FINANCIAL REPORT 
SEPTEMBER 30, 2018
SHINGLE CREEK COMMUNITY DEVELOPMENT DISTRICT

TABLE  OF CONTENTS

Year Ended September 30, 2018

  Page

Financial Section:
Independent Auditor's Report	1
Management's Discussion and Analysis	3
Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position	7
Statement of Activities	8
Fund Financial Statements:
Balance Sheet - Governmental Funds	9
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds	10
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities	11
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual - General Fund	12
Notes to Financial Statements	13
Compliance Section:
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	25
Management Comments	27
Independent Auditor's Report on Compliance with the Requirements
of Section 218.415, Florida Statutes	29

INDEPENDENT AUDITOR'S REPORT

To the Board of Supervisors
Shingle Creek Community Development District

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of the Shingle Creek Community Development District (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 as listed in the table of contents.

Management’s Responsibility for the Financial Statements

The District’s 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 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 principles 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.

MCDIRMIT DAVIS & COMPANY, LLC
934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803
T: 407-843-5406  │  F: 407-649-9339  │ WWW.MCDIRMITDAVIS.COM
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 Shingle Creek Community Development District, as of September 30, 2018, and the respective changes in financial position thereof and the respective budgetary comparison for the General Fund 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 starting on page 3, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient  evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued a report dated May 13, 2019, on our consideration of the Shingle Creek Community Development District’s, internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal  control over financial  reporting and compliance.

Orlando, Florida May 13, 2019
MANAGEMENT’S DISCUSSION AND ANALYSIS

Our discussion and analysis of the Shingle Creek Community Development District (the “District”) financial accomplishments provide an overview of the District’s financial activities for the year ended September 30, 2018. Please read it in conjunction with the District’s Independent Auditor’s Report, financial statements and accompanying notes.

This information is being presented to provide additional information regarding the activities of the District and to meet the disclosure requirements of Government Accounting Standards Board Statement (GASB) No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments issued June 1999.

Financial Highlights

The assets of the District  exceeded  its liabilities  at September  30, 2018 by
$46,567,017, a decrease of $445,461 in comparison with the prior year.
At September 30, 2018, the District’s governmental funds reported a combined fund balance of $1,986,169, a decrease of $6,440,497 in comparison with the prior year.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the Shingle Creek Community Development District’s financial statements. The District’s financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements and 3) notes to financial statements.

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 of the District’s assets and liabilities, with the difference between the two 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.

The government-wide financial statements include all governmental activities that are principally supported by special assessment revenues. The District does not have any business-type activities. The governmental activities of the District include general government and maintenance and operations related functions.

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 one fund category: Governmental 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 outflows 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 government’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, all of which 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.

Notes to 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

Statement of Net Position - The District’s net position was $46,567,017 at September 30, 2018. The following analysis focuses on the net position of the District’s governmental activities.

Government-Wide Financial Analysis (Continued):
Shingle Creek Community Development District Statement of Net Position

	September 30,
2018		September 30,
2017	
Assets, excluding capital assets	$	1,997,062		$	8,453,430	
Capital Assets, net of depreciation	 	65,523,056		 	59,883,848	
Total assets	 	67,520,118		 	68,337,278	
Liabilities, excluding long-term liabilities	452,561		473,870	
Long-term Liabilities	 	20,500,540		 	20,850,930	
Total liabilities	 	20,953,101		 	21,324,800	

Net Position:				
Net investment in capital assets	45,033,268	45,537,878		
Restricted for debt service	1,199,438	1,176,121		
Unrestricted	 	334,311	 	298,479		
Total net position	  $	46,567,017	  $	47,012,478		

The following is a summary of the District’s governmental activities for the fiscal years ended September 30, 2018 and 2017.

Changes in Net Position Year ended September 30,

	2018		2017	
Revenues:				
Program revenues	  $	1,865,531		  $	1,864,891	
Total revenues	 	1,865,531		 	1,864,891	

Expenses:				
General government	115,505	123,637		
Maintenance and operations	1,124,786	1,067,520		
Interest on long-term debt	 	1,070,701	 	1,083,706		
Total expenses	 	2,310,992	 	2,274,863		
Change in net position	(445,461)	(409,972)		
Net position - beginning of year	 	47,012,478	 	47,422,450		
Net position - ending	  $	46,567,017	  $	47,012,478		

Government-Wide Financial Analysis (Continued):

As noted above and in the statement of activities, the cost of all governmental activities during the year ended September 30, 2018 was $2,310,992. The majority of these costs are comprised of maintenance and operations and interest on long-term debt.

