Towne Park Community Development District

FINANCIAL STATEMENTS

September 30, 2017

Towne Park Community Development District
Table of Contents September 30, 2017

REPORT
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	22
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	23
Management Letter	25
Attestation Report on Compliance with Section 218.415 Florida Statutes	27

INDEPENDENT AUDITORS' REPORT

To the Board of Supervisors
Towne Park Community Development District Polk County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of Towne Park Community Development District (hereinafter referred to as “District”), as of and for the year ended September 30, 2017, 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, 2017, 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 1, 2018, 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 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 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 1, 2018

Management’s Discussion And Analysis

Our discussion and analysis of the Towne Park Community Development District’s financial performance provides an overview of the District’s financial activities for the fiscal year ended September 30, 2017. Please read it in conjunction with the District’s financial statements, which begin on page 8.

FINANCIAL HIGHLIGHTS

At September 30, 2017, the liabilities of the District exceed its assets by approximately $135,000 (deficit net position).

During the fiscal year ended September 30, 2017, the District incurred approximately $146,000 of interest expenditures on outstanding long‐term bonds.

During the fiscal year ended September 30, 2017, the District established infrastructure of approximately $1,846,000.

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 9 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,	2017	2016	Change	
Assets
Current and other assets	
$	289,978	
$	2,056,118	
$ (1,766,140)	
Construction in progress	2,701,239	855,069	1,846,170	
Total assets	$	2,991,217	$	2,911,187	$	80,030	
Liabilities and deferred inflows of resources
Current liabilities	
$	70,082	
$	221,200	
$	(151,118)	
Other liabilities	3,056,660	3,037,041	19,619	
Total liabilities	3,126,742	3,258,241	(131,499)	
Deferred inflows of resources
Deferred inflows of resources	‐	4,820	(4,820)

Net position
Net investment in capital assets
Restricted for:	(57,445)	(396,962)	339,517	
Capital projects	(5,039)	169,509	(174,548)	
Unrestricted	(73,041)	(124,421)	51,380	
Total net position (deficit)	(135,525)	(351,874)	216,349 Total liabilities, deferred inflows of resources and

net position

$	2,991,217	$

2,911,187	$

80,030

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

During the fiscal year ended September 30, 2017, total assets increased by approximately $80,000, while total liabilities decreased by approximately $131,000. The net increase in assets is primarily due to construction in progress. The net decrease in liabilities is due payment on outstanding construction contracts in the current year.

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

Year ended September 30,	2017	2016	Change	
Revenues:
Program revenues: Charges for services	

$	118,723	

$	‐	

$	118,723	
Grants and contributions	319,172	46,348	272,824	
General revenues:				
Interest and other revenues	‐	3	(3)	
Total revenues	437,895	46,351	391,544	
Expenses:				
General government	50,985	56,797	(5,812)	
Cost of issuance	‐	220,921	(220,921)	
Maintenance and operations	9,612	‐	9,612	
Interest	160,949	49,541	111,408	
Total expenses	221,546	327,259	(105,713)	
Change in net position	216,349	(280,908)	497,257	
Net position (deficit), beginning	(351,874)	(70,966)	(280,908)	
Net position (deficit), ending	$	(135,525)	$	(351,874)	$	216,349	

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

Revenues increased from the prior year while expenses decreased over prior year by approximately
$392,000 and $106,000, respectively. The increase in revenues is primarily due to an increase in funding needed to pay for the debt service and capital expenditures of the District. The decrease in expenses is primarily due to the District not incurring any bond issuance related costs in the current year. The overall result was a $216,349 increase in net position for fiscal year 2017.

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 $265,000, which is a decrease from last year’s balance that totaled $1.9 million. Significant transactions are discussed below.

During the fiscal year ended September 30, 2017, the District incurred approximately $146,000 of interest expenditures on outstanding long‐term bonds.

During the year ended September 30, 2017, the District incurred capital outlay of approximately
$1,846,000 towards construction of infrastructure.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2017, the District had approximately $2.7 million invested in capital assets (under construction). This amount represents a net increase of approximately $1.8 million from fiscal year 2016 total.

