Bella Collina Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2019

Bella Collina Community Improvement District ANNUAL FINANCIAL REPORT
September 30, 2019

TABLE OF CONTENTS

Page Number

FINANCIAL SECTION
REPORT OF INDEPENDENT AUDITORS	1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-8

BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Position	9
Statement of Activities	10
Fund Financial Statements
Balance Sheet – Governmental Funds	11
Reconciliation of Total Governmental Fund Balances
to Net Position of Governmental Activities	12
Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds	13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities	14
Statement of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – General Fund	15
Statement of Fund Net Position – Water and Sewer Fund	16
Statement of Revenues, Expenses and Changes in Fund
Net Position – Water and Sewer Fund	17
Statement of Cash Flows – Water and Sewer Fund	18

Notes to Financial Statements	19-35
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	36-37
MANAGEMENT LETTER	38-39
INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH
SECTION 218.415, FLORIDA STATUTES	40

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
Bella Collina Community Development District Lake County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of Bella Collina Community Development District as of and for the year ended September 30, 2019, and the related notes to financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

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

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

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

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To the Board of Supervisors
Bella Collina Community Development District

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities and each major fund of Bella Collina Community Development District, as of September 30, 2019, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

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

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued a report dated June  15, 2020 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations and contracts. The purpose  of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Bella Collina Community

Development District’s internal co

ntrol over financial reporting and compliance.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 15, 2020

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Management’s discussion and analysis of Bella Collina Community Development District (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities. The analysis provides summary financial information for the District and should be read in conjunction with the District’s financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

The District’s basic financial statements comprise three components; 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to financial statements. The Government-wide financial statements present an overall picture of the District’s financial position and results of operations. The Fund financial statements present financial information for the District’s major funds. The Notes to financial statements provide additional information concerning the District’s finances.

The Government-wide financial statements are the statement of net position and the statement of activities. These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net position of governmental activities and business-type activities and the change in net position. Governmental activities are primarily supported by special assessments. Business-type activities are supported by charges to the users of those activities, such as water and sewer service charges.

The statement of net position presents information on all assets and liabilities of the District, with the difference between assets and liabilities reported as net position. Net position  is reported in three categories; 1) net investment in capital assets, 2) restricted  and  3) unrestricted. Assets, liabilities, and net position are reported for all Governmental activities separate from the assets, liabilities, and net position of business-type activities.

The statement of activities presents information on all revenues and expenses of  the District  and the change in net position. Expenses are reported by major function and program revenues relating to those functions are reported, providing the net cost of all functions provided by the District. To assist in understanding the District’s operations, expenses have been reported as  governmental activities or business-type activities. Governmental activities financed by  the District include general government, physical environment, and interest on long-term debt. Business-type activities financed by user charges include water and sewer services.

Fund financial statements present financial information for the governmental fund and enterprise fund. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources. The enterprise funds financial statements provide information on all assets and liabilities of the funds, changes in the economic resources (revenues  and expenses),  and total economic resources.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Fund financial  statements  include a balance  sheet  and a statement  of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances – budget and actual, is provided for the District’s General Fund. For the Water and Sewer fund, a statement of fund net position, a statement of revenues, expenses, and changes in fund net position; and a  statement of cash flows are presented. Fund financial statements provide more detailed information about the District’s activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements.

The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District’s financial standing, split between Governmental Activities and Business-type Activities. These statements are comparable to private-sector companies and give a good understanding of the District’s overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of the District, including buildings, land, and roads are reported in the statement of net position. All liabilities, including principal outstanding on bonds, and future employee benefits obligated but not paid by the District, are included. The statement of activities includes depreciation on all long-lived assets of the District, but transactions between the different functions of the District have been eliminated in order to avoid “doubling up” the revenues and expenses. The fund financial statements provide a picture of the major funds of the District. In the case of governmental activities, outlays for long lived assets are reported as expenditures and long-term liabilities, such as general obligation bonds, are not included in the fund financial statements. To provide a link from the fund financial statements to the government-wide financial statements, a reconciliation is provided from the fund financial statements to the government-wide financial statements.

Notes to financial statements provide additional detail concerning the financial activities and financial balances of the District. Additional information about the accounting practices of the District and investments of the District are some of the items included in the notes to financial statements.

Financial Highlights

The following are the highlights of financial activity for the year ended September 30, 2019.

□     The  District’s  total  assets exceeded  total  liabilities  by $2,310,017.	Unrestricted net position for Governmental Activities was $496,922 and for Business-type Activities was
$1,090,875. Net investment in capital assets for Governmental Activities was $1,289,451 and for Business-type Activities was $(1,180,212). Restricted net position for Governmental Activities was $533,377 and for Business-type Activities was $79,604.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Highlights (Continued)

□ Governmental activities revenues totaled $1,796,119 while governmental activities  expenses totaled $1,522,136. Business-type revenues totaled $809,341 while business- type expenses totaled $753,019.

Financial Analysis of the District

The following schedule provides a summary of the assets, liabilities and net position of the District. It is not intended to be a complete presentation of government-wide financial activity.

