TOHOQUA
COMMUNITY DEVELOPMENT DISTRICT

OSCEOLA COUNTY, FLORIDA
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2018

TOHOQUA COMMUNITY DEVELOPMENT DISTRICT
OSCEOLA COUNTY, FLORIDA

TABLE OF CONTENTS

	Page		
INDEPENDENT AUDITOR’S REPORT	1- 2		
MANAGEMENT’S DISCUSSION AND ANALYSIS	3- 6		
BASIC FINANCIAL STATEMENTS			
Government-Wide Financial Statements:			
Statement of Net Position	7		
Statement of Activities	8		
Fund Financial Statements:			
Balance Sheet – Governmental Funds	9		
Reconciliation of the Balance Sheet – Governmental Funds			
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 of Governmental Funds to the Statement of Activities	12		
Notes to the Financial Statements	13-20		
REQUIRED SUPPLEMENTARY INFORMATION			
Schedule of Revenues, Expenditures and Changes in Fund Balance –			
Budget and Actual – General Fund	21		
Notes to Required Supplementary Information	22		
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL			
REPORTING AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT			
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH	23-24		
GOVERNMENT AUDITING STANDARDS			
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS			
OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10)			
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	25		
MANAGEMENT LETTER REQUIRED BY CHAPTER 10.550 OF THE RULES			
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	26-27		

951 Yamato Road ▪ Suite 280 Boca Raton, Florida 33431 (561) 994-9299 ▪ (800) 299-4728 Fax (561) 994-5823 www.graucpa.com

INDEPENDENT AUDITOR’S REPORT

To the Board of Supervisors
Tohoqua Community Development District
Osceola County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of Tohoqua Community Development District, Osceola County, Florida (“District”) as of and for the fiscal 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.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 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, thereof for the fiscal 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 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 14, 2019, 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, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the 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.

Report on Other Legal and Regulatory Requirements

We have also issued our report dated June 14, 2019, on our consideration of the District’s compliance with the requirements of Section 218.415, Florida Statutes, as required by Rule 10.556(10) of the Auditor General of the State of Florida. The purpose of that report is to provide an opinion based on our examination conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.

June 14, 2019

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The management of the Tohoqua Community Development District, Osceola, Florida (“District”) would like to offer the readers of the District’s financial statements this discussion and analysis of the District’s financial activities for the fiscal year ended September 30, 2018. Please read it in conjunction with the District’s Independent Auditor’s Report, basic financial statements, accompanying notes and supplementary information to the basic financial statements.

The District was established pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes and created by Ordinance No. 2017-57 of Osceola County, Florida enacted on August 14, 2017, effective on August 14, 2017 and no audit was required for the prior period. As a result, the balances as of and for the period ended September 30, 2017 are for less than an twelve month period and are unaudited.

FINANCIAL HIGHLIGHTS

•	The assets of the District exceeded its liabilities at the close of the most recent fiscal year resulting in a net position balance of $94,240.

•	The change in the District’s total net position in comparison with the prior fiscal year was $83,866, an increase. The key components of the District’s net position and change in net position are reflected in the table in the government-wide financial analysis section.

•	At September 30, 2018, the District’s governmental funds reported combined ending fund balances of $138,215, an increase of $127,841 in comparison with the prior fiscal year. The total fund balance is restricted for debt service and capital projects and the remainder is unassigned fund balance which is available for spending at the District’s discretion.

OVERVIEW OF FINANCIAL STATEMENTS

This discussion and analysis are intended to serve as the introduction to the District’s financial statements. The District’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

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 the District’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the residual amount being 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 government’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 government-wide financial statements include all governmental activities that are principally supported by Developer contributions. The District does not have any business-type activities. The governmental activities of the District include the general government (management) and maintenance functions.

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OVERVIEW OF FINANCIAL STATEMENTS (Continued)

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, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has one fund category, the 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 District’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 the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

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

The District adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget.

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the basic financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net position may serve over time as a useful indicator of an entity’s financial position. In the case of the District, assets exceeded liabilities at the close of the fiscal year ended September 30, 2018.

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GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)

Key components of the District’s net position are reflected in the following table:

NET POSITION

SEPTEMBER 30,

		2018		2017		
Current and other assets				(Unaudited)		
	$	153,750	$	11,845		
Capital assets, net of depreciation		2,163,871		-		
Total assets		2,317,621		11,845		
Current liabilities		58,381		1,471		
Long-term liabilities		2,165,000		-		
Total liabilities		2,223,381		1,471		
Net position						
Net investment in capital assets		11,962		-		
Restricted		77,790		-		
Unrestricted		4,488		10,374		
Total net position	$	94,240	$	10,374		

The District’s net position reflects its investment in capital assets (e.g. land, land improvements, and infrastructure) less any related debt used to acquire those assets that is still outstanding. These assets are used to provide services to residents; consequently, these assets are not available for future spending. Although the District’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The restricted portion of the District’s net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position may be used to meet the District’s other obligations.

The District’s net position increased during the most recent fiscal year. The majority of the increase was due to conveyance of infrastructure to the District by the Developer.

Key elements of the change in net position are reflected in the following table:

CHANGES IN NET POSITION				
FOR THE FISCAL YEAR END SEPTEMBER 30,			
		2018		2017		
Revenues:				(Unaudited)		
						
Program revenues						
Operating grants and contributions	$	78,398	$	11,845		
Capital grants and contributions		365,202		-		
Total revenues		443,600		11,845		
Expenses:						
General government		84,102		1,471		
Interest		66,554		-		
Bond issue costs		209,078		-		
Total expenses		359,734		1,471		
Change in net position		83,866		10,374		
Net position - beginning		10,374		-		
Net position - ending	$	94,240	$	10,374		

As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2018 was $359,734. The costs of the District’s activities were primarily funded by program revenues. Program revenues of the District are comprised of Developer contributions and income from investments in the current fiscal year. The increase in revenues from the prior year is due to the District receiving more Developer contributions in the current year as a result of increased expenses and capital contributions from the Developer. The majority of the increase in expenses is the result of the bond issuance costs and interest expense recognized in the current fiscal year.

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GENERAL BUDGETING HIGHLIGHTS

An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2018.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2018, the District had $2,163,871 invested in capital assets for its governmental activities. No depreciation has been taken, so the book value is $2,163,871. More detailed information about the District’s capital assets is presented in the notes of the financial statements.

Capital Debt

At September 30, 2018, the District had $2,165,000 in Bonds outstanding for its governmental activities. More detailed information about the District’s capital debt is presented in the notes of the financial statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND OTHER EVENTS

It is anticipated that the general operations of the District will increase as the District is being built out.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact the Tohoqua Community Development District’s Finance Department at 135 W. Central Blvd, Suite 320, Orlando, Florida, 32801.

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TOHOQUA COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2018

				Governmental		
ASSETS		Activities		
				
Cash	$	6,592		
Investments		13,091		
Due from Landowner		13,431		
Restricted assets:				
Investments		120,636		
Capital assets:				
Nondepreciable		2,163,871		
Total assets			2,317,621		
LIABILITIES				
Accounts payable		15,535		
Accrued interest payable		42,846		
Noncurrent liabilities:				
Due within one year		35,000		
Due in more than one year		2,130,000		
Total liabilities			2,223,381		
NET POSITION		11,962		
Net investment in capital assets				
Restricted for debt service		77,790		
Unrestricted			4,488		
Total net position		$	94,240		

See notes to the financial statements

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TOHOQUA COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018