Somerset Community Development District

Board of Supervisors’ Regular Meeting August 10, 2020

District Office:
120 Richard Jackson Blvd, Suite 220 Panama City Beach, Florida 32407 850-334-9055

www.somersetcdd.org

SOMERSET COMMUNITY DEVELOPMENT DISTRICT AGENDA

Rizzetta & Company, Inc., 120 Richard Jackson Boulevard, Suite 220, Panama City Beach, FL 32407

District Board of Supervisors	Andrew O’Connell	Chairman	
	John Rosenberg	Vice Chairman	
	George Hartley	Assistant Secretary	
	Eddie Foster	Assistant Secretary	
	Tonya Pippin	Assistant Secretary	

District Manager	
Anthony Jeancola	
Rizzetta & Company, Inc	
District Counsel	Tucker Mackie	Hopping Green & Sams, P.A.	
District Engineer	Jim Martelli	Innerlight Engineering	

All cellular phones must be placed on mute while in the meeting room.

The Audience Comment portion of the agenda is where individuals may make comments on matters that concern the District. Individuals are limited to a total of three
minutes to make comments during this time.

Pursuant to provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this meeting/hearing/workshop is asked to advise the District Office at least forty-eight (48) hours before the meeting/hearing/workshop by contacting the District Manager at (850) 334-9055. If you are hearing or speech impaired, please contact the Florida Relay Service by dialing 7-1- 1, or 1-800-955-8771 (TTY)1-800-955-8770 (Voice), who can aid you in contacting the District Office.

A person who decides to appeal any decision made at the meeting/hearing/workshop with respect to any matter considered at the meeting/hearing/workshop is advised that person will need a record of the proceedings and that accordingly, the person may need to ensure that a verbatim record of the proceedings is made including the testimony and evidence upon which the appeal is to be based.

SOMERSET COMMUNITY DEVELOPMENT DISTRICT
DISTRICT OFFICE  120 RICHARD JACKSON BLVD., SUITE 220, PANAMA CITY BEACH, FL 32407
http://somersetcdd.org/

August 3, 2020
Board of Supervisors Somerset Community Development District

AGENDA

Dear Board Members:
The regular meeting of the Board of Supervisors’ of the Somerset Community Development District will be held on Monday, August 10, 2020 at 2:00 p.m. (CDT) by phone teleconference at 1-929-205-6099; Meeting ID 997 8971 1784. The following is the agenda for this meeting:

BOARD OF SUPERVISORS MEETING:
CALL TO ORDER/ROLL CALL
AUDIENCE COMMENTS
BUSINESS ADMINISTRATION
Consideration of Minutes of the Board of
Supervisors’ Meetings Held on May 26, 2020	Tab 1
Ratification of Operation and Maintenance Expenditures for
May - June 2020	Tab 2
BUSINESS ITEMS
Public Hearing on Fiscal Year 2020/2021 Final Budget
Consideration of Resolution 2020-06, Adopting Fiscal Year 2020/2021 Final Budget	Tab 3
Consideration of Resolution 2020-07, Imposing Special Assessments and Certifying an Assessment Roll…	Tab 4
Consideration of Fiscal Year 2019/2020 Direct Collect Agreement	Tab 5
Consideration of Resolution 2020-08, Fiscal Year 2020/2021
Annual Meeting Schedule	Tab 6
Ratification of Acceptance of Fiscal Year 2019 Audit	Tab 7
Discussion Regarding Infrastructure Related Items
Trash Compactors/Pick Up
Pedestrian Crosswalks
STAFF REPORTS
District Counsel
District Engineer
District Manager
SUPERVISOR REQUESTS
ADJOURNMENT
I look forward to seeing you at the meeting. In the meantime, if you have any questions, please do not hesitate to call me at 850-334-9055.
Sincerely,
Anthony Jeancola
Anthony Jeancola District Manager

cc: Tucker Mackie, Hopping Green & Sams, P.A. Jim Martelli, Innerlight Engineering

Tab 1

1	MINUTES OF MEETING
2
Each person who decides to appeal any decision made by the Board with respect
to any  matter considered at the  meeting is  advised that the  person may need to
ensure that a verbatim record of the proceedings is made, including the testimony
and evidence upon which such appeal is to be based.
7
SOMERSET
COMMUNITY DEVELOPMENT DISTRICT
10
A special meeting of the Board of Supervisors of the Somerset Community
Development District was held on Tuesday, May 26, 2020 at 2:02 p.m. CDT by phone
13	teleconference at 1-929-205-6099; Meeting ID 984 5091 0581.
14
Present and constituting a quorum:
Andrew O’Connell	Board Supervisor, Chair
John Rosenberg	Board Supervisor, Vice Chair
Eddie Foster	Board Supervisor, Assistant Secretary
George Hartley	Board Supervisor, Assistant Secretary (in-progress)
Tonya Pippin	Board Supervisor, Assistant Secretary
21
Also present were:
Anthony Jeancola	District Manager, Rizzetta & Company, Inc.
Tucker Mackie	District Counsel, Hopping Green & Sams, P.A.
Audience Members	None
26
27	FIRST ORDER OF BUSINESS	Call to Order
28
29	Mr. Jeancola called the meeting to order and read the roll call.
30
31	SECOND ORDER OF BUSINESS	Audience Comments
32
33	Mr. Jeancola stated for the record that there were no audience members present.
34
35	George Hartley joined the meeting
36
37
38
39
40
41

THIRD ORDER OF BUSINESS	Consideration of the Minutes of the
Audit Committee Meeting Held on
February 10, 2020
45
A motion was made to accept both the Minutes of the Audit Committee Meeting
and Minutes of the Board of Supervisors’ Meeting held on February 10, 2020.
48
FOURTH ORDER OF BUSINESS	Consideration of the Minutes of the
Board of Supervisors’ Meeting Held
on February 10, 2020
52

On a motion by Mr. O’Connell, seconded by Mr. Hartley, with all in favor, the Board of Supervisors accepted the Minutes of the Audit Committee Meeting and Board of Supervisors’ Meeting which were both held on February 10, 2020, for Somerset Community Development District.

53
FIFTH ORDER OF BUSINESS	Ratification	of	Operation	and
Maintenance	Expenditures	for
January 2020 – April 2020
57
Mr. Jeancola reviewed the Operation and Maintenance Expenditures for January
2020 – April 2020. He noted that the expenditures for January 2020 were inclusive of the
dune restoration expense of $25,000.00.
61

On a motion by Mr. O’Connell, seconded by Mr. Rosenberg, with all in favor, the Board of Supervisors ratified the Operation and Maintenance Expenditures for January 2020 ($97,771.84), February 2020 ($20,122.24), March 2020 ($16,115.85) and April 2020
($30,189.55), for Somerset Community Development District.

62
63
64
65
66
67
68

SIXTH ORDER OF BUSINESS	Consideration of Resolution  2020-01,
Authorizing	Bank	Account
Signatories
72
Mr. Jeancola presented and reviewed Resolution 2020-01, Authorizing Bank
Account  Signatories  with  the  Board.	This resolution adds Shawn Wildermuth as
(Assistant Treasurer).

On a Motion by Mr. O’Connell, seconded by Mr. Foster, with all in favor, the Board of Supervisors approved Resolution 2020-01, Authorizing Back Account Signatories, for the Somerset Community Development District.

