A.H. at Turnpike South Community
Development District

FINANCIAL STATEMENTS

September 30, 2018

A.H. at Turnpike South Community Development District
Table of Contents September 30, 2018

REPORT	PAGE
Independent Auditors' Report	1
FINANCIAL STATEMENTS
Management’s Discussion And Analysis (required supplemental information)	3
Basic Financial Statements Government‐Wide Financial Statements
Statement of Net Position	8
Statement of Activities	9
Fund Financial Statements
Balance Sheet – Governmental Funds	10
Reconciliation of the Balance Sheet of Governmental Funds to the Statement
of Net Position	11
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds	12
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities	13
Notes to Financial Statements	14
Required Supplemental Information (other than MD&A)
Budget to Actual Comparison Schedule ‐ General Fund	23
Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards	24
Management Letter	26
Independent Accountants’ Report on Compliance with Section 218.415 Florida Statutes	28

INDEPENDENT AUDITORS' REPORT

To the Board of Supervisors
A.H. at Turnpike South Community Development District Miami‐Dade County, Florida

Report on the Financial Statements

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

Management’s Responsibility for the Financial Statements

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

Auditors' Responsibility

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

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

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

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2018, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 4, 2019, on our consideration of the District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards  in considering the District’s internal control over financial reporting and compliance.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 4, 2019

Management’s Discussion And Analysis

Our discussion and analysis of the A.H. at Turnpike South Community Development District’s financial performance provides an overview of the District’s financial activities for the fiscal year ended September 30, 2018. Please read it in conjunction with the District’s financial statements, which begin on page 8.

FINANCIAL HIGHLIGHTS

Due to the accrual of Debt Service, at September 30, 2018, the liabilities of the District exceeded its assets by approximately $1.3 million (deficit).

During the fiscal year end September 30, 2018, the District established infrastructure of approximately $46,000, incurred approximately $479,000 of interest expenditures and made principal payments totaling $55,000.

USING THE ANNUAL REPORT

This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities on pages 8 – 9 provide information about the activities of the District as a whole and present a longer‐term view of the District’s finances. Fund financial statements start on page 10. For governmental activities, these statements tell how these services were financed in the short‐term as well as what remains for future spending. Fund financial statements also report the District’s operations in more detail than the government‐wide statements by providing information about the District’s most significant funds.

Reporting the District as a Whole

Our analysis of the District as a whole begins on page 4. One of the most important questions asked about the District’s finances is, “Is the District as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the District as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private‐sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

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

Reporting the District’s Most Significant Funds

Our analysis of the District’s major funds begins on page 5. The fund financial statements begin on page 10 and provide detailed information about the most significant funds – not the District as a whole. Some funds are required to be established by State law and by bond covenants. All of the District’s funds are governmental fund‐types.

Governmental funds – All of the District’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year‐end that are available for spending. The governmental fund statements provide a detailed short‐ term view of the District’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs.

THE DISTRICT AS A WHOLE

The following table reflects the condensed Statement of Net Position and is compared to the prior year.

September 30,	2018	2017	Change	
Assets
Current and other assets	
$	4,154,874	
$	4,312,295	
$	(157,421)	
Capital assets, net	3,129,960	3,205,244	(75,284)	

Total assets

$	7,284,834	$

7,517,539	$

(232,705)

Liabilities

Current liabilities	$	328,681	$	484,336	$	(155,655)	
Other liabilities	8,230,000	8,350,000	(120,000)	
Total liabilities	8,558,681	8,834,336	(275,655)	
Net position
Net investment in capital assets Restricted for:
Debt service	
(1,520,503)

192,932	
(1,456,496)

114,242	
(64,007)

78,690	
Capital projects	11,742	5,802	5,940	
Unrestricted	41,982	19,655	22,327	
Total net position (deficit)	(1,273,847)	(1,316,797)	42,950	
Total liabilities and net position	$	7,284,834	$	7,517,539	$	(232,705)	

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

During the fiscal year ended September 30, 2018, total assets and liabilities decreased by approximately
$233,000 and $276,000, respectively. The decrease in assets is primarily due to the use of existing resources to pay for capital outlay expenses accrued at the end of the prior year, as well as, current year depreciation on capital assets. The decrease in liabilities is primarily due to the substantial completion of the right of way infrastructure project in the current year, as well as the repayment of principal on long‐term debt.

