AVE MARIA STEWARDSHIP COMMUNITY DISTRICT COLLIER COUNTY, FLORIDA
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020

AVE MARIA STEWARDSHIP COMMUNITY DISTRICT COLLIER COUNTY, FLORIDA

TABLE OF CONTENTS

	    Page		
INDEPENDENT AUDITOR’S REPORT	1-2	
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-7	
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 – 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	
Statement of Net Position – Proprietary Fund	14	
Statement of Revenues, Expenses and Changes in Net Position –
Proprietary Fund	
15	
Statement of Cash Flows – Proprietary Fund	16	
Notes to the Financial Statements	17-27	
REQUIRED SUPPLEMENTARY INFORMATION		
Schedule of Revenues, Expenditures and Changes in Fund Balance –
Budget and Actual – General Fund	
28	
Notes to Required Supplementary Information	29	
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS	

30-31	
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10)
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	

32	
MANAGEMENT LETTER REQUIRED BY CHAPTER 10.550 OF THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	
33-34	

INDEPENDENT AUDITOR’S REPORT

To the Board of Supervisors
Ave Maria Stewardship Community District Collier County, Florida

Report on the Financial Statements

951 Yamato Road ▪ Suite 280 Boca Raton, Florida   33431 (561) 994-9299 ▪ (800) 299-4728
Fax (561) 994-5823
www.graucpa.com

We have audited the accompanying financial statements of the governmental activities, the business-type activities and each major fund of Ave Maria Stewardship Community District, Collier County, Florida (“District”) as of and for the fiscal year ended September 30, 2020, 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.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 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, the business-type activities and each major fund of the District as of September 30, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof for the fiscal 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 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 25, 2021, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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.

June 25, 2021

MANAGEMENT’S DISCUSSION AND ANALYSIS

Our discussion and analysis of Ave Maria Stewardship Community District, Collier County, Florida (“District”) provides a narrative overview of the District’s financial activities for the fiscal year ended September 30, 2020. Please read it in conjunction with the District’s Independent Auditor’s Report, basic financial statements, accompanying notes and supplementary information to the basic financial statements.

FINANCIAL HIGHLIGHTS

The assets plus deferred outflows of resources of the District exceeded its liabilities at the close of the most recent fiscal year resulting in a net position balance of $2,549,183.

The change in the District’s total net position in comparison with the prior fiscal year was ($345,881), a decrease. The key components of the District’s net position and change in net position are reflected in the table in the government-wide financial analysis section.

At September 30, 2020, the District’s governmental funds reported combined ending fund balances of
$7,776,877, an increase of $1,139,340 in comparison with the prior fiscal year. The total fund balance is restricted for debt service and capital projects and the remainder is unassigned fund balance which is available for spending at the District’s discretion.

OVERVIEW OF FINANCIAL STATEMENTS

This discussion and analysis are intended to serve as the introduction to the District’s basic financial statements. The District’s basic financial statements are comprised of three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements

The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all the District’s assets plus deferred outflows of resources and liabilities, with the residual amount being reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

Both of the government-wide financial statements distinguish functions of the District that are principally supported by assessments and Developer contributions (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the District include general government and maintenance operations. The business-type activities of the District include master irrigation operations.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has two fund categories: governmental funds and proprietary funds.

Governmental Funds

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflow of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a District’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains three individual governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, debt service fund and capital projects fund. The general, debt service and capital projects funds are considered to be major funds.

The District adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget.

Proprietary Fund
The District maintains one type of proprietary fund, an enterprise fund. An enterprise fund is used to report the same function presented as business-type activities in the government-wide financial statements. The District uses an enterprise fund to account for the irrigation operations within the District.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail.

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net position may serve over time as a useful indicator of an entity’s financial position. In the case of the District, assets plus deferred outflows of resources exceeded liabilities at the close of the most recent fiscal year.

NET POSITION SEPTEMBER 30,
Governmental Activities

Business-type Activities	Total

	2020	2019	2020	2019	2020	2019	
Current and other assets	$	8,746,255	$	6,999,976	$	429,360	$	427,270	$	9,175,615	$	7,427,246	
Capital assets, net of depreciation	62,231,145	61,761,915	1,439,398	1,529,361	63,670,543	63,291,276	
Deferred outflows of resources	772,710	816,448	-	-	772,710	816,448	
Total assets and deferred outflows	71,750,110	69,578,339	1,868,758	1,956,631	73,618,868	71,534,970	
Current liabilities	2,352,938	1,668,737	96,276	287,380	2,449,214	1,956,117	
Long-term liabilities	68,620,471	66,683,789	-	-	68,620,471	66,683,789	
Total liabilities	70,973,409	68,352,526	96,276	287,380	71,069,685	68,639,906	
Net position
Net investment in capital assets	
(3,846,752)	
(3,001,082)	
1,439,398	
1,529,361	
(2,407,354)	
(1,471,721)	
Restricted	4,249,951	3,818,600	-	-	4,249,951	3,818,600	
Unrestricted	373,502	408,295	333,084	139,890	706,586	548,185	
Total net position	$	776,701	$	1,225,813	$ 1,772,482	$ 1,669,251	$	2,549,183	$	2,895,064	

The District’s net position reflects its investment in capital assets (e.g. land, land improvements, and infrastructure) less any related debt used to acquire those assets that is still outstanding. These assets are used to provide services to residents; consequently, these assets are not available for future spending. Although the District’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The restricted portion of the District’s net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position may be used to meet the District’s other obligations.
The District’s net position decreased during the most recent fiscal year. The majority of the decrease was due to costs and deprecation in excess of operating revenues.
Governmental activities

As noted below and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2020 was $7,670,072. The costs of the District’s activities were primarily funded by program revenues. Program revenues comprised primarily of Developer contributions and assessments. The majority of the decrease in expenses was due to decreased bond issuance costs as well as decreased interest as expected over time as the Bond principal balance is lowered due to schedule payments being made.