		Net	Position			
		Governmental Activities	Business-type Activities		Total	
		2019	2018	2019	2018		2019	2018	

Current assets	
$	
2,401,579	$ 2,315,919	
$   1,216,013	$ 1,092,898	
$	
3,617,592	$ 3,408,817	
Capital assets, net	 		14,839,551 15,301,078	 	5,643,688 	5,732,526	     20,483,239 21,033,604 24,100,831	24,442,421

966,914	965,268	
Total Assets		17,241,130	17,616,997	6,859,701 	6,825,424		

Current liabilities		
921,380	911,230	
45,534	54,038		
Non-current liabilities	 		14,000,000 14,660,000	 	6,823,900 	6,837,441	     20,823,900      21,497,441
21,790,814	22,462,709	
Total Liabilities		14,921,380	15,571,230	6,869,434 	6,891,479		

Net Position						
Net investment in capital						
assets		1,289,451	1,160,428	(1,180,212)	(1,104,915)		109,239	55,513	
Restricted for debt service		533,377	410,964	79,604	96,613		612,981	507,577	
Unrestricted	 	496,922 	474,375	 	1,090,875 	942,247	 	1,587,797 	1,416,622	
Total Net Position	   $ 	2,319,750 $ 2,045,767	  $	(9,733)    $	(66,055)	  $ 	2,310,017 $ 1,979,712	

The decrease in capital assets for governmental activities and for business-type activities was primarily due to depreciation.

The decrease in non-current liabilities for governmental activities  and business-type activities was primarily due to principal payments on bonds in the current year.

The increase in net investment in capital assets  is related to current year  debt  payments in excess of depreciation.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District (Continued)

The following schedule provides a summary of the changes in net position of the District and is presented at the government-wide level for comparison purposes. It is not intended to be a complete presentation of District-wide financial activity.

	Financial Activity			
	 Governmen	tal Activities		   Business-type Activities			 	Total		
	 	2019		 	2018		 	2019		 	2018			 	2019		 	2018		
Revenues				
Program revenues	$ 1,748,568	$ 1,773,545	$	801,498	$	685,699		$ 2,550,066	$ 2,459,244	
General revenues	 	47,551	30,816	7,843	5,363		55,394	36,179	
Total Revenues	1,796,119	1,804,361	809,341	691,062		2,605,460	2,495,423	

Expenses				
General government	121,687	84,107	-	-		121,687	84,107	
Physical environment	511,722	510,775	-	-		511,722	510,775	
Interest/other charges	888,727	932,138	-	-		888,727	932,138	
Water and sewer	-	-	753,019	769,927		753,019	769,927	

Total Expenses	
1,522,136	
1,527,020	
753,019	
769,927		
2,275,155	
2,296,947	

Change in Net Position	
273,983	
277,341	
56,322	
(78,865)		
330,305	
198,476	
Net Position -				
Beginning of Year	2,045,767	1,768,426	(66,055)	12,810		1,979,712	1,781,236	
Net Position -				
End of Year	 $ 2,319,750	 $ 2,045,767	 $	(9,733)	 $	(66,055)		$ 2,310,017	$ 1,979,712	
The increase in program revenues for business-type activities was primarily due to increased connection fees and sewer usage fees in the current year.

The increase in governmental activities general government expenses is related to increased legal advertising and legal fees related to the boundary change in the current year.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Capital Assets Activity

The following schedule provides a summary of the District’s capital assets at September 30, 2019.

Governmental	Business-type				
Description			Activities	Activities			Total	

Land and improvements		
$	
4,500,000		
$	
-		
$	
4,500,000	
Infrastructure			14,954,821			7,465,728			22,420,549	
Equipment			-			229,262			229,262	
Less: accumulated depreciation

Total Capital Assets (Net)	 	(4,615,270)	 	(2,051,302)	 	(6,666,572)	
		 $ 	14,839,551		 $		5,643,688		 $ 	20,483,239	

During the year, business-type equipment additions were $124,551 and depreciation was
$461,527 for governmental activities and $213,389 for business-type activities.

General Fund Budgetary Highlights

The budget exceeded governmental expenditures primarily because trustee  fees  and  printing and binding costs were less than anticipated.

The September 30, 2019 budget was amended for legal advertising and legal  fees that  were higher than anticipated.

Debt Management

Governmental Activities debt includes the following:

□ In  December  2004,  the  District  issued  $22,780,000  Special  Assessment  Revenue  Bonds, Series 2004. These bonds were issued to finance the acquisition  and  construction of certain improvements within the District. The balance outstanding at September 30, 2019 was $14,570,000.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Debt Management (Continued)

Business-type Activities debt includes the following:

□          On September 1,  2016,  the  District issued $2,346,216 Utility System  Bonds,  Series 2016 to restructure the Series 2004 Utility Bonds outstanding balance of  $2,005,000.  The  Series 2016 Utility Bonds include an initial principal amount of $2,346,216. Accreted interest will result in a matured amount of $3,595,000 due by  November 1,  2024.  The  total balance of bonds payable at September 30, 2019 was $1,230,446.

Economic Factors and Next Year’s Budget

The District does not anticipate any economic factors to affect operations for the year ended September 30, 2020.