Financial Analysis of the Government’s Funds

The District uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At September 30, 2018, the District’s governmental funds reported combined ending fund balances of $1,986,169. Of this total, $19,653 is nonspendable, $1,651,858 is restricted and $314,658 is unassigned.

The fund balance of the general fund increased $35,832 due to special assessment revenue exceeding expenditures. The debt service fund balance increased $17,879. The capital projects fund decreased $6,494,208 due to capital outlay expenditures.

General Fund Budgetary 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. There were no amendments to the September 30, 2018 general fund budget. The legal level of budgetary control is at the fund level.

Capital Asset and Debt Administration

Capital Assets  - At September 30, 2018, the District  had $65,523,056  invested  in infrastructure, net of accumulated depreciation. More detailed information about the District’s  capital assets is presented in the notes to the financial statements.

Capital Debt - At September 30, 2018, the District had $20,760,000 in bonds outstanding. More detailed information about the District’s capital debt is presented in the notes to the financial statements.

Requests for Information

If you have questions about this report or need additional financial information, contact the Shingle Creek Community Development District’s Finance Department at 135 W. Central Blvd, Suite 320, Orlando, Florida 32801.

FINANCIAL  STATEMENTS

STATEMENT OF NET POSITION

September  30,  2018

	Governmental
Activities	
Assets:		
Cash	$	319,378	
Assessments receivable	88,299	
Receivables	3,400	
Prepaid costs
Restricted assets:	19,653	
Temporarily restricted investments	1,566,332	
Capital assets:		
Capital assets not being depreciated	42,247,326	
Capital assets being depreciated, net	 	23,275,730	
Total assets	67,520,118	

Liabilities:		
Accounts payable and accrued expenses	10,893	
Accrued interest payable	441,668	
Noncurrent liabilities:
Due within one year	
370,000	
Due in more than one year	 	20,130,540	
Total liabilities	 	20,953,101	

Net Position:		
Net investment in capital assets	45,033,268	
Restricted for debt service	1,199,438	
Unrestricted	 	334,311	
Net position	  $	46,567,017	

STATEMENT  OF ACTIVITIES

Year Ended September 30, 2018

Program Revenue
Charges	Operating Grants	Capital Grants
Net (Expense) Revenue and Changes in Net Position
for		and		and	Governmental Functions/Programs	Expenses	Services	Contributions	Contributions		Activities
Governmental activities:
General government	
115,505		
33,838		
$	-		
$	-	
$	(81,667)	
Physical environment	1,124,786		329,511		-		-	(795,275)	
Interest on long-term debt	1,070,701		1,423,723		20,685		57,774	431,481	
Total governmental activities	$	2,310,992		$	1,787,072		$	20,685		$	57,774	(445,461)	

BALANCE SHEET GOVERNMENTAL FUNDS

September  30,  2018

Assets:

 	General		Debt Service

Capital Projects
Total Governmental Funds

Cash	$	319,378	$	-	$	-	$	319,378	
Investments	-	1,554,483	11,849	1,566,332	
Accounts receivable	3,400	-	-	3,400	
Assessments receivable	1,676	86,623	-	88,299	
Prepaid costs	 	19,653		-	-	19,653		
Total assets	$	344,107		$	1,641,106	$	11,849	$	1,997,062		

Liabilities and Fund Balances:
Liabilities:
Accounts payable and accrued expenses	  $	9,796		$	-	$	1,097		$	10,893	
Total liabilities	9,796		-	1,097		10,893	

Fund Balances:						
Nonspendable	19,653	-	-	19,653		
Restricted for:						
Debt service	-	1,641,106	-	1,641,106		
Capital projects	-	-	10,752	10,752		
Unassigned	 	314,658	 	-	 	-	 	314,658		
Unreserved, reported in non-major:
Total fund balances	 	334,311	1,641,106	10,752	1,986,169

