8 million and approximately $1.95 million of past due principal and interest, respectively, on the Series 2007 Bonds. However, the required current year bond principal and interest payments of $205,000 and approximately $643,000, respectively, on the Series 2007 Bonds were not made as of September 30, 2018.
During the fiscal year ended September 30, 2018, the District established approximately
$60,000 of infrastructure.

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

Reporting the District’s Most Significant Funds
Our analysis of the District’s major funds begins on page 6. The fund financial statements begin on page 10 and provide detailed information about the most significant funds – not the District as a whole. Some funds are required to be established by State law and by bond covenants. All of the District’s funds are governmental fund‐types.
Governmental funds – All of the District’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year‐ end that are available for spending. The governmental fund statements provide a detailed short‐term view of the District’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs. We describe the relationship (or differences) between governmental activities and governmental funds in a reconciliation with the fund financial statements.

THE DISTRICT AS A WHOLE
The following table reflects the condensed Statement of Net Position and is compared to the prior year.

September 30,	2018	2017	Change	
Assets
Current and other assets	
$	1,798,498	
$	1,777,609	
$	20,889	
Capital assets, net	20,396,184	20,908,133	(511,949)	

Total assets

$	22,194,682	$

22,685,742	$

(491,060)

Liabilities
Current liabilities	$	4,554,937	$	7,488,832	$	(2,933,895)	
Other liabilities	13,905,500	14,120,500	(215,000)	
Total liabilities	18,460,437	21,609,332	(3,148,895)	
Net position				
Net investment in capital assets	5,010,670	3,734,931	1,275,739	
Restricted for:
Capital projects	
444,315	
106,721	
337,594	
Unrestricted	(1,720,740)	(2,765,241)	1,044,501	
Total net position	3,734,245	1,076,411	2,657,834	

Total liabilities and net position

$	22,194,682	$

22,685,743	$

(491,061)

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

During the fiscal year ended September 30, 2018, total assets and liabilities decreased from the prior year by approximately $491,000 and $3.1 million, respectively. The decrease in assets is primarily due to the depreciation of capital assets. The decrease in liabilities is due to past due principal and interest payments made in the current year.

The following schedule compares the Statement of Activities for the current and previous fiscal year.
Year ended September 30,	2018	2017	Change Revenues:
Program revenues:

Charges for services General revenues:

$	4,186,236	$

2,693,286	$

1,492,950

Developer contributions	‐	8,753	(8,753)	
Interest and other revenues	405,330	107,791	297,539	
Total revenues	4,591,566	2,809,830	1,781,736	
Expenses:				
General government	79,359	56,343	23,016	
Maintenance and operations	966,434	912,854	53,580	
Amenity Center	262,675	271,388	(8,713)	
Interest	625,264	671,509	(46,245)	
Total expenses	1,933,732	1,912,094	21,638	
Change in net position	2,657,834	897,736	1,760,098	
Net position, beginning of year	1,076,411	178,675	897,736	
Net position, ending of year	$	3,734,245	$	1,076,411	$	2,657,834	

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

Revenues and expenses increased over the prior year by approximately $1.8 million and $22,000, respectively. Revenues increased primarily due to an increase in prepayment revenues received from lot sales in the current year. Expenses increased primarily due to an increase in trustee fees and landscaping maintenance and improvement expenses in the current year. The overall result was a $2,657,834 increase in net position for the fiscal year 2018.

THE DISTRICT’S FUNDS

As the District completed the year, its governmental funds (as presented in the balance sheet on page 10) reported a combined fund balance (deficit) of approximately $2.3 million, which is an increase from last year’s fund balance (deficit) of $5.2 million. Significant transactions are discussed below.

During the fiscal year ended September 30, 2018, the District repaid approximately $1.8 million and approximately $1.95 million of past due principal and interest, respectively, on the Series 2007 Bonds. However, the required current year bond principal and interest payments of $205,000 and approximately $643,000, respectively, on the Series 2007 Bonds were not made as of September 30, 2018.
During the fiscal year ended September 30, 2018, the District established approximately
$60,000 of infrastructure.

