PBR Community

Development District

FINANCIAL STATEMENTS

September 30, 2018

CARR
CRI RIGGS &
IN GRAM

CPAs and Advisors

CRlcpa.com

PBR Community Development District

Table of Contents

September 30, 2018

REPORT

Independent Auditors’ Report

FINANCIAL STATEMENTS

Management’s Discussion And Analysis (required supplemental information)

Basic Financial Statements

Government‐Wide Financial Statements

PAGE
---

1

3

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	
Independent Accountants’ Report on Compliance with Section 218.415 Florida Statutes	27	

CRI CARR

RIGGS &
IN GRAM

CPAs and Advisors

Carr, Riggs & Ingram, LLC

Certified Public Accountants

500 Grand Boulevard

Suite 210

Miramar Beach, Florida 32550

INDEPENDENT AUDITORS’ REPORT

To the Board of Supervisors

PBR Community Development District

West Melbourne, Florida

(850)	837-3141	
(850)	654-4619	
CRlcpa.com	

(fax)

Report on the Financial Statements

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

Management’s Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinions

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

Other Matters

Required Supplementary Information

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

Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2019, on our consideration of the District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida

June 30, 2019

‐ 2 ‐

Management’s Discussion And Analysis

PBR Community Development District

Management’s Discussion and Analysis

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

FINANCIAL HIGHLIGHTS

	At September 30, 2018, the liabilities of the District exceed its assets by approximately $618,000 (deficit).

	During the fiscal year ended September 30, 2018, the District incurred approximately $834,000 of interest expenditures and repaid principal of $210,000.

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.

‐ 3 ‐

PBR Community Development District

Management’s Discussion and Analysis

Reporting the District’s Most Significant Funds

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

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

THE DISTRICT AS A WHOLE

The following table reflects the condensed Statement of Net Position and is compared to the prior year.
September 30,		2018		2017		Change	
Assets							
Current and other assets	$	889,970	$	880,183	$	9,787	
Capital assets, net		18,202,394		18,446,935		(244,541)	
Total assets	$	19,092,364	$	19,327,118	$	(234,754)	
							
Liabilities							
Current liabilities	$	511,079	$	502,014	$	9,065	
Other liabilities		19,278,579		19,498,579		(220,000)	
Total liabilities		19,789,658		20,000,593		(210,935)	
Deferred Inflows of Resources							
Deferred revenue		7,587		‐		7,587	
Total deferred inflows of resources		7,587		‐		7,587	
Net position							
Net investment in capital assets		(1,017,714)		(983,173)		(34,541)	
Restricted for:							
Debt service		305,128		300,491		4,637	
Unrestricted		7,705		9,207		(1,502)	
Total net position (deficit)		(704,881)		(673,475)		(31,406)	
Total liabilities, deferred inflows of resources							
and net position	$	19,092,364	$	19,327,118	$	(234,754)	

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

‐ 4 ‐

PBR Community Development District

Management’s Discussion and Analysis

During fiscal year ended September 30, 2018, total assets and liabilities decreased by approximately $235,000 and $211,000, respectively, while deferred inflows of resources did not materially change from prior year. The decrease in assets is primarily due to the current year depreciation expense. The decrease in liabilities is primarily due to the repayment of outstanding long‐term bond principal.

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

Year ended September 30,		2018		2017		Change	
Revenues:							
Program revenues:							
Charges for services	$	1,096,438	$	1,138,815	$	(42,377)	
Total revenues		1,096,438		1,138,815		(42,377)	
Expenses:							
General government		297,697		291,218		6,479	
Interest		830,147		775,790		54,357	
Total expenses		1,127,844		1,067,008		60,836	
Change in net position		(31,406)		71,807		(103,213)	
Net position (deficit), beginning		(673,475)		(745,282)		71,807	
Net position (deficit), ending	$	(704,881)	$	(673,475)	$	(31,406)	

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

During fiscal year ended September 30, 2018, total revenues decreased, while total expenses increased by approximately $45,000 and $61,000 from prior year, respectively. The decrease in revenues is due to a decrease in user fee revenue received in the current year. Expenses increased primarily due to an increase in interest amounts in the current year.

THE DISTRICT’S FUNDS

As the District completed the year, its governmental funds (as presented in the balance sheet on page 10) reported a combined fund balance of approximately $955,000, which is an increase from last year’s balance that totaled $803,595. Significant transactions are discussed below.

