South Village Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2018

South Village Community Development District ANNUAL FINANCIAL REPORT
September 30, 2018 TABLE OF CONTENTS

Page Number
REPORT OF INDEPENDENT AUDITORS	1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-8

BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Position	9
Statement of Activities	10
Fund Financial Statements
Balance Sheet – Governmental Funds	11
Reconciliation of Total Governmental Fund Balances
to Net Position of Governmental Activities	12
Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds	13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities	14
Statement of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – General Fund	15
Statement of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – Recreation Fund	16
Statement of Fund Net Position – Enterprise Fund	17
Statement of Revenues, Expenses and Changes in Fund
Net Position – Enterprise Fund	18
Statement of Cash Flows – Enterprise Fund	19

Notes to Financial Statements	20-36
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS	37-38
MANAGEMENT LETTER	39-40
INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH
SECTION 218.415, FLORIDA STATUTES	41

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
South Village Community Development District Clay County, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of South Village Community Development District as of and for the year ended September 30, 2018, and the related notes to 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 an opinion 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 Accounting 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 opinion.

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To the Board of Supervisors
South Village Community Development District

Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, and each major fund of the South Village Community Development District as of September 30, 2018, and the respective changes in financial position and cash flows for the Enterprise Fund and the budgetary comparison for the General and Special Revenue Funds for the year then ended in conformity 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 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 in accordance with governmental auditing standards generally accepted in the United States of America, which consisted principally of inquires of management regarding 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 a report dated August 12, 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 and contracts.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering South Village Community Development District’s internal control over financial reporting and compliance.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida August 12, 2019
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Management’s discussion and analysis of South Village Community Development District’s (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities. The analysis provides summary financial information for the District and should be read in conjunction with the District’s financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

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

The Government-wide financial statements are the statement of net position and the statement of activities. These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net position of governmental activities  and business-type activities and the change in net position. Governmental activities are primarily supported by special assessments. Business-type activities are supported by charges to the users of those activities, such as golf course and restaurant service charges.

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

The statement of activities presents information on all revenues and expenses of the District and the change in net position. Expenses are reported by major function and program revenues relating to those functions are reported, providing the net cost of all functions provided by the District. To assist in understanding the District’s operations, expenses have been reported as governmental activities or business-type activities. Governmental activities financed by the District include general government, physical environment, culture/recreation, and debt service. Business-type activities financed by user charges include golf course and restaurant services.

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

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances – budget and actual is provided for the District’s General Fund and Special Revenue Fund. For the enterprise fund, a statement of fund net position, a statement of revenues, expenses, and changes in fund net position; and a statement of cash flows are presented. Fund financial statements provide  more detailed information about the District’s activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements.

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

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

Financial Highlights

The following are the highlights of financial activity for the year ended September 30, 2018:

The District’s total liabilities exceeded total assets by $(8,591,850) (net position). Net investment in capital assets for Governmental Activities was $(5,376,233). Net investment in capital assets for Business-type Activities was $2,602,958. Unrestricted net position for Governmental Activities was $(7,063,419) and for Business-type Activities was $173,692. Restricted net position for Governmental Activities was
$1,071,152.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Highlights (Continued)

Governmental activities revenues totaled $4,316,754, while governmental activities expenses totaled $3,220,486. Business-type Activities revenues totaled $2,692,029 while Business-type Activities expenses totaled $2,693,862.

Financial Analysis of the District

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

	Net Position					
	Governmental Activities
 
 	2018	 	2017		Business-type Activities
 
 	2018	 	2017				Total		
			 	2018	  		2017		
Current assets	$	678,907	$	529,273	$	424,079	$	368,438		$	1,102,986	$	897,711	
Restricted assets	2,223,160	2,586,367	-	-			2,223,160	2,586,367	
Capital assets, net	 	11,561,514 	11,534,028 	 	2,602,958 	 	2,564,052 	 	14,164,472     		14,098,080 	
Total Assets	 	14,463,581 	14,649,668 	 	3,027,037 	 	2,932,490 	 	17,490,618    		17,582,158 	
Deferred outflows	 	228,453	242,229 	 	- 	 	- 	 	228,453    		242,229 	
Current liabilities	1,379,656	1,587,693	250,387	154,007			1,630,043	1,741,700	
Non-current liabilities	 	24,680,878 	25,768,972 	 	- 	 	- 	 	24,680,878    		25,768,972 	
Total Liabilities	 	26,060,534 	27,356,665 	 	250,387 	 	154,007 	 	26,310,921    		27,510,672 	
Net Position						
Net investment in						
capital assets	(5,376,233)	(4,716,810)	2,602,958	2,524,367			(2,773,275)	(2,192,443)	
Restricted	1,071,152	468,877	-	-			1,071,152	468,877	
Unrestricted	 	(7,063,419) 	(8,216,835)	 	173,692 	 	254,116 	 	(6,889,727)   		(7,962,719)	
Total Net Position	  $ (11,368,500) $ (12,464,768)	  $ 2,776,650 	  $ 2,778,483 		  $ 	(8,591,850) $ 	(9,686,285)	

The increase in current assets and current liabilities for business-type activities is primarily related to timing.

The decrease in restricted assets for governmental activities is primarily related to capital outlay expenditures at the fund level.

The decrease in current liabilities for governmental activities is primarily the result of timing as there were less payables in the current year.