Total liabilities and fund balances
$	344,107	$
1,641,106	$
11,849

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 in the funds.	
65,523,056	

Liabilities not due and payable from current available resources are not reported in governmental fund statements. All liabilities, both current and long-term, are reported in the government-wide statements.		
Accrued interest payable	(441,668)		
Bonds payable	 	(20,500,540)	(20,942,208)	
Net Position of Governmental Activities	$	46,567,017	

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS

Year Ended September 30, 2018

Revenues:

 	General		Debt Service	Capital Projects
  
Total Governmental Funds

Special assessments	$	363,349	$	1,423,723	$	-	$	1,787,072	
Investment income	 	-	 	20,685	 	57,774	 	78,459	
Total revenues	 	363,349	1,444,408	57,774	1,865,531	

Expenditures:
Current:
General government	115,505	-	-	115,505						
Maintenance and operations	212,012	-	-	212,012						
Debt service:								
Interest	-		1,066,529		-		1,066,529	
Principal	-		360,000		-		360,000	
Capital outlay	 	-		-		6,551,982		6,551,982	
Total expenditures	 	327,517		1,426,529		6,551,982		8,306,028	

Net change in fund balances	
35,832		
17,879		
(6,494,208)		
(6,440,497)	
Fund Balances - beginning of year	 	298,479		1,623,227		6,504,960		8,426,666	
Fund Balances - end of year	  $	334,311		  $	1,641,106		  $	10,752		  $	1,986,169	

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

Amounts reported for Governmental Activities in the Statement of Activities are different because:			
Net change in fund balances - total governmental funds (page 10)		$	(6,440,497)	
Governmental funds report outlays for capital assets as expenditures because such outlays use current financial resources; however, in the statement of net position the cost of those assets is recorded as capital assets. Depreciation on capital assets is not recognized in the fund statements but is reported as an expense in the statement of activities:			
Capital outlay	$	6,551,982			
Depreciation expense	 	(912,774)		5,639,208	

Repayments of long-term liabilities are reported as expenditures in governmental funds, while repayments reduce long-term liabilities in the statement of net position.		

360,000	
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.			

Change in accrued interest	5,438			
Amortization of bond discount	 	(9,610)		(4,172)	
Change in Net Position of Governmental Activities (page 8)		$	(445,461)	

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND

Year Ended September 30, 2018

Revenues:

Budgeted Amounts
 	Original		Final

Actual Amounts
Variance with Final Budget Positive (Negative)

Special Assessments
  $	359,955	$
359,955	$
363,349	$
3,394
   
Total revenues	 	359,955	359,955	363,349	3,394
   
Expenditures:
Current:
General government	132,275		132,275		115,505		16,770	
Maintenance and operations	 	227,680		227,680		212,012		15,668	
Total expenditures	 	359,955		359,955		327,517		32,438	
Excess (Deficit) of Revenues Over Expenditures	
 	-		
-		
35,832		
35,832	

Net change in fund balance			-		-		35,832	35,832 Fund Balance - beginning	 	298,479	298,479	298,479		-
Fund Balance - ending
$	298,479	$
298,479	$
334,311	$
35,832

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS

Year Ended September 30, 2018

Note 1 - Summary of Significant Accounting Policies:

Reporting Entity

The Shingle Creek Community Development District, (the “District”) was established by Osceola County Ordinance #05-15 enacted on May 23, 2005 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes. The Act provides, among other things, the power to manage basic services for community development, the power to borrow money and issue bonds, and the power to levy and collect non-ad valorem assessments for the financing and delivery of capital infrastructure. The District was established for the purpose 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 the Board of Supervisors (the “Board”), which is composed of five members. At present, 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 exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2018, most of the Board of Supervisors are affiliated with the Developer, LEN OT Holdings, LLC (Lennar). The District is economically dependent on the Developer.

The Board has the final responsibility for, among other things:

Allocating 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  14, 39 and 61. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District Board of Supervisors 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 1 - Summary of Significant Accounting Policies (Continued): Government-Wide and Fund Financial Statements
The 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 and 2) grants, contributions and investment income that are restricted to meeting the operational or capital requirements of a particular function or segment and 3) operating-type special assessments that are treated as charges for services (including assessments for maintenance and debt service). 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  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 recognized as revenues 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 are recorded when a liability is incurred, as under accrual accounting; however, debt service expenditures are recorded only when payment is due.