The following schedule compares the Statement of Activities for the current and previous fiscal year.

Year ended September 30,	2018	2017	Change	
Revenues:
Program revenues: Charges for services	

$	697,129	

$	416,676	

$	280,453	
Grants and contributions	9,383	5,669	3,714	
General revenues:
Interest and other revenue	
10,101	
7,065	
3,036	
Total revenues	716,613	429,410	287,203	
Expenses:
General government	
74,224	
65,462	
8,762	
Unallocated depreciation	121,649	121,649	‐	
Bond issue costs	‐	336,710	(336,710)	
Interest	477,790	438,865	38,925	
Total expenses	673,663	962,686	(289,023)	
Change in net position	42,950	(533,276)	576,226	
Net position, beginning of year (deficit)	(1,316,797)	(783,521)	(533,276)	
Net position, ending of year (deficit)	$   (1,273,847)	$   (1,316,797)	$	42,950	

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

Revenues increased approximately $287,000 from the prior fiscal year, while expenses decreased by approximately $289,000. The increase in revenues is primarily due to the District levying debt service assessments for the Series 2016 bonds. The decrease in expenses is primarily due to the bond issue costs related to the issuance of the Series 2016 Bonds in the prior year. The overall result was a $32,999 increase in net position for fiscal year 2018.

THE DISTRICT’S FUNDS

As the District completed the year, its governmental funds (as presented in the balance sheet on page
reported a combined fund balance of approximately $4.15 million, which is an increase from last year’s balance that totaled approximately $4.08 million. Significant transactions are discussed below:

During the fiscal year end September 30, 2018, the District established infrastructure of approximately $46,000, incurred approximately $479,000 of interest expenditures and made principal payments totaling $55,000.

The overall increase in fund balance for the year ended September 30, 2018 totaled approximately
$62,000.

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At September 30, 2018, the District had approximately $3.1 million invested in capital assets (net of accumulated depreciation). This amount represents a net decrease of approximately $75,000 from the fiscal year 2017 total.
A listing of capital assets by major category for the current and prior year follows:

September 30,	2018	2017	Change	

Capital assets not being depreciated	
$	367,547	
$	321,182	
$	46,365	
Capital assets being depreciated	3,041,228	3,041,228	‐	

Total, prior to depreciation	
3,408,775	
3,362,410	
46,365	
Accumulated depreciation	(278,815)	(157,166)	(121,649)	

Net capital assets	
$	3,129,960	
$	3,205,244	
$	(75,284)	

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

At September 30, 2018, the District had $8.35 million of bonds outstanding. This amount represents a decrease of $55,000 from the fiscal year 2017 total.
A listing of debt amounts outstanding for the current and prior year is as follows:

September 30,	2018	2017	Change

Series 2015

$	4,375,000

$	4,430,000	$

(55,000)

Series 2016	3,975,000	3,975,000	‐

$	8,350,000	$

8,405,000	$

(55,000)

More information about the District’s long‐term debt is presented in Note 5 to the financial statements.

GOVERNMENTAL FUNDS BUDGETARY HIGHLIGHTS

An Operating budget was established by the governing board for the District pursuant to the requirements of Florida Statutes. The budget to actual comparison for the general fund, including the original budget and final adopted budget, is shown at page 23.

The District experienced a favorable variance in both revenues and expenses as compared to the budget in the amount of $9,950 and $2,301, respectively. The variance in revenues occurred primarily due to a refund received from Miami‐Dade Water & Sewer in the current year, which was not anticipated. The variance in expenditures occurred primarily due to anticipated budgeted legal expenditures that were not incurred during the year.

FUTURE FINANCIAL FACTORS

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

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide a general overview of the District’s finances. If you have questions about this report or need additional financial information, contact the A.H. at Turnpike South Community Development District’s management company at 2501A Burns Road, Palm Beach Gardens, Florida, 33410.