Business-type activities

Business-type activities reflect the operations of the irrigation services within the District. The cost of operations is covered primarily by charges to customers. In addition, program revenues include Developer contributions for the current fiscal year. The increase in revenues and expenses is primarily due to an increase in irrigation usage in the current year.

CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,
Governmental Activities	Business-type Activities	Total
	2020	2019	2020	2019	2020	2019	
Revenues:							
Program revenues							
Charges for services	$	4,106,238	$	3,509,037	$   1,012,758	$	782,539	$	5,118,996	$	4,291,576	
Operating grants and contributions	3,102,814	3,739,294	377,701	477,601	3,480,515	4,216,895	
Capital grants and contributions	3,088	22,168	-	-	3,088	22,168	
General revenues							
Investment and other revenues	8,820	370,551	-	-	8,820	370,551	
Total revenues	7,220,960	7,641,050	1,390,459	1,260,140	8,611,419	8,901,190	
Expenses:							
General government	302,304	282,001	-	-	302,304	282,001	
Maintenance and operations	3,798,925	3,782,915	-	-	3,798,925	3,782,915	
Master irrigation utility	-	-	1,287,228	1,261,948	1,287,228	1,261,948	
Bond issuance costs	201,725	983,381	-	-	201,725	983,381	
Interest	3,367,118	3,968,847	-	-	3,367,118	3,968,847	
Total expenses	7,670,072	9,017,144	1,287,228	1,261,948	8,957,300	10,279,092	
Change in net position	(449,112)	(1,376,094)	103,231	(1,808)	(345,881)	(1,377,902)	
Net position - beginning	1,225,813	2,601,907	1,669,251	1,671,059	2,895,064	4,272,966	
Net position - ending	$	776,701	$	1,225,813	$   1,772,482	$   1,669,251	$	2,549,183	$	2,895,064	

GENERAL BUDGETING HIGHLIGHTS

An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. The general fund budget for the fiscal year ended September 30, 2020 was amended to increase revenues by $199,250 and increase appropriations by $361,614. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2020.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2020, the District had $82,501,073 invested in capital assets for its governmental activities. In the government-wide financial statements depreciation of $20,269,928 has been taken, which resulted in a net book value of $62,231,145. The District’s business-type activities reported net capital assets of
$1,439,398. More detailed information about the District’s capital assets is presented in the notes of the financial statements.

Capital Debt

At September 30, 2020, the District had $69,260,000 in Bonds outstanding for its governmental activities. More detailed information about the District’s capital debt is presented in the notes of the financial statements.

Subsequent to fiscal year end, the District issued $11,340,000 of Series 2021 Capital Improvement Revenue Bonds, consisting of multiple term bonds with due dates ranging from May 1, 2026 through May 1, 2051 and fixed interest rates ranging from 2.60% to 4.00%.The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District.

Subsequent to fiscal year end, the Board is in the process of refinancing its outstanding Series 2016 BAN; however, the terms of the refinancing have not yet been established.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, land owners, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact the Ave Maria Stewardship Community District’s management services at Special District Services, Inc., 2501A Burns Road, Palm Beach Gardens, Florida 33410.

AVE MARIA STEWARDSHIP COMMUNITY DISTRICT COLLIER COUNTY, FLORIDA
STATEMENT OF NET POSITION SEPTEMBER 30, 2020

	Governmental
Activities	Business-type
Activities	
Total	
ASSETS				
Cash	$	478,218	$	129,142	$	607,360	
Assessments receivable	18,972	300,218	319,190	
Due from Developer	1,406,859	-	1,406,859	
Restricted assets:				
Investments	6,842,206	-	6,842,206	
Capital assets:				
Nondepreciable	40,268,908	-	40,268,908	
Depreciable, net	21,962,237	1,439,398	23,401,635	
Total assets	70,977,400	1,868,758	72,846,158	

DEFERRED OUTFLOWS OF RESOURCES				
Deferred charge on refunding (debit)	772,710	-	772,710	
Total deferred outflows of resources	772,710	-	772,710	

LIABILITIES				
Accounts payable	333,324	96,276	429,600	
Contracts and retainage payable	576,000	-	576,000	
Due to Developer	60,054	-	60,054	
Accrued interest payable	1,383,560	-	1,383,560	
Non-current liabilities:				
Due within one year	1,580,000	-	1,580,000	
Due in more than one year	67,040,471	-	67,040,471	
Total liabilities	70,973,409	96,276	71,069,685	

NET POSITION				
Net investment in capital assets	(3,846,752)	1,439,398	(2,407,354)	
Restricted for debt service	4,249,951	-	4,249,951	
Unrestricted	373,502	333,084	706,586	
Total net position	$	776,701	$	1,772,482	$	2,549,183	

See notes to the financial statements

AVE MARIA STEWARDSHIP COMMUNITY DISTRICT COLLIER COUNTY, FLORIDA STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020