Request for Information

The financial report is designed to provide a general overview of Bella Collina Community Development District’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Bella Collina Community Development District, Governmental Management Services – CF, LLC, 219 East Livingston Street, Orlando, Florida 32801.

	Governmental	Business-type			
	Activities			Activities		Total	
ASSETS							
Current Assets							
Cash and equivalents	$	95,624	$	734,112		$	829,736	
Investments	389,899			212,459		602,358	
Accounts receivable	-			46,058		46,058	
Assessments receivable	9,792			759		10,551	
Prepaid expenses	12,668			17,863		30,531	
Restricted investments	 	1,893,596	 	204,762		 	2,098,358	
Total Current Assets	 	2,401,579	 	1,216,013		 	3,617,592	
Non-current Assets					
Capital assets, not being depreciated							
Land and improvements	4,500,000			-		4,500,000	
Capital assets, being depreciated							
Infrastructure	14,954,821			7,465,728		22,420,549	
Equipment	-			229,262		229,262	
Less: accumulated depreciation	 	(4,615,270)	 	(2,051,302)		 	(6,666,572)	
Total Non-current Assets	 	14,839,551	 	5,643,688		 	20,483,239	
Total Assets	 	17,241,130	 	6,859,701		 	24,100,831	
LIABILITIES							
Current Liabilities							
Accounts payable and accrued expenses	2,306			45,534		47,840	
Accrued interest payable	349,074			-		349,074	
Bonds payable	 	570,000	 	-		 	570,000	
Total Current Liabilities	 	921,380	 	45,534		 	966,914	
Non-current Liabilities							
Due to developer	-			5,593,454		5,593,454	
Bonds payable	 	14,000,000	 	1,230,446		 	15,230,446	
Total Non-current Liabilities	 	14,000,000	 	6,823,900		 	20,823,900	
Total Liabilities	 	14,921,380	 	6,869,434		 	21,790,814	
NET POSITION							
Net investment in capital assets	1,289,451			(1,180,212)		109,239	
Restricted for debt service	533,377			79,604		612,981	
Unrestricted	 	496,922	 	1,090,875		 	1,587,797	
Total Net Position	 $	2,319,750		 $		(9,733)		 $	2,310,017	

See accompanying notes to financial statements.

Bella Collina Community Development District STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2019

		Program			Net (Expenses) Revenues and	
	  	Revenues				Changes in Net Position	
	Charges for	Governmental		Business-type			
Functions/Programs		 Expenses	Services		Activities		Activities		Total	
Primary government										
Governmental Activities										
General government	$	(121,687)	$	131,094	$	9,407	$	-	$	9,407	
Physical environment	(511,722)	54,075			(457,647)		-		(457,647)	
Interest on long-term debt	 	(888,727)	 		1,563,399		 	674,672		 	-		 	674,672	
Total Governmental Activities	  (1,522,136)	 		1,748,568		 	226,432		 	-		 	226,432	
Business-type Activities										
Water and sewer	 	(753,019)	 		801,498		 	-		 	48,479		 	48,479	
Total Primary Government	 $(2,275,155)	 $	2,550,066	226,432		48,479		274,911	

General Revenues	
	Investment earnings			 	47,551		 	7,843		 	55,394	
	Change in Net Position		273,983		56,322		330,305	
Net Position - October 1, 2018	 	2,045,767		 	(66,055)		 	1,979,712	
Net Position - September 30, 2019	 $		2,319,750	 $	(9,733)	 $	2,310,017	

See accompanying notes to financial statements.

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BALANCE SHEET – GOVERNMENTAL FUNDS
September 30, 2019

						Total	
						Governmental	
	General		Debt Service		Funds	
ASSETS							
Cash and equivalents	$	95,624		$	-		$	95,624	
Investments		389,899		-		389,899	
Assessments receivable		1,037		8,755		9,792	
Prepaid expenses		12,668		-		12,668	
Restricted assets							
Investments		-		1,893,596		1,893,596

$   2,401,579	
Total Assets	$	499,228		$ 1,902,351			

LIABILITIES AND FUND BALANCES							
Liabilities:							
Accounts payable and accrued expenses	$	2,306		$	-		$	2,306	

Fund Balances:							
Nonspendable - prepaid expenses		12,668		-		12,668	
Restricted - debt service		-		1,902,351		1,902,351	
Unassigned		484,254		-		484,254

2,399,273

$   2,401,579	
Total Fund Balances

Total Liabilities and Fund Balances	
$	496,922

499,228		1,902,351

$ 1,902,351			

See accompanying notes to financial statements.

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2019

Total Governmental Fund Balances	$	2,399,273	
Amounts reported for governmental activities in the Statement of Net Position			
are different because:			
Capital assets not being depreciated (land and improvements) in			
governmental activities are not current financial resources and therefore,			
are not reported at the fund level.		4,500,000	
Capital assets being depreciated, infrastructure, $14,954,821, net of accumulated			
depreciation, $(4,615,270), used in governmental activities are not			
current financial resources and therefore, are not reported at the fund level.		10,339,551	
Long-term liabilities, including bonds payable are not due and payable in the			
current period and, therefore, are not reported at the fund level.	(14,570,000)	
Accrued interest expense for long-term debt is not a current financial use and;			
therefore, is not reported at the fund level.	 	(349,074)	
Net Position of Governmental Activities	 $		2,319,750	

See accompanying notes to financial statements.