Assessments, including debt service assessments and operation and maintenance assessments, are non-ad valorem assessments imposed on all lands located within the District and benefited by the District’s activities. Operation and maintenance assessments are levied by the District prior to the start of the fiscal year which begins October 1st and ends on September 30th. These assessments are imposed upon all benefited lands located in the District. Debt service special assessments are imposed upon certain lots and lands as described in each resolution imposing the special assessment for each series of bonds issued by the District. Certain debt service assessments are collected upon the closing of those lots subject to short term debt and are used to prepay a portion of the bonds outstanding.

Note 1 - Summary of Significant Accounting Policies (Continued):

Measurement Focus, Basis of Accounting  and Financial  Statement  Presentation (Continued):

Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current 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 - is the District’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Debt Service Fund - accounts for the accumulation of resources for the annual payment of principal and interest on long-term debt.

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

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.

Assets, Liabilities,  Deferred Outflows/Inflows  of Resources and Net Position/Fund Balance

Restricted Assets - These assets represent cash and investments set aside pursuant to bond covenants.

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

Investments of the District are reported at fair value and are categorized within the fair value hierarchy established in accordance with GASB Statement No. 72, Fair Value Measurement and Application. The District’s investments consist of investments authorized in accordance with Section 218.415, Florida Statutes.

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.

Note 1 - Summary of Significant Accounting Policies (Continued):

Assets, Liabilities,  Deferred Outflows/Inflows  of Resources and Net Position/Fund Balance (Continued):

Capital Assets - Capital assets, which include property, plant, equipment and infrastructure assets (e.g., utilities system, stormwater system, landscaping and similar items), are reported in the applicable governmental activities column 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 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.

Property, plant and equipment of the District are depreciated using the straight-line method over the following estimated useful lives:
 	Assets	 	Years	
Infrastructure	30

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 method. Bonds payable are reported net of premiums or discounts.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of 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 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. The District does not have any item that qualifies for reporting in this category for the year ended September 30, 2018.

Note 1 - Summary of Significant Accounting Policies (Continued):

Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position/Fund Balance (Continued):

Deferred Outflows/Inflows of Resources (Continued) - 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. The District does not have any item that qualifies for reporting in this category for the year ended September 30, 2018.

Net Position Flow Assumption - Sometimes the District will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the District’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.

Fund Balance Policies - Fund balance of governmental funds is reported in various categories based on the nature of any imitations requiring the use of resources for specific purposes. The District itself can establish limitations on the use of resources through either commitment (committed fund balance) or an assignment (assigned fund balance).

The committed fund balance classification includes fund balance amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. The Board of Supervisors is the highest level of decision-making authority for the government that can, by adoption of an ordinance or resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance or resolution remains in place until a similar action is taken to remove or revise the limitation.

Amounts in the assigned fund balance classification  are intended  to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The Board of Supervisors has authorized the District Manager to assign amounts for specific purposes. The Board of Supervisors may also assign fund balance as it does when  appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for  the removal of an assignment. Conversely, as discussed above an additional action is essential to either remove or revise a commitment.

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 2 - Stewardship, Compliance and Accountability:

Budgetary Information

The District is required to establish a budgetary system and an approved annual budget for the General Fund. Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. All annual appropriations lapse  at the fiscal year end. The legal level of budgetary control is at the fund level. Any budget amendments that increase the aggregate budgeted appropriations, at the fund level, must be approved by the Board of Supervisors.

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 proposed budgets for the fiscal year commencing the following October 1.

A public hearing is conducted to obtain public comments.

Prior to October 1, the budget is legally adopted by the District Board.

Subject to certain limited exceptions set forth in the District’s appropriation resolutions adopted each year, all budget changes must be approved by the District Board.

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

Note 3 - 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.

Note 3 - Deposits and Investments (Continued):

Investments

The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.

Under GASB 72, assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable, and uses significant unobservable inputs that uses the best information available under the circumstances, which includes the District’s own data in measuring unobservable inputs.