Program Revenues Operating

Capital

Net (Expense) Revenue and Changes in Net Position

Functions/Programs	Expenses Primary government:
Governmental activities:

Charges for Services

Grants and Contributions

Grants and Contributions

Governmental Activities

Business-type Activities

Total

General government

$	302,304

$	302,304	$

-	$	-	$

-	$	-	$	-

Maintenance and operations	3,798,925	750,925	1,313,971	3,088	(1,730,941)	-	(1,730,941)
Bond issuance costs
Interest on long-term debt	201,725
3,367,118	-
3,053,009	-
1,788,843	-
-	(201,725)
1,474,734	-
-	(201,725)
1,474,734	
Total governmental activities	7,670,072	4,106,238	3,102,814	3,088	(457,932)	-	(457,932)	

Business-type activities Master irrigation utility	

1,287,228	

1,012,758	

377,701	

-	-	

103,231	

103,231	
Total business-type activities	1,287,228	1,012,758	377,701	-	-	103,231	103,231	

General revenues:	
Unrestricted investment earnings	739	-	739	
Miscellaneous	8,081	-	8,081	
Total general revenues	8,820	-	8,820	
Change in net position	(449,112)	103,231	(345,881)	
Net position - beginning	1,225,813	1,669,251	2,895,064	
Net position - ending	$	776,701	$ 1,772,482	$ 2,549,183  

See notes to the financial statements

BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2020

 	Major Funds	
Capital

Total Governmental

General

Debt Service

Projects

Funds

ASSETS
Cash	
$	
478,218	
$	
-	
$	
-	
$	
478,218	
Investments	-	4,496,342	2,345,864	6,842,206	
Assessments receivable	18,972	-	-	18,972	
Due from Developer	269,690	1,137,169	-	1,406,859	
Total assets	$	766,880	$	5,633,511	$ 2,345,864	$	8,746,255	

LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable	

$	

333,324	

$	

-	

$	

-	

$	

333,324	
Contracts and retainage payable	-	-	576,000	576,000	
Due to Developer	60,054	-	-	60,054	
Total liabilities	393,378	-	576,000	969,378	

Fund balances: Restricted for:
Debt service		

-		

5,633,511		

-		

5,633,511	
Capital projects		-		-		1,769,864		1,769,864	
Unassigned		373,502		-		-		373,502	
Total fund balances		373,502		5,633,511		1,769,864		7,776,877	

Total liabilities and fund balances	
$	
766,880	
$	
5,633,511	
$	
2,345,864	
$	
8,746,255	

See notes to the financial statements

RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2020

Fund balance - governmental funds	$	7,776,877
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore, are not reported as assets in the governmental funds. The statement of net position includes those capital assets, net of any accumulated depreciation, in the net position of the government as a whole.
Cost of capital assets	82,501,073		
Accumulated depreciation	    (20,269,928)  	62,231,145	
Deferred charges on refunding of long-term debt are shown as deferred outflows/inflows of resources in the government-wide financial statements; however, this amount is expensed in the governmental fund financial statements.		

772,710	
Liabilities not due and payable from current available resources are not reported as liabilities in the governmental fund			
statements.	All liabilities, both current and long-term, reported in the government-wide financial statements.
Accrued interest payable	are	

(1,383,560)	
Bonds payable		    (68,620,471)	(70,004,031)  	
Net position of governmental activities		$	776,701	

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020

 	Major Funds		Total
Capital	Governmental
	General	Debt Service	Projects	Funds	
REVENUES
Assessments	
$	1,053,229	
$	3,053,009	
$	-	
$	4,106,238	
Developer contributions	1,313,971	1,762,133	-	3,076,104	
Interest income	739	26,710	3,088	30,537	
Miscellaneous	8,081	-	-	8,081	
Total revenues	2,376,020	4,841,852	3,088	7,220,960	

EXPENDITURES
Current:
General government	302,304	-	-	302,304	
Maintenance and operations	2,108,509	-	-	2,108,509	
Debt service:
Principal	
-	
1,535,000	
-	
1,535,000	
Interest	-	3,214,436	-	3,214,436	
Bond issuance costs	-	-	201,725	201,725	
Capital outlay	-	-	2,159,646	2,159,646	
Total expenditures	2,410,813	4,749,436	2,361,371	9,521,620	

Excess (deficiency) of revenues over (under) expenditures	

(34,793)	

92,416	

(2,358,283)	

(2,300,660)	

OTHER FINANCING SOURCES (USES)
Transfers in (out)	

-	

(3,405)	

3,405	

-	
Bond proceeds	-	419,602	3,020,398	3,440,000	
Total other financing sources (uses)	-	416,197	3,023,803	3,440,000	

Net change in fund balances	
(34,793)	
508,613	
665,520	
1,139,340	
Fund balances - beginning	408,295	5,124,898	1,104,344	6,637,537	

Fund balances - ending	
$	373,502	
$	5,633,511	
$ 1,769,864	
$	7,776,877	

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020

are different because:		
Governmental funds report capital outlays as expenditures, however, the cost of capital assets is eliminated in the statement of activities and capitalized in the statement of net position.	

2,159,646	
Depreciation of capital assets is not recognized in the governmental fund statements but is reported as an expense in the statement of activities.	

(1,690,416)	
Governmental funds report bond proceeds when debt is first issued, whereas these proceeds are eliminated in the statement of activities and recognized as long-term liabilities in the statement of net position.	

(3,440,000)	
Repayments of long-term liabilities are reported as expenditures in the governmental fund statement but such repayments reduce liabilities in the statement of net position and are eliminated in the statement of activities.	