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
For the Year Ended September 30, 2019

					Total	
					Governmental	
	General		Debt Service		Funds	
Revenues						
Special assessments	$	185,169		$ 1,563,399		$ 1,748,568	
Investment earnings	9,260		38,291		47,551

1,796,119	
Total Revenues	194,429		1,601,690			

Expenditures						
Current						
General government	121,687		-		121,687	
Physical environment	50,195		-		50,195	
Debt Service						
Principal	-		635,000		635,000	
Interest	-		872,850		872,850	
Other	-		31,090		31,090

1,710,822

85,297	
Total Expenditures	171,882		1,538,940			

Net change in fund balances	
22,547		
62,750			
Fund Balances - October 1, 2018

Fund Balances - September 30, 2019	474,375

$   496,922		1,839,601

$ 1,902,351		2,313,976

$   2,399,273	

See accompanying notes to financial statements.

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2019

Net Change in Fund Balances - Total Governmental Funds	$	85,297	
Amounts reported for governmental activities in the Statement of Activities are			
different because:			
Governmental funds report capital outlays as expenditures. However, in the			
Statement of Activities, the cost of those assets is allocated over their			
estimated useful lives as depreciation. This is the amount of			
depreciation in the current period.		(461,527)	
Repayments of bond principal are expenditures in the governmental funds, but			
the repayment reduces long-term liabilities in the Statement of Net Position.		635,000	
In the Statement of Activities, interest is accrued on outstanding bonds;			
whereas in governmental funds, interest expenditures are reported			
when due. This is the net change in accrued interest in the current period.		15,213	

Change in Net Position of Governmental Activities	
$	
273,983	

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
For the Year Ended September 30, 2019

							Variance with	
							Final Budget	
	Original		Final				Positive	
	Budget		Budget		Actual		(Negative)	
Revenues								
Special assessments	$ 183,158		$ 183,158		$ 185,169		$	2,011	
Investment earnings	2,500		2,500		9,260		6,760

 	8,771	
Total Revenues	   185,658		  185,658		   194,429			
Expenditures								
Current								
General government	104,696		123,696		121,687		2,009	
Physical environment	59,736		59,736		50,195		9,541

11,550

20,321	
Total Expenditures	164,432		183,432		171,882			

Net change in fund balance	
21,226		
2,226		
22,547			
Fund Balances - October 1, 2018	   361,324		  380,324		   474,375		 	94,051	
Fund Balances - September 30, 2019	$ 382,550		$ 382,550		$ 496,922		$	114,372	

STATEMENT OF FUND NET POSITION – WATER AND SEWER FUND
September 30, 2019

ASSETS			
Current Assets			
Cash and equivalents	$	734,112	
Investments		212,459	
Accounts receivable		46,058	
Assessments receivable		759	
Prepaid expenses		17,863	
Restricted investments		204,762	
Total Current Assets		1,216,013	
Non-current Assets			
Infrastructure		7,465,728	
Equipment		229,262	
Less: accumulated depreciation	(	2,051,302)	
Total Non-current Assets		5,643,688	
Total Assets		6,859,701	

LIABILITIES			
Current Liabilities			
Accounts payable and accrued expenses		45,534	

Non-current Liabilities			
Due to developer		5,593,454	
Bonds payable		1,230,446	
Total Non-current Liabilities		6,823,900	
Total Liabilities		6,869,434	

NET POSITION			
Net investment in capital assets	(	1,180,212)	
Restricted for debt service		79,604	
Unrestricted

Total Net Position		1,090,875	
	
$	
(9,733)	

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION – WATER AND SEWER FUND
For the Year Ended September 30, 2019

Operating Revenues:
Charges for services	
$	665,935	
Special assessments	135,563	
Total Operating Revenues	801,498	

Operating Expenses:		
General and administrative	108,197	
Plant operations	366,027	
Depreciation	213,389	
Total Operating Expenses	 	687,613	
Operating Income (Loss)	113,885	

Non-Operating Revenues (Expenses):
Interest earnings	

7,843	
Interest expense	(65,406)	

Total Non-operating Revenues/(Expenses)	
 	(57,563)	
Change in Net Position	56,322	
Net Position - October 1, 2018	(66,055)	

Net Position - September 30, 2019	
$	(9,733)	

STATEMENT OF CASH FLOWS – WATER AND SEWER FUND
For the Year Ended September 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers	$	664,930	
Receipts from special assessments	135,604	
Payments to suppliers for goods and services	(483,623)	
Net Cash Provided by Operating Activities	316,911	

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets	(124,551)	
Bond and loan principal payments	(13,541)	
Bond and loan interest payments	(65,406)	
Net Cash Used by Investing Activities	(203,498)	

CASH FLOWS FROM INVESTING ACTIVITIES		
Sale of investments	78,947	
Purchase of investments	(147,533)	
Interest on investments	7,843	
Net Cash Used by Investing Activities	(60,743)	

Net Increase in Cash and Cash Equivalents	
52,670	
Cash and cash equivalents - October 1, 2018	681,442	

Cash and cash equivalents - September 30, 2019	
$	734,112	

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income	

$	113,885	
Adjustments to reconcile operating income to net cash provided by operating activities:		
Depreciation	213,389	
Decrease in assessments receivable	41	
Increase in accounts receivable	(1,005)	
Increase in prepaid expenses	(895)	
Decrease in accounts payable and accrued expenses	(8,504)	

Net Cash Provided by Operating Activities	$	316,911

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of Bella Collina Community Development District (the “District”) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The District's more significant accounting policies are described below.