76
SEVENTH ORDER OF BUSINESS	Consideration of Resolution  2020-02,
Re-Designating	Secretary	of	the
District
Mr. Jeancola presented and reviewed Resolution 2020-02, Re-Designating
Secretary of the District with the Board. This resolution appoints Mr. Bob Schleifer.

On a motion by O’Connell, seconded by Mr. Hartley, with all in favor, the Board approved Resolution 2020-02, Re-Designating Secretary of the District, for the Somerset Community Development District.

82
EIGHTH ORDER OF BUSINESS	Consideration of Roadway / 30A
Corridor Curbing Related
Expenditures
86
87	PUBLIC SAFETY IMPROVEMENTS
88
Mr. Jeancola reviewed the expenditures/invoices for a total of $200,783.87 as
follows:
91
92		Pat Shea’s:
93	o $6,160.00 (curb work)
94	o $8,720.00 (curb)
95	o $72,200.00 (slip road widening)
96
	Murdock d/b/a Griffin
o $62,000.00 (solar assembly)
99

100		Innerlight Engineering
101	o $5,181.87 (30A corridor)
102	o $43,632.50 (surveys)
103
	McHenry Electric
o $3,159.50 (replace conduits and conductors)
106
Mr. Jeancola noted that these would be allocated to be paid from reserves as they
are not reoccurring expenditures, unless otherwise directed by the Board.
Mr. O’Connell provided an overview as to why these expenses were incurred. The
roads are very narrow for trucks to maneuver through without having to run over
landscaping. Landscaping  maintenance is costly. This is a one-time preventative
maintenance charge to widen the roads by 3 feet and to install a curb to avoid this from
happening going forward. Discussion ensued regarding the solar assembly for the crossing
point.
Ms. Mackie inquired about ongoing maintenance for the pedestrian crossing and
curbing. She asked who would be responsible (County or District) if the improvements were
damaged going forward as this needs to be accounted for in the O&M budget. Mr. O’Connell
anticipates that these would continue to be District related expenses. Discussion ensued.
Mr. O’Connell will provide a summary to the Board.

On a motion by Mr. O’Connell, seconded by Mr. Hartley, with all in favor, the Board of Supervisors approved $200,783.87 ($192,063.87 + $8,720.00) for the Roadway / 30A Corridor Curbing Related Expenditures, for the Somerset Community Development District.

120
121
122
123

On a motion by Mr. O’Connell, seconded by Mr. Foster, with all in favor, the Board of Supervisors authorized the Chair to work with District Staff on to obtain and approve proposals for additional pedestrian crossings in a not to exceed amount of $110,000.00 (for 13 crosswalks), for the Somerset Community Development District.

124
125
126
127
128
REFUSE COLLECTION IMPROVEMENTS EXEPNSES
130
Mr. O’Connell discussed that there is an issue regarding the collection and removal
of refuse/trash. The District has reached out to waste management regarding the installation
of compactors onsite. Waste management suggested installing 2 compactors. These could
cost about $70,000.00 each which includes 8 carts that can be used to pick up trash on the
property. Mr. O’Connell is looking into leasing options versus purchasing. Discussion
ensued.
137

Ms. Mackie noted that it was previously noted that the compactors were going to be
a District expense but the operational aspect trash puck up and delivery to the compactor)
was going to be run by the POA/HOA. The operational expense is still yet to be determined.
It was noted that the District could provide the infrastructure while the HOA/POA provides
the operational aspect. Discussion ensued.
143
NINTH ORDER OF BUSINESS	Presentation	of	Proposed	Budget
Fiscal Year 2020/2021
146
Mr. Jeancola presented the Fiscal Year 2020-2021 budget to the Board for
consideration. The proposed budget for fiscal year 2020/2021 proposed to maintain the
overall rate of assessments and opposed considering an increase this fiscal year. The
reserves were slightly reduced to maintain level of assessments. An amended budget will
have to be prepared in November for Fiscal Year 2019/2020.
152
Consideration of Resolution 2020-03, Accepting the Proposed Budget Fiscal Year
2020/2021 and Setting the Public Hearing

On a motion by Mr. Hartley, seconded by Mr. Rosenberg, with all in favor, the Board of Supervisors approved Resolution 2020-03, Accepting the Proposed Budget Fiscal Year 2020/2021 and Setting the Public Hearing for August 10th, 2020 at 2:00 p.m., for the Somerset Community Development District.

155
156
157
158
159
160
TENTH ORDER OF BUSINESS	Presentation	of	Registered	Voter
Count
Mr. Jeancola stated that the registered voter count was 71 as of April 15, 2020.
164
ELEVENTH ORDER OF BUSINESS	Consideration of Resolution 2020-04,
Designating a Date, Time and Location
for a Landowners’ Meeting to Elect
Supervisors
169
Mr. Jeancola presented and reviewed Resolution 2020-04, Designating a Date,
Time and Location for a Landowners’ Meeting to Elect Supervisors of the Board.
172

On a motion by Mr. O’Connell, seconded by Mr. Foster, with all in favor, the Board of Supervisors approved Resolution 2020-04, Designating a Date, Time and Location for a Landowners’ Meeting to Elect Supervisors for November 9th, 2020 at 2:00 p.m., for the Somerset Community Development District.

173

TWELFTH ORDER OF BUSINESS	Consideration of Resolution 2020-05,
Adopting Internal Controls Policy
176
Mr. Jeancola noted that Mr. O’Connell had a few revisions to the resolution. These
have been incorporated and reviewed by Ms. Mackie.
179

On a Motion by Mr. Hartley, seconded by Mr. O’Connell, with all in favor, the Board of Supervisors approved Resolution 2020-05, Adopting Internal Controls Policy, for the Somerset Community Development District.

180
THIRTEENTH ORDER OF BUSINESS	Staff Reports
182
A. District Counsel
184
No Report.
186
Mr. O’Connell asked Ms. Mackie  what the District’s  liability was regarding
pedestrian/vehicular safety. He asked what insurance was in place to address this
type of situation.
190
Ms. Mackie responded that the District does not own, operate or maintain the right of
way. Discussion ensued.
193
B. District Engineer
195
Not present at this time.
197
C. District Manager
199
Mr. Jeancola advised that the next meeting of the Board of Directors will be August
201	10, 2020 at 2:00 pm.
202
203	FOURTEENTH ORDER OF BUSINESS	Supervisor Requests
204
205	There were no Supervisor Requests at this time.
206
207
208
209
210
211
212

213	FIFTEENTH ORDER OF BUSINESS	Adjournment
214

On a Motion by Mr. O’Connell, seconded by Mr. Hartley, with all in favor, the Board of Supervisors adjourned the meeting at 2:53 pm (CDT), for the Somerset Community Development District.

215		
216		
217		
218	 	_	 		
219	Secretary/Assistant Secretary	Chairman/ Vice Chairman	

Tab 2

SOMERSET COMMUNITY DEVELOPMENT DISTRICT

DISTRICT OFFICE · 120 RICHARD JACKSON BLVD · SUITE 220 · PANAMA CITY BEACH, FL 32407

Operation and Maintenance Expenditures	
May 2020	
For Board Approval	

Attached please find the check register listing the Operation and Maintenance expenditures paid from May 1, 2020 through May 31, 2020. This does not include expenditures previously approved by the Board.