Basic Financial Statements

Statement of Net Position

September 30,	2018	
	Governmental	
	Activities	
Assets
Cash and cash equivalents	
$	3,657,000	
Investments
Capital assets:
Not being depreciated	497,874

367,547	
Depreciable, net	2,762,413	
Total assets	7,284,834	

Liabilities
Accounts payable	

9,707	
Accrued interest payable
Non‐current liabilities: Due within one year	198,974

120,000	
Due in more than one year	8,230,000	
Total liabilities	8,558,681	

Net position
Net investment in capital assets Restricted for:
Debt service	

(1,520,503)

192,932	
Capital projects	11,742	
Unrestricted	41,982	

Total net position (deficit)

$	(1,273,847)

Year ended September 30,

2018

Program Revenues

Net (Expense) Revenue and Changes in Net Position

	
Charges for	Operating Grants and	Capital Grants and	
Governmental	
Functions/Programs	Expenses	Services	Contributions	Contributions	Activities	
Primary government: Governmental activities:						
General government Unallocated
depreciation	$	(74,224)

(121,649)	$	86,450

‐	$	‐

‐	$	‐

‐	$	12,226

(121,649)	
Interest	(477,790)	610,679	1,453	7,930	142,272	

Total governmental activities

$	(673,663)  $

697,129	$

1,453	$

7,930

32,849

General revenues

Interest and other revenue	10,101	

Change in net position	
42,950	
Net position ‐ beginning of year (deficit)	(1,316,797)	

Net position ‐ end of year (deficit)	
$   (1,273,847)	

September 30,

2018

Total

General

Debt Service Fund

Capital Projects Fund

Governmental Funds

Assets
Cash and cash equivalents	
$	51,689	
$   305,531	
$   3,299,780	
$	3,657,000	
Investments	‐	384,482	113,392	497,874	
Due from other funds	‐	4,153	‐	4,153	

Total assets	
$	51,689	
$   694,166	
$   3,413,172	
$	4,159,027	

Liabilities and Fund Balance					
Liabilities					
Accounts payable	$	9,707	$	‐	$	‐	$	9,707	
Due to other funds	‐	‐	4,153	4,153	
Total liabilities	9,707	‐	4,153	13,860	

Fund balances					
Restricted for debt service	‐	694,166	‐	694,166	
Restricted for capital projects	‐	‐	3,409,019	3,409,019	
Unassigned	41,982	‐	‐	41,982	
Total fund balances	41,982	694,166	3,409,019	4,145,167	

Total liabilities and fund balances

$	51,689

$   694,166

$   3,413,172	$

4,159,027

Net Position

September 30,	2018	

Total fund balances, governmental funds	
$	4,145,167	
Capital assets used in governmental activities are not financial resources and therefore are not reported in the fund financial statements.	
3,129,960	
Liabilities  not  due  and  payable  from  current  resources,  including  accrued		
interest, are not reported in the fund financial statements.	(8,548,974)	

Total net position ‐ governmental activities (deficit)	
$	(1,273,847)	

Governmental Funds

Year ended September 30,			2018		
		Debt	Capital	Total	
	General	Service	Projects	Governmental	
	Fund	Fund	Fund	Funds	
Revenues
Assessments	
$ 86,450	
$ 610,679	
$	‐	
$	697,129	
Interest and other revenue	10,101	1,453	7,930	19,484	
Total revenues	96,551	612,132	7,930	716,613	

Expenditures
Current:

General government
Debt service: Principal	74,224

‐	‐

55,000	‐

‐	74,224

55,000	
Interest	‐	479,051	‐	479,051	
Capital outlay	‐	‐	46,365	46,365	
Total expenditures	74,224	534,051	46,365	654,640	

Excess (deficit) of revenues over					
expenditures	22,327	78,081	(38,435)	61,973	
Other Financing Sources
Transfers in	
‐	
‐	
267	
267	
Transfers out	‐	(267)	‐	(267)	
Total other financing sources	‐	(267)	267	‐	

Net change in fund balances	
22,327	
77,814	
(38,168)	
61,973	
Fund balances, beginning of year	19,655	616,352	3,447,187	4,083,194	

Fund balances, end of year	
$  41,982	
$ 694,166	
$ 3,409,019	
$	4,145,167	

Balances of Governmental Funds to the Statement of Activities

Year ended September 30,	2018	

Net change in fund balances ‐ governmental funds	
$	61,973	
Capital outlay, reported as expenditures in the governmental funds, is shown as		
capital assets on the Statement of Net Position.	46,365	
Governmental funds report principal payments on bonds when debt is paid,		
whereas  these  payments  are  eliminated  in  the  Statement  of  Activities  and recognized as a decrease in bonds payable in the Statement of Net Position.	
55,000	
Depreciation on capital assets is not recognized in the fund financial statements but is reported as an expense in the Statement of Activities.	
(121,649)	
The change in accrued interest between the current and prior year is recorded		
on the Statement of Activities but not on the fund financial statements.	1,261	

Change in net position of governmental activities	
$	42,950	

NOTE 1: NATURE OF ORGANIZATION

The A.H. at Turnpike South Community Development District (the “District”) was established on July 17, 2012 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, by Miami – Dade County Commission Ordinance No. 12‐60. The boundaries were expanded by enactment of ordinance No. 13‐93 on October 1, 2013. The Act provides, among other things, the power to manage basic services for community development, power to borrow money and issue bonds, and to levy and assess non‐ad valorem assessments for the financing and delivery of capital infrastructure.