The District has the following recurring fair value measurements as of September 30, 2018:

Fidelity Government Portfolio Fund of $1,566,332 are valued using Level 2 inputs.
The District’s investment policy is governed by State Statutes and the District Trust Indenture. This policy allows investments in any financial institution that is a qualified public depository of the State of Florida as identified by the State Treasurer, in accordance with Chapter 280 of the Florida Statutes. Authorized investments are:

The State Board of Administration Local Government Investment Pool (SBA);

Securities and Exchange Commission Registered Money Market Funds with the highest credit quality rating from a nationally recognized rating agency;

Interest-bearing savings accounts and certificates of deposit in state-certified qualified public depositories;

Direct obligations of the U.S. Treasury.

Investment Type	Fair Value

Credit Rating
Weighted Average Maturity
Fidelity Government Portfolio Fund
  $ 1,566,332
 
AAAm	36 Days

Note 3 - Deposits and Investments (Continued):

Credit Risk:

The District’s investment policy limits credit risk by restricting authorized investments to those described. Investments in U.S. Government securities and agencies must be backed by the full faith and credit of the United States Government. Short term bond funds shall be rated by a nationally recognized ratings agency and shall maintain the highest credit quality rating.

Custodial Credit Risk:

In the case of deposits, this is the risk that, in the event of a bank failure, the District’s deposits may not be returned to it. The District’s investment policy requires that bank deposits be secured as provided by Chapter 280, Florida Statutes. This law requires local governments to deposit funds only in financial institutions designated as qualified public depositories by the Chief Financial Officer of the State of Florida, and creates the Public Deposits Trust Fund, a multiple financial institution pool with the ability to assess its member financial institutions for collateral shortfalls if a default or insolvency has occurred. At September 30, 2018, all of the District’s bank deposits were in qualified public depositories.

For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2018, none of the investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form.

Concentration of Credit Risk:

The District’s investment policy does not specify limits on the amount the District may invest in any one issuer.

Interest Rate Risk:

The District’s investment policy does not specifically address interest rate risk; however, the general investment policy is to apply the prudent-person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and in general, avoid speculative investments. The District manages its exposure to declines in fair values by investing primarily in pooled investments that have a weighted average maturity of less than three months.

Note 4 - Capital Assets:

Capital asset activity for the year ended September 30, 2018 was as follows:
Beginning
Balance	Additions	Disposals

Ending Balance
   
Governmental Activities:
Capital Assets, not being depreciated:

Land and land improvements	$ 22,315,159		$	-		$	-	$ 22,315,159	
Infrastructure under construction	13,380,185		6,551,982		-	19,932,167	
Total capital assets, not being depreciated	35,695,344		6,551,982		-	42,247,326	

Capital Assets Being Depreciated:
Infrastructure	27,383,213		-	-	27,383,213			
Total capital assets, being depreciated	27,383,213		-	-	27,383,213			

Less Accumulated Depreciation for:						
Infrastructure	(3,194,709)		(912,774)		-	(4,107,483)	
Total accumulated depreciation	(3,194,709)		(912,774)		-	(4,107,483)	

Total capital assets being depreciated, net	
24,188,504		
(912,774)		
-	23,275,730	
Governmental activities capital assets, net	$ 59,883,848		$ 5,639,208		$	-	$ 65,523,056	

Depreciation expense for 2018 in the amount of $912,774 was charged to maintenance and operations.
Note 5 - Long-Term Liabilities: Series 2015 Bonds
In May 2015, the District issued $21,465,000 of Special Assessment Bonds, Series 2015. The Series 2015 Bonds are due on November 1, 2045 with a fixed interest rate between 3.625% and 5.4%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the property within the District and pay certain bond issuance costs. Interest is paid semiannually on each May 1 and November 1, commencing on November 1, 2015. Principal on the Series 2015 Bonds is due in annual installments through November 1, 2045.

In a previous year, an entity affiliated with the Developer acquired a previous Bond Series (2006 Bonds), in a variety of transactions. As a condition to closing on the Series 2015 Bonds, the outstanding balance of the Series 2006 Bonds totaling $69.7 million was cancelled and liens against Series 2006 special assessments was released.