The total items being presented:	$18,532.28	

Approval of Expenditures:

 		
Chairperson	

 		Vice Chairperson	

 		Assistant Secretary	

Somerset Community Development District	
Paid Operation & Maintenance Expenditures	
May 1, 2020 Through May 31, 2020	

Vendor Name		Check Number	Invoice Number		Invoice Description		 Invoice Amount	

ALYS Beach Neighborhood Association	002606	00033120	ALYS Beach Neighborhood
Association Reimbursement 03/20	$	10,930.62	
Digital Assurance Certification LLC	002607	48422	Annual Dissemination Services 2020	$	1,500.00	
Gulf Power Company	002608	21046-33165 05/20	9954 E Cty Hwy 30A Irrigation 05/20	$	239.40	
Gulf Power Company	002608	21080-12465 05/20	9396 E Cty Hwy 30A Irrigation 05/20	$	142.09	
Hopping Green & Sams	002612	114469	General/Monthly Legal Services Billed Through 03/20	$	851.00	
Mills Supply	002614	7978	Pump Station Maintenance 05/20	$	200.00	
Rizzetta & Company, Inc.	002609	INV0000049309	District Management Fees 05/20	$	4,524.17	
Rizzetta Technology Services, LLC.	002610	INV0000005834	Website Hosting Services 05/20	$	100.00	
The Lake Doctors, Inc.	002613	501346	Monthly Monitoring/Inspection 05/20	$	45.00	

Report Total	$	18,532.28

SOMERSET COMMUNITY DEVELOPMENT DISTRICT

DISTRICT OFFICE · 120 RICHARD JACKSON BLVD · SUITE 220 · PANAMA CITY BEACH, FL 32407

Operation and Maintenance Expenditures	
June 2020	
For Board Approval	

Attached please find the check register listing the Operation and Maintenance expenditures paid from June 1, 2020 through June 30, 2020. This does not include expenditures previously approved by the Board.

The total items being presented:	$134,324.68	

Approval of Expenditures:

 		
Chairperson	

 		Vice Chairperson	

 		Assistant Secretary	

Vendor Name	Check Number Invoice Number	Invoice Description	 Invoice Amount

ALYS Beach Neighborhood Association	002622	00043020	ALYS Beach Neighborhood
Association Reimbursement 04/20	$	22,920.80	
Andrew O'Connell	002617	AO052620	Board of Supervisors Meeting 05-26-	$	200.00	

Anthony Eddie Foster	
002615	
EF052620	20
Board of Supervisors Meeting 05-26-	
$	200.00	

Dune Doctors, LLC	
002623	
042220-1	20
Phase 3 - Optimization - Plant	
$	35,055.66	

George Hartley	
002616	
GH052620	Installation 04/20
Board of Supervisors Meeting 05-26-	
$	200.00	

Grau & Associates	
002624	
19644	20
Audit Services FYE 09/30/2019	
$	2,000.00	
Grau & Associates	002632	19819	Audit Services FYE 09/30/2019	$	1,400.00	
Gulf Power Company	002625	21046-33165 06/20	9954 E Cty Hwy 30A Irrigation 06/20	$	238.71	
Gulf Power Company	002625	21080-12465 06/20	9396 E Cty Hwy 30A Irrigation 06/20	$	488.97	
Hopping Green & Sams	002633	115162	General/Monthly Legal Services 04/20	$	350.00	
Innerlight Engineering Corporation	002626	4349	Engineering Services 07/19 - 10/19	$	5,181.87	
Innerlight Engineering Corporation	002630	4485	Engineering Services 10/19 - 2/20	$	43,362.50	
Innerlight Engineering Corporation	002626	4734	Engineering Services 04/20 & 05/20	$	3,800.00	

Vendor Name	Check Number Invoice Number	Invoice Description	 Invoice Amount

John Rosenberg	002620	JR052620	Board of Supervisors Meeting 05-26-	$	200.00	

McHenry Electric, Inc.	
002627	
22406	20
McHenry Electric Repairs to Slip	
$	3,159.50	

McHenry Electric, Inc.	
002627	
22450	Roads 03/20
Repair Broken Pipe & Damaged Wires	
$	1,152.50	

Mills Supply	
002631	
8036	03/20
Pump Station Maintenance 06/20	
$	200.00	
Newagetutors LLC DBA VGlobalTech	002629	1681	Website ADA Compliance 06/20	$	425.00	
Pat Shea's Concrete, Inc.	002628	5456	Curb Radius Replacement 01/20	$	8,720.00	
Rizzetta & Company, Inc.	002618	INV0000050192	District Management Fees 06/20	$	4,524.17	
Rizzetta Technology Services, LLC.	002619	INV0000005935	Website Hosting Services 06/20	$	100.00	
The Lake Doctors, Inc.	002634	507544	Monthly Monitoring/Inspection 06/20	$	45.00	
Tonya Johnson Pippin	002621	TP021020	Board of Supervisors Meeting 02-10-	$	200.00	

Tonya Johnson Pippin	
002621	
TP052620	20
Board of Supervisors Meeting 05-26-	
$	200.00	
			20		

Report Total				
$	134,324.68	

Tab 3

RESOLUTION 2020-06

THE ANNUAL APPROPRIATION RESOLUTION OF THE SOMERSET COMMUNITY DEVELOPMENT DISTRICT (“DISTRICT”) RELATING TO THE ANNUAL APPROPRIATIONS AND ADOPTING THE BUDGETS FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2020, AND ENDING SEPTEMBER 30, 2021; AUTHORIZING BUDGET AMENDMENTS; AND PROVIDING AN EFFECTIVE DATE.

WHEREAS, the District Manager has, prior to the fifteenth (15th) day in June, 2020, submitted to the Board of Supervisors (“Board”) of the Somerset Community Development District (“District”) proposed budgets (“Proposed Budget”) for the fiscal year beginning October 1, 2020 and ending September 30, 2021 (“Fiscal Year 2020/2021”) along with an explanatory and complete financial plan for each fund of the District, pursuant to the provisions of Section 190.008(2)(a), Florida Statutes; and

WHEREAS, at least sixty (60) days prior to the adoption of the Proposed Budget, the District filed a copy of the Proposed Budget with the local governing authorities having jurisdiction over the area included in the District pursuant to the provisions of Section 190.008(2)(b), Florida Statutes; and

WHEREAS, the Board set a public hearing thereon and caused notice of such public hearing to be given by publication pursuant to Section 190.008(2)(a), Florida Statutes; and

WHEREAS, the District Manager posted the Proposed Budget on the District’s website at least two days before the public hearing; and

WHEREAS, Section 190.008(2)(a), Florida Statutes, requires that, prior to October 1st of each year, the Board, by passage of the Annual Appropriation Resolution, shall adopt a budget for the ensuing fiscal year and appropriate such sums of money as the Board deems necessary to defray all expenditures of the District during the ensuing fiscal year; and

WHEREAS, the District Manager has prepared a Proposed Budget, whereby the budget shall project the cash receipts and disbursements anticipated during a given time period, including reserves for contingencies for emergency or other unanticipated expenditures during the fiscal year.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE SOMERSET COMMUNITY DEVELOPMENT DISTRICT:

SECTION 1.   BUDGET

The Board has reviewed the Proposed Budget, a copy of which is on file with the office of the District Manager and at the District’s Local Records Office, and hereby approves certain amendments thereto, as shown in Section 2 below.