The overall increase in fund balance for the year ended September 30, 2018 totaled approximately
$2.9 million.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2018, the District had approximately $20.4 million invested in capital assets (net of accumulated depreciation). This amount represents a net decrease of approximately $512,000 from the fiscal year 2017 total.

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

September 30,	2018	2017	Change

Capital assets not being depreciated

$	9,808,649	$

9,748,885	$

59,764

Capital assets being depreciated	12,302,674	12,302,674	‐

Total, prior to depreciation	22,111,323	22,051,559	59,764
Accumulated depreciation	(1,715,139)	(1,143,426)	(571,713)

Net capital assets

$	20,396,184	$

20,908,133	$

(511,949)

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

Debt

At September 30, 2018, the District had approximately $16.3 million of outstanding debt. This amount represents a decrease of approximately $1.8 million from the fiscal year 2017 total.

A listing of debt amounts outstanding for the current and prior year is as follows:
September 30,	2018	2017	Change
Series 2007A bonds	$	8,400,000	$	8,470,000	$	(70,000)	
Series 2007B bonds	1,450,000	3,155,000	(1,705,000)	
Due to Developer	6,415,500	6,415,500	‐	
 	$	16,265,500	$	18,040,500	$	(1,775,000)
More information about the District’s long‐term debt is presented in Note 7 to the financial statements.

GOVERNMENTAL FUNDS BUDGETARY HIGHLIGHTS

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

The District experienced a favorable variance in revenues and expenditures as compared to the budget in the amount of $14,053 and $52,436, respectively. The variance in expenditures occurred primarily due to anticipated budgeted Amenity Center landscape maintenance expenditures that were not incurred during the year.

FUTURE FINANCIAL FACTORS

Parker Road Community Development District is an independent special district that operates under the provisions of Chapter 190, Florida Statutes. The District operates under an elected Board of Supervisors, which establishes policy and sets assessment rates. Assessment rates for fiscal year 2019 were established to provide for the operations of the District as well as the necessary debt service requirements.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

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

Basic Financial Statements

Statement of Net Position

September 30,	2018	
	Governmental	
	Activities	
Assets
Cash and cash equivalents	
$	152,555	
Investments	1,612,437	
Assessments receivable, net	1,201	
Interest receivable	1,071	
Prepaid expenses	31,234	
Capital Assets:
Not being depreciated	
9,808,649	
Depreciable, net	10,587,535	

Total assets	
22,194,682	

Liabilities		
Accounts payable	47,447	
Accrued interest payable	2,147,490	
Non‐current liabilities:
Due within one year	
2,360,000	
Due in more than one year	7,490,000	
Due to Developer	6,415,500	

Total liabilities	
18,460,437	

Net position		
Net investment in capital assets	5,010,670	
Restricted for:
Capital projects	
444,315	
Unrestricted	(1,720,740)	

Total net position	$	3,734,245

Statement of Activities

Year ended September 30,

2018

Program Revenues Operating	Capital

Net (Expense) Revenue and Changes in Net Position

Functions/Programs	
Expenses	Charges for
Services	Grants and	Grants and
Contributions Contributions	Governmental
Activities	
Primary government:					
Governmental activities:					
General government	$	(79,359)	$	43,516	$	‐	$	‐	$	(35,843)	
Field operations	(966,434)	529,935	−	‐	(436,499)	
Amenity expenses	(262,675)	144,035	−	‐	(118,640)	
Interest	(625,264)	1,415,194	2,061,177	397,142	3,248,249	

Total governmental activities

$ (1,933,732)

