Sandmine Road Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2020

Sandmine Road Community Development District ANNUAL FINANCIAL REPORT
September 30, 2020 TABLE OF CONTENTS
Page Number

REPORT OF INDEPENDENT AUDITORS	1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-6
BASIC FINANCIAL STATEMENTS:
Government-wide Financial Statements:
Statement of Net Position	7
Statement of Activities	8
Fund Financial Statements:
Balance Sheet – Governmental Funds	9
Reconciliation of Total Governmental Fund Balances
to Net Position of Governmental Activities	10
Statement of Revenues, Expenditures and Changes in Fund
Balances – Governmental Funds	11
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities	12
Statement of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – General Fund	13
Notes to Financial Statements	14-26
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	27-28
MANAGEMENT LETTER	29-30
INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH
SECTION 218.415, FLORIDA STATUTES	31

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
Sandmine Road Community Development District Polk County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of Sandmine Road Community Development District as of and for the six months ended September 30, 2020, 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
Sandmine Road 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 and each major fund of Sandmine Road Community Development District, as of September 30, 2020, and the respective changes in financial position and the budgetary comparison for the General Fund for the six months 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 Discussion and Analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated June 28, 2021 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 Sandmine Road Community Development District’s internal control over financial reporting and compliance.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 28, 2021
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Management’s discussion and analysis of Sandmine Road Community Development District (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 the change in net position. Governmental activities are primarily supported by special assessments.

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. Assets, liabilities, and net position are reported for all Governmental 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. Governmental activities financed by the District include general government and debt service.

Fund financial statements present financial information for governmental funds. 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.

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. 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. 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 construction in progress, are reported in the statement of net position. All liabilities, including principal outstanding on bonds are included. In the statement of activities, 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, 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 6 months ended September 30, 2020.

The District’s total liabilities exceeded total assets by $(346,507) (net position).
Restricted net position was $19,957 and unrestricted net position was $(366,464).

Governmental activities revenues totaled $59,846 while governmental activities  expenses totaled $406,353.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District

Generally schedules provide a summary of the assets, liabilities and net position and revenues, expenses and changes in net position of the District and is presented by category for comparison purposes. The District was established on April 7, 2020, and therefore, there are no prior year numbers for comparison.

Capital Assets Activity

The following schedule provides a summary of the District’s capital assets as of September 30, 2020.

Governmental
 	Activities	 2020

Construction in progress	 $	3,359,085 

Current year activity consisted of additions to construction in progress of $3,359,085.

General Fund Budgetary Highlights

Budgeted expenditures exceeded actual expenditures primarily due to lower supervisor fees and engineering fees than were anticipated.

The September 30, 2020 budget was not amended.

Debt Management

Governmental Activities debt includes the following:

In August 2020, the District issued $6,590,000 Series 2020 Special Assessment Bonds. These bonds were issued to finance a portion of the cost of acquisition and construction of the Phase One Project. As of September 30, 2020, the balance outstanding was
$6,590,000.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Economic Factors and Next Year’s Budget

Sandmine Road Community Development District is in the process of finishing construction within the District. The District does not expect any other economic factors to have a significant effect on the financial position or results of operations of the District in fiscal year 2021.

Request for Information

The financial report is designed to provide a general overview of Sandmine Road 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 Sandmine Road Community Development District, Governmental Management Services, 219 East Livingston Street, Orlando, Florida 32801.

ASSETS	
Current Assets	
Cash	
Due from developer	
Prepaid expenses	
Total Current Assets	
Non-Current Assets	
Restricted Assets	
Investments	
Capital Assets, Not Being Depreciated	
Construction in progress	
Total Non-Current Assets	
Total Assets	

LIABILITIES	
Current Liabilities	
Accounts payable	
Unavailable revenues	
Accrued interest	
Bonds payable, current	
Total Current Liabilities	
Non-Current Liabilities	
Bonds payable, net	
Total Liabilities	

NET POSITION	
Restricted for debt service	
Unrestricted	
Total Net Position	

See accompanying notes to financial statements.

Governmental Activities

$	4,477	
2,846	
 	5,000 	
 	12,323 	

2,873,581

 	3,359,085 	
 	6,232,666 	
 	6,244,989 	

3,984	
5,000	
19,314	
 	130,000 	
 	158,298 	

 	6,433,198 	
 	6,591,496 	

19,957	
 	(366,464)	
  $	(346,507)	

Functions/Programs	Expenses

$	(49,538)	
$	52,877	
$	-	
$	3,339	
-	-	6,969	6,969	
 	(356,815)	 	- 	 	- 	 	(356,815)	
  $	(406,353)	  $	52,877 	  $	6,969 	(346,507)	

Governmental Activities General government Physical environment Interest and other charges
Total Governmental Activities

Program Operating Grants and

Net (Expense)	
Revenues and	
Changes in	
Revenues	Net Position	
Capital Grants
and	Governmental Contributions		Activities	

Contributions

 	

Change in Net Position		(346,507) Net Position - April 7, 2020	 		- 
Net Position - September 30, 2020	 $	(346,507)

See accompanying notes to financial statements.