The decrease in non-current liabilities for governmental activities is primarily the result of principal payments made during the year.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District (Continued)

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

Change in Net Position	
	 	Governmental  Activities	

 	2018	 	2017		Business-type Activities

 	2018	 	2017				Total		
					2018		 	2017		
Program Revenues Charges for services Grants and contributions
General Revenues Investment earnings Miscellaneous
Total Revenues	
$	
4,271,360	
$	3,493,117		
$ 2,689,060		
$ 2,478,614		
$	
6,960,420	
$	
5,971,731	
		-	20,000		-		-			-		20,000	
		28,411
 	16,983 	10,873
 	- 		-
 	2,969 		-
 	10,255 			28,411
 	19,952 	
 		10,873
10,255 	
		 	4,316,754 	3,523,990		2,692,029		2,488,869			7,008,783		6,012,859	

Expenses
General government Physical environment Culture/recreation Interest on
long-term debt Golf course Restaurant
Total Expenses	

182,869		

163,869		

-		

-	

182,869	

163,869	
	626,149		530,832		-		-	626,149	530,832	
	1,317,816		1,283,834		-		-	1,317,816	1,283,834	
	1,093,652		1,098,910		-		-	1,093,652	1,098,910	
	-		-		2,157,982		1,730,550	2,157,982	1,730,550	
	 	- 		 	- 		 	535,880 		 	645,033 	 	535,880 	 	645,033 	
	 	3,220,486 		 	3,077,445 		 	2,693,862 		 	2,375,583 	 	5,914,348 	 	5,453,028 	
Change in Net Position		1,096,268		446,545		(1,833)		113,286			1,094,435			559,831	
Net Position - Beginning of Ye	ar  		(12,464,768)	 	(12,911,313)		 	2,778,483 		 	2,665,197 			 	(9,686,285)			 	(10,246,116)	
Net Position - End of Year	  	$ (11,368,500)	  $ (12,464,768)		  $ 2,776,650 		  $ 2,778,483 		  	$ (8,591,850)		  	$ (9,686,285)	
The increase in governmental activities charges for services is primarily the result of an increase in assessments and debt service prepayments at the fund level.

The increase in business-type activities charges for services is related to increased greens fees and food sales.

The increase in golf course expenses is related to an increase in management fees, cart lease and repairs and maintenance expenses.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Capital Assets Activity

The following schedule provides a summary of the District’s capital assets as of September 30, 2018.

Description

Land	Governmental Activities

$	-	Business-Type Activities

$	1,359,781	
Total

$	1,359,781	
Construction in progress		-		2,040		2,040	
Infrastructure		5,283,667		405,000		5,688,667	
Recreation facilities		11,456,135		738,577		12,194,712	
Equipment		197,945		223,973		421,918	
Accumulated depreciation		 	(5,376,233)		(126,413)		(5,502,646)	
Total Capital Assets (Net)	$	11,561,514	$	2,602,958	$	14,164,472	

The governmental activities changes in the current year include depreciation of $659,423, capital asset additions of infrastructure, $8,438, and recreational facilities, $678,471.

Business-type activities changes in the current year include depreciation of $57,385, and capital asset additions of equipment, $25,714 and recreation facilities, $70,577.

General Fund Budgetary Highlights

The budget exceeded actual expenditures for the year mostly due to lower utilities, contingencies and direct costs than were anticipated.

The budget was not amended during the year.

Debt Management

Governmental Activities debt includes the following:

In June 2016, the District issued $17,075,000 Capital Improvement Revenue and Refunding Bonds, Series 2016A-1, $5,480,000 Capital Improvement Revenue and Refunding Bonds, Series 2016A-2, and $5,530,000 Capital Improvement Revenue and Refunding Bonds, Series 2016A-3. These bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District and to refund the Series 2005A Bonds. The balance outstanding at September 30, 2018 was $15,840,000 for the A-1 bond, $5,095,000 for the A-2 bond and $5,150,000 for the A-3 bond.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Economic Factors and Next Year’s Budget

South Village Community Development District does not expect any economic factors to have any significant effect on the financial position or results of operations of the District in fiscal year 2019.

Request for Information

The financial report is designed to provide a general overview of South Village Community Development District’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the South Village Community Development District, GMS-SF, LLC, 5385 N Nob Hill Road, Sunrise, Florida, 33351.

	Governmental
Activities		Business-type
Activities			
Total	
ASSETS							
Current Assets:							
Cash and equivalents	$	556,895		$	208,871		$	765,766	
Investments	113,816		-			113,816	
Accounts receivable, net	7,600		145,154			152,754	
Inventory	-		55,322			55,322	
Prepaid expenses	-		3,726			3,726	
Deposits	-		6,403			6,403	
Internal balances	596		(596)			-	
Cash - restricted for customer deposits
Total Current Assets	 	- 
 	678,907 		 	5,199 
 	424,079 	 	5,199 
 	1,102,986 	
Non-Current Assets:					
Restricted assets:							
Investments - debt service	1,627,155		-			1,627,155	
Investments - capital projects	596,005		-			596,005	
Capital assets not being depreciated:							
Land	-		1,359,781			1,359,781	
Construction in progress	-		2,040			2,040	
Capital assets being depreciated:							
Infrastructure	5,283,667		405,000			5,688,667	
Recreation facilites	11,456,135		738,577			12,194,712	
Equipment	197,945		223,973			421,918	
Less: Accumulated depreciation	(5,376,233)		(126,413)			(5,502,646)	
Total Non-Current Assets	 	13,784,674 		 	2,602,958 	 	16,387,632 	
Total Assets	 	14,463,581 		 	3,027,037 	 	17,490,618 	
DEFERRED OUTFLOWS OF RESOURCES							
Deferred amount on refunding

LIABILITIES	228,453		-			228,453	
Current Liabilities:							
Accounts payable and accrued expenses	76,079		219,894			295,973	
Unearned revenues	-		25,294			25,294	
Customer deposits, payable from restricted assets	-		5,199			5,199	
Accrued interest	428,577		-			428,577	
Bonds payable
Total Current Liabilities	 	875,000 
 	1,379,656 		 	- 
 	250,387 	 	875,000 
 	1,630,043 	
Non-Current Liabilities:					
Bonds payable, net Total Liabilities	 	24,680,878 
 	26,060,534 		 	- 
 	250,387 	 	24,680,878 
 	26,310,921 	
NET POSITION							
Net investment in capital assets	(5,376,233)		2,602,958			(2,773,275)	
Restricted for debt service	330,096		-			330,096	
Restricted for special revenue	101,189		-			101,189	
Restricted for capital projects	639,867		-			639,867	
Unrestricted
Total Net Position	 	(7,063,419)
  $	(11,368,500)		 	173,692 
  $	2,776,650 		
  $		 	(6,889,727)
(8,591,850)	

See accompanying notes to financial statements.