$ 2,132,680

$ 2,061,177	$

397,142

2,657,267

General revenues
Interest and other revenues	567	
Total general revenues	567	

Change in net position	
2,657,834	
Net position ‐ beginning of year	1,076,411	

Net position ‐ end of year	
$	3,734,245	

Balance Sheet – Governmental Funds

September 30,

2018

General	Debt Service

Capital Project

Total Governmental Funds

Assets
Cash and cash equivalents	
$	152,555	
$	‐	
$	‐	
$	152,555	
Investments	‐	1,160,462	451,975	1,612,437	
Assessments receivable, net	1,201	‐	‐	1,201	
Interest receivable	‐	468	603	1,071	
Prepaid expenditures	31,234	‐	‐	31,234	

Total assets	
$	184,990	
$ 1,160,930	
$	452,578	
$	1,798,498	

Liabilities and Fund Balances
Liabilities
Accounts payable	

$	38,613	

$	571	

$	8,263	

$	47,447	
Debt service obligation	‐	4,042,378	‐	4,042,378	

Total liabilities	
38,613	
4,042,949	
8,263	
4,089,825	

Fund balances					
Nonspendable	31,234	‐	‐	31,234	
Restricted for capital projects	‐	‐	444,315	444,315	
Unassigned	115,143	(2,882,019)	‐	(2,766,876)	
Total fund balances (deficit)	146,377	(2,882,019)	444,315	(2,291,327)	

Total liabilities and fund balances	
$	184,990	
$ 1,160,930	
$	452,578	
$	1,798,498	

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

September 30,	2018	

Total fund balances (deficit), governmental funds	
$	(2,291,327)	
Capital assets used in governmental activities are not financial resources and therefore are not reported in the fund level statements.	
20,396,184	
Liabilities not due and payable from current resources, including accrued		
interest, are not reported in the fund level statements.	(14,370,612)	

Total net position ‐ governmental activities	
$	3,734,245	

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

Year ended September 30,

2018

General	Debt Service

Capital Project

Total Governmental Funds

Revenues		
Assessment revenue	$ 717,486	$ 1,415,194	$	‐	$	2,132,680	
Prepayment revenue	‐	2,053,556	‐	2,053,556	
Interest and other revenues	567	7,621	397,142	405,330	
Total revenues	718,053	3,476,371	397,142	4,591,566	

Expenditures
Current:
General government	69,168	10,191	‐	79,359	
Field operations	394,721	‐	‐	394,721	
Amenity expenses	262,675	‐	‐	262,675	
Debt service:					
Principal	‐	205,000	‐	205,000	
Interest	‐	643,114	‐	643,114	
Capital outlay	‐	‐	59,764	59,764	
Total expenditures	726,564	858,305	59,764	1,644,633	

Excess (deficit) of revenues over
expenditures	(8,511)	2,618,066	337,378	2,946,933

Other financing sources (uses)
Transfers in	‐	‐	21,167	21,167	
Transfers out	(21,167)	‐	‐	(21,167)	
Total other financing sources (uses)	(21,167)	‐	21,167	‐	

Net change in fund balances	
(29,678)	
2,618,066	
358,545	
2,946,933	
Fund balances (deficit), beginning of year	176,055	(5,500,085)	85,770	(5,238,260)	

Fund balances (deficit), end of year	
$ 146,377	
$ (2,882,019)	
$ 444,315	
$ (2,291,327)	

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

Year ended September 30,	2018	

Net change in fund balances ‐ governmental funds	
$	2,946,933	
Capital outlay, reported as expenditures in the governmental funds, is shown as capital assets on the Statement of Net Assets.	
59,764	
Depreciation on capital assets is not recognized in the fund financial statements but is reported as an expense in the Statement of Activities.	
(571,713)	
Accrual of the unpaid bond principal is a reduction in fund balance in the governmental funds but has no effect on the Statement of Activities.	
205,000	
The change in accrued interest between the current and prior year is recorded on the Statement of Activities but not on the fund level		
statements.	17,850	

Change in net position of governmental activities	
$	2,657,834	

NOTE 1: NATURE OF ORGANIZATION

The Parker Road Community Development District (the “District”) was established on May 23, 2006 pursuant to the Uniform Community Development District Act of 1980, otherwise known as  Chapter 190, Florida Statutes, by Board of County Commissioners of Alachua County Ordinance 06‐
The Act provides among other things, the power to manage basic services for community development, power to borrow money and issue bonds, and to levy and assess non‐ad valorem assessments for the financing and delivery of capital infrastructure.