Sandmine Road Community Development District BALANCE SHEET –
GOVERNMENTAL FUNDS
September 30, 2020

Total	
Governmental	
 	Funds		

ASSETS	
Cash	
Due from developer	
Prepaid expenses	
Restricted assets	
Cash and investments, at fair value	
Total Assets	

 	General	 Debt Service   Capital Projects

$	4,477	$	-	$	-	
2,846	-	-	
5,000	-	-	

$	4,477	
2,846	
5,000	

 	- 	221,130 	2,65	
  $	12,323      $	221,130      $	2,65	

 	2,873,581 	
   $	2,885,904 	

2,451 
2,451 

LIABILITIES AND FUND BALANCES	
LIABILITIES	
Accounts payable	
Unearned revenues	
Total Liabilities	

$	3,984	
 	5,000 	
 	8,984 	

$	3,984	$	-	$	-
 	5,000 	- 	- 
 	8,984 	- 	- 

FUND BALANCES	
Nonspendable - prepaid expenses	
Restricted:	
Debt service	
Capital projects	
Unassigned	
Total Fund Balances	
Total Liabilities and Fund Balances	

5,000	-	-	5,000

-	221,130	
-	-	2,65	
 	(1,661) 	-     		
 	3,339 	221,130 	2,65	
$	12,323	$	221,130	$	2,65	

-	221,130
2,451	2,652,451
- 		(1,661) 2,451 	2,876,920 

See accompanying notes to financial statements.

2,451

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$	2,885,904

Sandmine Road Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2020

Total Governmental Fund Balances

Amounts reported for governmental activities in the Statement of Net Position	
are different because:	

Capital assets, not being depreciated, construction in progress, used in	
governmental activities are not current financial resources and therefore,	
are not reported at the governmental fund level.	

$	2,876,920

3,359,085

(6,563,198)

Accrued interest expense for long-term debt is not a current financial use	
and therefore, is not reported at the governmental fund level.	

Long-term liabilities, including bonds payable, $(6,590,000), net of bond	
discount, net, $26,802, are not due and payable in the current period and	
therefore, are not reported at the governmental fund level.	

 	(19,314)

Net Position of Governmental Activities	 $	(346,507)

See accompanying notes to financial statements.

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Sandmine Road Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
For the Period Ended September 30, 2020

Total	
Governmental	
 	Funds		

Series	Series
2019	2019
 	General	 Debt Service Capital Projects

Revenues	
Developer contributions	

49,538	
-	

  $	52,877 

Expenditures	
Current	
General government	
Capital outlay	
Debt service	
Other debt service costs	
Total Expenditures	

  $	- 

   $	6,969 

-	
-	

- 3,359,085

 	- 	
 	- 	

 	337,425 
 	3,696,510 

  $	59,846 

49,538	
3,359,085	

 	337,425 	
 	3,746,048 	

 	- 	
 	49,538 	

Excess of revenues over/(under) expenditures	 	3,339 	- 	(3,689,541) 	(3,686,202)

Other Financing Sources/(Uses)	
Issuance of long-term debt	
Bond discount	

-	
 	- 	

221,130	
 	- 	

6,368,870	
 	(26,878)	

6,590,000	
 	(26,878)	

 	6,341,992     		6,563,122 	

Total Other Financing Sources/(Uses)	 	- 	221,130 

2,652,451	2,876,920	

Net Change in Fund Balances	3,339	221,130

Fund Balances - April 7, 2020	 	- 	- 	- 	- 

Fund Balances - September 30, 2020

$	3,339

$	221,130

$ 2,652,451

$	2,876,920

See accompanying notes to financial statements.

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AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For the Period Ended September 30, 2020

Net Change in Fund Balances - Total Governmental Funds	$

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

The issuance of long-term debt is recognized as an other financing source at the	
fund level. At the government-wide level it is reflected as an increase in	
long-term liabilities.	

Bond discount associated with the issuance of long-term debt, is a reduction in an	
other financing use at the fund level, but at the government-wide level it is included	
in long-term liabilities.	

Bond discount does not current resources and therefore, is amortized over the	
life of the bonds as interest expense at the government-wide level. This is the	
current year amortization.	