The Proposed Budget, attached hereto as Exhibit “A,” as amended by the Board, is hereby adopted in accordance with the provisions of Section 190.008(2)(a), Florida Statutes (“Adopted Budget”), and incorporated herein by reference; provided, however, that the comparative figures contained in the Adopted Budget

may be subsequently revised as deemed necessary by the District Manager to reflect actual revenues and expenditures.

The Adopted Budget, as amended, shall be maintained in the office of the District Manager and at the District’s Local Records Office and identified as “The Budget for the Somerset Community Development District for the Fiscal Year Ending September 30, 2021.”

The Adopted Budget shall be posted by the District Manager on the District’s official website within thirty (30) days after adoption and shall remain on the website for at least 2 years.

SECTION 2.	APPROPRIATIONS

There is hereby appropriated out of the revenues of the District, for Fiscal Year 2020/2021, the sum of $ 	to be raised by the levy of assessments and/or otherwise, which sum is deemed by the Board to be necessary to defray all expenditures of the District during said budget year, to be divided and appropriated in the following fashion:

TOTAL GENERAL FUND	$ 	

DEBT SERVICE FUND(S)	$ 	

TOTAL ALL FUNDS	$ 	

SECTION 3.	BUDGET AMENDMENTS

Pursuant to Section 189.016, Florida Statutes, the District at any time within Fiscal Year 2020/2021 or within 60 days following the end of the Fiscal Year 2020/2021 may amend its Adopted Budget for that fiscal year as follows:

The Board may authorize an increase or decrease in line item appropriations within a fund by motion recorded in the minutes if the total appropriations of the fund do not increase.

The District Manager or Treasurer may authorize an increase or decrease in line item appropriations within a fund if the total appropriations of the fund do not increase and if the aggregate change in the original appropriation item does not exceed $10,000 or 10% of the original appropriation.

By resolution, the Board may increase any appropriation item and/or fund to reflect receipt of any additional unbudgeted monies and make the corresponding change to appropriations or the unappropriated balance.

Any other budget amendments shall be adopted by resolution and consistent with Florida law.

The District Manager or Treasurer must establish administrative procedures to ensure that any budget amendments are in compliance with this Section 3 and Section 189.016, Florida Statutes, among other applicable laws. Among other procedures, the District Manager or Treasurer must ensure that any amendments to budget under subparagraphs c. and d. above are posted on the District’s website within 5 days after adoption and remain on the website for at least 2 years.

SECTION 4. EFFECTIVE DATE. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED THIS 10th DAY OF AUGUST, 2020.

ATTEST:	SOMERSET COMMUNITY
DEVELOPMENT DISTRICT

Secretary/Assistant Secretary

By:	 Its: 	

EXHIBIT A

Somerset Community Development District
http://somersetcdd.org

Approved Proposed Budget for Fiscal Year 2020/2021

Presented by: Rizzetta & Company, Inc.

120 Richard Jackson Blvd Suite 220
Panama City Beach, Florida 32407 Phone: 850-334-9055

rizzetta.com

Table of Contents

Page

General Fund Budget Account Category Descriptions	1
Reserve Fund Budget Account Category Descriptions	7
Debt Service Fund Budget Account Category Descriptions	8
General Fund Budget for Fiscal Year 2020/2021	9
Reserve Fund for Fiscal Year 2020/2021	11
Debt Service Fund Budget for Fiscal Year 2020/2021	12
Assessments Charts for Fiscal Year 2020/2021	13

1
GENERAL FUND BUDGET ACCOUNT CATEGORY DESCRIPTION
The General Fund Budget Account Category Descriptions are subject to change at any time depending on its application to the District. Please note, not all General Fund Budget Account Category Descriptions are applicable to the District indicated above. Uses of the descriptions contained herein are intended for general reference.
REVENUES:

Interest Earnings: The District may earn interest on its monies in the various operating accounts.

Tax Roll: The District levies Non-Ad Valorem Special Assessments on all of the assessable property within the District to pay for operating expenditures incurred during the Fiscal Year. The assessments may be collected in two ways. The first is by placing them on the County’s Tax Roll, to be collected with the County’s Annual Property Tax Billing. This method is only available to land properly platted within the time limits prescribed by the County.

Off Roll: For lands not on the tax roll and that is by way of a direct bill from the District to the appropriate property owner.

Developer Contributions: The District may enter into a funding agreement and receive certain prescribed dollars from the Developer to off-set expenditures of the District.

Event Rental: The District may receive monies for event rentals for such things as weddings, birthday parties, etc.

Miscellaneous Revenues: The District may receive monies for the sale or provision of electronic access cards, entry decals etc.

Facilities Rentals: The District may receive monies for the rental of certain facilities by outside sources, for such items as office space, snack bar/restaurants etc.

EXPENDITURES – ADMINISTRATIVE:

Supervisor Fees: The District may compensate its supervisors within the appropriate statutory limits of
$200.00 maximum per meeting within an annual cap of $4,800.00 per supervisor.

2

Administrative Services: The District will incur expenditures for the day to today operation of District matters. These services include support for the District Management function, recording and preparation of meeting minutes, records retention and maintenance in accordance with Chapter 119, Florida Statutes, and the District’s adopted Rules of Procedure, preparation and delivery of agenda, overnight deliveries, facsimiles and phone calls.

District Management: The District as required by statute, will contract with a firm to provide for management and administration of the District’s day to day needs. These service include the conducting of board meetings, workshops, overall administration of District functions, all required state and local filings, preparation of annual budget, purchasing, risk management, preparing various resolutions and all other secretarial duties requested by the District throughout the year is also reflected in this amount.

District Engineer: The District’s engineer provides general engineering services to the District. Among these services are attendance at and preparation for monthly board meetings, review of construction invoices and all other engineering services requested by the district throughout the year.

Disclosure Report: The District is required to file quarterly and annual disclosure reports, as required in the District’s Trust Indenture, with the specified repositories. This is contracted out to a third party in compliance with the Trust Indenture.

Trustee’s Fees: The District will incur annual trustee’s fees upon the issuance of bonds for the oversight of the various accounts relating to the bond issues.

Assessment Roll: The District will contract with a firm to maintain the assessment roll and annually levy a Non-Ad Valorem assessment for operating and debt service expenses.

Financial & Revenue Collections: Services include all functions necessary for the timely billing and collection and reporting of District assessments in order to ensure adequate funds to meet the District’s debt service and operations and maintenance obligations. These services include, but are not limited to, assessment roll preparation and certification, direct billings and funding request processing as well as responding to property owner questions regarding District assessments. This line item also includes the fees incurred for a Collection Agent to collect the funds for the principal and interest payment for its short- term bond issues and any other bond related collection needs. These funds are collected as prescribed in the Trust Indenture. The Collection Agent also provides for the release of liens on property after the full collection of bond debt levied on particular properties.

Accounting Services: Services include the preparation and delivery of the District’s financial statements in accordance with Governmental Accounting Standards, accounts payable and accounts receivable functions, asset tracking, investment tracking, capital program administration and requisition processing, filing of annual reports required by the State of Florida and monitoring of trust account activity.

