Lakewood Ranch Stewardship District
AUDITED FINANCIAL STATEMENTS

September 30, 2019

Lakewood Ranch Stewardship District
Table of Contents
September 30, 2019
REPORT		
Independent Auditors’ Report	1	
Management’s Discussion and Analysis	3	
BASIC FINANCIAL STATEMENTS		
Government-Wide Financial Statements:		
Statement of Net Position	8	
Statement of Activities	9	
Fund Financial Statements:		
Balance Sheet – Governmental Funds and Reconciliation of the Balance Sheet to the
Statement of Net Position	10	
Statement of Revenues, Expenditures, and Changes in Fund Balances –
Governmental Funds	
11	
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
– Governmental Funds to the Statement of Activities	
12	
Notes to the Financial Statements	13	
REQUIRED SUPPLEMENTARY INFORMATION		
Budgetary Comparison Schedule – General Fund	25	
OTHER NON-FINANCIAL INFORMATION		
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	

26	
Independent Accountants’ Report on Compliance with Florida Statutes 218.415 – Investment of Public Funds	
28	
Management Letter	29	
REQUIRED COMMUNICATION		
Required Communications	31	
Accounting Policies, Judgments, & Sensitive Estimates & CRI Comments on Quality	37	
Summary of Adjustments	38	
Management Representation Letter	40	
Internal Control Findings	47	

REPORT

INDEPENDENT AUDITORS’ REPORT

Board of Supervisors
Lakewood Ranch Stewardship District

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of Lakewood Ranch Stewardship District ("District"), as of and for the year then ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain 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 District’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 District’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.

Opinion

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 Lakewood Ranch Stewardship District, as of September 30, 2019, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 3 through 7 and page 25 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 February 7, 2020, 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, 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 result 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

Bradenton, Florida February 7, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following is a narrative overview and analysis of the financial activities of the Lakewood Ranch Stewardship District (“District”) for the fiscal year ended September 30, 2019.

Financial Highlights and Analysis of Financial Statements

As of September 30, 2019 and 2018, the total assets of the District were $346,951,594, and
$285,182,769, respectively, an increase of $61,768,825. The primary factor for the change was the approximate increase in capitalized assets of $77.2 million less approximately $13.1 million in depreciation charges.

As of September 30, 2019 and 2018, the total liabilities of the District were $344,086,100 and $279,134,946, respectively, an increase of $64,954,154. The primary factor for the change was the approximate $74.3 million of debt from new bond issues less approximately
$9.4 million in bond principal repayments.

In the government-wide financial statements (accrual basis), the District’s assets exceeded liabilities by $2,865,494 and $6,047,823 as of September 30, 2019 and 2018, respectively.

In the governmental funds (modified accrual basis), the District’s fund balance totaled
$72,105,277 and $75,951,664 as of September 30, 2019 and 2018, respectively. The primary factor for both of these variances was the change in assets and liabilities as discussed above.

Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements comprise three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.

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

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

The statement of activities presents information showing how the District’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.

Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

The District’s governmental activities include general government, physical environment, and interest on long-term debt.

The government-wide financial statements can be found on pages 8 and 9 of this report.

Fund financial statements – A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the District’s funds are governmental funds.

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

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

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

The basic governmental fund financial statements can be found on pages 10 to 12 of this report.

Notes to the financial statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 13 through 24 of this report.

Government-Wide Financial Analysis

Statement of Net Position	2019	2018	
Current and other assets	$	75,915,289	$	78,292,975	
Capital assets	271,036,305	206,889,794	
Total assets	$	346,951,594	$	285,182,769	
Curent liabilities	$	10,654,012	$	7,520,318	
Long-term liabilities	333,432,088	271,614,628	
Total liabilities	$	344,086,100	$	279,134,946	

Net investment in capital assets	
$	6,435,858	
$	8,169,886	
Unrestricted	(3,570,364)	(2,122,063)	
Total net position	$	2,865,494	$	6,047,823	

Current and other assets decreased by $2,377,686 primarily due to investments held as a result of bond proceeds less capital outlay for the Villages of Lakewood Ranch South, Lakewood Centre Northwest, Del Webb, Northeast Sector, Lakewood Centre South, and Lakewood National & Polo Run infrastructure projects.

The primary changes in the capital assets increase of approximately $64.1 million were the completion of Lakewood National & Polo Run infrastructure improvements, and the infrastructure improvements on the Villages of Lakewood Ranch South, Lakewood Centre Northwest, Del Webb, Northeast Sector, and Lakewood Centre South projects of approximately $77.2 million less approximately $13.0 million of depreciation expense. The continued issuance of new bonds by the District is due to the continuing opening up of new residential development areas within the District with the bond proceeds being disbursed for master infrastructure in the appropriate assessment areas

Total liabilities increased by approximately $64.9 million, due primarily to new bonds issued, Lakewood Centre South, NE Sector, Phase 1B, The Isles at LWR, Lake Club Phase 4, Cresswind Project, and Indigo.

Statement of Activities	2019	2018

Program revenues
Charges for services	$	14,541,174	$	13,368,046	
Operating grants and contributions	13,655,803	13,571,184	
General revenues			
Investment income	886,452	671,589	
Non advalorem assessments	2,970,621	2,551,151	
Total revenues	32,054,050	30,161,970	
Expenses			
General government	608,845	573,807	
Physical environment	17,597,998	14,638,031	
Interest on long-term debt	17,029,536	15,768,142	
Total expenses	35,236,379	30,979,980	
Changes in net position	(3,182,329)	(818,010)	
Net position - beginning	6,047,823	6,865,833	
Net position - ending	$	2,865,494	$	6,047,823	

Charges for services consist of lot sale proceeds and operating grants and contributions consists of Developer cash funding contributions. As the statement of activities is on an accrual basis, the expenses include $3,810,012 of accounts payable with payments made in October 2018 from additional Program revenues received. Charges for services increased by $1,173,128, primarily due increased land sales. Physical environment increased by $2,959,967 due to costs associated with new projects.

Capital Assets

During the year ended September 30, 2019, the District had a gross increase of infrastructure approximately $77.2 million. Primary capital projects continuing were the Lakewood Centre North, Villages of Lakewood Ranch South, Del Webb, Northeast Sector, and Lakewood Centre South, and Lakewood National & Polo Run projects. Additional information on the District’s capital assets can be found in Note 4 of this report.

Debt Administration

During the year ended September 30, 2019, the District issued six new bonds, Lakewood Centre South, NE Sector, Phase 1B, The Isles at LWR, Lake Club Phase 4, Cresswind Project, and Indigo, netting to $74.3 million. Approximately $9.3 million was made in repayments of amounts due on the various issues of the District.