September 30,	2017	2016	Change	

Capital assets not being depreciated	
$	2,701,239	
$	855,069	
$	1,846,170	

Net capital assets	
$	2,701,239	
$	855,069	
$	1,846,170	

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

Debt

At September 30, 2017, the District had approximately $3.0 million of bonds outstanding. A listing of debt amounts outstanding for the current and prior year is as follows:
September 30,	2017	2016	Change		

Series 2016 bonds	
$	2,960,000	
$	2,960,000	
$	
‐	
Due to developer	77,041	77,041		‐	

Total	
$	3,037,041	
$	3,037,041	
$	
‐	

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 22.

The District experienced unfavorable variance in revenues and favorable variance in expenditures as compared to the budget in the amount of $147,474 and $149,403, respectively. The variances occurred primarily due to anticipated budgeted operating expenditures, including certain maintenance and operations expenditures, which were not incurred during the year and the related impact on Developer funding.

FUTURE FINANCIAL FACTORS

Towne Park 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. Developer contribution and off‐roll assessment rates for fiscal year 2018 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 Towne Park Community Development District’s management company at 12051 Corporate Blvd, Orlando, Florida 32817.

Basic Financial Statements

Statement of Net Position

September 30,	2017	
	Governmental	
	Activities	
Assets
Cash and cash equivalents	
$	263,907	
Accounts receivable	23,283	
Prepaid expenses	2,788	
Construction in progress	2,701,239	
Total assets	2,991,217

Liabilities
Accounts payable	25,082	
Accrued interest payable	64,619	
Non‐current liabilities:
Due to the Developer	
77,041	
Due within one year	45,000	
Bonds payable	2,915,000	

Total liabilities	
3,126,742	

Net position		
Net investment in capital assets	(57,445)	
Restricted for:
Capital projects	
(5,039)	
Unrestricted	(73,041)	

Total net position (deficit)	$	(135,525)

Statement of Activities

Year ended September 30,

2017

Program Revenues

Net (Expense) Revenue and Changes in Net Position

Functions/Programs	

Expenses	
Charges for Services	Operating	Capital
Grants and	Grants and	Governmental Contributions Contributions		Activities	
Primary government:				
Governmental activities:				
General government	$ (50,985)	$	‐	$	297,660	$	‐	$	246,675	
Maintenance and				
operations	(9,612)	‐	20,304	‐	10,692	
Interest	(160,949)	118,723	346	862	(41,018)	

Total governmental activities

$ (221,546) $

118,723	$

318,310	$

862

216,349

Change in net position	216,349	
Net position (deficit) ‐ beginning of year	(351,874)	

Net position (deficit) ‐ end of year	
$	(135,525)	

Balance Sheet – Governmental Funds

September 30,

2017

General	Debt Service

Capital Projects

Total Governmental Funds

Assets		
Cash and cash equivalents	$	4,089	$	257,386	$	2,432	$	263,907	
Accounts receivable	7,951	‐	15,332	23,283	
Prepaid expenditures	2,788	‐	‐	2,788	

Total assets

$	14,828	$

257,386	$

17,764	$

289,978

Liabilities and fund balances
Liabilities
Accounts payable	$	10,738	$	‐	$	14,344	$	25,082	
Total liabilities	10,738	‐	14,344	25,082	

Fund balance					
Nonspendable	2,788	‐	‐	2,788	
Restricted for debt service	‐	257,386	‐	257,386	
Restricted for capital projects	‐	‐	3,420	3,420	
Unassigned	1,302	‐	‐	1,302	
Total fund balance	4,090	257,386	3,420	264,896	

Total liabilities and fund balance	
$	14,828	
$	257,386	
$	17,764	
$	289,978	

Reconciliation of the Balance Sheet of Governmental Funds to the Statements of
Net Position

September 30,	2017	

Total fund balances, governmental funds	
$	264,896	
Capital assets used in governmental activities are not financial resources and therefore are not reported in the fund level statements.	
2,701,239	
Developer advances are recorded as a liability on the Statement of Net		
Position but are treated as other financing sources on the fund level		
financial statements.	(77,041)	
Liabilities not due and payable from current resources, including accrued interest, are not reported in the fund level statements.	
(3,024,619)	
Total net position (deficit) ‐ governmental activities	
$	(135,525)	

Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds

Year ended September 30,			2017		
				Total	
		Debt	Capital	Governmental	
	General	Service	Projects	Funds	
Revenues
Developer contributions	
$	62,526	
$	‐	
$ 255,438	
$	317,964	
Assessments	‐	118,723	‐	118,723	
Interest and other revenues	‐	346	862	1,208	
Total revenues	62,526	119,069	256,300	437,895	

Expenditures
Current:
General government	50,985	‐	‐	50,985	
Maintenace	9,612	‐	‐	9,612	
Debt service:
Interest	
‐	
145,871	
‐	
145,871	
Capital outlay	‐	‐	1,846,170	1,846,170	
Total expenditures	60,597	145,871	1,846,170	2,052,638	

Excess (deficit) of revenues over expenditures	

1,929	

(26,802)	

(1,589,870)	

(1,614,743)	
Other Financing Sources (Uses)
Transfers in	
‐	
10,687	
‐	
10,687	
Transfers out	‐	‐	(10,687)	(10,687)	
Total other financing sources (uses)	‐	10,687	(10,687)	‐	

Net change in fund balances	
1,929	
(16,115)	
(1,600,557)	
(1,614,743)	
Fund balances, beginning of year	2,161	273,501	1,603,977	1,879,639	

Fund balances, end of year	
$	4,090	
$ 257,386	
$	3,420	
$	264,896	

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Year ended September 30,	2017
Net change in fund balances ‐ governmental funds	$	(1,614,743)

Capital outlay, reported as expenditures in the government funds, is shown
as capital assets on the Statement of Net Position.	1,846,170
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.	(15,078)

Change in net position of governmental activities

$	216,349

NOTE 1: NATURE OF ORGANIZATION

The Towne Park Community Development District (the “District”) was established on November 3, 2014 pursuant to Chapter 190, Florida Statutes, by Polk County Ordinance 5476. The District has among other things, the power to manage basic services for community development, power to borrow money and issue bonds, and the power to levy ad valorem taxes 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 a portion of the 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 on an at large basis by the owners of the property within the District. Certain supervisors are affiliated with the Developer of the District, TP Land Investors, LLC. 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:
Assessing and levying 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, 2017, 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.

Developer contributions 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 for the Series 2016 Bonds.

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, 2017, 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.

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 will be depreciated using the straight‐line method over the estimated useful lives. Estimated lives for financial reporting purposes once will be determined with items are placed into service.

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. Due to developer amounts represent developer advances that are expected to be repaid upon the issuance of long‐term bonds.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt are reported as other financing uses. Issuance costs, whether or note from the actual debt proceeds received, are reported as current period expenditures.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position 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, 2017.

In addition to liabilities, the accompanying statements 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, 2017.

Fund Equity

Net position in the government‐wide financial statements is categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents net 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.

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.

NOTE 3: CONCENTRATION

A significant portion of the District’s activity going forward is dependent upon the continued involvement of the Developer TP Land Investors, LLC, which currently owns the majority of the assessable property located within the District boundaries. The loss of support could potentially have a material adverse effect on the District’s operations.

During the current year, the Developer contributed approximately $318,000 to the District for operations and maintenance costs as well as capital expenditures. As of September 30, 2017, a total of
$22,295 is due from the Developer and a total of $77,041 is due to the Developer. The due to Developer amount is related to long‐term developer advances to fund the construction of infrastructure. The activity for the year is detailed in Note 5.

NOTE 4: CAPITAL ASSETS

The following is a summary of changes in the capital assets for the year ended September 30, 2017:

	Beginning
Balance	
Additions	
Reductions	Ending
Balance	
Governmental Activities:
Capital assets not being depreciated
Construction in progress	

$ 855,069	

$ 1,846,170	

$	‐	

$ 2,701,239	
Total capital assets, not being depreciated	855,069	1,846,170	‐	2,701,239	

Governmental activities capital assets, net	
$ 855,069	
$ 1,846,170	
$	‐	
$ 2,701,239	

The total projected cost of the infrastructure has been estimated at approximately $8.8 million, of which approximately $2.45 million was expected to be financed with the proceeds from the 2016 Bond Series with the remainder to be funded by the Developer. The infrastructure will include stormwater management, water and sewer facilities, roadways, landscaping and hardscaping and amenities. Upon completion certain assets will be conveyed to other entities for ownership and/or maintenance.