Reporting Entity

The District was established on June 14, 2004 by the Lake County Board of Commissioners pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, and was established under Rule 4200-1.001 by the Florida Land and Water Adjudicatory Commission under the name of Pine Island Community Development District. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of a portion of the infrastructure necessary for the community development within the District. On May 4, 2017, the District changed its name to Bella Collina Community Development District through a technical amendment to Rule Chapter 4200- 1, F.A.C.

The District is governed by a five-member Board of Supervisors (the “Board”), who are elected on an at large basis by owners of the property within the District. Among the primary powers, which the Act provides, the Board may exercise are the power to manage basic service for community development, the power to borrow money and  issue bonds, and to levy and assess non-ad valorem assessments for the financing and delivery of capital infrastructure, subject to the approval of applicable State administrative agencies.

As required by GAAP, these financial statements present the Bella Collina Community Development District (the primary government), as a stand-alone government. The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility which includes, but is not limited to, financial interdependency, selection of governing authority, designation of management, significant ability to influence operations and accountability for fiscal matters.

Based upon the application of the above-mentioned criteria as set forth by the Governmental Accounting Standards Board, the District has identified no component units.

Measurement Focus and Basis of Accounting

The basic financial statements of the District are composed of the following:
 Government-wide financial statements
 Fund financial statements
 Notes to financial statements

Government-wide Financial Statements
Government-wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include separate columns  for  the governmental and business-type activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.

Governmental activities, which normally are supported by special assessments and interest, are reported separately from business-type activities. Program revenues include charges for services and  special  assessments.  Program  revenues  are  netted with program expenses in the Statement of Activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financing source.
Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.
Fund Financial Statements
The underlying accounting system of the District is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually.
Governmental Funds
The District classifies fund balance according to Governmental Accounting Standards Board Statement 54 – Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.

The District has various policies governing the fund balance classifications.

Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.

Restricted Fund Balance – This classification includes amounts that can be spent  only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.

Committed Fund Balance – This classification consists of contractual obligations which require formal approval from the Board of Supervisors. This type of fund balance can only be removed by the Board of Supervisors through the  same  approval process.

Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes but are neither restricted nor committed.

Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance is considered to be utilized first when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.

Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period. Revenues are considered to be available when they are collected within the current period or soon thereafter to pay liabilities of the current period. For this purpose the district considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases  (revenues)  and  decreases (expenditures) in net current assets.  Accordingly, they are said to present  a summary of sources and uses of “available spendable resources” during a period.
Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded  as  expenditures  in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability.
Debt service expenditures, as well as expenditures  related  to  compensated absences, are recorded only when payment is due.
Enterprise Funds
In the fund financial statements, the enterprise fund is presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses  are recognized when the related goods or services are delivered. In the  fund  financial statements, enterprise funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or non-current) associated with their activity are included on their balance sheets. Enterprise fund operating statements present increases (revenues) and decreases (expenses) in total net position. The District applies all GASB pronouncements as well as all FASB Statements and Interpretations, APB Opinions and Accounting Research Bulletins, issued on or before November 30, 1989, which do not conflict with, or contradict, GASB pronouncements.

Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Enterprise Funds (Continued)
Enterprise fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as investment earnings, result from non- exchange transactions or ancillary activities. Amounts paid to acquire capital assets are capitalized as assets in the fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the fund financial statements, rather than as other financing sources.
Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liabilities, rather than as an expense.

Basis of Presentation

Governmental Major Funds

General Fund – The General Fund is the District’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Debt Service Fund – The Debt Service Fund accounts for debt service requirements for the District’s Outstanding Special Assessment Revenue Bonds, Series 2004.

Enterprise Major Fund

Water and Sewer Fund – The Enterprise Fund accounts for the operations of the water and sewer utility system within the District.

Non-Current Governmental Assets/Liabilities

GASB Statement 34 requires that non-current governmental assets, such  as  land and buildings, and non-current governmental liabilities, such as general obligation bonds, due to developer and accrued compensated absences be reported in the governmental activities column in the government-wide Statement of Net Position.

Cash and Investments

Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral from their deposits of public funds. This pool is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions, providing full insurance for public deposits.

The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of:

Direct obligations of the United States Treasury;

The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969;

Interest-bearing time deposits or savings accounts in authorized qualified public depositories;

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

For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less and held in a qualified public depository as defined by Section 280.02, Florida Statutes.

Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds”. Any residual balances outstanding between the governmental activities and business-type activities are reported as “internal balances”.