South Village Community Development District STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2018

Program	Net (Expense) Revenue and
Revenues	Changes in Net Position

Functions/Programs	
    Expenses			Charges for
 	Services			Governmental
Activities		Business-type
Activities	Total	
Governmental Activities
General government	
$	(182,869)		
$	201,429		
$	18,560		

$	-	$	18,560	
Physical environment	(626,149)		411,288		(214,861)		-	(214,861)	
Culture/recreation	(1,317,816)		1,406,780		88,964		-	88,964	
Interest on long-term debt	(1,093,652)		2,251,863		1,158,211		-	1,158,211	
Total Governmental Activities	(3,220,486)		4,271,360		1,050,874		
-	1,050,874	

Business-type activities Golf course and restaurant

Total Primary Government

(2,693,862)	2,689,060

  $ (5,914,348)	 $  6,960,420 

General revenues:

-	(4,802)	(4,802)

  $	1,050,874	(4,802)	1,046,072

Investment earnings	28,411		-		28,411	
Miscellaneous revenues	16,983		2,969		19,952	
Total General Revenues	45,394		2,969		48,363	

Change in Net Position	
1,096,268		
(1,833)		
1,094,435	
Net Position - October 1, 2017	(12,464,768)		2,778,483		(9,686,285)	
Net Position - September 30, 2018	  $ (11,368,500)		  $	2,776,650 		  $ (8,591,850)	

See accompanying notes to financial statements.
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South Village Community Development District BALANCE SHEET –
GOVERNMENTAL FUNDS
September 30, 2018

						2016A-1/A-2		2016A-3		2016A-1/A2		2016A-3					Total	
						Debt		Debt		Capital		Capital			Capital		Governmental	
ASSETS

Cash	

$	General

324,096		Recreation

$   109,960		Service

$	-		Service

$	-		Projects

$	-		Projects

$	-		

$	Reserve

122,839		Funds

$	556,895	
Investments		78,114		10,201		-		-		-		-			25,501		113,816	
Due from other funds		24,178		6,927		-		-		-		-			10,923		42,028	
Accounts receivable, net		-		7,600		-		-		-		-			-		7,600	
Restricted assets:																		
Investments, at fair value		-		-		1,185,213		441,942		102,000		494,005			-		2,223,160	
Total Assets	  $ 	426,388 		$ 134,688		$ 1,185,213		$441,942		$ 102,000		$ 494,005		$	159,263		$	2,943,499	

LIABILITIES AND FUND BALANCES																		
LIABILITIES																		
Accounts payable and accrued expenses	$	29,553		$	9,321		$	-		$	-		$	23,804		$	8,438		$	4,963		$	76,079	
Due to other funds	 	6,331 		 	24,178 		 	- 		 	- 		 	10,923 		 	- 	 	- 		 	41,432 	
Total Liabilities

FUND BALANCES	 	35,884 		 	33,499 		 	- 		 	- 		 	34,727 		 	8,438 	 	4,963 		 	117,511 	
Restricted for debt service		-		-		1,185,213		441,942		-		-			-		1,627,155	
Restricted for capital projects		-		-		-		-		67,273		485,567			-		552,840	
Committed recreation		-		101,189		-		-		-		-			154,300		255,489	
Unassigned
Total Fund Balances

Total Liabilities and Fund Balances	

  $ 	 	390,504 
390,504

426,388 		 	- 
101,189

$   134,688		 		- 1,185,213

$ 1,185,213		 		- 441,942

$441,942		 	- 
67,273

$  102,000		 	- 
485,567

$  494,005		

$	 	- 
154,300

159,263		 	390,504 
2,825,988

$	2,943,499	

See accompanying notes to financial statements.
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South Village Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES
TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2018

Total Governmental Fund Balances	$	2,825,988	
Amounts reported for governmental activities in the Statement of Net Position			
are different because:			
Capital assets being depreciated, infrastructure ($5,283,667), recreation			
facilities ($11,456,135), and equipment ($197,945), net of accumulated			
depreciation ($(5,376,233)) used in governmental activities are not current			
financial resources and, therefore, are not reported at the fund level.		11,561,514	
Long-term liabilities, including bonds payable, ($(26,085,000)), net of bond discounts,	
net, ($529,122) are not due and payable in the current period and therefore, are	
not reported at the fund level.		(25,555,878)	
Deferred outflows of resources are not current financial resources and therefore,	
are not reported at the fund level.		228,453	
Accrued interest expense for long-term debt is not a current financial use and;			
therefore, is not reported at the fund level.	 	(428,577)	
Net Position of Governmental Activities	  $ 	(11,368,500)	

See accompanying notes to financial statements.
- 12 -

South Village Community Development District
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
For the Year Ended September 30, 2018

	

Revenues:												
Special assessments	$	611,450	$ 652,857	$ 1,552,072	$	674,917	$	-	$	383,342	$	117,003	$	3,991,641	
Direct assessments		1,267	-	24,874		-	-		-		-	26,141	
Swim and tennis revenues		-	253,578	-		-	-		-		-	253,578	
Miscellaneous revenues		324	-	-		-	-		-		16,659	16,983	
Investment earnings	 	1,667 	 	192 	 	15,387 	 	4,230 	 	3,773 	 	2,682 	 	480 	 	28,411 	
Total Revenues	 	614,708 	 	906,627 	 	1,592,333 	 	679,147 	 	3,773 	 	386,024 	 	134,142 	 	4,316,754 	
Expenditures:													
Current													
General government		173,848	-	-		-	-		-		9,021	182,869	
Physical environment		354,972	-	-		-	-		-		-	354,972	
Culture/recreation		-	888,555	-		-	-		-		41,015	929,570	
Capital outlay		-	-	-		-	666,680		8,438		11,791	686,909	
Debt service													
Principal		-	-	820,000		280,000	-		-		-	1,100,000	
Interest	 	- 	 	- 	 	767,162 	 	295,512 	 	- 	 	- 	 	- 	 	1,062,674 
 	4,316,994 	
Total Expenditures