NOTE 5: LONG‐TERM LIABILITIES

On June 13, 2016, the District issued $2,960,000 of Special Assessment Bonds, Series 2016 consisting of
$675,000 2016 Term Bonds due on November 1, 2028 with a fixed interest rate of 5.00%, and
$2,285,000 of 2016 Term Bonds due on November 1, 2046 with a fixed interest rate of 5.75%. The 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 is paid serially commencing on November 1, 2017 through November 1, 2046.

NOTE 5: LONG‐TERM LIABILITIES (Continued)

The Bond Indenture has certain restrictions and requirements relating principally to the use of proceeds to pay for infrastructure improvements and the procedure 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 debt service reserve requirement. The District is in compliance with the requirements of the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in the reserve account to meet the debt service reserve requirement as defined in the Indenture. The requirement has been met for the fiscal year ended September 30, 2017.

Long‐term liability activity for the year ended September 30, 2017 was as follows:

Beginning	Ending	Due Within
Balance	Additions	Reductions	Balance	One Year

Governmental Activities
Bonds Payable:
Series 2016	$ 2,960,000	$	‐	$	‐	$ 2,960,000	$	45,000	
Due to Developer	77,041	‐	‐	77,041	‐	

$  3,037,041	$

−	$	‐

$  3,037,041	$

45,000

At September 30, 2017 , the scheduled debt service requirements on long‐term debt were as follows:

Year Ending September 30,	
Principal	
Interest	Total Debt
Service	
2018	$	45,000	$	164,013	$	209,013	
2019	45,000	161,763	206,763	
2020	45,000	159,513	204,513	
2021	50,000	157,138	207,138	
2022	50,000	154,637	204,637	
2023‐2027	300,000	730,938	1,030,938	
2028‐2032	380,000	643,813	1,023,813	
2033‐2037	500,000	518,937	1,018,937	
2038‐2042	670,000	352,187	1,022,187	
2043‐2046	875,000	131,531	1,006,531	
	
$ 2,960,000	
$ 3,174,469	
$	6,134,469	

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. The District has not incurred any losses or received any insurance claims exceeding the commercial coverage in the previous three years.

NOTE 7: MANAGEMENT COMPANY

The District has contracted with a 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.

Required Supplemental Information (Other Than MD&A)

Towne Park Community Development District Budget to Actual Comparison Schedule – General Fund

Year ended September 30,

Original and

2017

Variance with

 	Final Budget	Actual Amounts	Final Budget	 Revenues
Developer contributions	$	210,000	$	62,526	$	(147,474)	
Total revenues	210,000	62,526	(147,474)	

Expenditures
General government	

140,000	

50,985	

89,015	
Maintenance and operations	70,000	9,612	60,388	
Total expenditures	210,000	60,597	149,403	

Excess of revenues over expenditures	
$	‐	
$	1,929	
$	1,929	

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
Towne Park 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 the governmental activities and each major fund of Towne Park Community Development District (hereinafter referred to as the “District”), as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report dated June 1, 2018.

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 of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.

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

Our consideration of internal control was for the limited purpose described in the 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 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 result 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.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida June 1, 2018

MANAGEMENT LETTER

To the Board of Supervisors
Towne Park Community Development District Polk County, Florida

Report on the Financial Statements

We have audited the financial statements of Towne Park Community Development District (“District”) as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated June 1, 2018.

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 Florida Auditor General.

Other Reports and Schedule

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 Accountants’ 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 1, 2018, should be considered in conjunction with this management letter.

Prior Audit Findings

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

Annual Financial Report

Section 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and communicate the results of our determination as to whether the annual financial report for the District for the fiscal year ended September 30, 2017, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2017. In connection with our audit, we determined that these two reports were in agreement.

Additional Matters

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

Purpose of this Letter

Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, 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 1, 2018

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Supervisors
Towne Park Community Development District Polk County, Florida

We have examined Towne Park Community Development District’s compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2017. Management is responsible for the District’s compliance with those 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 perform the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe 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, 2017.

This report is intended solely for the information and use of Board of Supervisors, 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 1, 2018