Additional information on the District’s long-term debt can be found in Notes 5 and 6 of this report.

Budgetary Highlights

The District set its annual budget for the District expecting to be operational for the entire year. Landowner funding came in higher than anticipated by $198,802 and Assessment lower than anticipated by $78,685. The variance of the budgeted expenditures compared with actual results was $121,192 lower than anticipated, within the various areas within District operations. There were no budget amendments during the year.

Economic Factors and Year 2020 Budget

The District is anticipating increased interest in the various developments and projects currently underway. Next year’s budget main components will be maintenance of the project areas, administration of the District, and continued infrastructure acquisition and improvements on capital projects begun in 2016, 2017, 2018, and 2019.

Requests for Information

This financial report is designed to provide a general overview of the District’s finances for all those with an interest in them. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Lakewood Ranch Stewardship District, Attn: Supervisor, 14400 Covenant Way, Bradenton, Florida 34202.

FINANCIAL STATEMENTS

BASIC FINANCIAL STATEMENTS

Lakewood Ranch Stewardship District
Statement of Net Position

September 30, 2019	Governmental
Activities	

Assets		
Current Assets:
Cash and cash equivalents	
$	79,528	
Total current assets	79,528	

Other Assets:
Cash and cash equivalents - restricted	

75,674,560	
Accrued interest receivable	1,081	
Prepaid expenses	700	
Due from land owner	159,420	
Total other assets	75,835,761	

Capital Assets: Depreciable assets:		
District infrastructure	279,070,514	
Less accumulated depreciation	(75,521,024)	
Net depreciable assets	203,549,490	
Non-depreciable assets:		
Construction in progress	67,486,815	
Total capital assets	271,036,305	

Total assets	
346,951,594	

Liabilities		
Current Liabilities:
Accounts payable	
3,810,012	
Bonds payable, current portion	6,844,000	
Total current liabilities	10,654,012	

Non-current Liabilities:
Bonds payable, long-term portion	

333,432,088	
Total non-current liabilities	333,432,088	
Total liabilities	344,086,100	

Net Position		
Net investment in capital assets	6,435,858	
Unrestricted	(3,570,364)	
Total net position	$	2,865,494	

For the year ended September 30, 2019

Program Revenues
Charges	Operating	Capital

Net (Expense) Revenue and Changes in Net Position

for	Grants and	Grants and Governmental
Functions / Programs	Expenses	Services    Contributions    Contributions	Activities Primary government:
Governmental activities:

General government

$	608,845

$ 14,541,174

$ 13,655,803 $

-	$ 27,588,132

Physical environment	17,597,998	-	-	-	(17,597,998)
Interest on long-term debt	17,029,536	-	-	-	(17,029,536)

Total governmental activities

$ 35,236,379

$ 14,541,174

$ 13,655,803 $

-	(7,039,402)

General revenues:
Non advalorem assessments	2,970,621
  Investment income	886,452 
 		Total general revenues		3,857,073 Change in net position	(3,182,329)
  Net position - beginning	6,047,823 
  Net position - ending	$    2,865,494 

 	Major Funds	

Total

Debt	Capital	Governmental
September 30, 2019	General	Service	Projects	Funds

Assets
Cash and cash equivalents

$	79,528 $

-	$	-	$

79,528

Cash and cash equivalents - restricted	-	27,611,155	48,063,405	75,674,560	
Accrued interest receivable	-	1,081	-	1,081	
Prepaid expenses	700	-	-	700	
Due from land owner	159,420	-	-	159,420	
Total assets	$	239,648	$ 27,612,236	$ 48,063,405	$ 75,915,289	

Liabilities
Accounts payable	

$	221,934	

$	-	

$ 3,588,078	

$ 3,810,012	
Total liabilities	221,934	-	3,588,078	3,810,012	

Fund Balances					
Restricted reported	-	27,612,236	44,475,327	72,087,563	
Unassigned reported	17,714	-	-	17,714	
Total fund balances	17,714	27,612,236	44,475,327	72,105,277	
Total liabilities and fund balances	$	239,648	$ 27,612,236	$ 48,063,405	$ 75,915,289	

Amounts reported for governmental activities in the statement of net position are different because:
Fund balance - governmental funds
Capital assets used in governmental activities are not financial

$ 72,105,277

resources and therefore, are not reported in  the funds	271,036,305 Certain liabilities are not due and payable in the current period
and therefore are not reported in the funds.
Bonds payable, net	(340,276,088)

Net position - governmental activities	$ 2,865,494

 	Major Funds	

Total

Debt	Capital   Governmental
For the fiscal year ended September 30, 2019	General	Service	Projects	Funds

Revenues
Land owner funding contributions

$ 2,155,159 $

-	$ 11,500,644

$ 13,655,803

Assessments	2,970,621	-	-	2,970,621	
Investment income	-	486,118	400,334	886,452	
Allocated proceeds from landowner lot sales	-	3,975,550	-	3,975,550	
Homeowner debt service payments	-	10,564,549	-	10,564,549	
Other revenues	1,075	-	-	1,075	
Total revenues	5,126,855	15,026,217	11,900,978	32,054,050	

Expenditures
Current:
General government
Physical environment:	608,845	-	-	608,845	
Operations	4,518,010	-	-	4,518,010	
Debt service:				
Bond principal payments	-	9,386,000	-	9,386,000	
Bond interest payments	-	16,009,075	-	16,009,075	
Cost of issuance	-	-	825,750	825,750	
Capital outlay	-	-	77,226,496	77,226,496	
Total expenditures	5,126,855	25,395,075	78,052,246	108,574,176	

Other Financial Sources (Uses)					
Transfers in	-	14,163,134	601,346	14,764,480	
Transfers out	-	(601,346)	(14,163,134)	(14,764,480)	
Discount on bonds	-	-	(1,631,261)	(1,631,261)	
Debt and loan proceeds (net)	-		74,305,000	74,305,000	
Total other financing sources (uses)	-	13,561,788	59,111,951	72,673,739	

Net change in fund balances	
-	
3,192,930	
(7,039,317)	
(3,846,387)	
Fund balances - beginning	17,714	24,419,306	51,514,644	75,951,664	

Fund balances - ending	
$	17,714	
$ 27,612,236	
$ 44,475,327	
$ 72,105,277	

Fund Balances – Governmental Funds to the Statement of Activities

For the fiscal year ended September 30, 2019

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

Net change in fund balances - total governmental funds	$ (3,846,387)

Governmental funds report capital outlays as expenditures, however, in the statement of activities, the cost of those assets is eliminated and capitalized as capital assets ($77,226,505). The total reflects depreciation expense
for the current period ($13,079,994).	64,146,511

The issuance of debt is reported as an other financing source,
however, in the statement of net position these are treated as liabilities	(72,673,742)
The repayment of the principal of long-term debt consumes the
current financial resources of governmental funds.	9,386,000

Amortization on discount of bonds	(194,711)

Change in net position of governmental activities	$    (3,182,329)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting principles and policies used in the preparation of these basic financial statements.