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

The District is governed by a Board of Supervisors (“Board”), which is comprised of five members. The Supervisors are elected on an at large basis by the owners of the property within the District. The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2018, certain Board members were affiliated with CC Oakmont, LLC. (“the Developer”).

The Board has the final responsibility for:
Assessing and levying assessments.
Approving budgets.
Exercising control over facilities and properties.
Controlling the use of funds generated by the District.
Approving the hiring and firing of key personnel.
Financing improvements.

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

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Government‐wide and Fund Financial Statements

The basic financial statements include both government‐wide and fund financial statements.

The government‐wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the non‐fiduciary activities of the primary government. Governmental activities, which normally are supported by assessments, are reported separately from business‐type activities, which rely to a significant extent on fees and charges for support. The business‐type activities are reported separately in government‐wide financial statements; however, at September 30, 2018, 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 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 of bonds issued by the District. Certain debt service assessments are collected upon the closing of those lots subject to short term debt and are used to prepay a portion of the bonds outstanding.

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, 2018, the District does not report any proprietary funds.
As a general rule, the effect of interfund activity has been eliminated from the government‐wide financial statements.
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, then unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for use in the governmental fund financial statements, it is the government’s policy to use committed resources first, followed by assigned resources, then unassigned resources as needed.
Cash, Deposits and Investments
The District maintains deposits with "Qualified Public Depositories" as defined in Chapter 280, Florida Statutes. All Qualified Public Depositories must place with the Treasurer of the State of Florida securities in accordance with collateral requirements determined by the State’s Chief Financial Officer. In the event of default by a Qualified Public Depository, the State Treasurer will pay public depositors all losses. Losses in excess of insurance and collateral will be paid through assessments between all Qualified Public Depositories.
Under this method, all the District's deposits are fully insured or collateralized at the highest level of security as defined by GASB, Statement Number 40, Deposits and Investment Disclosures (An Amendment of GASB, Statement Number 3).
The District is authorized to invest in financial instruments as established by Section 218.415, Florida Statutes. The authorized investments include among others direct obligations of the United States Treasury; the Local Government Surplus Trust Funds as created by Section 218.405, Florida Statutes; SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency; and interest‐bearing time deposits or savings accounts in authorized financial institutions.

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 are depreciated using the straight‐line method over the estimated useful lives. Estimated useful lives for financial reporting purposes are as follows: roadways and other: 20 years; storm water system: 25 years.

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

Long‐Term Obligations

In the government‐wide financial statements, long‐term debt and other long‐term obligations are reported as liabilities in the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight‐line or effective interest method. Bonds payable are reported net of these premiums or discounts. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as current period expenses.

In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position and Balance Sheet – Governmental Funds will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District does not have any of this type of item at September 30, 2018.

In addition to liabilities, the Statement of Net Position and Balance Sheet – Governmental Funds will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District does not have any of this type of item at September 30, 2018.

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.

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

Budgets

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

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

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

Estimates
The preparation of financial statements in accordance with accounting principles generally  accepted in the U.S. requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Prepaid Expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenditures on the Statement of Net Position. These items will be expensed over the applicable usage period.