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

The District is governed by a Board of Supervisors (“Board”), which is comprised of five members. The Supervisors are elected by the owners of the property within the District. At September 30, 2018, all of the Supervisors are affiliated with the subsequent developer of the community. In November 2016, D.R. Horton, Inc. (the “subsequent developer”) purchased the lots and assumed developer rights and control of the District from Adrian Developers of De La Fuente Parcel, LLC (the “former developer”). The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes.

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

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

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Government‐wide and Fund Financial Statements

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

The government‐wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the non‐fiduciary activities of the primary government. Governmental activities, which normally are supported by assessments, are reported separately from business‐type activities, which rely to a significant extent on fees and charges for support. The business‐ type activities are reported separately in government‐wide financial statements; however, at September 30, 2018, the District did not have any significant business‐type activities.  Therefore, no business‐type activities are reported. Assessments and other items not properly included as program revenues (i.e., charges to customers or applicants who purchase, use, or directly benefit from goods or services) are reported as general revenues.

Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting and Basis of Presentation

The government‐wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and other similar items are to be recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

Assessments, including debt service assessments along with operation and maintenance assessments, are non‐ad valorem special assessments imposed on all lands located within the District and benefited by the District’s activities, operation and maintenance. Assessments are levied and certified for collection by the District prior to the start of the fiscal year which begins October 1st and ends on September 30th. Operation and maintenance special assessments are imposed upon all benefited lands located in the District. Debt service special assessments are imposed upon certain lots and lands as described in each resolution imposing the special assessment for each series of bonds issued by the District.

Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental funds:

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

Debt Service Fund – The Debt Service Fund is used to account for the accumulation of resources for the annual payment of principal and interest on long‐term debt.

Capital Projects Fund – The Capital Projects Fund accounts for the financial resources to be used in the acquisition or construction of major infrastructure within the District.

For the year ended September 30, 2018, the District does not report any proprietary funds. As a general rule, the effect of interfund activity has been eliminated from the government‐wide financial statements.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, then unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for use in the governmental fund financial statements, it is the government’s policy to use committed resources first, followed by assigned resources, then unassigned resources as needed.

Cash, Deposits and Investments

The District maintains deposits with "Qualified Public Depositories" as defined in Chapter 280, Florida Statutes. All Qualified Public Depositories must place with the Treasurer of the State of Florida securities in accordance with collateral requirements determined by the State’s Chief Financial Officer. In the event of default by a Qualified Public Depository, the State Treasurer will pay public depositors all losses. Losses in excess of insurance and collateral will be paid through assessments between all Qualified Public Depositories.

Under this method, all the District's deposits are fully insured or collateralized at the highest level of security as defined by GASB, Statement Number 40, Deposits and Investment Disclosures (An Amendment of GASB, Statement Number 3).

The District is authorized to invest in financial instruments as established by Section 218.415, Florida Statutes. The authorized investments include among others direct obligations of the U.S Treasury; the Local Government Surplus Trust Funds as created by Section 218.405, Florida Statutes; SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency; and interest‐bearing time deposits or savings accounts in authorized financial institutions. In addition, the District's Bond Indentures allow it to invest in commercial paper rated at the top two rating categories by both Moody’s and S&P at the time of purchase.

Capital Assets

Capital assets, which include primarily infrastructure assets (e.g., roads, sidewalks, water management systems and similar items), are reported in the governmental activities column in the government‐wide financial statements. Capital assets are defined by the District as assets with an initial/individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost and estimated historical cost if purchased or constructed. Donated assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant and equipment of the primary government are depreciated using the straight‐line method over the following estimated useful lives:

Asset	Years
Infrastructure	25

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

Long‐Term Obligations

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

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

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Deferred Outflows/Inflows of Resources

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

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

Fund Equity

Net position in the government‐wide financial statements represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources and is categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents assets related to infrastructure and property, plant and equipment, net of any related debt. Restricted net position represents the net position restricted by the District's bond covenants.