Note 5 - Long-Term Liabilities (Continued):

Series 2015 Bonds (Continued)
The Bonds are subject to extraordinary mandatory redemption prior to their selected maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.

The Bond Indentures require that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. This requirement has  been met at September 30, 2018.

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

Total principal and interest remaining on the Series 2015 Bonds at September 30, 2018 is
$39,535,062. For the year ended September 30, 2018, principal and interest of $1,426,529 was paid. Total special assessment revenue pledged was $1,423,723.

Long-term debt activity for the year ended September 30, 2018 was as follows:

	Beginning
Balance		
Increases		
Decreases		Ending
Balance		Due Within
One Year	
Governmental activities:
Bonds Payable:										
Series 2015	$ 21,120,000		$	-		$	(360,000)		$ 20,760,000		$	370,000	
Bond discount	(269,070)		-		9,610		(259,460)		-	
Governmental activity long- term liabilities	
$ 20,850,930		
$	-		
$	(350,390)		
$ 20,500,540		
$	370,000	

Note 5 - Long-Term Liabilities (Continued):

At September 30, 2018, the scheduled debt service requirements on the bonds payable were as follows:

Governmental Activities
Year Ending
September 30,		
Principal		
Interest	
2019		$	370,000		$	1,053,298	
2020		385,000		1,039,614	
2021		400,000		1,025,386	
2022		415,000		1,008,798	
2023		430,000		989,785	
2024 - 2028		2,465,000		4,626,847	
2029 - 2033		3,155,000		3,924,609	
2034 - 2038		4,040,000		3,006,395	
2039 - 2043		5,235,000		1,779,975	
2044 - 2046		3,865,000		320,355	
		  $	20,760,000		  $	18,775,062	

Note 6 - Related Party Transaction:					
Assessments from Developer:					

The Developer owns a portion of land within the District; therefore, assessment revenue in the general and debt service funds include the assessments levied on those lots owned by the Developer. In the current year, special assessment revenue and contributions from the Developer was approximately $1,038,000, 58% of total special assessment revenue.

Concentrations:

A significant portion 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 7 - Management Company:

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

Note 8 - 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. These risks are covered by commercial insurance from independent third parties. The District has not filed any claims under this commercial coverage during the last three years.

COMPLIANCE SECTION

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
Shingle Creek Community Development District

We have audited, 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, the financial statements of the governmental activities and each major fund of the Shingle Creek Community Development District (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 financial statements and have issued our report thereon dated May 13, 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 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 over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be a material weakness or significant deficiency. Given these limitations, during our audit, we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

MCDIRMIT DAVIS & COMPANY, LLC
934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803
T: 407-843-5406  │  F: 407-649-9339  │ WWW.MCDIRMITDAVIS.COM
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.

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.

Orlando, Florida May 13, 2019

MANAGEMENT COMMENTS

Board of Supervisors
Shingle Creek Community Development District

Report on the Financial Statements

We have audited the financial statements of the Shingle Creek Community Development District, (the “District”) as of and for the fiscal year ended September 30, 2018, and have issued our report thereon dated May 13, 2019.

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.

Reporting Requirements

We have issued our 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 and Independent Accountant’s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 13, 2019, should be considered in conjunction with this management letter.

Prior Audit Findings

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

Official Title and Legal Authority

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

MCDIRMIT DAVIS & COMPANY, LLC
934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803
T: 407-843-5406  │  F: 407-649-9339  │ WWW.MCDIRMITDAVIS.COM
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 of the specific condition(s) met. In connection with our audit, we determined that the District did not met 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 us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not note any such findings.

Purpose of this Letter

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

Orlando, Florida May 13, 2019

INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES

Board of Supervisors
Shingle Creek Community Development District

We have examined Shingle Creek Community Development District’s (the “District”) compliance with the requirements of Section 218.415, Florida Statutes, 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 and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a  reasonable basis for our opinion. Our examination does not provide a legal determination on 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.

Orlando, Florida May 13, 2019

MCDIRMIT DAVIS & COMPANY, LLC
934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803
T: 407-843-5406  │  F: 407-649-9339  │ WWW.MCDIRMITDAVIS.COM