	During the year ended September 30, 2018, the District incurred approximately $834,000 of interest expenditures and repaid principal of $210,000.

‐ 5 ‐

PBR Community Development District

Management’s Discussion and Analysis

	During the year ended September 30, 2018, the District collected approximately $1.1 million of user fee revenue.

The overall increase in fund balance for the year ended September 30, 2018 totaled $151,377.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2018, the District had approximately $18.2 million invested in capital assets (net of accumulated depreciation). This amount represents a decrease of approximately $245,000 from the fiscal year 2017 total.

A listing of capital assets by major category for the current and prior year follows:

September 30,		2018		2017		Change	
Land and land improvements	$	13,800,656	$	13,800,656	$	‐	
Infrastructure‐ other		6,113,525		6,113,525		‐	
Total, prior to depreciation		19,914,181		19,914,181		‐	
Accumulated depreciation		(1,711,787)		(1,467,246)		(244,541)	
Net capital assets	$	18,202,394	$	18,446,935	$	(244,541)	

More information about the District’s capital assets is presented in Note 3 to the financial statements.

Debt

At September 30, 2018, the District had approximately $19.5 million of long‐term debt outstanding.

This amount represents a decrease of $210,000 from the fiscal year 2017 total.

A listing of debt amounts outstanding for the current and prior year is as follows:

September 30,		2018		2017		Change	
Series 2016A	$	11,500,000	$	11,665,000	$	(165,000)	
Series 2016B		4,965,000		5,010,000		(45,000)	
Deferred Obligation		3,033,579		3,033,579		‐	
	$	19,498,579	$	19,708,579	$	(210,000)	

More information about the District’s long‐term debt is presented in Note 4 to the financial statements.

‐ 6 ‐

PBR Community Development District

Management’s Discussion and Analysis

GOVERNMENTAL FUNDS BUDGETARY HIGHLIGHTS

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

The District experienced an unfavorable variance in revenues as compared to the budget in the amount of $39,034 but a favorable variance in expenditures of $31,694. The variance in expenditures occurred primarily due to anticipated budgeted operating expenditures that were not incurred during the year. Revenues varied in a similar manner because the Developer currently funds the District generally to the extent it makes expenditures.

FUTURE FINANCIAL FACTORS

PBR 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. User fee rates for fiscal year 2019 were established to provide for the operations of the District as well as the necessary debt service requirements.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide a general overview of the District’s finances. If you have questions about this report or need additional financial information, contact the PBR Community Development District’s management company at 12051 Corporate Blvd., Orlando, Florida 32817.

‐ 7 ‐

Basic Financial Statements

	PBR Community Development District	
	Statement of Net Position	
September 30,		2018		
		Governmental		
		Activities	
Assets				
Cash and cash equivalents	$	790,596		
Accounts receivable		91,787		
Prepaid expenses		7,587		
Capital assets:				
Not being depreciated		13,800,656		
Depreciable, net		4,401,738		
Total assets		19,092,364		
Liabilities				
Accounts payable		8,591		
Accrued interest payable		282,488		
Non‐current liabilities:				
Due in less than one year		220,000		
Due in more than one year		19,278,579		
Total liabilities		19,789,658		
Deferred Inflows of Resources				
Deferred revenue		7,587		
Total deferred inflows of resources		7,587		
Net position				
Net investment in capital assets		(1,017,714)		
Restricted for:				
Debt service		305,128		
Unrestricted		7,705		
Total net position (deficit)	$	(704,881)		

The accompanying notes are an integral part of these financial statements.

‐ 8 ‐

PBR Community Development District

Statement of Activities

Year ended September 30,				2018							
									Net (Expense)	
									Revenue and	
											Changes in	
					Program Revenues				Net Position		
						Operating						
				Charges for	Grants and		Governmental	
Functions/Programs		Expenses		Services	Contributions			Activities	
Primary government:													
Governmental activities:													
General government	$	(297,697)	$	51,654	$		‐	$	(246,043)	
Interest		(830,147)		1,044,784			‐			214,637	
Total governmental activities	$	(1,127,844)	$	1,096,438	$		‐			(31,406)	

Change in net position	(31,406)	
Net position (deficit) ‐ beginning of year	(673,475)	
Net position (deficit) ‐ end of year	$   (704,881)	

The accompanying notes are an integral part of these financial statements.