NOTE 3: INVESTMENTS

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

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

September 30,	2018	Credit Risk	Maturities	
Short‐term Money Market Funds	$	1,612,437	S&P AAAm	21 days	
	$	1,612,437			

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, 2018, none of the investments listed above are 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, 2018:

	Beginning
Balance	
Additions	Transfers and
Conveyances	Ending
Balance	
Governmental Activities:
Capital assets not being depreciated
Land improvements	

$ 1,101,000	

$	‐	

$	‐	

$ 1,101,000	
Infrastructure under construction	8,647,885	59,764	‐	8,707,649	
Total capital assets, not being depreciated	9,748,885	59,764	‐	9,808,649	

Capital assets being depreciated
Infrastructure ‐ roads	

2,763,719	

‐	

‐	

2,763,719	
Infrastructure ‐ water control	4,342,092	‐	‐	4,342,092	
Infrastructure ‐ other	5,196,863	‐	‐	5,196,863	
Total capital assets, being depreciated	12,302,674	‐	‐	12,302,674	

Less accumulated depreciation
Infrastructure ‐ roadways and other	

(796,058)	

(398,029)	

‐	

(1,194,087)	
Infrastructure ‐ stormwater system	(347,368)	(173,684)	‐	(521,052)	
Total accumulated depreciation	(1,143,426)	(571,713)	‐	(1,715,139)	

Total capital assets, being depreciated, net	
11,159,248	
(571,713)	
‐	
10,587,535	

Governmental activities capital assets, net	
$ 20,908,133	
$ (511,949)	
$	‐	
$ 20,396,184	
The total projected cost of the infrastructure has been estimated at $45.1 million, of which approximately $17.8 million is expected to be financed with the proceeds from the issuance of Bonds with the remainder to be funded by the Developer. Upon completion, certain assets will be conveyed to others for maintenance. In addition, the development encompasses approximately 556 acres. Ownership of approximately 20 acres was transferred to the Alachua County School Board, approximately 5 acres were transferred to Alachua County for other uses, and approximately 46 acres will remain undeveloped and be utilized as a conservation easement.

If the cost of the 2007 project or portion thereof to be conveyed by the Developer to the District pursuant to its Acquisition Agreement exceeds the amount actually paid by the District for the 2007 project or portion thereof from proceeds of the Series 2007 bonds, it may be determined that a deferred obligation exists. Upon completion of the project, certain funds available from the bonds may be used to pay deferred obligations, as outlined in the bond indenture. At September 30, 2018, the projects have not been completed and no determination has been made as to whether or not a deferred obligation exists.

Depreciation expense of $571,713 was allocated to field operations on the accompanying Statement of Activities.

NOTE 5: RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The District maintains commercial insurance coverage to mitigate the risk of loss. Coverage may not extend to all situations. Management believes such coverage is sufficient to preclude any significant uninsured losses to the District. The District has no settled claims in the previous three years.

NOTE 6: 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 7: BONDS PAYABLE

On June 18, 2007 the District issued $17,880,000 of Capital Improvement Revenue Bonds, Series 2007 consisting of $9,300,000 Term Bonds, Series 2007A, due May 1, 2038 with a fixed interest rate of 5.60% and $8,580,000 Term Bonds, Series 2007B, due May 1, 2015 with a fixed interest rate of 5.35%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Bonds is to be paid serially commencing May 1, 2009 through May 1, 2038 for Series 2007A Bonds and in one lump sum payment on May 1, 2015 for Series 2007B Bonds. The Series 2007 Bonds are subject to optional redemption beginning May 1, 2016 and to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occur as outlined in the Bond Indenture.

During the current and prior fiscal years, the District did not have sufficient funds to make certain scheduled debt service payments and as a result, the payments were not made. As of September 30, 2018, the amount has been accrued on the fund financial statements as Debt Service Obligation and reflects $695,000 and $1,450,000 due for Series 2007A and Series 2007B principal respectively and $1,596,123 and $301,255 of interest on the Series 2007A and 2007B Bonds, respectively.