Restricted Net Position

Certain net position of the District are classified as restricted on the Statement of Net Position because their use is limited either by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors. In a fund with both restricted and unrestricted net position, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position.

Capital Assets

Capital assets, which include land and improvements, infrastructure and equipment are reported in the applicable governmental or business-type activities column.

The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year.  The valuation basis for  all assets is historical cost.

The costs of normal maintenance and repairs that do not add to the value  of the  asset or materially extend its useful life are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Depreciation of capital assets is computed and recorded by utilizing the straight-line method. Estimated useful lives of the various classes of depreciable capital assets  are as follows:

Equipment	5-10 years
Infrastructure	30-40 years

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Budgets

Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to the requirements of the Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general and  debt service funds. As a result, deficits in the budget columns of the accompanying financial statements may occur.

NOTE	B	–		RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS

1. Explanation of Differences Between the Governmental Fund Balance  Sheet  and   the Government-wide Statement of Net Position

“Total fund balances” of the District’s governmental funds, $2,399,273 , differs from “net position” of governmental activities, $2,319,750, reported in the Statement of Net Position. This difference primarily results from the long-term economic focus of the Statement of Net Position versus the current financial resources focus of the governmental fund balance sheet. The effect of the differences is illustrated below.

Capital related items

When capital assets (land, buildings, infrastructure and equipment that are to be used in governmental activities) are purchased or constructed, the cost of those assets is  reported as expenditures in governmental funds. However, the Statement of  Net  Position included those capital assets among the assets of the District as a whole.

Land and improvements	$	4,500,000	
Infrastructure	14,954,821	
Accumulated depreciation	 	(4,615,270)	
Total	$	14,839,551	

NOTE	B	–		RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS (CONTINUED)

Explanation of Differences Between the Governmental Fund  Balance  Sheet  and the Government-wide Statement of Net Position (Continued)

Long-term debt transactions

Long-term liabilities applicable to the District’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position. Balances at September 30, 2019 were:

Bonds payable	$	(14,570,000)

Accrued interest

Accrued liabilities in the Statement of Net Position differ from the amount reported in governmental funds due to accrued interest on bonds.

Accrued interest	$	(349,074)

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

The “net changes in fund balances” for government funds, $85,297, differs from the “change in net position” for governmental activities, $273,983, reported in the Statement of Activities. The differences arise primarily from the long-term economic focus of the Statement of Activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated as follows.

Capital related items

When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the costs of those assets are allocated over their estimated useful lives and reported as depreciation. As a result, fund balances decrease by the amount of financial resources expended, whereas, net position decrease by the amount of depreciation charged for the year.

Depreciation	$	(461,527)

NOTE	B	–		RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS (CONTINUED)

2. Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities (Continued)

Long-term debt transactions

Repayments of bond principal are reported as expenditures in the governmental funds and, thus, have the effect of reducing fund balance because current financial resources have been used.

Bond principal payments	$	635,000

Some expenses reported in the Statement of Activities do not require the use of current financial resources; therefore, are not reported as expenditures in governmental funds.

Net change in accrued interest payable	$	15,213

NOTE C – CASH AND INVESTMENTS
All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash and investments.

Custodial Credit Risk – Deposits

Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not have a formal deposit policy for custodial credit risk, however, they follow the provisions of Chapter 280, Florida Statutes regarding deposits and investments. As of September 30, 2019, the District's bank balance was $868,750 and the carrying value was $829,736. Exposure to custodial credit risk was as follows. The District maintains all deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes.

As of September 30, 2019, the District had the following investments and maturities:

 	Investment		Maturities	  Fair Value		
Fidelity Government Portfolio Class III Fund Local Gov't Surplus Trust Fund - FL Prime Fund
Total
* Weighted Average Maturity	23 Days*
37 Days*	$
 	
 $		2,098,357
602,358
2,700,715	

The District categorizes its fair value measurements within the fair value hierarchy recently established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs  used to measure the fair value of the asset. The District uses a market approach in measuring  fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities, or groups of assets and liabilities.

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

Based on the criteria in the preceding paragraph, the investment in Fidelity Government Portfolio Class III Fund is a Level 1 asset.

Investments

The District’s investment policy allows management to invest funds  in  investments  permitted under Section 218.415, Florida Statutes.  Among  other  investments,  the  policy  allows  the  District to invest in the State Board of Administration Local Government Surplus Trust Funds.

Interest Rate Risk

The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Credit Risk

The District's investments in government loans are limited by state statutory requirements and bond compliance. The District has no investment policy that would further limit its investment choices. The Local Government Surplus Funds Trust is an authorized  investment  under  Section 218.415, Florida Statutes. The District's investments in the state investment pool and government loans are limited by state statutory requirements and bond compliance. As of September 30, 2019, the District's investments in the Fidelity Government Portfolio Class III Fund were rated as AAAm by Standard & Poor's.

Concentration of Credit Risk

The investments in Fidelity Government Portfolio are 78% of the District’s total investments. The remaining investments in Local Government Surplus Funds are 22% of the District’s total investments.