Excess of revenues over (under)	 	528,820 	 	888,555 	 	1,587,162 	 	575,512 	 	666,680 	 	8,438 	 	61,827 		
expenditures

Other Financing Sources/(Uses)	 	85,888 	 	18,072 	 	5,171 	 	103,635 	 	(662,907)	 	377,586 	 	72,315 	 	(240)	
Transfers in		-	-	-		-	-		6,658		-	6,658	
Transfers out	 	- 	 	- 	 	- 	 	(6,658)	 	- 	 	- 	 	- 	 	(6,658)	
Total Other Financing Sources/(Uses)	 	- 	 	- 	 	- 	 	(6,658)	 	- 	 	6,658 	 	- 	 	- 	
Net Change in Fund Balances	85,888	18,072	5,171	96,977	(662,907)	384,244	72,315	(240)	
Fund Balances - October 1, 2017		 	304,616 	 	83,117 	 	1,180,042 		 	344,965 	 	730,180 		 	101,323 		 	81,985 	 	2,826,228 	
Fund Balances - September 30, 2018	  $ 	390,504 	$ 101,189	$ 1,185,213	$	441,942	$	67,273	$	485,567	$	154,300	$	2,825,988	

See accompanying notes to financial statements.
- 13 -

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2018

Net Change in Fund Balances - Total Governmental Funds	$	(240)	
Amounts reported for governmental activities in the Statement of Activities are			
different because:			
Governmental funds report capital outlays as expenditures. However, in the			
Statement of Activities, the cost of those assets is allocated over their			
estimated useful lives as depreciation. This is the amount capital outlay ($686,909)	
exceeded depreciation ($(659,423)) in the current period.		27,486	
Principal payments are reported as expenditures in the governmental funds,			
but are reported as reductions of liabilities in the Statement of Net Position.		1,100,000	
Deferred outflows of resources for refunding debt is recognized as a component			
of interest on long-term debt in the Statement of Activities, but not in the			
governmental funds. This is the amount of interest in the current year.		(13,776)	
Amortization of bond discount reported in the Statement of Activities does not require	
the use of current financial resources and therefore, is not reported as an			
expenditure in governmental funds.		(31,906)	
In the Statement of Activities, interest is accrued on outstanding bonds;			
whereas in governmental funds, interest expenditures are reported when			
due. This is the change in accrued interest during the current period.

Change in Net Position of Governmental Activities		14,704	
	
$	
1,096,268	

See accompanying notes to financial statements.

GENERAL FUND
For the Year Ended September 30, 2018

							Variance with	
	
Original Budget		
Final Budget		
Actual		Final Budget Positive (Negative)	
Revenues								
Special assessments	$ 607,472		$ 607,472		$ 611,450		$	3,978	
Direct assessments	-		-		1,267		1,267	
Miscellaneous revenues	-		-		324		324	
Investment earnings Total Revenues

Expenditures	- 607,472		- 607,472		1,667

614,708		1,667

7,236	
Current								
General government	156,500		156,500		173,848		(17,348)	
Physical environment Total Expenditures

Net Change in Fund Balances	450,900

607,400

72		450,900

607,400

72		354,972

528,820

85,888		95,928

78,580

85,816	
Fund Balances - October 1, 2017

Fund Balances - September 30, 2018	-

$	72		-

$	72		304,616

$ 390,504		304,616

$	390,432	

RECREATION FUND
For the Year Ended September 30, 2018

							Variance with	
	
Original		
Final				Final Budget Positive	
	Budget		Budget		Actual		(Negative)	
Revenues								
Special assessments	$	646,712		$ 646,712		$ 652,857		$	6,145	
Swim and tennis revenues	241,770		241,770		253,578		11,808	
Investment earnings Total Revenues

Expenditures	- 888,482		- 888,482		192

906,627		192

18,145	
Current								
Culture/recreation

Net Change in Fund Balances	939,500

(51,018)		881,683

6,799		888,555

18,072		(6,872)

11,273	
Fund Balances - October 1, 2017

Fund Balances - September 30, 2018	58,049

$	7,031		58,049

$  64,848		83,117

$ 101,189		25,068

$	36,341	

STATEMENT OF FUND NET POSITION – ENTERPRISE FUND
September 30, 2018

ASSETS			
Current Assets			
Cash and equivalents	$	208,871	
Accounts receivable		145,154	
Due from other funds		2,566	
Prepaid expenses		3,726	
Inventories		55,322	
Deposits		6,403	
Cash restricted for customer deposits		5,199	
Total Current Assets		427,241	
Non-Current Assets			
Construction in progress		2,040	
Land		1,359,781	
Infrastructure		405,000	
Recreation facilities		738,577	
Equipment		223,973	
Less: Accumulated depreciation		(126,413)	
Total Non-Current Assets		2,602,958	
Total Assets		3,030,199	

LIABILITIES			
Current Liabilities			
Accounts payable and accrued expenses		219,894	
Customer deposits payable from restricted assets		5,199	
Due to other funds		3,162	
Unearned revenues		25,294	
Total Current Liabilities		253,549	

NET POSITION			
Net investment in capital assets		2,602,958	
Unrestricted		173,692	

Total Net Position	
   $		
2,776,650 	

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION – ENTERPRISE FUND
For the Year Ended September 30, 2018

Operating Revenues:		
Charges for services	$ 2,388,127	
Miscellaneous revenues	2,969	
Special assessments	300,933	
Total Operating Revenues	2,692,029	

Operating Expenses:		
Personal services	1,128,711	
Contractual and professional services	408,194	
Supplies and expenses	816,975	
Repairs and maintenance	58,953	
Utilities	113,704	
Rent and lease expense	109,940	
Depreciation	57,385	
Total Operating Expenses	2,693,862	