REPORTING ENTITY

Lakewood Ranch Stewardship District is a local  unit  special  purpose  government  created  on  June 17, 2005 under the "Lakewood Ranch Stewardship District Act," otherwise known as Chapter 2005-338, Florida Statutes. The District was established for the purpose of financing and managing the acquisition, construction, maintenance and operation of a portion of the infrastructure necessary for community development within the District.

The District is governed by the Board of Supervisors ("Board") which is composed of five members. The Supervisors are elected on an at large basis by the owners of the property within the District. Ownership of land within the District entitles the owner to one vote per acre. The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 2005- 338, amended by Chapter 2009-263, Florida Statutes. The District encompasses 23,255 acres of land located in Manatee County and Sarasota County, Florida.

The Board has the final responsibility for contracting for the services of consultants; borrowing money; adopting and enforcing rules and orders pursuant to the provisions of Chapter 120; holding, controlling and acquiring by donation, purchase or condemnation or dispose of any public easements; lease as lessor or assess to or from any person, firm, corporation, association or body; borrow money and issue bonds, certificates, warrants, notes, or other evidence of indebtedness; raise, by user charges or fees authorized by resolution of the board, amounts of money necessary for the conduct of District activities; assess and impose ad valorem taxes; determine, order, levy, impose, collect, and enforce maintenance taxes.

The financial statements were prepared in accordance with Governmental Accounting Standards Board ("GASB") Statement 34, and Statement 39, an amendment of GASB Statement 34. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District Board of Supervisors is considered to be financially accountable, and other organizations for which the District Board of Supervisors is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District.

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.

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

Measurement Focus, Basis of Accounting and Financial Statement Presentation

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

Government 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 government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

The government reports the following major governmental funds:

General Fund

The General Fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund.

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 general obligation debt.

Capital Projects Fund

The Capital Projects fund is used to account for the cost of construction of the infrastructure of the District.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.

When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources, as they are needed.

Restricted Assets

These assets represent cash and cash equivalents set aside pursuant to bond covenants or other contractual restrictions.

Cash and Cash Equivalents

All deposits are placed in a bank that qualifies as a public depository, as required by law (Florida Security for Public Deposits Act). Accordingly, all deposits are insured by Federal depository insurance and/or entirely collateralized pursuant to Chapter 280, Florida Statutes. The District considers investments with original maturities less than 3 months to be cash equivalents.

Capital Assets

Capital assets are defined by the District as assets with an initial, individual cost of $1,000 or more and an estimated useful life of more than one year. These assets are recorded at historical cost. Pursuant to GASB 34, the District elected to the report infrastructure prospectively. Construction in progress is not depreciated. Major outlays for capital assets and improvements are capitalized as projects are constructed. District infrastructure is being depreciated over twenty years.

Long-Term Obligations

In the government-wide financial statements long-term debt are reported as liabilities in the statement of net position. Bond premiums and discounts, as well as insurance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of premiums or discounts.

Long-Term Obligations (Continued)

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

Fund Balances

Governmental funds report fund balances are classified either as nonspendable, or as spendable. Spendable fund balances are further classified based on the extent to which there are external and internal constraints on the spending of these fund balances. These classifications are described as follows:

Nonspendable Fund Balance – Amounts that cannot be spent because they are not in spendable form or legally or contractually required to be maintained intact.

Restricted Fund Balance – Amounts that are constrained for specific purposes which are externally imposed by creditors, grantors, contributors, or laws or regulations or imposed by laws through constitutional provisions or enabling legislation.

Committed Fund Balance – Amounts that are constrained for specific purposes imposed by formal action of the highest level of decision making authority. The highest level of authority is the Board of Supervisors. Committed amounts cannot be used for any other purpose unless the Board of Supervisors removes those constraints by taking the same type of action.

Assigned Fund Balance – Amounts that are constrained by the District’s intent to be used for specific purposes, but are neither restricted nor committed. Intent is expressed by (a) the Board of Supervisors or (b) a body or official to which the Board of Supervisors has delegated the authority to assign amounts to be used for specific purposes.

Unassigned Fund Balance – Represents the residual fund balance within the General Fund, which has not been assigned to other funds and has not been restricted, committed, or assigned.

The District considers restricted funds to be used first when an expenditure is incurred and both restricted and unrestricted funds are available, followed by committed, assigned, and then unassigned as applicable.

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

Budgetary Information

The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital projects fund, which adopts a project-length budget.

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.
Public hearings are conducted to obtain taxpayer comments.
Prior to October 1, the budget is legally adopted by the District Board.
All budget changes must be approved by the District Board.
Unused appropriations for annually budgeted funds lapse at the end of the year.
The legal level of budgetary control is the fund level.

Reclassifications

The District has reclassified certain prior-period amounts to conform to the current-period presentation.

NOTE 2: CASH AND CASH EQUIVALENTS

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

NOTE 2: CASH AND CASH EQUIVALENTS (Continued)

The District has not formally adopted a written investment policy. According to Florida Statutes 218.415(17) the District is authorized to invest in the following:

The Local Government Surplus Funds Trust Fund, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in §163.01.
Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency.
Interest-bearing time deposits or savings accounts in qualified public depositories, as defined in §280.02.
Direct obligations of the U.S. Treasury.

The securities listed in (c) and (d) above must be invested such as to provide sufficient liquidity to pay obligations as they come due.

As of September 30, 2019, the District has the following balances in cash equivalents:

 Money market accounts	$	75,674,560 

NOTE 3: RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. These risks are covered by commercial insurance from independent third parties. There have been no significant reductions in insurance coverage from the prior year. No settlements have exceeded the District’s insurance coverage for each of the past three fiscal years.