The types of deposits and investments and their level of risk exposure as of  September  30, 2019 were typical of these items during the fiscal year then ended.

NOTE D – SPECIAL ASSESSMENT REVENUES

Assessments are non-ad valorem assessments on benefitted property within the District. Operating and Maintenance Assessments are based upon adopted budget and levied annually. Debt Service Assessments are levied when bonds are issued and collected  annually.  The District may collect assessments directly or utilize the uniform method of collection (Chapter 197.3632, Florida Statutes). Direct collected assessments are due as determined by annual assessment resolution adopted by the Board of Supervisors. Assessments collected under the uniform method are mailed by County Tax Collector on November 1 and due on or before March 31 of each year. Property owners may prepay a portion or all of the Debt Service Assessments on their property subject to various provisions in the bond documents.

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.

NOTE E – CAPITAL ASSETS
Capital asset activity for Governmental Activities for the year ended September 30, 2019 was as follows:

		Balance							Balance	
		10/1/2018		Additions		Deletions			9/30/2019	
Governmental Activities:										
Capital assets, not being depreciated:										
Land and improvements	 $ 	4,500,000		 $	-		 $	-		 $ 	4,500,000	
Capital assets, being depreciated:										
Infrastructure		14,954,821		-		-			14,954,821	
Less accumulated depreciation for:										
Infrastructure	    (4,153,743)		   (461,527)		 	-		  	(4,615,270)

10,339,551

14,839,551	
Total Capital Assets Depreciated, Net

Governmental Activities Capital Assets, Net	

$	10,801,078

15,301,078		(461,527)

$ (461,527)		-

$	-		

$		

Depreciation of $461,527 was charged to physical environment.

Capital asset activity for Business-type Activities for the year ended September 30, 2019 was as follows:

	Balance								Balance	
Business-type Activities:	10/1/2018	Additions		Deletions			9/30/2019	
Capital assets, being depreciated:										
Infrastructure	$ 7,465,728		$	-		$	-		$	7,465,728	
Equipment	104,711			124,551		-			229,262	
Total Capital Assets, Being Depreciated	7,570,439			124,551		-			7,694,990	

Less accumulated depreciation for:										
Infrastructure	(1,772,317)			(186,643)		-			(1,958,960)	
Equipment	(65,596)			(26,746)		-			(92,342)	
Total Accumulated Depreciation

Business-type Activities Capital Assets	(1,837,913)

$ 5,732,526		

$		(213,389)

(88,838)		-

$	-		

$ 	(2,051,302)

5,643,688	

Depreciation of $213,389 was charged to water and sewer.

NOTE F – LONG-TERM DEBT

The following is a summary of the long-term debt activity of the Governmental Activities for the year ended September 30, 2019:

Special Assessment Revenue Bonds payable at September 30, 2019 are comprised of the following:

$22,780,000 Special Assessment Revenue Bonds, Series 2004 due in annual principal installments beginning May 1, 2010. Interest at 5.75% is due
in May and November.	$	14,570,000

The Special Assessment Revenue Bonds are secured primarily from special assessment taxes levied by the District.

The annual requirements to amortize the principal and interest of governmental activity debt outstanding for the next five years and thereafter are as follows:

Year Ending						
  September 30,	    Principal		     Interest		 	Total		
2020	$	620,000	$	837,776	$	1,457,776	
2021	605,000		802,126		1,407,126	
2022	640,000		767,338		1,407,338	
2023	675,000		730,538		1,405,538	
2024	715,000		691,726		1,406,726	
2025-2029	4,270,000		2,789,900		7,059,900	
2030-2034	5,695,000		1,408,752		7,103,752	
2035	 	1,350,000	 	77,626	 	1,427,626	
Totals	$ 14,570,000	$		8,105,782	$		22,675,782	

Special Assessment Revenue  Bonds,  Series  2004 Summary of Significant Bond Resolution Terms and Covenants Depository Funds
The bond resolution established certain funds and determines the order in which revenues are   to be deposited in these funds. A description of these funds, including their purpose, is as follows:

1. Bond Reserve Fund – Series 2004 – for deposit of an amount equal to 7% of the deemed outstanding principal at defined measurement dates. The monies in the reserve account  are only available for the payment of the principal and interest on the bonds.
The following is a schedule of required reserve deposits as of September 30, 2019:

Reserve	Reserve	
Requirement	 	Balance	

Series 2004 Special Assessment Revenue Bonds	 $	1,019,900	 $	1,060,850	

The following is a summary of the long-term debt activity of the Business-type Activities for the year ended September 30, 2019:

Utility System Bonds, Series 2004
In December 2004, the District issued $8,030,000 Series 2004 Utility System Bonds were due in one balloon payment on November 1, 2010. The Bonds have a fixed interest rate of 5.30% due in May and November.
The Series 2004 Utility System Bonds are secured by a pledge of revenues under  the  Indenture, which are defined as net revenues received from the water and sewer system for connection fees, user fees, standby fees, and payments from the Developer pursuant to the  Utility Development Agreement. The Developer defaulted on this agreement in a prior year and, as a result, the Series 2004 Utility System Bonds were not fully redeemed upon maturity in 2010. To cure the default on the Series 2004 Utility System Bonds, the matured bonds, payable in the amount of $2,005,000, were restructured with the issuance of the Series 2016 Utility System Bonds.