Auditing Services: The District is required annually to conduct an audit of its financial records by an Independent Certified Public Accounting firm, once it reaches certain revenue and expenditure levels, or has issued bonds and incurred debt.

� Rizzetta & Company
�

Professionals in Community Management

3

Arbitrage Rebate Calculation: The District is required to calculate the interest earned from bond proceeds each year pursuant to the Internal Revenue Code of 1986. The Rebate Analyst is required to verify that the District has not received earnings higher than the yield of the bonds.

Travel: Each Board Supervisor and the District Staff are entitled to reimbursement for travel expenses per Florida Statutes 190.006(8).

Public Officials Liability Insurance: The District will incur expenditures for public officials’ liability insurance for the Board and Staff.

Legal Advertising: The District will incur expenditures related to legal advertising. The items for which the District will advertise include, but are not limited to meeting schedules, special meeting notices, and public hearings, bidding etc. for the District based on statutory guidelines

Bank Fees: The District will incur bank service charges during the year.

Dues, Licenses & Fees: The District is required to pay an annual fee to the Department of Economic Opportunity, along with other items which may require licenses or permits, etc.

Miscellaneous Fees: The District could incur miscellaneous throughout the year, which may not fit into any standard categories.

Website Hosting, Maintenance and Email: The District may incur fees as they relate to the development and ongoing maintenance of its own website along with possible email services if requested.

District Counsel: The District’s legal counsel provides general legal services to the District. Among these services are attendance at and preparation for monthly board meetings, review of operating and maintenance contracts and all other legal services requested by the district throughout the year.

EXPENDITURES - FIELD OPERATIONS:

Deputy Services: The District may wish to contract with the local police agency to provide security for the District.

Security Services and Patrols: The District may wish to contract with a private company to provide security for the District.

Electric Utility Services: The District will incur electric utility expenditures for general purposes such as irrigation timers, lift station pumps, fountains, etc.

Street Lights: The District may have expenditures relating to street lights throughout the community. These may be restricted to main arterial roads or in some cases to all street lights within the District’s boundaries.

4

Utility - Recreation Facility: The District may budget separately for its recreation and or amenity electric separately.

Gas Utility Services: The District may incur gas utility expenditures related to district operations at its facilities such as pool heat etc.

Garbage - Recreation Facility: The District will incur expenditures related to the removal of garbage and solid waste.

Solid Waste Assessment Fee: The District may have an assessment levied by another local government for solid waste, etc.

Water-Sewer Utility Services: The District will incur water/sewer utility expenditures related to district operations.

Utility - Reclaimed: The District may incur expenses related to the use of reclaimed water for irrigation.

Aquatic Maintenance: Expenses related to the care and maintenance of the lakes and ponds for the control of nuisance plant and algae species.

Fountain Service Repairs & Maintenance: The District may incur expenses related to maintaining the fountains within throughout the Parks & Recreational areas

Lake/Pond Bank Maintenance: The District may incur expenditures to maintain lake banks, etc. for the ponds and lakes within the District’s boundaries, along with planting of beneficial aquatic plants, stocking of fish, mowing and landscaping of the banks as the District determines necessary.

Wetland Monitoring & Maintenance: The District may be required to provide for certain types of monitoring and maintenance activities for various wetlands and waterways by other governmental entities.

Mitigation Area Monitoring & Maintenance: The District may be required to provide for certain types of monitoring and maintenance activities for various mitigation areas by other governmental entities.

Aquatic Plant Replacement: The expenses related to replacing beneficial aquatic plants, which may or may not have been required by other governmental entities.

General Liability Insurance: The District will incur fees to insure items owned by the District for its general liability needs

Property Insurance: The District will incur fees to insure items owned by the District for its property needs

Entry and Walls Maintenance: The District will incur expenditures to maintain the entry monuments and the fencing.

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Landscape Maintenance: The District will incur expenditures to maintain the rights-of-way, median strips, recreational facilities including pond banks, entryways, and similar planting areas within the District. These services include but are not limited to monthly landscape maintenance, fertilizer, pesticides, annuals, mulch, and irrigation repairs.

Irrigation Maintenance: The District will incur expenditures related to the maintenance of the irrigation systems.

Irrigation Repairs: The District will incur expenditures related to repairs of the irrigation systems.

Landscape Replacement: Expenditures related to replacement of turf, trees, shrubs etc.

Field Services: The District may contract for field management services to provide landscape maintenance oversight.

Miscellaneous Fees: The District may incur miscellaneous expenses that do not readily fit into defined categories in field operations.

Gate Phone: The District will incur telephone expenses if the District has gates that are to be opened and closed.

Street/Parking Lot Sweeping: The District may incur expenses related to street sweeping for roadways it owns or are owned by another governmental entity, for which it elects to maintain.

Gate Facility Maintenance: Expenses related to the ongoing repairs and maintenance of gates owned by the District if any.

Sidewalk Repair & Maintenance: Expenses related to sidewalks located in the right of way of streets the District may own if any.

Roadway Repair & Maintenance: Expenses related to the repair and maintenance of roadways owned by the District if any.

Employees - Salaries: The District may incur expenses for employees/staff members needed for the recreational facilities such as Clubhouse Staff.

Employees - P/R Taxes: This is the employer’s portion of employment taxes such as FICA etc.

Employee - Workers’ Comp: Fees related to obtaining workers compensation insurance.

Management Contract: The District may contract with a firm to provide for the oversight of its recreation facilities.

Maintenance & Repair: The District may incur expenses to maintain its recreation facilities.

Facility Supplies: The District may have facilities that required various supplies to operate.

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Gate Maintenance & Repairs: Any ongoing gate repairs and maintenance would be included in this line item.

Telephone, Fax, Internet: The District may incur telephone, fax and internet expenses related to the recreational facilities.

Office Supplies: The District may have an office in its facilities which require various office related supplies.

Clubhouse - Facility Janitorial Service: Expenses related to the cleaning of the facility and related supplies.

Pool Service Contract: Expenses related to the maintenance of swimming pools and other water features.

Pool Repairs: Expenses related to the repair of swimming pools and other water features.

Security System Monitoring & Maintenance: The District may wish to install a security system for the clubhouse

Clubhouse Miscellaneous Expense: Expenses which may not fit into a defined category in this section of the budget

Athletic/Park Court/Field Repairs: Expense related to any facilities such as tennis, basketball etc.

Trail/Bike Path Maintenance: Expenses related to various types of trail or pathway systems the District may own, from hard surface to natural surfaces.

Special Events: Expenses related to functions such as holiday events for the public enjoyment

Miscellaneous Fees: Monies collected and allocated for fees that the District could incur throughout the year, which may not fit into any standard categories.

Miscellaneous Contingency: Monies collected and allocated for expenses that the District could incur throughout the year, which may not fit into any standard categories.

Capital Outlay: Monies collected and allocated for various projects as they relate to public improvements.

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RESERVE FUND BUDGET ACCOUNT CATEGORY DESCRIPTION

The Reserve Fund Budget Account Category Descriptions are subject to change at any time depending on its application to the District. Please note, not all Reserve Fund Budget Account Category Descriptions are applicable to the District indicated above. Uses of the descriptions contained herein are intended for general reference.