NOTE 4: CAPITAL ASSETS

Capital asset activity for the fiscal year ended September 30, 2019 was as follows:

Captial Assets, not being depreciated: Construction in Progress

Beginning	Ending
Balance	Increases	Decreases	Balance

Public Roads

$	899,575

$ 17,136,076 $

1,554,257

$ 16,481,394

Signals / Intersections	-	252,706	-	252,706	
Bridges Tunnels	-	1,377,252	-	1,377,252	
Lighting	453,892	2,493,158	38,327	2,908,723	
Drainage	1,683,940	13,592,745	3,528,584	11,748,101	
Irrigation	863,214	2,953,272	493,397	3,323,089	
Other Utilities	755,349	2,471,420	336,700	2,890,069	
Landscaping	383,516	2,380,541	687,785	2,076,272	
Hardscape	14,347	1,649,158	1,569,782	93,723	
Sanitary Sewer	786,169	6,680,620	4,374,130	3,092,659	
Potable Water	814,530	7,172,897	1,886,480	6,100,947	
Earthwork, Clearing & Fill	1,443,682	12,165,625	6,086,306	7,523,001	
Engineering & Surveying	5,976,180	6,209,277	4,881,909	7,303,548	
Mitigation/Littoral Plantings	55,167	240,277	-	295,444	
Permit Fees & Bonding	194,887	239,013	131,548	302,352	
Other Infrastructure	2,093,858	212,468	588,792	1,717,534	
Total Construction in Progress	16,418,306	77,226,505	26,157,997	67,486,815	
Capital Assets, being depreciated:					
District infrastructure	252,912,517	26,157,997	-	279,070,514	
Total depreciable assets	252,912,517	26,157,997	-	279,070,514	
Less accumulated depreciation for:					
District infrastructure	62,441,030	13,079,994	-	75,521,024	
Total Capital Assets, being depreciated net	190,471,487	13,078,003	-	203,549,490	

Total Capital Assets, net	
$ 206,889,793	
$ 39,236,000	
$	-	
$ 271,036,305	

Depreciation expense was $13,079,994 for the fiscal year ended September 30, 2019, reported under the Physical environment function in the statement of activities.

NOTE 5: LINE OF CREDIT

On September 8, 2017, the District entered into a Non-Bank Qualified Tax Exempt Revolving Line of Credit not to exceed $45,000,000, with an interest rate of 4.0%. The line of credit was entered to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District known as the Northeast Sector, as well the set-up of a debt service reserve fund and to pay cost of issuance. On August 30, 2018, the line was amended to a maximum $33,000,000 credit available and an interest rate of 4.25%. The line expires on September 8, 2022 and as of September 30, 2019, the balance on the line was $0.

NOTE 6: LONG TERM DEBT

Unamortized discounts on governmental activities revenue bonds amounted to $6,545,930 and
$5,109,369 as of September 30, 2019 and 2018, respectively.

10/1/18	
Additions	
Decreases	
9/30/19	Due within
1 year	

2006 Country Club East Bonds	
20,575,000	
-	
675,000	
19,900,000	
670,000	
2010 Central Park Series A Bonds	2,875,000	-	70,000	2,805,000	50,000	
2011 Lakewood Ctr NW Sector Bonds	32,425,000	-	735,000	31,690,000	635,000	
2011 Belle Isle Series A Bonds	1,580,000	-	40,000	1,540,000	30,000	
2013 Country Club East Series A Bonds	7,870,000	-	125,000	7,745,000	135,000	
2013 Central Park Series A Bonds	6,705,000	-	120,000	6,585,000	125,000	
2014 Country Club East Series A Bonds	11,390,000	-	205,000	11,185,000	220,000	
2015 Lakewood Ctr North Bonds	34,590,000	-	900,000	33,690,000	680,000	
2016 The Villages of LWR South Bonds	72,280,000	-	4,440,000	67,840,000	1,245,000	
2017 Del Webb Bonds	14,505,000	-	255,000	14,250,000	255,000	
2017 Lakewood National & Polo Run Bonds	48,725,000	-	785,000	47,940,000	815,000	
2017 Lake Club Bonds	13,461,000	-	1,036,000	12,425,000	519,000	
2018 Northeast Sector Bonds - Phase 1A	14,925,000	-	-	14,925,000	250,000	
2019 Lakewood Centre South & NW Sector	-	11,790,000	155,000	11,635,000	175,000	
2018 NE Sector, Phase 1B	-	36,185,000	-	36,185,000	575,000	
2019 The Isles at LWR	-	7,580,000	-	7,580,000	130,000	
2019 Lake Club Phase 4	-	9,125,000	-	9,125,000	160,000	
2019 Cresswind Project	-	5,005,000	-	5,005,000	85,000	
2019 Indigo Expansion Area	-	4,775,000	-	4,775,000	90,000	

Bonds payable	
$ 281,906,000	
$ 74,460,000	
$ 9,541,000	
$ 346,825,000	
$ 6,844,000	
Less unamoritzed discounts	(5,109,369)	(1,631,258)	(194,711)	(6,545,916)	-	
Bonds payable, less unamortized discounts	$ 276,796,631	$ 72,828,742	$ 9,346,289	$ 340,279,084	$ 6,844,000	

On June 19, 2006, the District issued $27,215,000 of Special Assessment Revenue Bonds, Series 2006, due on May 1, 2037, with a fixed interest rate of 5.40%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Country Club East Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On July 12, 2010, the District issued $5,720,000 of Special Assessment Revenue Bonds, Series 2010A, due on May 1, 2040, with a fixed interest rate of 7.40%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Central Park Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On May 13, 2011, the District issued $36,255,000 of Special Assessment Revenue Bonds, Series 2011, due on May 1, 2040, with interest rates ranging from 7.40% to 8.00%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit  of the District, known as the Lakewood Centre & NW Sector Projects, as well as set up a debt service reserve fund and to pay costs of issuance.

On May 13, 2011, the District issued $1,765,000 of Special Assessment Revenue Bonds, Series 2011A, due on May 1, 2040, with a fixed interest rate of 8.00%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Belle Isle Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On August 5, 2013, the District issued $8,500,000 of Special Assessment Revenue Bonds, Series 2013A, due on May 1, 2043, with two fixed interest rates of 6.70% and 7.00%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Country Club East Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On August 5, 2013, the District issued $7,535,000 of Special Assessment Revenue Bonds, Series 2013, due on May 1, 2043, with interest rates ranging from 6.10% to 6.40%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit  of the District, known as the Central Park Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On October 14, 2014, the District issued $12,145,000 of Special Assessment Revenue Bonds, Series 2014, due of May 1, 2044, with interest rates ranging from 5.35% to 5.60%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit  of the District known as the Country Club East Project, as well as set-up of a debt service reserve fund and to pay cost of issuance.

On February 9, 2015, the District issued $37,360,000 of Special Assessment Revenue Bonds, Series 2015, due of May 1, 2045, with interest rates ranging from 4.25% to 4.875%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit  of the District known as the Lakewood Centre North Project, as well as set-up of a debt service reserve fund and to pay cost of issuance.

On February 8, 2016, the District issued $79,505,000 of Special Assessment Revenue Bonds, Series 2016, due of May 1, 2046, with interest rates ranging from 4.00% to 5.125%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit  of the District known as the Villages of Lakewood Ranch South Project, as well as set-up of a debt service reserve fund and to pay cost of issuance.