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

Budgets

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

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

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

NOTE 3: INVESTMENTS
The District's investments at September 30, 2018 consist of commercial paper, which is considered by GASB to be money market investments. In accordance with GASB 72, Fair Value Measurement and Application, these amounts are reported at amortized cost.
September 30,	2018	Credit Risk	Maturities

Commercial Paper	$	497,874 	

Moody's P‐1 & S&P A+	N/A

Concentration risk – The District’s investment policy requires diversification, but does not specify limits on types of investments.

Custodial credit risk – For an investment, custodial credit risk is the risk that the District will not be able to recover the value of the investments or collateral securities that are in the possession of an outside party. The District has no formal policy for custodial risk. At September 30, 2018, the commercial paper is held by a counter party in the District's name.

Interest rate risk – The District does not have a formal policy for addressing interest rate risk; however, investments are made with discretion, to seek reasonable returns, preserve capital, and in general, avoid speculative investments. The District manages its exposure to declines in fair values from interest rate changes by reviewing the portfolio on an ongoing basis for changes in effective yield amounts.

Note 4: CAPITAL ASSETS

The construction project related to the Series 2015 bonds (Phase I) is still on going. Management anticipates incurring additional capital outlay expenditures of approximately $100,000 related to this project. The anticipated completion of this project is fiscal year 2019. As discussed in Note 9 to the financial statements, the District has entered into a contract for the Series 2016 bonds (2nd addition) subsequent to year end. At this time, there is no anticipated completion date for this project.

NOTE 4: CAPITAL ASSETS (Continued)
The following is a summary of changes in the capital assets for the year ended September 30, 2018:

	Beginning Balance	
Additions	Transfers and Conveyances	Ending Balance	
Governmental Activities:
Capital assets not being depreciated
Infrastructure under construction	

$	321,182	

$	46,365	

$	‐	

$	367,547	
Total capital assets, not being depreciated	321,182	46,365	‐	367,547	
Capital assets being depreciated
Infrastructure	

3,041,228	

‐	

‐	

3,041,228	
Total capital assets, being depreciated	3,041,228	‐	‐	3,041,228	
Less accumulated depreciation
Infrastructure	

(157,166)	

(121,649)	

‐	

(278,815)	
Total accumulated depreciation	(157,166)	(121,649)	‐	(278,815)	
Total capital assets, being depreciated, net	2,884,062	(121,649)	‐	2,762,413	
Governmental activities capital assets, net	$	3,205,244	$	(75,284)	$	‐	$  3,129,960	

Depreciation expense of $121,649 was unallocated on the accompanying Statement of Activities.

NOTE 5: BONDS PAYABLE

In February 2015, the District issued $4,430,000 of Special Assessment Bonds, Series 2015 consisting of
$640,000 Term Bonds and $3,790,000 Term Bonds with interest rates of 5.50% and 6.25%, respectively. These bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is paid semiannually on each May 1 and November 1. Principal payments on the $640,000 Term Bonds are made serially commencing on November 1, 2017 through November 1, 2025. Principal payments on the $3,790,000 Term Bonds are made serially commencing on November 1, 2026 through November 1, 2046.

In November 2016, the District issued $3,975,000 of Special Assessment Bonds, Series 2016 consisting of $330,000 Term Bonds, $410,000 Term Bonds, $1,050,000 Term Bonds and $2,185,000 Term Bonds with interest rates of 4.00%, 4.875%, 5.250% and 5.50%, respectively. These bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is paid semiannually on each May 1 and November 1. Principal payments on the $330,000 term bonds are made serially commencing on November 1, 2018 through November 1, 2022. Principal payments on the $410,000 term bonds are made serially commencing on November 1, 2023 through November 1, 2027.

NOTE 5: BONDS PAYABLE (Continued)

Principal payments on the $1,050,000 term bonds are made serially commencing on November 1, 2028 through November 1, 2036. Principal payments on the $2,185,000 term bonds are made serially commencing on November 1, 2037 through November 1, 2047.