1,535,000	
Governmental funds report the effect of, discounts and deferred amounts on refunding when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.		
Amortization on original issue discount	(31,682)	
Amortization on deferred amount on refunding	(43,738)	
The change in accrued interest on long-term liabilities between the current and prior fiscal year is recorded in the statement of activities but not in the fund financial statements.	

 	(77,262) 	
Change in net position of governmental activities	$	(449,112)	

Net change in fund balances - total governmental funds	$	1,139,340 Amounts reported for governmental activities in the statement of activities

STATEMENT OF NET POSITION - PROPRIETARY FUND SEPTEMBER 30, 2020

ASSETS
Current assets: Cash

Business-type Activities - Master Irrigation
 	Utility	

$	129,142

Accounts receivables	 	300,218  

Capital assets:		
Master Irrigation System Improvements	2,249,065	
Less accumulated depreciation	 	(809,667) 	
Total capital assets, net	 	1,439,398  	
Total noncurrent assets	 	1,439,398  	
Total assets	 	1,868,758  	

Total current assets	 	429,360 Noncurrent assets:

LIABILITIES
Current liabilities:
Accounts payable	 	96,276  
Total current liabilities	 	96,276  

Total liabilities	 	96,276  

NET POSITION		
Invested in capital assets	1,439,398	
Unrestricted	 	333,084  	
Total net position	  $	1,772,482  	

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - PROPRIETARY FUND
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020

OPERATING REVENUES
Charges for sales and services: Charges for irrigation services

Business-type Activities - Master
    Irrigation Utility	

$	881,300

Other	 	131,458  
Total operating revenues	 	1,012,758  

OPERATING EXPENSES
Irrigation	
306,865	
Administrative and operations	890,400	
Depreciation	 	89,963  	
Total operating expense	 	1,287,228  	
Operating income (loss)	 	(274,470) 	

NON OPERATING REVENUES (EXPENSES)
Developer contribution	

 	377,701  	
Total non operating revenue (expenses)	 	377,701  	
Net income	103,231	
Total net position- beginning	 	1,669,251  	
Total net position - ending	  $	1,772,482  	

STATEMENT OF CASH FLOWS - PROPRIETARY FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users

Business-type Activities - Master Irrigation
 	Utility	
$	1,028,990

Payments to suppliers of goods and services	 	(1,388,369) Net cash provided (used) by operating activities	 		(359,379) 

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Developer contribution	
 	377,701  	
Net cash provided (used) by noncapital financing activities	 	377,701  	
Net increase (decrease) in cash and cash equivalents	18,322	
Cash and cash equivalents - October 1	 	110,820  	
Cash and cash equivalents - September 30	  $	129,142  	
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss)	

$	(274,470)	
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities: Depreciation	

89,963	
(Increase)/Decrease in:
Accounts receivable	
16,232	
Increase/(Decrease) in:
Accounts payable	
 	(191,104) 	
Total adjustments	 	(84,909) 	

Net cash provided (used) by operating activities	$	(359,379) 

COLLIER COUNTY, FLORIDA
NOTES TO FINANCIAL STATEMENTS

NOTE 1 – NATURE OF ORGANIZATION AND REPORTING ENTITY

Ave Maria Stewardship Community District ("District") was created by the Florida Legislature (Chapter 2004- 461) on April 23, 2004 and became effective on June 17, 2004, pursuant to Chapter 189, Florida Statutes.

The District was established for the purposes of providing the public infrastructure and managing the acquisition, construction, maintenance and operation of all or a portion of the infrastructure necessary for community development within the District.

The District is governed by the Board of Supervisors ("Board"), which is composed of five members. The Supervisors are elected on an at large basis by the owners of the property within the District. Ownership of land within the District entitles the owner to one vote per acre. The Board of Supervisors of the District exercise all powers granted to the District pursuant to Chapter 2004-461 and other appropriate Florida Statutes. As of September 30, 2020, one of the Board members was affiliated with Ave Maria Development, LLLP (“Developer”).

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.

The financial statements were prepared in accordance with Governmental Accounting Standards Board (“GASB”) Statements. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District is considered to be financially accountable and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING 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 of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; operating-type special assessments for maintenance and debt service are treated as charges for services and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Other items not included among program revenues are reported instead as general revenues.

Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements and the enterprise fund 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 related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and 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 government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

Assessments
Assessments are non-ad valorem assessments on certain land and all platted lots within the District. Assessments are levied each November 1 on property of record as of the previous January. The fiscal year for which annual assessments are levied begins on October 1 with discounts available for payments through February 28 and become delinquent on April 1. For debt service assessments, amounts collected as advance payments are used to prepay a portion of the Bonds outstanding. Otherwise, assessments are collected annually to provide funds for the debt service on the portion of the Bonds which are not paid with prepaid assessments.

Assessments and interest associated with the current fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. The portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period.

The District reports the following major governmental funds:

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

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

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

The District reports the following major proprietary fund:

Master Irrigation Utility Fund
The master irrigation utility fund is used to account for operations that are to be financed and operated in a manner similar to private business enterprises. The costs of providing services to customers are to be recovered primarily through user charges.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the District’s enterprise fund are charges to customers for sales and services. Operating expenses of the enterprise fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
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 government’s policy to use restricted resources first for qualifying expenditures, then unrestricted resources as they are needed.