On May 8, 2017, the District issued $14,805,000 of Special Assessment Revenue Bonds, Series 2017, due as of May 1, 2047, with interest rates ranging from 3.65% to 5.125%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District known as the Del Webb Project, as well as set-up of a debt service reserve fund and to pay cost of issuance.

On February 21, 2017, the District issued $49,480,000 of Special Assessment Revenue Bonds, Series 2017, due of May 1, 2047, with interest rates ranging from 4.00% to 5.375%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit  of the District known as the Lakewood National and Polo Run Project, as well as set-up of a debt service reserve fund and to pay cost of issuance.

On September 29, 2017, the District issued $14,548,000 of Special Assessment Revenue Refunding Bonds, Series 2017, due as of May 1, 2036 with a fixed interest rate of 4.00%. The bonds were issued to refund and redeem all of the outstanding principal amount of the District’s Special Assessment Revenue Bonds, 2006 Series A (Lake Club Project), pay certain costs associated with the issuance of the 2017 Bond, make a deposit into the 2017 Reserve Account, and pay interest first coming due on the 2017 Bond.

On August 30, 2018, the District issued $14,925,000 of Special Assessment Revenue Bonds, Series 2018, due as of May 1, 2048 with interest rates ranging from 3.90% to 5.10%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District known as the NE Sector Project Phase 1A, as well as set-up of a debt service reserve fund and to pay cost of issuance.

On December 10, 2018, the District issued $11,790,000 of Special Assessment Revenue Bonds, Series 2018, due on May 1, 2048, with interest rates ranging from 4.55% to 5.65%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Lakewood Centre & NW Sector Projects, as well as set up a debt service reserve fund and to pay costs of issuance.

On December 10, 2018, the District issued $36,185,000 of Special Assessment Revenue Bonds, Series 2018, due on May 1, 2048, with interest rates ranging from 4.35% to 5.45%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Northeast Sector Project – Phase 1B, as well as set up a debt service reserve fund and to pay costs of issuance.

On April 8, 2019, the District issued $7,580,000 of Special Assessment Revenue Bonds, Series 2019, due on May 1, 2049, with interest rates ranging from 3.50% to 4.875%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as The Isles at Lakewood Ranch Project – Phase 1, as well as set up a debt service reserve fund and to pay costs of issuance.

On May 20, 2019, the District issued $9,125,000 of Special Assessment Revenue Bonds, Series 2019, due on May 1, 2049, with interest rates ranging from 3.60% to 4.50%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Lake Club Phase 4 Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On May 20, 2019, the District issued $5,005,000 of Special Assessment Revenue Bonds, Series 2019, due on May 1, 2049, with interest rates ranging from 3.60% to 4.50%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Cresswind Project, as well as set up a debt service reserve fund and to  pay costs of issuance.

On September 9, 2019, the District issued $4,775,000 of Special Assessment Revenue Bonds, Series 2019, due on May 1, 2049, with interest rates ranging from 2.90% to 4.00%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit  of the District, known as the Indigo Expansion Area Project, as well as set up a debt service reserve fund and to pay costs of issuance.

Lakewood Ranch Stewardship District Notes to Financial Statements

NOTE 6: LONG TERM DEBT (Continued)

2006 Country

2010 Central 2011 Lakewood

2013 Country

2013 Central

2014 Country

2016 The Villages

2017 Lakewood

2019 NE

Club East

Park Series A

Ctr NW Sector

2011 Belle Isle Club East Series

Park Series A Club East Series 2015 Lakewood

of LWR South 2017 Del Webb National & Polo 2017 Lake Club 2018 Northeast 2019 Lakewood

Sector, Phase

2019 The Isles 2019 Lake Club 2019 Cresswind

Principal

Bonds

Bonds

Bonds

Series A Bonds

A Bonds

Bonds

A Bonds Ctr North Bonds

Bonds

Bonds

Run Bonds

Bonds

Sector Bonds

Centre South

1B	at LWR

Phase 4

Project	2019 Indigo	Total

2020	$	670,000 $	50,000	$	635,000	$	30,000	$	135,000	$	125,000	$	220,000	$	680,000	$	1,245,000	$	255,000	$	815,000	$ 519,000 $	250,000	$	175,000	$	575,000	$	130,000	$	160,000	$	85,000	$	90,000	$ 6,844,000	
2021	710,000	55,000	685,000	30,000	145,000	130,000	230,000	710,000	1,345,000	265,000	850,000	540,000	260,000	180,000	600,000	135,000	165,000	90,000	95,000	7,220,000	
2022	745,000	60,000	735,000	35,000	155,000	140,000	240,000	740,000	1,485,000	270,000	885,000	562,000	270,000	190,000	625,000	135,000	170,000	95,000	100,000	7,637,000	
2023	790,000	60,000	795,000	35,000	165,000	150,000	255,000	775,000	1,500,000	285,000	920,000	585,000	280,000	200,000	655,000	140,000	175,000	95,000	100,000	7,960,000	
2024	830,000	70,000	855,000	40,000	175,000	160,000	270,000	810,000	1,535,000	300,000	965,000	609,000	295,000	205,000	680,000	145,000	185,000	100,000	105,000	8,334,000	
2025-2029	4,910,000	460,000	5,370,000	250,000	1,067,500	940,000	1,590,000	4,665,000	8,890,000	1,700,000	5,575,000	3,439,000	1,675,000	1,300,000	3,940,000	825,000	1,025,000	565,000	570,000	48,756,500	
2030-2034	6,430,000	720,000	7,855,000	370,000	1,502,500	1,265,000	2,060,000	5,965,000	11,280,000	2,175,000	7,205,000	4,222,000	2,130,000	1,580,000	5,060,000	1,025,000	1,260,000	690,000	675,000	63,469,500	
2035-2039	4,815,000	1,060,000	11,725,000	555,000	2,127,500	1,795,000	2,730,000	7,620,000	14,125,000	2,770,000	9,380,000	1,949,000	2,725,000	2,085,000	6,600,000	1,295,000	1,565,000	865,000	820,000	76,606,500	
2040-2044	-	270,000	3,035,000	195,000	2,272,500	1,880,000	3,590,000	9,575,000	17,710,000	3,590,000	12,255,000	-	3,510,000	2,840,000	8,635,000	1,650,000	1,960,000	1,075,000	995,000	75,037,500	
2045+	-	-	-	-	-	-	-	2,150,000	8,725,000	2,640,000	9,090,000	-	3,530,000	2,880,000	8,815,000	2,100,000	2,460,000	1,345,000	1,225,000	44,960,000	
Total	$ 19,900,000 $ 2,805,000 $ 31,690,000 $ 1,540,000 $ 7,745,000 $ 6,585,000 $ 11,185,000 $ 33,690,000	$ 67,840,000	$ 14,250,000	$ 47,940,000	$ 12,425,000 $	14,925,000	$ 11,635,000	$ 36,185,000	$ 7,580,000	$ 9,125,000	$ 5,005,000	$ 4,775,000	$ 346,825,000	