Operating Income(Loss)	
(1,833)	
Net Position - October 1, 2017	2,778,483	

Net Position - September 30, 2018	
$ 2,776,650	

STATEMENT OF CASH FLOWS – ENTERPRISE FUND
For the Year Ended September 30, 2018

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers Receipts from other sources
Payments to suppliers for goods and services Payments to employees for services
Net Cash Provided by Operating Activities	
$	
2,288,755	
		303,902	
		(1,275,503)	
		(1,128,711)	
		188,443	

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition and construction of capital assets Principal payments on capital leases
Net Cash Provided/(Used) by Investing Activities		

(96,291)	
		(39,685)	
		(135,976)	

Net increase in cash and cash equivalents		
52,467	
Cash and equivalents - October 1, 2017		161,603	

Cash and equivalents - September 30, 2018	
$	
214,070	

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income/(loss)
Adjustments to reconcile operating income to net cash provided by operating activities:
Depreciation expense
Increase in accounts receivable Decrease in prepaid expenses Increase in inventories
Decrease in due from other funds
Increase in accounts payable and accrued expenses Decrease in customer deposits
Increase in due to other funds
Decrease in unearned revenues	

$	

(1,833)	
		
57,385	
		(87,051)	
		16,904	
		(4,201)	
		68,012	
		148,386	
		(1,532)	
		3,162	
		(10,789)	

Net Cash Provided by Operating Activities	
$	
188,443	

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Reporting Entity

The District was established on April 28, 2003, pursuant the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the “Act”) by Ordinances Number 2003-36 as amended by ordinance number 2004-67 of the Clay County Board of County Commissioners, as a Community Development District. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is authorized to issue bonds for the purpose, among others, of financing, funding, planning, establishing, acquiring, constructing or re- constructing, enlarging or extending, equipping, operating and maintaining water management, bridges or culverts, district roads, landscaping, street lights and other basic infrastructure projects within or without the boundaries of the South Village Community Development District. The District is governed by a five-member Board of Supervisors who are elected by qualified electors of the District for four year terms. The District operates within the criteria established by Chapter 190.

As required by GAAP, these financial statements present the South Village Community Development District (the primary government) as a stand-alone government. The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility including, but not limited to, financial interdependency, selection of governing authority, designation of management, significant ability to influence operations and accountability for fiscal matters.

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

Measurement Focus and Basis of Accounting

The basic financial statements of the District are composed of the following:

Government-wide financial statements

Fund financial statements

Notes to financial statements

Government-wide Financial Statements

Government-wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include separate columns for the governmental and business-type activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.

Governmental activities, which normally are supported by special assessments and interest, are reported separately from business-type activities. Program revenues  include charges for services and grants and contribution. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program.

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

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

Fund Financial Statements

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

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

Governmental Funds

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered to be available when they are collected within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period

Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period.
Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund  balance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net position. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.
Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that resources are expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing source rather than as a fund liability.
Debt service expenditures are recorded only when payment is due.
The District classifies fund balance according to Governmental Accounting Standards Board Statement 54 – Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
The District has various policies governing the fund balance classifications.
Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.
Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company.

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

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

Enterprise Funds

In the fund financial statements, the enterprise fund is presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, enterprise funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or non-current) associated with their activity are included on their balance sheets. Enterprise fund operating statements present increases (revenues) and decreases (expenses) in total net position. The District applies all GASB pronouncements as well as FASB  Statements and Interpretations, APB Opinions and Accounting Research Bulletins, issued on or before November 30, 1989, which do not conflict with, or contradict, GASB pronouncements.

Basis of Presentation
a. Governmental Major Funds
General Fund – The General Fund is the District’s primary operating fund. It accounts  for all financial resources of the general government, except those required to be accounted for in another fund.
Recreation Fund – The Recreation Fund is a special revenue fund established to account for the financial resources of the District’s recreation areas.

Basis of Presentation (Continued)
Governmental Major Funds (Continued)
2016A-1/A-2 Debt Service Fund – The 2016A-1/A-2 Debt Service Fund accounts for debt service requirements to retire the capital improvement revenue and refunding bonds, Series 2016A-1 and Series 2016A-2.

2016A-3 Debt Service Fund – The 2016A-3 Debt Service Fund accounts for debt service requirements to retire the capital improvement revenue and refunding bonds, Series 2016A-3.

2016A-1/A-2 Capital Projects Fund – The Capital Projects Fund accounts for the proceeds from Long-Term debt issued in 2016 through Series 2016 A-1 and A-2 Capital Improvement Revenue and Refunding Bonds for the acquisition or construction of major infrastructure within the District.

2016A-3 Capital Projects Fund – The Capital Projects Fund accounts for the proceeds from Long-Term debt issued in 2016 through Series 2016 A-3 Capital Improvement Revenue and Refunding Bonds for the acquisition or construction of major infrastructure within the District.

Capital Reserve Fund – The Capital Reserve Fund accounts for the funds set aside to ensure the District has adequate funding for ongoing and future projects.

Enterprise Major Fund

Enterprise Fund – The Enterprise Fund accounts for the operations of the Golf Course, Pro Shop and Restaurant, which are funded by proceeds from operations of these facilities, including green fees, cart fees and member dues in the form of annual special assessments.

Non-current Governmental Assets/Liabilities

GASB Statement 34 requires that non-current governmental assets, such as land and buildings, and non-current governmental liabilities, such as general obligation bonds, be reported in the governmental activities column in the government-wide Statement of Net Position.

Assets, Liabilities, and Net Position or Equity

Cash and Investments

Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral from their deposits of public funds. This pool is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions, providing full insurance for public deposits.
The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of:
Direct obligations of the United States Treasury;
The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969;
Interest-bearing time deposits or savings accounts in authorized qualified public depositories;
Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency.
For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less and held in a qualified public depository as defined by Chapter 280.02, Florida Statutes.
Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds".   Any residual balances outstanding between the governmental activities and business- type activities are reported as "internal balances".

Inventories

Inventories are recorded at cost using the first in-first out basis and recognized as expenses as they are consumed.

Restricted Assets
Certain assets of the District and a corresponding liability or portion of net position is classified as restricted assets on the statement of net position because their use is limited either by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors. In a fund with both restricted and unrestricted assets, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position.