REVENUES:

Tax Roll: The District levies Non-Ad Valorem Special Assessments on all of the assessable property within the District to pay for operating expenditures incurred during the Fiscal Year. The assessments may be collected in two ways. The first is by placing them on the County’s Tax Roll, to be collected with the County’s Annual Property Tax Billing. This method is only available to land properly platted within the time limits prescribed by the County.

Off Roll: For lands not on the tax roll and that is by way of a direct bill from the District to the appropriate property owner.

Developer Contributions: The District may enter into a funding agreement and receive certain prescribed dollars from the Developer to off-set expenditures of the District.

Miscellaneous Revenues: The District may receive monies for the sale or provision of electronic access cards, entry decals etc.

EXPENDITURES:

Capital Reserve: Monies collected and allocated for the future repair and replacement of various capital improvements such as club facilities, swimming pools, athletic courts, roads, etc.

Capital Outlay: Monies collected and allocated for various projects as they relate to public improvements.

8

DEBT SERVICE FUND BUDGET ACCOUNT CATEGORY DESCRIPTION

The Debt Service Fund Budget Account Category Descriptions are subject to change at any time depending on its application to the District. Please note, not all Debt Service Fund Budget Account Category Descriptions are applicable to the District indicated above. Uses of the descriptions contained herein are intended for general reference.

REVENUES:

Special Assessments: The District may levy special assessments to repay the debt incurred by the sale of bonds to raise working capital for certain public improvements. The assessments may be collected in the same fashion as described in the Operations and Maintenance Assessments.

EXPENDITURES – ADMINISTRATIVE:

Bank Fees: The District may incur bank service charges during the year.

Debt Service Obligation: This would a combination of the principal and interest payment to satisfy the annual repayment of the bond issue debt.

	

Chart of Accounts Classification	
Actual YTD through 06/30/20	Projected Annual Totals 2019/2020	
Annual Budget for 2019/2020	Projected Budget variance for 2019/2020	
Budget for 2020/2021	Budget Increase (Decrease) vs    2019/2020	

Comments	
1									
2	REVENUES								
3									
4	Interest Earnings								
5	Interest Earnings	$	936	$	1,248	$	-	$	1,248	$	-	$	-		
6	Special Assessments								
7	Tax Roll*	$ 176,195	$ 176,195	$ 172,872	$	3,323	$ 202,151	$	-	Tax Roll allocations to be determined upon final roll certifications.	
8	Off Roll*	$ 207,403	$ 207,403	$ 207,403	$	-	$ 193,215	$	-	Off Roll allocations to be determined upon final roll certifications.	
9									
10	TOTAL REVENUES	$ 384,534	$ 384,846	$ 380,275	$	4,571	$ 395,366	$	15,091		
11									
12	Balance Forward from Prior Year	$	-	$	-	$	-	$	-	$	-	$	-		
13									
14	TOTAL REVENUES AND BALANCE FORWARD	$ 384,534	$ 384,846	$ 380,275	$	4,571	$ 395,366	$	15,091		
15									
16	*Allocation of assessments between the Tax Roll and Off Roll are estimates only and subject to change prior to certification.		
17			
18	EXPENDITURES - ADMINISTRATIVE								
19									
20	Legislative								
21	Supervisor Fees	$	2,400	$	3,400	$	4,000	$	600	$	4,000	$	-	Based on 4 meetings, $200 per supervisor/per mtg.	
22	Financial & Administrative								
23	Administrative Services	$	4,005	$	5,340	$	5,340	$	-	$	5,500	$	160	FY 20/21 increase.	
24	District Management	$	19,275	$	25,700	$	25,700	$	-	$	26,471	$	771	FY 20/21 increase.	
25	District Engineer	$	-	$	1,800	$	3,600	$	1,800	$	3,600	$	-	Maintained at same rate.	
26	Disclosure Report	$	1,500	$	1,500	$	1,500	$	-	$	1,500	$	-	Maintained at same rate.	
27	Trustees Fees	$	3,836	$	3,836	$	5,000	$	1,164	$	5,000	$	-	Maintained at same rate.	
28	Assessment Roll	$	5,250	$	5,250	$	5,250	$	-	$	5,250	$	-	Maintained at same rate	
29	Financial & Revenue Collections	$	3,938	$	5,250	$	5,250	$	-	$	5,250	$	-	Maintained at same rate.	
30	Accounting Services	$	13,500	$	18,000	$	18,000	$	-	$	18,540	$	540	FY 20/21 increase	
31	Auditing Services	$	3,400	$	3,400	$	3,400	$	-	$	3,400	$	-	Per agreement, FYE 20 $3,400	
32	Arbitrage Rebate Calculation	$	-	$	500	$	500	$	-	$	500	$	-	Per Agreement with LLS Tax Solutions, $500 annually	
33	Public Officials Liability Insurance	$	2,819	$	2,819	$	3,025	$	206	$	3,101	$	76	Based on renewal projections provided by Egis.	
34	Legal Advertising	$	528	$	1,565	$	2,000	$	435	$	1,600	$	(400)	Projection based on prior FYE. Adjusted based on projections.	
35	Dues, Licenses & Fees	$	175	$	175	$	175	$	-	$	175	$	-	Payable to the State annually	
36	Miscellaneous Fees	$	100	$	133	$	750	$	617	$	200	$	(550)	Reduced based on projections.	
37	Website Hosting, Maintenance, Backup (and Email)	$	3,650	$	6,300	$	6,200	$	(100)	$	6,300	$	100	$525 mos. ADA compliance and hosting	
38	Legal Counsel								
39	District Counsel	$	6,531	$	8,708	$	14,000	$	5,292	$	14,000	$	-	Suggest maintaining in event additional legal services required.	
40									

	

Chart of Accounts Classification	
Actual YTD through 06/30/20	Projected Annual Totals 2019/2020	
Annual Budget for 2019/2020	Projected Budget variance for 2019/2020	
Budget for 2020/2021	Budget Increase (Decrease) vs    2019/2020	