Assets, Liabilities and Net Position or Equity

Restricted Assets
These assets represent cash and investments set aside pursuant to Bond covenants or other contractual restrictions.

Deposits and Investments
The District’s cash and cash equivalents are considered to be cash on hand and demand deposits.

The District has elected to proceed under the Alternative Investment Guidelines as set forth in Section
218.415 (17) Florida Statutes. The District may invest any surplus public funds in the following:
The Local Government Surplus Trust Funds, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act;
Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency;
Interest bearing time deposits or savings accounts in qualified public depositories;
Direct obligations of the U.S. Treasury.

Securities listed in paragraph c and d shall be invested to provide sufficient liquidity to pay obligations as they come due. In addition, surplus funds may be deposited into certificates of deposit which are insured and any unspent Bond proceeds are required to be held in investments as specified in the Bond Indenture.

The District records all interest revenue related to investment activities in the respective funds. Investments are measured at amortized cost or reported at fair value as required by generally accepted accounting principles.

Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Capital Assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, sidewalks and similar items) are reported in the government activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition 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 assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Assets, Liabilities and Net Position or Equity (Continued)
Property, plant and equipment of the District are depreciated using the straight-line method over the following estimated useful lives:
Assets	Years	
Roadway Improvements	25	
Master Irrigation System	25	
Equipment	10	
Mitigation and Restoration	25	
Stormwater Management	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.

Refundings of Debt
For current refundings and advance refundings resulting in the defeasance of debt, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources/deferred inflow of resources and recognized ratably as a component of interest expense over the remaining life of the old debt or the life of the new debt, whichever is shorter. In connection with refunding,
$43,738 was recognized as a component of interest expense in the current fiscal year.

Unearned Revenue
Governmental funds report unearned revenue in connection with resources that have been received, but not yet earned.

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 ratably over the life of the Bonds. Bonds payable are reported net of applicable premiums or discounts. Bond issuance costs are expensed when incurred.

In the fund financial statements, governmental fund types recognize premiums and discounts, as well as issuance costs, during the current period. The face amount of 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 will sometimes report 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.

In addition to liabilities, the statement of financial position 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.

Fund Equity/Net Position
In the fund financial statements, governmental funds report non spendable and restricted fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Assignments of fund balance represent tentative management plans that are subject to change.

Assets, Liabilities and Net Position or Equity (Continued)

Fund Equity/Net Position
The District can establish limitations on the use of fund balance as follows:

Committed fund balance – Amounts that can be used only for the specific purposes determined by a formal action (resolution) of the Board of Supervisors. Commitments may be changed or lifted only by the Board of Supervisors taking the same formal action (resolution) that imposed the constraint originally. Resources accumulated pursuant to stabilization arrangements sometimes are reported in this category.

Assigned fund balance – Includes spendable fund balance amounts established by the Board of Supervisors that are intended to be used for specific purposes that are neither considered restricted nor committed. The Board may also assign fund balance as it does when appropriating fund balance to cover differences in estimated revenue and appropriations in the subsequent year’s appropriated budget. Assignments are generally temporary and normally the same formal action need not be taken to remove the assignment.

The District first uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.
Net position is the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources. Net position in the government-wide financial statements are categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents net position related to infrastructure and property, plant and equipment. Restricted net position represents the assets restricted by the District’s Bond covenants or other contractual restrictions. Unrestricted net position consists of the net position not meeting the definition of either of the other two components.
.
Other Disclosures

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

NOTE 3 – BUDGETARY INFORMATION

The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund. All annual appropriations lapse at fiscal year-end.

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.
Public hearings are conducted to obtain public comments.
Prior to October 1, the budget is legally adopted by the District Board.
All budget changes must be approved by the District Board.
The budgets are adopted on a basis consistent with generally accepted accounting principles.
Unused appropriation for annually budgeted funds lapse at the end of the year.

NOTE 4 – DEPOSITS AND INVESTMENTS
Deposits
The District’s cash balances were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer. Florida Statutes Chapter 280, "Florida Security for Public Deposits Act", requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral equal to various percentages of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally, U.S. Governmental and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository's financial history and its compliance with Chapter 280. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses.
Investments
The District’s investments were held as follows at September 30, 2020:

Investment	Fair Value	Credit Risk	Maturities

First American Government Obligation Fund	$ Class Y
First American Treasury Obligations Fund

2,602,928

S&P AAAm	Weighted average of the fund
portfolio: 44 days
S&P AAAm	Weighted average of the fund

Class Y	1,015,577	portfolio: 24 days
US Bank Mmkt	 	3,223,701	Not available	Not available
Total Investments	$	6,842,206  

Credit risk – For investments, credit risk is generally the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Investment ratings by investment type are included in the preceding summary of investments.

Concentration risk – The District places no limit on the amount the District may invest in any one issuer.
Interest rate risk – The District does not have a formal policy that limits investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates.
However, the Bond Indenture limits the type of investments held using unspent proceeds.

Fair Value Measurement – When applicable, the District measures and records its investments using fair value measurement guidelines established in accordance with GASB Statements. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques.

These guidelines recognize a three-tiered fair value hierarchy, in order of highest priority, as follows:
Level 1: Investments whose values are based on unadjusted quoted prices for identical investments in active markets that the District has the ability to access;
Level 2: Investments whose inputs - other than quoted market prices - are observable either directly or indirectly; and,
Level 3: Investments whose inputs are unobservable.

The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the entire fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs.