‐ 9 ‐

PBR Community Development District

Balance Sheet – Governmental Funds

September 30,				2018			
						Total	
					Governmental	
		General		Debt Service		Funds	
Assets							
Cash and cash equivalents	$	7,705	$	782,891	$	790,596	
Accounts receivable		8,591		83,196		91,787	
Prepaid expenditures		7,587		‐		7,587	
Total assets	$	23,883	$	866,087	$	889,970	
							
Liabilities and Fund Balance							
Liabilities							
Accounts payable	$	8,591	$	‐	$	8,591	
Total liabilities		8,591		‐		8,591	
Deferred Inflows of Resources							
Deferred revenue		13,425		‐		13,425	
Total deferred inflows of resources		13,425		‐		13,425	
Fund balances							
Nonspendable		7,587		‐		7,587	
Restricted for debt service		‐		866,087		866,087	
Unassigned		(5,720)		‐		(5,720)	
Total fund balances		1,867		866,087		867,954	
Total liabilities and fund balances	$	23,883	$	866,087	$	889,970	

The accompanying notes are an integral part of these financial statements.

‐10‐

PBR Community Development District
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of

Net Position

September 30,		2018		
Total fund balances, governmental funds	$	867,954		
Capital assets used in governmental activities are not financial resources		18,202,394		
and therefore are not reported in the fund level statements.				
Receivables not considered available to pay current expenditures are		5,838		
reported as deferred inflows of resources in the fund level statements.				
Liabilities not due and payable from current resources, including accrued		(19,781,067)		
interest, are not reported in the fund level statements.				
Total net position (deficit) ‐ governmental activities	$	(704,881)		

The accompanying notes are an integral part of these financial statements.

‐11‐

PBR Community Development District Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds

Year ended September 30,				2018			
						Total	
					Governmental	
		General	Debt Service		Funds	
Revenues							
Developer contributions	$	45,816	$	‐	$	45,816	
User fee revenue		‐		1,115,449		1,115,449	
Total revenues		45,816		1,115,449		1,161,265	
Expenditures							
Current:							
General government		48,409		‐		48,409	
Maintenance and operations		4,747		‐		4,747	
Debt service:							
Principal		‐		210,000		210,000	
Interest		‐		833,750		833,750	
Total expenditures		53,156		1,043,750		1,096,906	
Excess (deficit) of revenues over expenditures		(7,340)		71,699		64,359	
Fund balances, beginning of year		9,207		794,388		803,595	
Fund balances, end of year	$	1,867	$	866,087	$	867,954	

The accompanying notes are an integral part of these financial statements.

‐12‐

PBR Community Development District
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund

Balances of Governmental Funds to the Statement of Activities

Year ended September 30,		2018	
Net change in fund balances ‐ governmental funds	$	64,359	
Depreciation  on  capital  assets  is  not  recognized  in  the  fund  financial			
statements but is reported as an expense in the Statement of Activities.		(244,541)	
Revenues are recognized on the fund financial statements when they are			
available to pay current expenditures, but they are reported on a full accrual			
basis in the Statement of Activities.		(64,827)	
Repayment of bond principal is an expenditure in the governmental funds,			
but the repayment reduces long‐term liabilities in the Statement of Net		210,000	
The change in accrued interest between the current and prior year is			
recorded on the Statement of Activities but not on the fund financial		3,603	
Change in net position of governmental activities	$	(31,406)	

The accompanying notes are an integral part of these financial statements.

‐13‐

PBR Community Development District

Notes to Financial Statements

NOTE 1: NATURE OF ORGANIZATION

The PBR Community Development District (the “District”) was established on October 26, 2007 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, by City of West Melbourne Ordinance 2007‐35. The Act provides, among other things, the power to manage basic services for community development, to borrow money and issue bonds, and to levy 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 (the “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. The Board of Supervisors of the District exercise all powers granted to the District pursuant to Chapter 190, Florida Statutes. Certain Board members are affiliated with West Melbourne Town Center, LLC (the "Developer").

The Board has the final responsibility for:
1.	Assessing and levying assessments.
2.	Approving budgets.
3.	Exercising control over facilities and properties.
4.	Controlling the use of funds generated by the District.
5.	Approving the hiring and firing of key personnel.