Comments	
41	Administrative Subtotal	$	70,907	$	93,676	$ 103,690	$	10,014	$ 104,387	$	697		
42									
43	EXPENDITURES - FIELD OPERATIONS								
44									
45	Electric Utility Services								
46	Street Lights	$	-	$	-	$	27,000	$	27,000	$	27,000	$	-	Not incurred in prior or current fiscal year. Accounts to be transferred?	
47	Utility-Irrigation	$	4,852	$	6,469	$	7,500	$	1,031	$	7,500	$	-	Maintained at same rate.	
48	Stormwater Control								
49	Stormwater System Maintenance	$	-	$	-	$	5,000	$	5,000	$	-	$	(5,000)	Not incurred in current or prior fiscal year. Suggest removal.	
50	Lake/Pond Bank Maintenance	$	3,117	$	4,587	$	5,000	$	413	$	5,000	$	-	Maintained at same rate. $45 monthly visual inspections + maint.	
51	Miscellaneous Expense / Pond Liner Repair	$	-	$	-	$	2,500	$	2,500	$	-	$	(2,500)	Not incurred in current or prior fiscal year. Suggest removal.	
52	Aquatic Plant Replacement	$	-	$	-	$	3,600	$	3,600	$	-	$	(3,600)	Not incurred in current or prior fiscal year. Suggest removal.	
53	Other Physical Environment								
54	General Liability/Property Insurance	$	5,131	$	5,131	$	5,555	$	424	$	5,644	$	89	Based on renewal projections provided by Egis.	
55	Landscape Maintenance	$	84,264	$ 112,352	$	95,000	$ (17,352)	$ 127,621	$	32,621	Adjusted based on projections + $15,268.95 for dune management.	
56	Irrigation Repairs	$	18,649	$	30,649	$	6,500	$ (24,149)	$	31,000	$	24,500	Adjusted based on projections.	
57	Irrigation System Supply Pump Maintenance	$	2,286	$	3,048	$	6,250	$	3,202	$	3,360	$	(2,890)	Adjusted based on projections. Avg. $280 mos. for insp and maint.	
58	Ornamental Lighting & Maintenance	$	2,977	$	2,977	$	500	$	(2,477)	$	3,000	$	2,500	Adjusted based on projections.	
59	Irrigation Well Maintenance and Repair	$	6,571	$	6,571	$	3,600	$	(2,971)	$	6,575	$	2,975	Adjusted based on projections.	
60	Irrigation System -Feeder Pump Maintenance	$	-	$	1,000	$	1,000	$	-	$	-	$	(1,000)	Not incurred in current or prior fiscal year. Suggest removal.	
61	Irrigation System - Feeder Pump Chemicals	$	389	$	519	$	6,000	$	5,481	$	1,750	$	(4,250)	Reduced based on projection and prior FYE.	
62	Pond Well Inspections NPDES	$	31,234	$	36,000	$	27,500	$	(8,500)	$	36,000	$	8,500	NPDES = $475 per weekly inspection. Additional for rain event inspections.	
63	Landscape Replacement Plants, Shrubs, Trees	$	4,551	$	6,068	$	36,000	$	29,932	$	10,000	$	(26,000)	Reduced based on projections.	
64	Landscape Miscellaneous Palm Trees	$	-	$	9,000	$	9,000	$	-	$	-	$	(9,000)	Not incurred in current or prior fiscal year. Suggest removal.	
65	Landscape - Mulch	$	-	$	1,500	$	1,500	$	-	$	1,500	$	-	Maintained at same rate.	
66	Road & Street Facilities								
67	Street Light Decorative Light Maintenance	$	35,365	$	37,965	$	18,250	$ (19,715)	$	18,250	$	-	Higher in FY19/20 due to streetlight replacements & relocations. Not anticipated in FY 20/21. Inspections $866.67 mos.	
68	Contingency								
69	Miscellaneous Contingency	$	18,332	$	24,443	$	9,330	$ (15,113)	$	6,779	$	(2,551)	Allocation for unforeseen expenses.	
70									
71	Field Operations Subtotal	$ 217,718	$ 288,279	$ 276,585	$ (11,694)	$ 290,979	$	14,394		
72									
73	Contingency for County TRIM Notice								
74									
75	TOTAL EXPENDITURES	$ 288,625	$ 381,955	$ 380,275	$	(1,680)	$ 395,366	$	15,091		
76									
77	EXCESS OF REVENUES OVER EXPENDITURES	$	95,909	$	2,891	$	-	$	2,891	$	-	$	0		
78									

Proposed Budget
Somerset Community Development District Reserve Fund
Fiscal Year 2020/2021

Chart of Accounts Classification	
Actual YTD through 06/30/20	Projected Annual Totals 2019/2020	
Annual Budget for 2019/2020	Projected Budget variance for  2019/2020	
Budget for 2020/2021	Budget Increase (Decrease
) vs 2019/2020	

Comments	
1									
2	REVENUES								
3									
4	Interest Earnings								
5	Interest Earnings	$	3,409	$	4,545	$	-	$	4,545	$	-	$	-		
6	Special Assessments								
7	Tax Roll*	$	79,309	$	79,309	$	79,309	$	-	$	87,641	$	-	Tax Roll allocations to be determined upon final roll certification.	
8	Off Roll*	$	107,191	$ 107,191	$ 107,191	$	-	$	83,768	$	-	Off Roll allocations to be determined upon final roll certification.	
9									
10	TOTAL REVENUES	$	189,909	$ 191,045	$ 186,500	$	4,545	$ 171,409	$ (15,091)		
11									
15	Balance Forward from Prior Year	$	-	$	71,615	$	-	$	71,615	$	-	$	-		
12									
13	TOTAL REVENUES AND BALANCE	$	189,909	$ 262,660	$ 186,500	$	76,160	$ 171,409	$ (15,091)		
14									
15	*Allocation of assessments between the Tax Roll and Off Roll are estimates only and subject to change prior to
certification.		
16			
17	EXPENDITURES								
18									
19	Contingency								
20	Capital Reserves	$	137,753	$ 262,660	$ 186,500	$	(76,160)	$ 171,409	$ (15,091)	Projection based on dune restoration and msic. street/30a
corridor exepnditures.	
21									
22	TOTAL EXPENDITURES	$	137,753	$ 262,660	$ 186,500	$	(76,160)	$ 171,409	$ (15,091)	Adjusted to maintain assessment level.	
23									
24	EXCESS OF REVENUES OVER	$	52,156	$	-	$	-	$	-	$	-	$	-		
25									

Budget Template
Somerset Community Development District Debt Service
Fiscal Year 2020/2021

Chart of Accounts Classification	Series 2005	Budget for 2020/2021	
			
REVENUES			
Special Assessments			
Net Special Assessments	$1,161,919.76	$1,161,919.76	
			
TOTAL REVENUES	$1,161,919.76	$1,161,919.76	

EXPENDITURES			
Administrative			
Financial & Administrative			
Debt Service Obligation	$1,161,919.76	$1,161,919.76	
Administrative Subtotal	$1,161,919.76	$1,161,919.76	
			
TOTAL EXPENDITURES	$1,161,919.76	$1,161,919.76	
			
EXCESS OF REVENUES OVER EXPEN	$0.00	$0.00	

Walton County Collecction Costs (2%) and Early Payment  Discounts (4%)	6.0%

Gross assessments	$1,236,084.85

Notes:
Tax Roll Collection Costs and Early Payment Discounts are 6.0% of Tax Roll. Budgeted net of tax roll assessments. See Assessment Table.