2,876,920

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 of capital outlay	
in the current period.	3,359,085	

(6,590,000)

26,878

(76)

At the fund level interest is recognized when due. At the government-wide level	
interest is accrued on outstanding debt. This is the current year accrual.	

 	(19,314)

Change in Net Position of Governmental Activities	 $	(346,507)

FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
For the Period Ended September 30, 2020

Variance with	
Final Budget	
Positive	
(Negative)	

Original	
Budget	

Final	
Budget	

Actual

Revenues	
Developer contributions	

  $ 65,447 

  $ 65,447 

   $ 52,877 

  $	(12,570)

Expenditures	
Current	
General government	

 	65,447	 	65,447	 	49,538	 	15,909 

Net Change in Fund Balances	 	-	 	-	 	3,339	 	3,339 Fund Balances - April 7, 2020	 	-	 	-	 		-	 		- 

Fund Balances - September 30, 2020

   $	- 

   $	- 

   $	3,339 

   $	3,339 

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of Sandmine Road Community Development District (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 7, 2020, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the  "Act"), by Ordinance No. 20-023 of the Board of County Commissioners of Polk County, 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 district roads, landscaping, and other basic infrastructure projects within or outside the boundaries of the Sandmine Road Community Development District. The District is governed by a five-member Board of Supervisors. The District operates within the criteria established by Chapter 190.

As required by GAAP, these financial statements present the Sandmine Road 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 in Governmental Accounting Standards 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

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

Government-wide Financial Statements

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Government- wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include all the governmental activities of the primary government. The effect of interfund activity has been removed from these statements.

Governmental activities are supported by developer contributions.  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.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2. Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Governmental Funds
The District reports 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.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Governmental Funds (Continued)
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 current assets. 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 an other financing source rather than as a fund liability.

Debt service expenditures are recorded only when payment is due.

Basis of Presentation

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.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation (Continued)

Governmental Major Funds (Continued)

Debt Service Fund – The Debt Service Fund accounts for debt service requirements to retire Special Assessment Bonds, which were used to finance the construction of certain improvements within the District.

Capital Projects Fund – The Capital Projects Fund accounts for acquisition and construction of infrastructure improvements located within the boundaries of the District.

Non-current Governmental Assets/Liabilities

GASB Statement 34 requires that non-current governmental assets, such as construction in progress, 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;

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Cash and Investments (Continued)

4. Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency.

Cash and investments include time deposits, certificates of deposit, money market funds, and all highly liquid debt instruments with original maturities of three months or less.

Restricted Assets

Certain net position of the District are 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 net position, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position.

Capital Assets

Capital assets, which include construction in progress, are reported in the governmental activities column.

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 one year. 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.

Bond Discounts

Bond discounts associated with the issuance of bonds are amortized over the life of the bonds using the straight-line method of accounting.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general and debt service funds. As a result, deficits in the budget columns of the accompanying financial statements may occur.

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, $2,876,920, differs from “net position” of governmental activities, $(346,507), 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 below:

Capital related items

When capital assets (land, buildings and improvements, infrastructure and equipment 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.

Construction in progress	$	3,359,085

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, 2020 were:

Bonds payable	$	(6,590,000)	
Bond discount, net	 	26,802	
Bonds payable, net	$	(6,563,198)	

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	$	(19,314)

Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities

The “net change in fund balances” for government funds, $2,876,920, differs from the “change in net position” for governmental activities, $(346,507), 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	$	3,359,085

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

When long-term debt is issued for governmental activities, the resources obtained are recognized as an other financing source at the fund level. At the government-wide level, however, the new debt increases non-current liabilities. Also, interest is recognized when due at the fund level, but is accrued at the government-wide level.

Issuance of long-term debt	$ (6,590,000)	
Bond discount	$	26,878	
Accrued interest	$	(19,314)	
Amortization of bond discount	$	(76)	
NOTE C – CASH AND INVESTMENTS		
All deposits are held in qualified public depositories balance sheet as cash and investments.	and are included on the accompanying	
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, 2020, the District's bank balance and carrying value were
$4,477. 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.

Investments

As of September 30, 2020, the District had the following investments and maturities:

 	Investment		 Maturity Date	 Fair Value 
First American Govt Obligation Fund	N/A	 $ 2,873,581 

NOTE C – CASH AND INVESTMENTS (CONTINUED)

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 use 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 listed above is a Level 1 asset. 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. The investment in First American Government Obligation Funds is rated AAAm by Standards and Poors.

Credit Risk

The District has no investment policy that would further limit its investment choices. Concentration of Credit Risk
The District places no limit on the amount it may invest in any one fund.

The types of deposits and investments and their level of risk exposure as of September 30, 2020 were typical of these items during the fiscal year then ended.