6.	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 criteria identified, 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.

‐14‐

PBR Community Development District

Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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

Measurement Focus, Basis of Accounting and Basis of Presentation

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

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

60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

Developer contributions, user fee revenue, 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.

‐15‐

PBR Community Development District

Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 year ended September 30, 2018, the District does not report any proprietary funds.

As a general rule, the effect of interfund activity has been eliminated from the government‐wide financial statements.

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

Cash, Deposits and Investments

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

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

The District is authorized to invest in financial instruments as established by Section 218.415, Florida Statutes. The authorized investments include among others direct obligations of the U.S. Treasury; the Local Government Surplus Trust Funds as created by Section 218.405, Florida Statutes; SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency; and interest‐bearing time deposits or savings accounts in authorized financial institutions.

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.

‐16‐

PBR Community Development District

Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Property, plant and equipment of the primary government are depreciated using the straight‐line method over the estimated useful lives. Estimated useful lives for financial reporting purposes are as follows:

Assets	Years

Infrastructure	25

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

Long‐Term Obligations

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

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

Deferred Outflows/Inflows of Resources

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

In addition to liabilities, the statement of financial position or balance sheet – governmental funds will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District has one item, deferred revenue, which qualifies for this treatment at September 30, 2018.

‐17‐

PBR Community Development District

Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fund Equity

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

A.	Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1.

B.	A public hearing is conducted to obtain comments.
C.	Prior to October 1, the budget is legally adopted by the District Board.
D.	All budget changes must be approved by the District Board.

E.	Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

‐18‐

PBR Community Development District

Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Prepaid Expenses

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenditures on the Statement of Net Position. These items will be expensed over the applicable usage period.

Estimates

The preparation of financial statements in accordance 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: CAPITAL ASSETS

The following is a summary of changes in the capital assets for the year ended September 30, 2018:

	Beginning			Transfers and	Ending	
	Balance	Additions	Conveyances	Balance	
Governmental Activities:							
Capital assets not being depreciated							
Land and land improvements	$ 13,800,656	$	‐	$	‐	$ 13,800,656	
Total capital assets, not being depreciated	13,800,656		‐		‐	13,800,656	
Capital assets being depreciated							
Infrastructure	6,113,525		‐		‐	6,113,525	
Total capital assets, being depreciated	6,113,525		‐		‐	6,113,525	
Less accumulated depreciation							
Infrastructure	(1,467,246)		(244,541)		‐	(1,711,787)	
Total accumulated depreciation	(1,467,246)		(244,541)		‐	(1,711,787)	
Total capital assets, being depreciated, net	4,646,279		(244,541)		‐	4,401,738	
Governmental activities capital assets, net	$ 18,446,935	$	(244,541)	$	‐	$ 18,202,394	

Depreciation expense of $244,541 was allocated to general government on the accompanying Statement of Activities.

The total projected cost of the infrastructure improvements was previously estimated at $35.3 million. The land and improvements and infrastructure were acquired from the Developer. Certain improvements have been conveyed to others for maintenance.

‐19‐

PBR Community Development District

Notes to Financial Statements

NOTE 4: LONG‐TERM LIABILITIES

Bonds Payable

In July 2016, the District issued $11,820,000 of Capital Improvement Bonds, Series 2016A and $5,050,000 of Capital Improvement Bonds, Series 2016B each with interest rates of 5.00%. These bonds were issued to finance the remaining outstanding balance of the Series 2010 Note. Interest is paid semiannually on each May 1 and November 1. Principal payments on the $11,820,000 Term Bonds are made serially commencing on May 1, 2017 through May 1, 2048. Principal payments on the $5,050,000 Term Bonds are made serially commencing on May 1, 2017 through May 1, 2056.

Deferred Obligation

Certain costs advanced by the Developer for capital improvements exceeded the original principal amount of the Series 2010 Note. The difference is evidenced by a non‐interest bearing Deferred Obligation payable from excess user fee revenues as they are available. The balance of this deferred obligation totaled approximately $3 million at September 30, 2018.