During the year ended September 30, 2018, the District paid a portion of its past due principal and interest balances. A total of $1,775,000 and $1,952,730, respectively, were remitted related to principal and interest. These amounts reduced the outstanding debt service obligation.

NOTE 7: BONDS PAYABLE (Continued)
At September 30, 2018, the scheduled debt service requirements on bonds payable were as follows:

Year Ending September 30,	
Principal	
Interest	Total Debt
Service	
2019	$	2,360,000	$	2,328,858	$	4,688,858	
2020	225,000	419,440	644,440	
2021	240,000	406,840	646,840	
2022	255,000	393,400	648,400	
2023	270,000	379,120	649,120	
2024 ‐ 2028	1,595,000	1,651,160	3,246,160	
2029 ‐ 2033	2,110,000	1,150,240	3,260,240	
2034 ‐ 2038	2,795,000	487,200	3,282,200	
	$	9,850,000	$	7,216,258	$	17,066,258	

The Bond Indenture has certain restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedure to be followed by the District on assessments to property owners. The District agreed to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District is not in compliance with the requirements of the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in reserve accounts to meet the debt service reserve requirements as defined in the Indenture. The requirements have not been met for the fiscal year ended September 30, 2018.

NOTE 8: DEVELOPER TRANSACTIONS

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

The Developer has agreed to fund the general fund operations of the District. In connection with that agreement, the Developer paid $568,693 of General Fund assessments for the year ended September 30, 2018. In addition, the Developer also paid $1,195,434 of Debt Service Fund assessments for the year ended September 30, 2018. The Developer also remitted prepayments totaling $2,053,556 in the current year. These prepayments were made to facilitate repayment of the Series 2007B bonds as required when lots within the District are sold by the Developer.
As of September 30, 2018, a total of $6,415,500 is due to the Developer. This amount is related to long‐term developer advances to fund the construction of infrastructure. The amounts are non‐ interest bearing and have no defined maturity date. Due to developer activity for the year is detailed in Note 9.

NOTE 9: CHANGES IN LONG‐TERM LIABILITIES

Long‐term liability activity for the year ended September 30, 2018, was as follows:

	Beginning
Balance	
Additions	
Reductions	
Ending Balance	Due Within
One Year	
Governmental Activities
Bonds Payable: Series 2007A	

$	8,470,000	

$	‐	

$	(70,000)	

$	8,400,000	

$	910,000	
Series 2007B	3,155,000	‐	(1,705,000)	1,450,000	1,450,000	
Due to Developer	6,415,500	‐	‐	6,415,500	‐	
	$ 18,040,500	$	‐	$ (1,775,000)	$ 16,265,500	$ 2,360,000	

NOTE 10: INTERFUND TRANSFERS

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

Interfund
Funds	Transfers in	Transfers out	
General	$	‐	$	(21,167)	
Capital Project	21,167	‐	
Total	$	21,167	$	(21,167)	

The transfers between funds resulted primarily from the General Fund providing funds to support capital outlay expenditures in the current year.

NOTE 11: LEASE COMMITMENT

During 2016, the District entered into a 60‐month lease agreement for certain fitness equipment. Monthly payments of approximately $1,300 are due through April 2021. During the year ended September 30, 2018, the District recorded expenditures associated with this lease totaling approximately $15,600.

NOTE 12: SUBSEQUENT EVENT

Subsequent to year end, the District paid a portion of its past due principal and interest balances on the Series 2007A and 2007B Bonds. A total of $1,140,000 and $604,975, respectively, were remitted related to principal and interest. These amounts reduced the outstanding debt service obligation in fiscal year 2019.