At September 30, 2018, the scheduled debt service requirements on long‐term debt were as follows:

Year Ending September 30,	
Principal	
Interest	Total Debt Service	

2019	
$	120,000	
$	474,688	
$	594,688	
2020	130,000	468,750	598,750	
2021	130,000	462,575	592,575	
2022	140,000	456,163	596,163	
2023	145,000	449,375	594,375	
2024 ‐ 2028	850,000	2,121,888	2,971,888	
2029 ‐ 2033	1,110,000	1,847,875	2,957,875	
2034 ‐ 2038	1,475,000	1,477,019	2,952,019	
2039 ‐ 2043	1,960,000	975,763	2,935,763	
2044 ‐ 2048	2,290,000	312,719	2,602,719	
	
$	8,350,000	
$	9,046,815	
$	17,396,815	

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

Beginning
Balance	Additions	Reductions	Ending Balance

Due Within
One Year

Governmental Activities
Bonds Payable:

Series 2015	$	4,430,000	$	‐	$	55,000	$	4,375,000	$	60,000	
Series 2016	3,975,000	‐	‐	3,975,000	60,000	

$	8,405,000	$

‐	$	55,000	$

8,350,000	$

120,000

The Bond Indentures require that the District maintain adequate funds in the reserve accounts to meet the debt service reserve requirements as defined in the Bond Indentures. The requirements have been met for the fiscal year ended September 30, 2018.

The Bond Indentures has certain restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agreed to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District is in compliance with the requirements of the Bond Indentures.

NOTE 6: RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The District maintains commercial insurance coverage to mitigate the risk of loss. Coverage may not extend to all situations. Management believes such coverage is sufficient to preclude any significant uninsured losses to the District. Settled claims have not exceeded this commercial coverage in the previous three years.

NOTE 7: MANAGEMENT COMPANY

The District has contracted with SDS Management Company to perform management advisory services, which include financial and accounting advisory services. Certain employees of the management company also serve as officers (Board appointed non‐voting positions) of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, and other administrative costs.

NOTE 8: DEVELOPER TRANSACTIONS

A significant portion of the District’s activity is dependent upon the continued involvement of the subsequent developer, D.R. Horton, Inc., the loss of which could have a material adverse effect on the District’s operations.

During the year ended September 30, 2018, the subsequent developer was assessed $80,986 and
$591,574 for operations and maintenance and debt service assessments, respectively, through the local tax collector.

NOTE 9: SUBSEQUENT EVENT

Subsequent to year end, the District signed a contract totaling approximately $3.5 million for the A.H. at Turnpike South 2nd addition (Series 2016 Project).

Required Supplemental Information (Other Than MD&A)

Budget to Actual Comparison Schedule – General Fund

Year ended September 30,			2018		
	
Original	
Final	
Actual	
Variance with	
	Budget	Budget	Amounts	Final Budget	

Revenues					
Assessments	$	82,282	$	86,451	$	86,450	$	(1)	
Interest and other revenue	60	150	10,101	9,951	
Total revenues	82,342	86,601	96,551	9,950	

Expenditures
General government	

82,342	

76,525	

74,224	

2,301	
Total expenditures	82,342	76,525	74,224	2,301	

Excess of revenues over expenditures	
$	‐	
$	10,076	
$	22,327	
$	12,251	

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

To the Board of Supervisors
A.H. at Turnpike South Community Development District Miami‐Dade County, Florida

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of A.H. at Turnpike South Community Development District (hereinafter referred to as the “District”), as of and for the year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated June 4, 2019.

Internal Control Over Financial Reporting

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

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

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

Purpose of this Report

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

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 4, 2019

MANAGEMENT LETTER

To the Board of Supervisors
A.H. at Turnpike South Community Development District Miami‐Dade County, Florida

Report on the Financial Statements

We have audited the financial statements of the A.H. at Turnpike South Community Development District (“District”) as of and for the fiscal year ended September 30, 2018, and have issued our report thereon dated June 4, 2019.

Auditors' Responsibility

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

Other Reporting Requirements

We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards and Independent Accountant’s Report on an examination conducted in accordance with AICPA Professional Standards, AT‐C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 4, 2019, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding financial audit report.

Official Title and Legal Authority

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

Financial Condition and Management

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

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

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

Additional Matters

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

Purpose of this Letter

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

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 4, 2019

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Supervisors
A.H. at Turnpike South Community Development District Miami‐Dade County, Florida

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

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

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

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

This report is intended solely for the information and use of management and the State of Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 4, 2019