Money market investments that have a maturity at the time of purchase of one year or less and are held by governments other than external investment pools are measured at amortized cost.

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

Beginning
Balance	Additions	Reductions	Ending Balance
Governmental activities
Capital assets, not being depreciated		
Land and improvements	$	18,622,245	$	-	$	-	$	18,622,245	
Construction in progress-Crosswalks		239,047		-		-		239,047	
Construction in progress	19,247,970	2,159,646		-	21,407,616	
Total capital assets, not being depreciated	38,109,262	2,159,646		-	40,268,908	

Capital assets, being depreciated Roadway Improvements	

41,652,306	

-		

-	41,652,306	
Equipment	18,833	-		-	18,833	
Mitigation and Restoration	119,108	-		-	119,108	
Drainage/Stormwater Management System	441,918	-		-	441,918	
Total capital assets, being depreciated	42,232,165	-		-	42,232,165	

Less accumulated depreciation for: Roadway Improvements	

18,327,012	

1,666,092		

-	19,993,104	
Equipment	5,649	1,883		-	7,532	
Mitigation and Restoration	52,404	4,764		-	57,168	
Drainage/Stormwater Management System	194,447	17,677		-	212,124	
Total accumulated depreciation	18,579,512	1,690,416	-	20,269,928	

Total capital assets, being depreciated, net	
23,652,653	
(1,690,416)	-	21,962,237	

Governmental activities capital assets	
$    61,761,915	
$	469,230	$	-	$	62,231,145	

Business-type activities
Capital assets, being depreciated
Master Irrigation System Improvements	

$	2,249,065	

$	-	$	-	$	2,249,065	
Total capital assets, being depreciated	2,249,065	-	-	2,249,065	

Less accumulated depreciation for:			
Master Irrigation System Improvements	719,704	89,963		-	809,667	
Total accumulated depreciation	719,704	89,963	-	809,667	

Total capital assets, being depreciated, net	
1,529,361	
(89,963)	
-	1,439,398	

Business-type activities capital assets	
$	1,529,361	
$	(89,963)	
$	-	$	1,439,398	

The Maple Ridge Project consists of master roadway, irrigation, stormwater/drainage and landscaping improvements related to three neighborhoods within the District referred to as Maple Ridge Development (“Maple Ridge”). The total cost of the Maple Ridge project has been estimated at approximately $38,560,000.

In the current fiscal year, the District paid the Developer a total of $1,579,642 in order to acquire improvements valued for same amount.
For governmental activities, depreciation was charged to the maintenance and operations function.

Capital Improvement Revenue Refunding Bonds Series 2012
On June 7, 2012, the District issued $29,100,000 of Capital Improvement Revenue Refunding Bonds, Series 2012. The Series 2012 Bonds were applied together with other legally available funds to refund the Series 2006BAB (Bond Anticipation Bonds, Series 2006). The Series 2012 Bonds are due on May 1, 2042 with fixed interest rates of 6.70%. Interest is paid semiannually on each May 1 and November 1, commencing November 1, 2012. Principal on the Series 2012 Bonds is paid serially and commenced on May 1, 2013.

The Bonds are subject to optional, mandatory sinking fund and extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Bond Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Bond Indenture as of September 30, 2020.

Contemporaneously with the issuance of the 2012 Bonds, the District, the Developer and the Trustee entered into a Debt Service Reserve Fund Deficiency Agreement whereby the Developer agreed to restore the reserve account in the event that there is a deficiency in the reserve account. The Deficiency Agreement further provides that in the event payments are made by the Developer, it shall be reimbursed to the Developer from any sources legally available to the District so long as the 2012 Bonds are outstanding and the Developer is not delinquent in the payment of the Series 2012 Assessments.

Capital Improvement Revenue Bonds Series 2015
In March 2015, the District issued $2,530,000 of Capital Improvement Revenue Bonds, Series 2015. The Bonds are due May 1, 2045 with a fixed interest rate of 5.000% to 5.375%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1, commencing May 1, 2015. Principal is due annually on May 1, commencing May 1, 2016.

The Bonds are subject to redemption at the option of the District prior to maturity as outlined in the Bond Indenture. The Bonds are also subject to extraordinary mandatory redemption prior to their maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Bond Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Bond Indenture as of September 30, 2020.

Capital Improvement Revenue Bonds Series 2016
On November 02, 2016, the District the District issued $3,390,000 of Capital Improvement Revenue Bonds, Series 2016 due on May 1, 2047 with a fixed interest rate of 5.250% The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Bonds is to be paid serially commencing May 1, 2019 through May 1, 2047.

The Bonds are subject to redemption at the option of the District prior to maturity as outlined in the Bond Indenture. The Bonds are also subject to extraordinary mandatory redemption prior to their maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.

Capital Improvement Revenue Bonds Series 2016 (Continued)
The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Bond Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Bond Indenture as of September 30, 2020.

Bond Anticipation Notes Series 2016
On November 02, 2016, the District the District issued $11,085,000 of Bond Anticipation Notes due in May 1, 2021 with a fixed interest rate of 4.625%. The Notes were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Notes is to be paid in one lump sum on May 1, 2021.

The Notes are subject to redemption at the option of the District prior to maturity as outlined in the Note Indenture. The Notes are also subject to extraordinary mandatory redemption prior to their maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Note Indenture.

The Note Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Note Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Note Indenture as of September 30, 2020.