Required Supplemental Information (Other Than MD&A)

Parker Road Community Development District Budget to Actual Comparison Schedule – General Fund

Year ended September 30,

Original and

2018

Variance with

 	Final Budget	Actual Amounts	Final Budget	

Revenues		
Assessment revenue	$	704,000	$	717,486	$	13,486	
Interest and other revenues	‐	567	567	
Total revenues	704,000	718,053	14,053	

Expenditures
General government	

75,500	

69,168	

6,332	
Maintenance and operations	398,500	394,721	3,779	
Amenity expenses	305,000	262,675	42,325	
Total expenditures	779,000	726,564	52,436	

Excess (deficit) of revenues over expenditures	

(75,000)	

(8,511)	

66,489	

Other financing sources (uses)				
Transfers out	‐	(21,167)	(21,167)	
Fund balance, beginning of year	75,000	176,055	101,055	

Fund balance, end of year	
$	‐	
$	146,377	
$	146,377	

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
Parker Road Community Development District Alachua 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 Parker Road Community Development District (hereinafter referred to as the “District”), as of and for the year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated June 25, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a  combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify a deficiency in internal control, described below, that we consider to be a material weakness.

Condition: Approximately $205,000 and $643,000 of required principal and interest expenditures, respectively, were not recorded on the District’s financial statements as of September 30, 2018. These amounts were required debt service payments on outstanding bonds payable, however because of financial difficulties they were not paid. The unpaid matured installments should have been accrued.

Criteria: Internal controls relating to the annual financial close process should be in place to provide reasonable assurance that expenditures are appropriately and properly recorded.

Cause: The debt service expenditures were not paid and therefore had no direct impact on any of the District's cash or investment trust accounts. They appear to have been overlooked when District staff was preparing its annual financial report.

Effect: Debt service expenditures and related liabilities on the fund‐level financial statements were understated by approximately $848,000.

Recommendation: We recommend the District review debt service obligation activity prior to year‐end to ensure all required but unpaid expenditures and liabilities are identified and recorded.

The District's response to the finding identified in our audit is described below. We did not audit the District's Response and, accordingly, we express no opinion on it.

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 from material misstatement, we performed tests of its compliance with certain provisions of laws regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

IC2015‐1: The District is not in compliance with certain provisions of its Bond Indenture including those relating to 1) levying and collecting assessments to provide payment of debt service, 2) maintaining adequate funds in debt service reserve accounts, and 3) making its semi‐annual debt service principal and interest payments.

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

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 25, 2019

CRI

�l:G::
INGRAM

Carr, Riggs & Ingram, LLC Certified Public Accountants 500 Grand Boulevard

CPAs and Advisors

To the Board of Supervisors

MANAGEMENT LETTER

Suite 210
Miramar Beach, Florida 32550
(850) 837-3141
(850) 654-4619 (fax)

Parker Road Community Development District Alachua County, Florida

Report on the Financial Statements

CRlcpa.com

We have audited the financial statements of the Parker Road Community Development District (“District”) as of and for the fiscal year ended September 30, 2018, and have issued our report thereon dated June 25, 2019.

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 Reporting Requirements

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 Accountant’s Report on an examination conducted in accordance with AICPA Professional Standards, AT‐C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 25, 2019, 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. Items IC2017‐001 and IC2015‐1 in the previous financial report have not been corrected and are still findings in the current year. Item IC2017‐002 in the previous financial report has been corrected in the current year. IC2018‐001 and IC2015‐1 were also both included in the second preceding annual financial audit report.

Official Title and Legal Authority

Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The information required is disclosed in the notes to the financial statements.

− 28 ‐

Financial Condition and Management

Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not the District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific condition(s) met. In connection with our audit, we determined that the District did not meet any of the conditions described in Section 218.503(1), Florida Statutes.

Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for the District. It is management’s responsibility to monitor the District’s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same.

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.

Additional Matters

Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not note any such findings.

Purpose of this Letter

Our management letter is intended solely for the information and use of 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 25, 2019

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Supervisors
Parker Road Community Development District Alachua County, Florida

We have examined Parker Road Community Development District’s compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2018. Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on the District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and performed the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.

Our examination does not provide a legal determination on the District’s compliance with specified requirements.

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

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 25, 2019