2006 Country

2010 Central 2011 Lakewood

2013 Country

2013 Central

2014 Country

2016 The Villages

2017 Lakewood

2019 NE

Club East

Park Series A

Ctr NW Sector

2011 Belle Isle Club East Series

Park Series A Club East Series 2015 Lakewood

of LWR South 2017 Del Webb National & Polo 2017 Lake Club 2018 Northeast 2019 Lakewood

Sector, Phase

2019 The Isles 2019 Lake Club 2019 Cresswind

Interest

Bonds

Bonds

Bonds

Series A Bonds

A Bonds

Bonds

A Bonds Ctr North Bonds

Bonds

Bonds

Run Bonds

Bonds

Sector Bonds

Centre South

1B	at LWR

Phase 4

Project	2019 Indigo	Total

2020	$ 1,054,620 $	205,720	$ 2,443,245	$	117,600	$	532,470	$	409,753	$	608,313	$ 1,611,138	$	3,487,888	$	695,578	$ 2,468,763	$ 484,940 $	725,318	$	607,951	$ 1,880,021	$	345,521	$	390,041	$	214,000	$	176,008	$ 18,458,885	
2021	1,017,360	201,835	2,394,405	115,200	523,090	401,975	596,275	1,581,600	3,435,088	686,088	2,435,463	463,760	715,373	599,875	1,854,465	340,884	384,200	210,850	173,325	18,131,109	
2022	978,075	197,580	2,341,865	112,600	513,054	393,740	583,703	1,550,788	3,376,631	676,324	2,400,763	441,720	705,038	591,458	1,827,821	336,159	378,170	207,520	170,497	17,783,503	
2023	936,630	193,140	2,285,255	109,800	502,320	384,895	570,461	1,518,594	3,313,200	665,269	1,361,788	418,780	694,313	582,585	1,799,981	331,346	371,960	204,100	167,598	16,412,014	
2024	892,890	188,330	2,224,205	106,800	490,930	375,440	556,418	1,484,913	3,248,069	652,691	2,318,197	394,900	682,584	573,371	1,170,945	326,359	365,480	200,590	164,625	16,417,736	
2025-2029	3,718,170	849,890	10,028,600	480,000	2,255,911	1,717,990	2,542,675	6,815,900	25,095,513	3,049,921	10,845,238	1,580,660	3,208,613	2,700,978	8,330,713	1,541,897	1,716,415	941,605	771,193	88,191,880	
2030-2034	2,196,450	634,550	7,540,195	356,400	1,829,278	1,381,300	2,056,093	5,529,834	12,571,438	2,578,281	9,209,063	819,200	2,756,200	2,348,813	7,202,665	1,343,525	1,482,460	813,560	662,906	63,312,209	
2035-2039	396,360	307,100	3,679,000	174,200	1,067,588	902,560	1,404,760	3,878,794	9,257,813	1,962,934	7,039,625	77,940	2,152,025	1,848,725	5,666,463	1,072,100	1,172,590	642,950	523,125	43,226,651	
2040-2044	-	9,990	118,400	5,600	340,113	249,920	524,440	1,779,253	4,943,575	1,155,688	4,160,384	-	1,365,525	1,189,325	3,629,836	720,281	782,325	428,063	347,500	21,750,218	
2045+	-	-	-	-	-	-	-	54,844	481,494	207,563	750,081	-	371,535	327,014	993,126	265,688	286,425	156,938	126,500	4,021,206	
Total	$ 11,190,555 $	2,788,135	$	33,055,170	$	1,578,200	$ 8,054,752	$	6,217,573	$ 9,443,136	$	25,805,656	$ 69,210,706	$ 12,330,336	$ 42,989,363	$ 4,681,900 $	13,376,521	$	11,370,094	$ 34,356,037	$ 6,623,759	$ 7,330,066	$ 4,020,175	$	3,283,276	$	307,705,410	

2006 Country

2010 Central 2011 Lakewood

2013 Country

2013 Central

2014 Country

2016 The Villages

2017 Lakewood

2019 NE

Club East

Park Series A

Ctr NW Sector

2011 Belle Isle Club East Series

Park Series A Club East Series 2015 Lakewood

of LWR South 2017 Del Webb National & Polo 2017 Lake Club 2018 Northeast 2019 Lakewood

Sector, Phase

2019 The Isles 2019 Lake Club 2019 Cresswind

Total

Bonds

Bonds

Bonds

Series A Bonds

A Bonds

Bonds

A Bonds Ctr North Bonds

Bonds

Bonds

Run Bonds

Bonds

Sector Bonds

Centre South

1B	at LWR

Phase 4

Project	2019 Indigo	Total

2020	$ 1,724,620 $	255,720	$ 3,078,245	$	147,600	$	667,470	$	534,753	$	828,313	$ 2,291,138	$	4,732,888	$	950,578	$ 3,283,763	$ 1,003,940 $	975,318	$	782,951	$ 2,455,021	$	475,521	$	550,041	$	299,000	$	266,008	$ 25,302,885	
2021	1,727,360	256,835	3,079,405	145,200	668,090	531,975	826,275	2,291,600	4,780,088	951,088	3,285,463	1,003,760	975,373	779,875	2,454,465	475,884	549,200	300,850	268,325	25,351,109	
2022	1,723,075	257,580	3,076,865	147,600	668,054	533,740	823,703	2,290,788	4,861,631	946,324	3,285,763	1,003,720	975,038	781,458	2,452,821	471,159	548,170	302,520	270,497	25,420,503	
2023	1,726,630	253,140	3,080,255	144,800	667,320	534,895	825,461	2,293,594	4,813,200	950,269	2,281,788	1,003,780	974,313	782,585	2,454,981	471,346	546,960	299,100	267,598	24,372,014	
2024	1,722,890	258,330	3,079,205	146,800	665,930	535,440	826,418	2,294,913	4,783,069	952,691	3,283,197	1,003,900	977,584	778,371	1,850,945	471,359	550,480	300,590	269,625	24,751,736	
2025-2029	8,628,170	1,309,890	15,398,600	730,000	3,323,411	2,657,990	4,132,675	11,480,900	33,985,513	4,749,921	16,420,238	5,019,660	4,883,613	4,000,978	12,270,713	2,366,897	2,741,415	1,506,605	1,341,193	136,948,380	
2030-2034	8,626,450	1,354,550	15,395,195	726,400	3,331,778	2,646,300	4,116,093	11,494,834	23,851,438	4,753,281	16,414,063	5,041,200	4,886,200	3,928,813	12,262,665	2,368,525	2,742,460	1,503,560	1,337,906	126,781,709	
2035-2039	5,211,360	1,367,100	15,404,000	729,200	3,195,088	2,697,560	4,134,760	11,498,794	23,382,813	4,732,934	16,419,625	2,026,940	4,877,025	3,933,725	12,266,463	2,367,100	2,737,590	1,507,950	1,343,125	119,833,151	
2040-2044	-	279,990	3,153,400	200,600	2,612,613	2,129,920	4,114,440	11,354,253	22,653,575	4,745,688	16,415,384	-	4,875,525	4,029,325	12,264,836	2,370,281	2,742,325	1,503,063	1,342,500	96,787,718	
2045+	-	-	-	-	-	-	-	2,204,844	9,206,494	2,847,563	9,840,081	-	3,901,535	3,207,014	9,808,126	2,365,688	2,746,425	1,501,938	1,351,500	48,981,206	
Total	$ 31,090,555 $ 5,593,135 $ 64,745,170 $ 3,118,200 $ 15,799,752 $ 12,802,573 $ 20,628,136 $ 59,495,656	$ 137,050,706	$ 26,580,336	$ 90,929,363	$ 17,106,900 $	28,301,521	$ 23,005,094	$ 70,541,037	$ 14,203,759	$ 16,455,066	$ 9,025,175	$ 8,058,276	$ 654,530,410	