Capital Improvement Revenue Bonds Series 2018
On June 1, 2019, the District the District issued $4,000,000 of Capital Improvement Revenue Bonds, Series 2019 due on May 1, 2049 with a fixed interest rate of 4.90% to 5.375% The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Bonds is to be paid serially commencing May 1, 2020 through May 1, 2049.

The Bonds are subject to redemption at the option of the District prior to maturity as outlined in the Bond Indenture. The Bonds are also subject to extraordinary mandatory redemption prior to their maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Bond Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Bond Indenture as of September 30, 2020.

Capital Improvement Revenue Refunding Bonds Series 2019
In June 2020, the District issued $20,310,000 of Capital Improvement Revenue Refunding Bonds, Series 2019. The Bonds are due May 1, 2038 with interest rate ranging from 2% to 3%. The Bonds were issued to refund the Series 2006A Bonds. Interest is to be paid semiannually on each May 1 and November 1, commencing November 1, 2019. Principal is due annually on May 1, commencing May 1, 2020.

The Bonds are subject to redemption at the option of the District prior to maturity as outlined in the Bond Indenture. The Bonds are also subject to extraordinary mandatory redemption prior to their maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Bond Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Bond Indenture as of September 30, 2020.

Capital Improvement Revenue Bonds Series 2020
In July 2020, the District issued $3,440,000 of Series 2020 Capital Improvement Revenue Bonds, consisting of multiple term bonds with due dates ranging from May 1, 20232 through May 1, 2052 and fixed interest rates ranging from 3.80% to 4.45%.The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1, commencing November 1, 2020. Principal is due annually on May 1, commencing May 1, 2023.

The Bonds are subject to redemption at the option of the District prior to maturity as outlined in the Bond Indenture. The Bonds are also subject to extraordinary mandatory redemption prior to their maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Bond Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Bond Indenture as of September 30, 2020.

Long-term Debt Activity
Changes in long-term liability activity for the fiscal year ended September 30, 2020 were as follows:

Governmental activities Bonds payable:

Beginning
Balance	Additions	Reductions

Ending Balance

Due Within One Year

Series 2012	$	26,300,000	$	-	$	(500,000)	$	25,800,000	$	535,000	
Series 2015	2,370,000	-	(45,000)	2,325,000	45,000	
Less: Original issue discount	(419,285)	-	18,498	(400,787)	-	
Series 2016 Bonds	3,290,000	-	(55,000)	3,235,000	55,000	
Series 2016 BAN	11,085,000	-	-	11,085,000	-	
Less: Original issue discount	(14,333)	-	512	(13,821)	-	
Series 2018	4,000,000	-	(60,000)	3,940,000	60,000	
Series 2019	20,310,000	-	(875,000)	19,435,000	885,000	
Less: Original issue discount	(237,593)	-	12,672	(224,921)	-	
Series 2020	-	3,440,000	-	3,440,000	-	
Total	   $    66,683,789	$	3,440,000	$	(1,503,318)   $	68,620,471	$    1,580,000  	

At September 30, 2020, the scheduled debt service requirements on the long-term debt were as follows:

Year ending

 	Governmental Activities	

   September 30:	Principal	Interest	Total	
2021	$	1,580,000	$	3,351,440	$	4,931,440	
2022	1,645,000	3,064,071	4,709,071	
2023	12,850,000	2,742,705	15,592,705	
2024	1,840,000	2,672,320	4,512,320	
2025	1,920,000	2,598,098	4,518,098	
2026-2030	10,905,000	11,713,206	22,618,206	
2031-2035	13,730,000	8,964,241	22,694,241	
2036-2040	14,745,000	5,256,185	20,001,185	
2041-2045	7,425,000	1,586,324	9,011,324	
2046-2049	2,230,000	369,276	2,599,276	
2050-2052	 	390,000	26,255	416,255  
Total	$	69,260,000	$	42,344,121	$ 111,604,121  

The Developer has agreed to fund the general operations of the District. In connection with that agreement, Developer contributions to the general fund were $1,313,971 which includes a receivable of $269,690 as of September 30, 2020. The Developer has also agreed to fund the debt service on the Bonds which is not paid through special or prepaid assessments. During the current fiscal year, the Developer provided $1,762,133 to the Debt Service Fund which includes a receivable of $1,137,169 as of September 30, 2020. Finally, the Developer contributed $377,701 to the Master Irrigation Fund which includes a receivable of $114,370 as of September 30, 2020.

NOTE 8 – CONCENTRATION

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

NOTE 9 – INTERLOCAL AGREEMENT

In a prior year, the District and Collier County entered into an interlocal agreement related to the future development of the lands within and contiguous to the District that secures the traffic capacity for developing the community of Ave Maria. Collier County and the Developer had previously entered into a Developer Agreement related to the development of the Ave Maria community that states the Developer will donate $7.8 million in certain right of way and storm water improvements, provide the design and permitting related to certain road ways required for the project, and pay approximately $60 million in road impact fees for construction of roadways. The Developer Agreement is not an obligation of the District.

NOTE 10 – MANAGEMENT COMPANY

The District has contracted with a management company to perform management advisory services, which include financial and accounting services. Certain employees of the management company also serve as officers of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, computer and other administrative costs.

NOTE 11 – 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 has obtained commercial insurance from independent third parties to mitigate the costs of these risks; coverage may not extend to all situations. There were no settled claims during the past three years.