4. Assets, Liabilities, and Net Position or Equity (Continued)

Capital Assets
Capital assets, which include land, construction in progress, infrastructure, recreation facilities, and equipment, are reported in governmental activities.
The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of two years. The valuation basis for all assets is historical cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Depreciation of capital assets is computed and recorded by utilizing the straight-line method. Estimated useful lives of the various classes of depreciable capital assets are as follows:

Infrastructure and recreation facilities 30 years Equipment	10 years

Budgets

Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to Chapter 190, Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. Formal budgets are adopted for the general fund. The legal level of budgetary control is at the fund level. As a result, deficits in the budget columns of the accompanying financial statements may occur. All budgeted appropriations lapse at year end.

Deferred Outflows of Resources

Deferred outflows of resources represent a consumption of net position that applies to future periods. The District reported a deferred amount on refunding on the Statement  of Net Position. A deferred amount on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

Unamortized Bond Discount

Bond discounts are presented on the government-wide financial statements. The costs are amortized over the life of the bonds. For financial reporting, the unamortized bond discount is netted against the applicable long-term debt.

NOTE	B	–	RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS

1. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position

“Total fund balances” of the District’s governmental funds ($2,825,988) differs from “net position” of governmental activities ($(11,368,500)) reported in the Statement of Net Position. This difference primarily results from the long-term economic focus of the Statement of Net Position versus the current financial resources focus of the Governmental Fund Balance Sheet. The effect of the differences is illustrated as follows:

Capital related items
When capital assets (improvements and infrastructure that are to be used in governmental activities) are purchased or constructed, the cost of those assets is reported as expenditures in governmental funds. However, the Statement of Net Position included those capital assets among the assets of the District as a whole.

Infrastructure		$	5,283,667	
Recreation facilities		11,456,135	
Equipment		197,945	
Accumulated depreciation		 	(5,376,233)	
Total		$	11,561,514	
Long-term debt transactions
Long-term liabilities applicable to the	

District’s governmental	

activities are not due and	
payable in the current period and accordingly are not reported as fund liabilities.  All liabilities (both current and long-term) are reported in the Statement of Net Position. Balances at September 30, 2018 were:

Bonds payable	$	(26,085,000)	
Bond discount, net	 	529,122	
Total	$	(25,555,878)	

Deferred outflows of resources

Deferred outflows of resources applicable to the District's governmental activities are not financial resources and therefore, are not reported as fund deferred outflows of resources.

Deferred amount on refunding	$	228,453

NOTE	B	–	RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS (CONTINUED)

Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position (Continued)

Accrued interest

Accrued liabilities in the Statement of Net Position differ from the amount reported in governmental funds due to the accrued interest on bonds.

Accrued interest	$	(428,577)
Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities

The “net change in fund balances” for government funds ($(240)) differs from the “change in net position” for governmental activities ($1,096,268) reported in the Statement of Activities. The differences arise primarily from the long-term economic focus of the Statement of Activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below.

Capital related items
When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation. As a result, fund balances decrease by the amount of financial resources expended, whereas net position decrease by the amount of depreciation charged for the year.

Capital outlay	$	686,909	
Depreciation	 	(659,423)	
Net Change	$	27,486	
Long-term debt transactions
Repayments of bond principal are reported as an expenditure in	

the governmental funds	
and, thus, have the effect of reducing fund balance because current financial resources have been used.

Bond principal payments	$	1,100,000	
Amortization of bond discount	 	(31,906)	
Total	$	1,068,094	

NOTE	B	–	RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS (CONTINUED)

2. Explanation of Differences Between the Governmental Fund Operating Statements  and the Statement of Activities (Continued)

Long-term debt transactions (Continued)

Some expenses reported in the Statement of Activities do not require the use of current financial resources, therefore, are not reported as expenditures in governmental funds.

Net change in accrued interest payable	$	14,704	
Decrease in deferred amount on refunding	 	(13,776)	
Total	$	928	

NOTE C – CASH AND INVESTMENTS

All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash and investments.

Custodial Credit Risk – Deposits

Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not have a formal deposit policy for custodial credit risk, however, they follow the provisions of Chapter 280, Florida Statutes regarding deposits and investments. As of September 30, 2018, the District's bank balance was $747,343 and the carrying value was $770,965. Exposure to custodial credit risk was as follows. The District maintains all deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes.

As of September 30, 2018, the District had the following investments and maturities:

Investment		Maturities	Fair Value	
SBA Local Gov't Surplus Trust Fund
Florida Prime	33 days *
First American Government		
$	
113,816	
Obligation Fund Cl Y
Total		26 days *			 	2,223,160 
$ 2,336,976 	
				  		
* Weighted Average Maturity						

NOTE C – CASH AND INVESTMENTS (CONTINUED)

The District categorizes its fair value measurements within the fair value hierarchy recently established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The District uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities, or groups of assets and liabilities.

Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable and uses significant unobservable inputs that uses the best information available under the circumstances, which includes the District’s own data in measuring unobservable inputs.

Based on the criteria in the preceding paragraph, the investment in First American Government Obligation Fund Class Y is a Level 1 asset.

Investments

The District’s investment policy allows management to invest funds in investments permitted under Section 218.415, Florida Statutes.

Cash placed with the State Board of Administration represents the District’s participation in the Local Government Surplus Trust Funds Investment Pool and is reported at fair value.

Interest Rate Risk

The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Credit Risk

The District's investments in Government Obligation Mutual Funds are limited by state statutory requirements and bond compliance. The District has no investment policy that would further  limit its investment choices. As of September 30, 2018, the District's investment in the First American Government Obligation Fund Class Y was rated AAAm by Standard & Poor's.

Concentration of Credit Risk

The types of deposits and investments and their level of risk exposure as of September 30, 2018 were typical of these items during the fiscal year then ended. The District considers any decline in fair value to be temporary.