NOTE 7:– SUBSEQUENT EVENTS

Subsequent events have been evaluated through February 7, 2020, which is the date the financial statements were available to be issued.

REQUIRED SUPPLEMENTARY INFORMATION

Lakewood Ranch Stewardship District Budgetary Comparison Schedule – General Fund

For the year ended September 30, 2019	Original and
Final Budget	

Actual	Variance
Positive (Negative)	

Revenues				
Landowner funding	$	1,956,357	2,155,159	$	198,802	
Assessments	3,049,306	2,970,621	(78,685)	
Miscellaneous	-	1,075	1,075	
Total revenues	5,005,663	5,126,855	121,192	

Expenditures				
Current:				
General government	603,310	608,845	(5,535)	
Physical environment:				
Operations	4,402,353	4,518,010	(115,657)	
Total expenditures	5,005,663	5,126,855	(121,192)	

NET CHANGE IN FUND BALANCES	
-	
-	
-	
FUND BALANCES - BEGINNING OF YEAR	17,714	17,714	-	

FUND BALANCES - END OF YEAR	
$	17,714	
$	17,714	
$	-	

OTHER NON-FINANCIAL INFORMATION

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

Board of Supervisors
Lakewood Ranch Stewardship District

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 the Lakewood Ranch Stewardship District, (“the District”), as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated February 7, 2020.

Internal Control over Financial Reporting

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

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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District'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 would not necessarily identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

This 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

Bradenton, Florida February 7, 2020

INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH FLORIDA STATUTES 218.415 – INVESTMENT OF PUBLIC FUNDS

Board of Supervisors
Lakewood Ranch Stewardship District

We have examined the Lakewood Ranch Stewardship District (“District”) compliance with Section 218.415, Florida Statutes during the fiscal year ended September 30, 2019. Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on the District’s compliance with the specified requirements based on our examination.

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

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

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2019.

This report is intended solely for the information and use of Lakewood Ranch Stewardship District and the 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

Bradenton, Florida February 7, 2020

MANAGEMENT LETTER

Board of Supervisors
Lakewood Ranch Stewardship District

Report on the Financial Statements

We have audited the financial statements of Lakewood Ranch Stewardship District ("District"), as of and for the fiscal year ended September 30, 2019, and have issued our report thereon dated February 7, 2020.

Auditor’s Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Florida Auditor General.

Other Reporting Requirements

We have issued our Independent Auditor’s Report on Internal Control Over Financial Reporting and Compliance and Other Matters Based on an Audit of 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 February 7, 2020 should be considered in conjunction with this management letter.

Prior Audit Findings

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

Financial Condition and Management

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

Pursuant to Sections 10.554(1)(i)5.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 address in the management letter 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, require that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings.

Purpose of this Letter

Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, 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

Bradenton, Florida February 7, 2020

REQUIRED COMMUNICATIONS

 	

February 7, 2020

To the Board of Lakewood Ranch Stewardship District

We are pleased to present the results of our audit of the 2019 financial statements of Lakewood Ranch Stewardship District (the “District”).

The document also contains the communications required by our professional standards.

Our audit was designed, primarily to express an opinion on the District’s 2019 financial statements. We considered the District’s current and emerging business needs, along with an assessment of risks that could materially affect the financial statements, and aligned our audit procedures accordingly. We conducted the audit with the objectivity and independence that you expect. We received the full support and assistance of the District’s personnel.

At Carr, Riggs & Ingram, LLC (CRI), we are continually evaluating the quality of our professionals’ work in order to deliver audit services of the highest quality that will meet or exceed your expectations. We encourage you to provide any feedback you believe is appropriate to ensure that we do not overlook a single detail as it relates to the quality of our services.

This report is intended solely for the information and use of the District and management and others within the District and should not be used by anyone other than these specified parties.

We appreciate this opportunity to work with you. If you have any questions or comments, please contact me at 941-747-0500 or tgruters@cricpa.com.

Very truly yours,

Timothy Gruters, CPA Partner

As discussed with the District and management during our planning process, our audit plan represented an approach responsive to the assessment of risk for the District. Specifically, we planned and performed our audit to:

Perform audit services, as requested by the District and management, in accordance with auditing standards generally accepted in the United States of America, in order to express an opinion on the District’s financial statements for the year ended September 30, 2019;

Communicate directly with the District and management regarding the results of our procedures;

Address with the District and management any accounting and financial reporting issues;

Anticipate and respond to concerns of the District and management; and

Perform other audit-related projects as they arise and upon request.

We have audited the District’s financial statements for the year ended September 30, 2019, and have issued our report thereon dated February 7, 2020. Professional standards require that we provide you with the following information related to our audit:

MATTER TO BE COMMUNICATED	AUDITORS’ RESPONSE	
Auditors’ responsibility under Generally Accepted Auditing Standards	As stated in our engagement letter dated October 25, 2019, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America (GAAP). Our audit of the financial statements does not relieve you or management of your responsibilities.
As part of our audit, we considered the internal control of the District. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.	
Client’s responsibility	Management, with oversight from those charged with governance, is responsible for establishing and maintaining internal controls, including monitoring ongoing activities; for the selection and application of accounting principles; and for the fair presentation in the statements of activities and functional expenses, and the statements of financial position in conformity with the applicable framework. Management is responsible for the design and implementation of programs and controls to prevent and detect fraud.	
Planned scope and timing of the audit	Our initial audit plan was not significantly altered during our fieldwork.	
Management judgments and accounting estimates
The process used by management in forming particularly sensitive accounting estimates and the basis for the Auditors’ conclusion regarding the reasonableness of those estimates.	Please see the following section titled “Accounting Policies, Judgments and Sensitive Estimates and CRI Comments on Quality.”	
Potential effect on the financial statements of any significant risks and exposures
Major risks and exposures facing the District and how they are disclosed.	No such risks or exposures were noted.	