NOTE 12 – SUBSEQUENT EVENTS

Series 2021 Bonds
Subsequent to fiscal year end, the District issued $11,340,000 of Series 2021 Capital Improvement Revenue Bonds, consisting of multiple term bonds with due dates ranging from May 1, 2026 through May 1, 2051 and fixed interest rates ranging from 2.60% to 4.00%.The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District.

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020

 		Budget Amounts	 Original	Final

Actual Amounts

Variance with Final Budget - Positive (Negative)

REVENUES		
Assessments	$	849,060	$ 1,026,006	$ 1,053,229	$	27,223	
Developer contributions	1,300,488	1,313,971	1,313,971	-	
Interest	-	739	739	-	
Miscellaneous	-	8,082	8,081	(1)	
Total revenues	2,149,548	2,348,798	2,376,020	27,222	

EXPENDITURES
Current:
General government	281,048	309,487	302,304	7,183	
Maintenance and operations	1,868,500	2,201,675	2,108,509	93,166	
Total expenditures	2,149,548	2,511,162	2,410,813	100,349	

Excess (deficiency) of revenues over (under) expenditures	

-	

(162,364)	

(34,793)	

127,571	
OTHER FINANCING SOURCES
Use of Fund Balance	
-	
162,364	
-	
(162,364)	
Total other financing sources (uses)	-	162,364	-	(162,364)	

Net change in fund balances	
  $	-	$	-		
(34,793)   $	(34,793) 	
Fund balance - beginning		 	408,295  	
Fund balance - ending		  $	373,502  	

See notes to required supplementary information

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

The District is required to establish a budgetary system and an approved Annual Budget for the general fund. The District’s budgeting process is based on estimates of cash receipts and cash expenditures which are approved by the Board. The budget approximates a basis consistent with accounting principles generally accepted in the United States of America (generally accepted accounting principles).

The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. The general fund budget for the fiscal year ended September 30, 2020 was amended to increase revenues by $199,250 and increase appropriations by $361,614. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2020.

951 Yamato Road ▪ Suite 280 Boca Raton, Florida   33431 (561) 994-9299 ▪ (800) 299-4728
Fax (561) 994-5823
www.graucpa.com

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

To the Board of Supervisors
Ave Maria Stewardship Community District Collier 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, the business-type activities and each major fund of Ave Maria Stewardship Community District, Collier County, Florida (“District”) as of and for the fiscal year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our opinion thereon dated June 25, 2021.
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 from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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

June 25, 2021

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10) OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA

To the Board of Supervisors
Ave Maria Stewardship Community District Collier County, Florida

We have examined Ave Maria Stewardship Community District, Collier County, Florida’s (“District”) compliance with the requirements of Section 218.415, Florida Statutes, in accordance with Rule 10.556(10) of the Auditor General of the State of Florida during the fiscal year ended September 30, 2020. Management is responsible for District’s compliance with those requirements. Our responsibility is to express an opinion on 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 in Section 218.415, Florida Statutes. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the District’s compliance with specified requirements.

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2020.

This report 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, management, and the Board of Supervisors of Ave Maria Stewardship Community District, Collier County, Florida and is not intended to be and should not be used by anyone other than these specified parties.

June 25, 2021

MANAGEMENT LETTER PURSUANT TO THE RULES OF THE AUDITOR GENERAL FOR THE STATE OF FLORIDA

To the Board of Supervisors
Ave Maria Stewardship Community District Collier County, Florida

Report on the Financial Statements

We have audited the accompanying basic financial statements of Ave Maria Stewardship Community District, Collier County, Florida ("District") as of and for the fiscal year ended September 30, 2020, and have issued our report thereon dated June 25, 2021.

Auditor’s Responsibility

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

Other Reporting Requirements

We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Auditor’s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 25, 2021, should be considered in conjunction with this management letter.

Purpose of this Letter

The purpose of this letter is to comment on those matters required by Chapter 10.550 of the Rules of the Auditor General of the state of Florida. Accordingly, in connection with our audit of the financial statements of the District, as described in the first paragraph, we report the following:

Current year findings and recommendations.
Status of prior year findings and recommendations.
Compliance with the Provisions of the Auditor General of the State of Florida.

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, as applicable, management, and the Board of Supervisors of Ave Maria Stewardship Community District, Collier County, Florida and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties.

We wish to thank Ave Maria Stewardship Community District, Collier County, Florida and the personnel associated with it, for the opportunity to be of service to them in this endeavor as well as future engagements, and the courtesies extended to us.

June 25, 2021

REPORT TO MANAGEMENT

CURRENT YEAR FINDINGS AND RECOMMENDATIONS

None

PRIOR YEAR FINDINGS AND RECOMMENDATIONS

None

COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA

Unless otherwise required to be reported in the auditor’s report on compliance and internal controls, the management letter shall include, but not be limited to the following:

A statement as to whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report.

There were no significant findings and recommendations made in the preceding annual financial audit report for the fiscal year ended September 30, 2019.

Any recommendations to improve the local governmental entity's financial management.

There were no such matters discovered by, or that came to the attention of, the auditor, to be reported for the fiscal year ended September 30, 2020.

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.

There were no such matters discovered by, or that came to the attention of, the auditor, to be reported, for the fiscal year ended September 30, 2020.

The name or official title and legal authority of the District are disclosed in the notes to the financial statements.

The District has not met one or more of the financial emergency conditions described in Section 218.503(1), Florida Statutes.

We applied financial condition assessment procedures and no deteriorating financial conditions were noted as of September 30, 2020. It is management’s responsibility to monitor 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.