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

Year Ending September 30,		Principal		Interest		Service	
2019	$	220,000	$	823,250	$	1,043,250	
2020		230,000		812,250		1,042,250	
2021		240,000		800,750		1,040,750	
2022		255,000		788,750		1,043,750	
2023		265,000		776,000		1,041,000	
2024‐2028		1,545,000		3,667,000		5,212,000	
2029‐2033		1,970,000		3,240,250		5,210,250	
2034‐2038		2,520,000		2,695,250		5,215,250	
2039‐2043		3,210,000		2,000,000		5,210,000	
2044‐2048		4,105,000		1,112,500		5,217,500	
2049‐2053		1,100,000		371,250		1,471,250	
2054‐2056		805,000		81,750		886,750	
	$	16,465,000	$	17,169,000	$	33,634,000	

‐20‐

PBR Community Development District

Notes to Financial Statements

NOTE 4: LONG‐TERM LIABILITIES (Continued)

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

		Beginning							
		Balance		Additions		Reductions	Ending Balance	
Governmental Activities									
Bonds Payable:									
Series 2016A	$	11,665,000	$	‐	$	(165,000)	$	11,500,000	
Series 2016B		5,010,000		‐		(45,000)		4,965,000	
Deferred Obligation		3,033,579		‐		‐		3,033,579	
	$	19,708,579	$	‐	$	(210,000)	$	19,498,579	

NOTE 5: RISK MANAGEMENT

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

NOTE 6: 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.

NOTE 7: RELATED PARTY TRANSACTIONS

The Developer contributed $45,816 during the year for operations and maintenance costs in connection with an agreement to fund certain expenditures as they are incurred. Approximately $8,600 is due from the Developer at September 30, 2018. In addition, as detailed in Note 4, the District has a remaining Deferred Obligation payable to the Developer in the amount of $3,033,579.

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

‐21‐

Required Supplemental Information

(Other Than MD&A)

PBR Community Development District

Budget to Actual Comparison Schedule – General Fund

Year ended September 30,				2018			
		Original and			Variance with	
		Final Budget	Actual Amounts		Final Budget	
Revenues							
Developer contributions	$	84,850	$	45,816	$	(39,034)	
Total revenues		84,850		45,816		(39,034)	
Expenditures							
General government		75,450		48,409		27,041	
Maintenance and operations		9,400		4,747		4,653	
Total expenditures		84,850		53,156		31,694	
Excess of revenues over expenditures	$	‐	$	(7,340)	$	(7,340)	

‐22‐

CRI	~l:G::		
	IN GRAM		
			
CPAs and	Advisors		

Carr, Riggs & Ingram, LLC

Certified Public Accountants

500 Grand Boulevard

Suite 210

Miramar Beach , Florida 32550

(850)	837-3141	
(850)	654-4619	
CRlcpa.com	

(fa

x)

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
PBR Community Development District

West Melbourne, 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 PBR Community Development District (hereinafter referred to as the “District”), as of and for the year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated June 30, 2019.

Internal Control Over Financial Reporting

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

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

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

‐23‐

Compliance and Other Matters

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

Purpose of this Report

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

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida

June 30, 2019

‐24‐

CRI	~l:G::		
	IN GRAM		
			
CPAs and	Advisors		

Carr, Riggs & Ingram, LLC

Certified Public Accountants

500 Grand Boulevard

Suite 210

Miramar Beach , Florida 32550

MANAGEMENT LETTER

To the Board of Supervisors
PBR Community Development District

West Melbourne, Florida

Report on the Financial Statements

(850)	837-3141	
(850)	654-4619	
CRlcpa.com	

(fa

x)

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

Auditors’ Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the 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 report, which are dated June 30, 2019, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Item IC2017‐01 in the previous financial report has been corrected.

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.

‐25‐

Financial Condition and Management

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

Pursuant to Sections 10.554(1)(i)5.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.

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 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 30, 2019

‐26‐

CRI	~l:G::		
	IN GRAM		
			
CPAs and	Advisors		

Carr, Riggs & Ingram, LLC

Certified Public Accountants

500 Grand Boulevard

Suite 210

Miramar Beach , Florida 32550

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Supervisors
PBR Community Development District

West Melbourne, Florida

(850)	837-3141	
(850)	654-4619	
CRlcpa .com	

(fa

x)

We have examined PBR Community Development District’s compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2018. Management 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 performed the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgement, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.

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

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

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

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida

June 30, 2019

‐27‐