MATTER TO BE COMMUNICATED	AUDITORS’ RESPONSE	
Significant accounting policies, including critical accounting policies and alternative treatments within generally accepted accounting principles and the Auditors’ judgment about the quality of accounting principles
The initial selection of and changes in significant accounting policies or their application; methods used to account for significant unusual transactions; and effect of significant policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
The auditor should also discuss the Auditors’ judgment about the quality, not just the acceptability, of the District’s accounting policies as applied in its financial reporting. The discussion should include such matters as consistency of accounting policies and their application, and clarity and completeness of the financial statements, including disclosures. Critical accounting policies and practices applied by the District in its financial statements and our assessment of management’s disclosures regarding such policies and practices (including any significant modifications to such disclosures proposed by us but rejected by management), the reasons why certain policies and practices are or are not considered critical, and how current and anticipated future events impact those determinations.	There were no changes in, or initial selections of, accounting policies during 2019. The District’s accounting policies remain appropriate.	
Significant difficulties encountered in the audit Any significant difficulties, for example, unreasonable logistical constraints or lack of cooperation by management.	None.	
Disagreements with management Disagreements, whether or not subsequently resolved, about matters significant to the financial statements or Auditors’ report. This does not include those that came about based on incomplete facts or preliminary information.	None.	

MATTER TO BE COMMUNICATED	AUDITORS’ RESPONSE	
Other findings or issues
Matters significant to oversight of the financial reporting practices by those charged with governance. For example, an entity's failure to obtain the necessary type of audit, such as one under Government Auditing Standards, in addition to GAAS.	See the “Internal Control Findings”.	
Matters arising from the audit that were discussed with, or the subject of correspondence with, management
Business conditions that might affect risk or discussions regarding accounting practices or application of auditing standards.	None.	
Corrected and uncorrected misstatements
All significant audit adjustments arising from the audit, whether or not recorded by the District, that could individually or in the aggregate have a significant effect on the financial statements. We should also inform the Board about uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented, that were determined by management to be immaterial, both individually and in the aggregate, to the financial statements taken as a whole. Any internal control deficiencies that could have prevented the misstatements.	Please see the following section titled “Summary of Audit Adjustments.”	
Major issues discussed with management prior to retention
Any major accounting, auditing or reporting issues discussed with management in connection with our initial or recurring retention.	None.	
Consultations with other accountants
When management has consulted with other accountants about significant accounting or auditing matters.	None of which we are aware.	
Written representations
A description of the written representations the auditor requested (or a copy of the representation letter).	See “Management Representation Letter” section.	

MATTER TO BE COMMUNICATED	AUDITORS’ RESPONSE	
Internal control deficiencies
Any significant deficiencies or material weaknesses in the design or operation of internal control that came to the Auditors’ attention during the audit.	See the section titled “Internal Control Findings”.	
Fraud and illegal acts
Fraud involving the District’s Board of Directors or those responsible for internal controls, or causing a material misstatement of the financial statements, where the auditor determines there is evidence that such fraud may exist. Any illegal acts coming to the Auditors’ attention involving senior management and any other illegal acts, unless clearly inconsequential.	We are unaware of any fraud or illegal acts involving management or causing material misstatement of the financial statements.	
Other information in documents containing audited financial statements
The external Auditors’ responsibility for information in a document containing audited financial statements, as well as any procedures performed and the results.	Our responsibility related to documents (including annual reports, websites, etc.) containing the financial statements is to read the other information to consider whether:
Such information is materially inconsistent with the financial statements; and
We believe such information represents a material misstatement of fact.
We have not been provided any such items to date and are unaware of any other documents that contain the audited financial statements.	

Quality

We are required to communicate our judgments about the quality, not just the acceptability, of the District’s accounting principles as applied in its financial reporting. We are also required to communicate critical accounting policies and sensitive accounting estimates. The Board may wish to monitor throughout the year the process used to compute and record these accounting estimates. The table below summarizes our communications regarding these matters.

AREA	

ACCOUNTING POLICY	
CRITICAL POLICY?	
JUDGMENTS & SENSITIVE ESTIMATE	COMMENTS ON QUALITY OF ACCOUNTING POLICY &
APPLICATION	
Fixed Assets	Useful lives of depreciable assets are at twenty years and are depreciated at straight line.	X	A sensitive estimate for the District is the useful lives of fixed assets.	The District’s policies are in accordance with accounting principles generally accepted in the United States of America (GAAP).	

During the course of our audit, we accumulate differences between amounts recorded by the District and amounts that we believe to be recorded based on auditing standards. Those adjustments are either recorded (corrected) by the District or passed (uncorrected).

The corrected adjustments as a result of our audit procedures are as follows: None
We recorded the following entries as part of our non-attest services for the District:

Listed below are passed (uncorrected) adjustments. None

QUALITATIVE MATERIALITY CONSIDERATIONS

In evaluating the materiality of audit differences when they do arise, we consider both quantitative and qualitative factors, for example:

Whether the difference arises from an item capable of precise measurement or whether it arises from an estimate, and, if so, the degree of imprecision inherent in the estimate;

Whether the difference masks a change in earnings or other trends;

Whether the difference changes a net decrease in assets to addition, or vice versa;

Whether the difference concerns an area of the District’s operating environment that has been identified as playing a significant role in the District’s operations or viability;

Whether the difference affects compliance with regulatory requirements;

Whether the difference has the effect of increasing management’s compensation – for example, by satisfying requirements for the award of bonuses or other forms of incentive compensation;.

Whether the difference involves concealment of an unlawful transaction.

INTERNAL CONTROL RECOMMENDATIONS

Internal Control Findings

February 7, 2020

To the Board of Lakewood Ranch Stewardship District

In planning and performing our audit of the financial statements of Lakewood Ranch Stewardship District (“the District”) as of and for the year ended September 30, 2019, in accordance with auditing standards generally accepted in the United States of America, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion 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 preceding paragraph 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.
This communication is intended solely for the information and use of the District and management, and is not intended to be, and should not be, used by anyone other than these specified parties.

CARR, RIGGS & INGRAM, LLC