NOTE D – CAPITAL ASSETS

Capital Asset activity for the year ended September 30, 2020 was as follows:

Governmental activities:
Capital assets, not being depreciated:

Balance	Balance
April 7,	September 30,
 	2020	 	Additions	 	Deletions	 	2020	

Construction in progress

  $	- 

  $	3,359,085 

  $	- 

  $	3,359,085 

   

NOTE E – LONG-TERM DEBT

The following is a summary of debt activity for the District for the period ended September 30, 2020:

Bonds payable at April 7, 2020 Issuance of long-term debt	$	-
 	6,590,000 	
Bonds payable at September 30, 2020	6,590,000	
Bond discount, net	 	(26,802)	
Bonds Payable, Net at September 30, 2020	$	6,563,198 	
District debt is comprised of the following at September 30, 2020:		
Special Assessment Bonds		
$6,590,000 Series 2020 Special Assessment Bonds maturing through 2050, at various interest rates between 2.625% and 3.75%, payable May 1 and November 1. Current portion is
$130,000.	

$	6,590,000	

NOTE E – LONG-TERM DEBT (CONTINUED)

The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2020 are as follows:

Year Ending
   September 30, 		
 	Principal			
 	Interest			

 	Total		
2021		$	130,000		$	155,152		$	285,152	
2022		135,000		228,350		363,350	
2023		140,000		224,806		364,806	
2024		140,000		221,131		361,131	
2025		145,000		217,456		362,456	
2026-2030		800,000		1,019,813		1,819,813	
2031-2035		945,000		877,456		1,822,456	
2036-2040		1,135,000		692,763		1,827,763	
2041-2045		1,375,000		466,875		1,841,875	
2046-2050		 	1,645,000 		189,750		1,834,750	
Totals		  $	6,590,000 		  $	4,293,552 		
  $ 10,883,552 	

Summary of Significant Bonds Resolution Terms and Covenants Significant Bond Provisions
The Series 2020 Bonds are subject to redemption at the option of the District prior to their maturity, in whole or in part, at any time after May 1, 2031 a price equal to the par amount of the Series 2020 Bonds thereof, together with accrued interest to the date of redemption. The  Series 2020 are subject to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Trust Indenture.

The Trust Indenture established certain amounts be maintained in a reserve account. In addition, the Trust Indenture 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 agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements.

NOTE E – LONG-TERM DEBT (CONTINUED)

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:

Reserve Funds – The Series 2020 Reserve Account was funded from the proceeds of the Series 2020 Bonds in an amount equal to 50 percent of the maximum annual debt service for the Series 2020 Bonds. Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture.

The following is a schedule of required reserve balances as of September 30, 2020:

Reserve	Reserve
 	Balance	 Requirement 

Special Assessment Bonds, Series 2020

$	181,859

$	181,859

NOTE F – ECONOMIC DEPENDENCY

The Developers own a significant portion of land within the District. The District’s activity is dependent upon the continued involvement of the Developers, the loss of which could have a material adverse effect on the District’s operations. At September 30, 2020, all board members are affiliated with the Developers.

NOTE G – 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 for which the government carries commercial insurance. There were no claims or settled claims from these risks that  have exceeded commercial insurance coverage.

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
Sandmine Road Community Development District Polk 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 Sandmine Road Community Development District, as of and for the 6 months ended September 30, 2020, and the related notes to the financial statements, and have issued our report thereon dated June 28, 2021.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Sandmine Road Community Development District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Sandmine Road Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Sandmine Road Community Development 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 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.

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To the Board of Supervisors
Sandmine Road Community Development District

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Sandmine Road 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 PL
Fort Pierce, Florida June 28, 2021

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MANAGEMENT LETTER

To the Board of Supervisors
Sandmine Road Community Development District Polk County, Florida

Report on the Financial Statements

We have audited the financial statements of the Sandmine Road Community Development District as of and for the 6 months ended September 30, 2020, and have issued our report thereon dated June 28, 2021.

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 June 28, 2021, 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. This is the initial 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 Sandmine Road 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 Sandmine Road 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
Sandmine Road Community Development District

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 Sandmine Road Community Development District. It is management’s responsibility to monitor the Sandmine Road 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, 2020.

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 June 28, 2021

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INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES

To the Board of Supervisors
Sandmine Road Community Development District Polk County, Florida

We have examined Sandmine Road Community Development District's compliance with Section 218.415, Florida Statutes during the 6 months ended September 30, 2020. Management is responsible for Sandmine Road Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on Sandmine Road 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 Sandmine Road 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 Sandmine Road Community Development District’s compliance with the specified requirements.

In our opinion, Sandmine Road Community Development District complied, in all material respects, with the aforementioned requirements during the 6 months ended September 30, 2020.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 28, 2021

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