NOTE D – CAPITAL ASSETS
Capital Asset activity for the year ended September 30, 2018 was as follows:

	Balance						Balance	
	10/1/2017		Additions		Deletions		9/30/2018	
Governmental Activities:								
Capital assets, being depreciated:								
Infrastructure	$ 5,275,229		$	8,438		$	-		$ 5,283,667	
Recreation facilities	10,777,664		678,471		-		11,456,135	
Equipment	 	197,945 		 	- 		 	- 		 	197,945 
 	16,937,747 	
Total Capital Assets, Being Depreciated	 	16,250,838 		 	686,909 		 	- 			
Less accumulated depreciation for:								
Infrastructure	(1,136,038)		(236,523)		-		(1,372,561)	
Recreation facilities	(3,531,889)		(388,246)		-		(3,920,135)	
Equipment
Total Accumulated Depreciation Total Capital Assets Depreciated, Net
Governmental Activities Capital Assets, Net	 	(48,883)
 	(4,716,810)
 	11,534,028 
  $ 11,534,028 		 	(34,654)
 	(659,423)
 	27,486 
  $	27,486 		 	- 
 	- 
 	- 
  $	- 		 	(83,537)
 	(5,376,233)
 	11,561,514 
  $ 11,561,514 	

The infrastructure intended to serve the District has been estimated at a total cost of approximately $49 million. The infrastructure includes roadways, stormwater management system, water and sewer facilities, recreational facilities, and other related infrastructure. A portion of the project costs were financed with the proceeds from the Series 2005A Bonds while the remainder will be funded by additional bonds and the Developer. In a prior fiscal year, certain improvements were conveyed to other entities for ownership and maintenance responsibilities.

Depreciation was charged to physical environment, $271,177, and culture/recreation, $388,246.

NOTE D – CAPITAL ASSETS (CONTINUED)

The following is a summary of changes in the Business-type Activities capital assets for the year ended September 30, 2018.
	Balance						Balance	
	10/1/2017		Additions		Deletions		9/30/2018	
Capital assets, not being depreciated:								
Land	$ 1,359,781		$	-		$	-		$ 1,359,781	
Construction in progress	2,040		-		-		2,040	
Total Capital Assets, Not Depreciated	1,361,821		-		-		1,361,821	

Capital assets, being depreciated:								
Infrastructure	405,000		-		-		405,000	
Recreation facilities	668,000		70,577		-		738,577	
Equipment	198,259		25,714		-		223,973	
Total Capital Assets, Being Depreciated	1,271,259		96,291		-		1,367,550	

Less accumulated depreciation for:								
Infrastructure	(16,875)		(13,500)		-		(30,375)	
Recreation facilities	(27,834)		(23,269)		-		(51,103)	
Equipment	(24,319)		(20,616)		-		(44,935)	
Total accumulated depreciation	(69,028)		(57,385)		-		(126,413)

1,241,137

  $  2,602,958 	
Total capital assets depreciated, net

Business-Type Activities Capital Assets	1,202,231

  $ 2,564,052 		38,906

  $	38,906 		-

  $	- 			

Depreciation was charged to the following functions:

Golf Course	$	57,385

NOTE E – LONG-TERM DEBT

The following is a summary of debt activity for the District for the year ended September 30, 2018.

	Balance					Balance	
	October 1,					September 30,	
	 	2017		 	Additions			 		Deletions		 	2018		
Capital Improvement Revenue	
and Refunding Bonds							
Series 2016A-1	$ 16,450,000	$	-	$	610,000	$ 15,840,000	
Capital Improvement Revenue	
and Refunding Bonds							
Series 2016A-2	5,305,000		-		210,000	5,095,000	
Capital Improvement Revenue	
and Refunding Bonds							
Series 2016A-3 Bonds Payable	 	5,430,000 
  $ 27,185,000 	
  $		 	- 
- 	
  $ 	 	280,000 
1,100,000 	 	5,150,000 
  $ 26,085,000 	

Long-term debt is comprised of the following:

Capital Improvement Revenue and Refunding Bonds		
$17,075,000 Series 2016A-1 Capital Improvement Revenue and Refunding Bonds due in annual principal installments beginning May 2017. Interest at various rates between 2.00% and 3.75% is due  May and November beginning November 2017. Current portion is
$600,000.	

$	15,840,000	
$5,480,000 Series 2016A-2 Capital Improvement Revenue and Refunding Bonds due in annual principal installments beginning May 2017. Interest at various rates between 4.35% and 5.00% is due  May and November beginning November 2017. Current portion is
$170,000.	

5,095,000	
$5,530,000 Series 2016A-3 Capital Improvement Revenue and Refunding Bonds due in annual principal installments beginning May 2017. Interest at various rates between 5.50% and 6.00% is due  May and November beginning November 2017. Current portion is
$105,000.	

 	5,150,000	
Bonds payable	26,085,000	
Bond discount, net	 	(529,122)	
Bonds Payable, net	$	25,555,878 	

NOTE E – LONG-TERM DEBT (CONTINUED)

The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2018 are as follows:

Year Ending							
 	September 30, 

2019	 	Principal		 	Interest		 	Total		
	$	875,000	$	1,027,611	$	1,902,611	
2020		910,000		1,001,466		1,911,466	
2021		930,000		975,011		1,905,011	
2022		960,000		947,864		1,907,864	
2023		995,000		918,906		1,913,906	
2024-2028		5,470,000		4,066,993		9,536,993	
2029-2033		6,730,000		2,880,663		9,610,663	
2034-2038		7,495,000		1,359,569		8,854,569	
2039-2043		995,000		335,500		1,330,500	
2044-2046

Totals	 	725,000 	 	73,750 	 	798,750 	
	  $ 	26,085,000 	  $		13,587,333 	  $ 	39,672,333 	

Summary of Significant Bonds Resolution Terms and Covenants

Depository Funds – The bond resolution establishes certain funds and determines the order in which revenues are to be deposited into these funds. A description of the significant funds, including their purposes, is as follows:

1. Reserve Fund – The Series 2016A-1 and 2016A-2 Capital Improvement Revenue and Refunding Bonds Reserve Accounts are funded from the proceeds of the Bonds in an amount equal to fifty percent of the Maximum Annual Debt Service Requirement for the respective bond. The Series 2016A-3 Capital Improvement Revenue and Refunding Bonds is funded from the proceeds of the Bonds in an amount equal to thirty-five percent of the Maximum Annual Debt Service Requirement for the Series 2016A-3 Bonds.  Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture.