Utility System Bonds, Series 2016

In September 2016, the District issued $2,346,216 Series 2016 Utility System Bonds due in one balloon payment on November 1, 2024 inclusive of the respective applicable accreted interest. The Series 2016 Utility System Bonds matured balance shall amount to $3,595,000 per the  bond restructuring agreement and the trust indenture amendment. The bonds have a fixed interest rate of 5.30%. The Series 2016 Utility System Bonds outstanding balance as of September 30, 2019 is $1,230,446.

The annual requirements to amortize the principal payments, accreted interest, and bonds payable of the business-type activity debt outstanding for the next five years and thereafter are as follows:

Year Ending		Principal	Accreted		Bonds	
September 30,

2020	  	Payments	

-	 		Interest			Payable	
	
$		
$	
66,151	
$	
1,296,597	
2021		-		69,630		1,366,227	
2022		-		73,369		1,439,596	
2023		-		77,310		1,516,906	
2024		-		81,461		1,598,367	
2025
Totals	 		1,605,000
$	1,605,000	 	6,633	 	-	
	 		 $		374,554	 $		7,217,693	

Summary of Significant Bond Resolution Terms and Covenants
Series 2016 Bonds shall not be subject to optional or mandatory redemption. The Series  2016 Bonds are subject to an extraordinary mandatory redemption, in whole or in part, prior to maturity by the District on each February 1, May 1, August 1, and November 1, from moneys deposited into the Connection Payment account of the redemption funds following the payment of Connection Fees per the first supplemental indenture.

There are established within the bond fund held by the trustee: (i) a 2016 Interest Subaccount within the interest account, (ii) a 2016 principal subaccount within the principal account, and (iii) a 2016 reserve subaccount within the reserve account which shall be held solely for the benefits of all of the Series 2016 bonds.

In prior years, the District entered into a Standard Potable Water and Wastewater Development Agreement with the Developer (Utility Development Agreement). In connection with this agreement, the District received a total of $5,059,983 in refundable advance fees (RAF), minimum Equivalent Residential Connections (ERC), and Allowance for Funds Prudently Invested (AFPI) Fees from the Developer. The Developer failed to make certain  payments under the agreement and, as a result, the District withdrew approximately $464,779 from the RAF and Shortfall escrow accounts funded by the Developer in prior years. During the 2016 Bond restructuring, the agreement was amended. The total balance remaining in the escrow accounts was $71,057 at September 30, 2019. During previous years, a new developer purchased most of the assets of the old developer. The total amount due to the new developer under the amended utility development agreement dated September 1, 2017 may not exceed
$5,593,454.

NOTE H – RISK MANAGEMENT

The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. There were no claims or settled claims from these risks have not exceeded commercial insurance coverage.

NOTE I – SUBSEQUENT EVENT

In November 2019, the District had a special call of $135,000 par ($103,948.65 Accreted Value) on the Series 2016 Utility System Bonds.

In May 2020, the District had a special call of $75,000 par ($59,279.55) on the Series 2016 Utility System Bonds.

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
Bella Collina Community Development District Lake 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 Bella Collina Community Development District, as of and for the year ended September 30, 2019, and the related notes to the financial statements, and have issued our  report thereon dated June 15, 2020.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Bella Collina Community Development District's internal control over financial reporting 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 Bella  Collina Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Bella Collina Community Development District's internal control over financial reporting.

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

Our consideration of internal control 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 that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not  been identified.

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Board of Supervisors
Bella Collina Community Development District

Compliance and Other Matters

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

Purpose of this Report

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

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 15, 2020

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MANAGEMENT LETTER

To the Board of Supervisors
Bella Collina Community Development District Lake County, Florida

Report on the Financial Statements

We have audited the financial statements of the Bella Collina Community Development District as of and for the year ended September 30, 2019, and have issued our report thereon dated   June 15, 2020.

Auditor’s Responsibility

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

Other Reporting Requirements

We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and our Independent Auditor’s Report on an examination conducted in accordance with AICPA Professionals Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 15, 2020, should be considered in conjunction with this management letter.

Prior Audit Findings

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

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 Bella Collina Community Development District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific conditions met. In connection with our audit, we determined that Bella Collina Community Development District did not meet any of the conditions described in Section 218.503(1) Florida Statutes.

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To the Board of Supervisors
Bella Collina Community Development District

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 Bella Collina Community Development District. It is management’s responsibility to monitor the Bella Collina Community Development District’s financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same as of September 30, 2019.

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.

Additional Matters

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

Purpose of this Letter

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

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 15, 2020

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INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES

To the Board of Supervisors
Bella Collina Community Development District Lake County, Florida

We have examined Bella Collina Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2019. Management is responsible for Bella Collina Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on Bella Collina Community Development District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about Bella Collina Community Development District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on Bella Collina Community Development District’s compliance with the specified requirements.

In our opinion, Bella Collina Community Development District complied, in all material respects, with the aforementioned requirements during the year ended September 30, 2019.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 15, 2020

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