Reserve	Reserve
 	Balance		 Requirement 

Series 2016A-1 Capital Improvement Revenue and Refunding Bond	$	548,790	$	529,471	
Series 2016A-2 Capital Improvement Revenue and Refunding Bond	$	206,685	$	202,248	
Series 2016A-3 Capital Improvement Revenue and Refunding Bond	$	141,128	$	136,763	

NOTE F – OPERATING LEASES

The District leases golf carts and equipment under various operating lease agreements. The lease terms range from 42 to 60 months. During the year, golf cart and equipment lease payments totaled $104,412. The future minimum payments on the leases are as follows:

Year Ending	Business-type
 	September 30,		Activities
 	
2019	$	104,412
2020	104,412
2021	46,936
2022	 	34,291 

Total	$	290,051

NOTE G – SPECIAL ASSESSMENT REVENUES
Assessments are non-ad valorem assessments on benefitted property within the District. Operating and Maintenance Assessments are based upon adopted budget and levied annually at a public hearing of the District. Debt Service Assessments are levied when bonds are issued and collected annually. The District may collect assessments directly or utilize the uniform method of collection (Chapter 197.3632, Florida Statutes). Direct collected assessments are due as determined by annual assessment resolution adopted by the Board of Supervisors. Assessments collected under the uniform method are due and payable on November 1 or as soon as the assessment roll is certified and delivered to the Tax Collector. Per  Section 197.162, Florida Statutes, discounts are allowed for early payment at the rate of 4% in November, 3% in December, 2% in January, and 1% in February. Taxes paid in March are without discount.

Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

NOTE H – INTERLOCAL AGREEMENTS
In January 2004, the District entered into a cost sharing agreement with Middle Village Community Development District (“Middle Village”) for the maintenance of certain landscape improvements for which both Districts benefit. In accordance with the interlocal agreement, Middle Village will perform the required maintenance and the District will provide 31% of the costs incurred to perform the maintenance. For the fiscal year ended September 30, 2018, the costs related to the maintenance incurred by Middle Village was approximately $115,784, of which $35,893 was reimbursed to Middle Village by the District in connection with the agreement.

NOTE I – DEVELOPER AGREEMENTS

The Developer owns a portion of the land within the District; therefore, assessment revenues in the general, recreation, and debt service funds include assessments levied on the Developer owned property.

Pursuant to the funding agreement dated September 4, 2012, the Developer has agreed to fund any deficit of the District’s general government, physical environment, and recreation expenditures in excess of the special assessments collected up to the total amount expended by the District for the fiscal year, without any reimbursement to the Developer. In connection with this agreement, there were no Developer contributions to the general fund in the current year.

NOTE J – MANAGEMENT AGREEMENTS

The District has contracted with a management company to perform management advisory services, which include financial and accounting services. Certain employees of the management company also serve as officers of the District.

The District has also contracted with two additional management companies, both who are affiliated with the Developer, to perform property management services, including managing, operating, maintaining, and supervising the recreation facilities of the District. Under these agreements, the District compensates the management companies for management, accounting, financial reporting, computer and other administrative costs.

NOTE K – ECONOMIC DEPENDENCY

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

NOTE L – RISK MANAGEMENT

The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance.

NOTE M – SUBSEQUENT EVENT

At various times subsequent to year end, the District made prepayments of $80,000, $30,000, and $335,000 on the Series 2016 A-1, A-2 and A-3 Capital Improvement Revenue and Refunding Bonds, respectively.

In February 2019, the District issued $3,255,000 of Capital Improvement Revenue Bonds, Series 2019A and $1,700,000 of Capital Improvement Revenue Bonds, Series 2019B. The Series 2019 Bonds were issued to fund a portion of the Series 2019 Project, pay certain issuance costs, Fund the Series 2019 Reserve and pay a portion of the interest that will become due on the Series 2019 Bonds.

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Supervisors
South Village Community Development District Clay County, FL

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 South Village Community Development District, as of and for the year ended September 30, 2018, and the related notes to the financial statements, and have issued our report thereon dated August 12, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered South Village Community Development District's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of South Village Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of South Village Community Development 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 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 over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. 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.

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To the Board of Supervisors
South Village Community Development District Clay County, FL

Compliance and Other Matters

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

Purpose of this Report

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

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants
Fort Pierce, Florida August 12, 2019

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MANAGEMENT LETTER

To the Board of Supervisors
South Village Community Development District Clay County, Florida

Report on the Financial Statements

We have audited the financial statements of the South Village Community Development District as of and for the year ended September 30, 2018, and have issued our report thereon dated August 12, 2019.

Auditor’s Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United States; 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 on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and our Independent Auditor’s Report on an examination conducted in accordance with AICPA Professionals 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 August 12, 2019, should be considered in conjunction with this management letter.

Prior Audit Findings

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

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 South Village Community Development District has met one or more of the conditions  described in Section 218.503(1), Florida Statutes, and to identify the specific conditions met. In connection with our audit, we determined that South Village Community Development District did not meet any of the conditions described in Section 218.503(1) Florida Statutes.

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To the Board of Supervisors
South Village Community Development District

Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for South Village Community Development District.  It is management’s responsibility to monitor the South Village Community Development  District’s financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same as of September 30, 2018.

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

Additional Matters

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

Purpose of this Letter

Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida August 12, 2019

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INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES

To the Board of Supervisors
South Village Community Development District Clay County, FL

We have examined South Village Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2018. Management is responsible for South Village Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on South Village Community Development District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about South Village Community Development District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on South Village Community Development District’s compliance with the specified requirements.

In our opinion, South Village Community Development District complied, in all material respects, with the aforementioned requirements during the year ended September 30, 2018.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida August 12, 2019

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