SOMERSET COMMUNITY DEVELOPMENT DISTRICT

FISCAL YEAR 2020/2021 O&M AND DEBT SERVICE ASSESSMENT SCHEDULE

2020/2021 O&M Budget	$566,775.00	
Collection Costs (2%):	$12,059.04	
Early Payment Discount (4%):	$24,118.09	
2020/2021 Total:	$602,952.13	

2019/2020 O&M Budget	$566,775.00	
2020/2021 O&M Budget	$566,775.00	
Total Difference:	$0.00	

ER UNIT ANNUAL ASSESSMEN	Proposed Increase / Decrease
	2019/2020	2020/2021	$	%	
Debt Service - Commercial	$1,217.02	$1,217.02	$0.00	0.00%	
Operations/Maintenance - Commercial	$593.65	$593.65	$0.00	0.00%	
Total	$1,810.67	$1,810.67	$0.00	0.00%	

Debt Service - Hotel / Inn	

$811.35	

$811.35	

$0.00	

0.00%	
Operations/Maintenance - Hotel / Inn	$395.77	$395.77	$0.00	0.00%	
Total	$1,207.12	$1,207.12	$0.00	0.00%	

Debt Service - Single Family	

$1,622.69	

$1,622.69	

$0.00	

0.00%	
Operations/Maintenance - Single Family	$791.54	$791.54	$0.00	0.00%	
Total	$2,414.23	$2,414.23	$0.00	0.00%	

14

SOMERSET COMMUNITY DEVELOPMENT DISTRICT

FISCAL YEAR 2020/2021 O&M & DEBT SERVICE ASSESSMENT SCHEDULE TOTAL O&M BUDGET	$566,775.00
COLLECTION COSTS @:	2.0%	$12,059.04
EARLY PAYMENT DISCOUNT @	4.0%	$24,118.09

TOTAL O&M ASSESSMENT:	$602,952.13

UNITS ASSESSED	

TOTAL				
		SERIES 2005		ALLOCATION OF O&M ASSESSMENT	SERIES 2005	PER LOT ANNUAL ASSESSMENT	
		DEBT		
TOTAL	% TOTAL	TOTAL	DEBT SERVICE		SERIES 2005		
LOT SIZE	O&M	SERVICE (1)		EAU FACTOR	EAU's	EAU's O&M BUDGET	ASSESSMENT	O&M (2)	DEBT SERVICE (3)	TOTAL (4)	
PLATTED LOTS					
SINGLE FAMILY	349	349		1.00	349.00	45.82% $276,245.87	$566,318.81	$791.54	$1,622.69	$2,414.23	
COMMERCIAL	8.7	8.7	1K sf	0.75	6.53	0.86%	$5,164.77	$10,588.07	$593.65	$1,217.02	$1,810.67	
Total Platted	        357.7 	

      357.7 		

         355.53	46.67% $281,410.64 	

   $576,906.88 				
UNPLATTED LOTS					
COMMERCIAL	168.3	168.3	1K sf	0.75	126.23	16.57%	$99,911.56	$204,824.47	$593.65	$1,217.02	$1,810.67	
HOTEL / INN	60	60		0.50	30.00	3.94%	$23,746.06	$48,681.00	$395.77	$811.35	$1,207.12	
SINGLE FAMILY	250	250		1.00	250.00	32.82% $197,883.86	$405,672.50	$791.54	$1,622.69	$2,414.23	
Total Unplatted	        478.3 	      478.3 		         406.23	53.33% $321,541.49 	   $659,177.97 				
TOTAL COMMUNITY	 	836		

        836 		

         761.75	100.00% $602,952.13 	

  $1,236,084.85				
LESS: Walton County Collection Costs (2%) and Early Payment Discounts (4%):	($36,177.13)	($74,165.09)				

Net Revenue to be Collected:	$566,775.00	
$1,161,919.76				

UNPLAT BY ACREAGE (2)	

88.62	

88.62		

$321,541.49	

$659,177.97	PER ACRE ASSESSMENTS - UNPLATTED O&M	DEBT SERVICE	TOTAL
$3,628.28	$7,438.17	$11,066.45	

(1) Reflects the number of total lots with Series 2005 debt outstanding.

(2) Assessments are allocated on an equal assessment per acre basis until lots are platted.

(3) Annual debt service assessment per lot adopted in connection with the Series 2005 bond issue. Annual assessment includes principal, interest, Walton County collection costs and early payment discounts.

(4) Annual assessment that will appear on November 2020 Walton County property tax bill. Amount shown includes all applicable collection costs and early payment discounts (up to 4% if paid early).	

Tab 4

RESOLUTION 2020-07

A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE SOMERSET COMMUNITY DEVELOPMENT DISTRICT MAKING A DETERMINATION OF BENEFIT AND IMPOSING SPECIAL ASSESSMENTS FOR FISCAL YEAR 2020/2021; PROVIDING FOR THE COLLECTION AND ENFORCEMENT OF SPECIAL ASSESSMENTS, INCLUDING BUT NOT LIMITED TO PENALTIES AND INTEREST THEREON; CERTIFYING AN ASSESSMENT ROLL; PROVIDING FOR AMENDMENTS TO THE ASSESSMENT ROLL; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE.

WHEREAS, the Somerset Community Development District (“District”) is a local unit of special-purpose government established pursuant to Chapter 190, Florida Statutes, for the purpose of providing, operating and maintaining infrastructure improvements, facilities and services to the lands within the District; and

WHEREAS, the District is located in Walton County, Florida (“County”); and

WHEREAS, the District has constructed or acquired various infrastructure improvements and provides certain services in accordance with the District’s adopted capital improvement plan and Chapter 190, Florida Statutes; and

WHEREAS, the Board of Supervisors (“Board”) of the District hereby determines to undertake various operations and maintenance and other activities described in the District’s budget (“Adopted Budget”) for the fiscal year beginning October 1, 2020 and ending September 30, 2021 (“Fiscal Year 2020/2021”), attached hereto as Exhibit “A;” and

WHEREAS, the District must obtain sufficient funds to provide for the operation and maintenance of the services and facilities provided by the District as described in the Adopted Budget; and

WHEREAS, the provision of such services, facilities, and operations is a benefit to lands within the District; and

WHEREAS, Chapter 190, Florida Statutes, provides that the District may impose special assessments on benefitted lands within the District; and

WHEREAS, it is in the best interests of the District to proceed with the imposition of the special assessments for operations and maintenance in the amount set forth in the Adopted Budget; and

WHEREAS, the District has previously levied an assessment for debt service, which the District desires to collect for Fiscal Year 2020/2021; and

WHEREAS, Chapter 197, Florida Statutes, provides a mechanism pursuant to which such special assessments may be placed on the tax roll and collected by the local tax collector (“Uniform Method”), and the District has previously authorized the use of the Uniform Method by, among other things, entering into agreements with the Property Appraiser and Tax Collector of the County for that purpose; and

WHEREAS, it is in the best interests of the District to adopt the assessment roll (“Assessment Roll”) attached to this Resolution as Exhibit “B,” and to certify the portion of the Assessment Roll related to certain developed property (“Tax Roll Property”) to the County Tax Collector pursuant to the Uniform Method and to directly collect the portion of the Assessment Roll relating to the remaining property (“Direct Collect Property”), all as set forth in Exhibit “B;” and

WHEREAS, it is in the best interests of the District to permit the District Manager to amend the Assessment Roll adopted herein, including that portion certified to the County Tax Collector by this Resolution, as the Property Appraiser updates the property roll for the County, for such time as authorized by Florida law.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE SOMERSET COMMUNITY DEVELOPMENT DISTRICT:

SECTION 1. BENEFIT & ALLOCATION FINDINGS. The provision of the services, facilities, and operations as described in Exhibit “A” confers a special and peculiar benefit to the lands within the District, which benefit exceeds or equals the cost of the assessments. The allocation of the assessments to the specially benefitted lands is shown in Exhibits “A” and “B,” and is hereby found to be fair and reasonable.

SECTION 2. ASSESSMENT IMPOSITION. Pursuant to Chapters 170, 190 and 197, Florida Statutes, and using the procedures authorized by Florida law for the levy and collection of special assessments, a special assessment for operation and maintenance is hereby imposed and levied on benefitted lands within the District and in accordance with Exhibits “A” and “B.” The lien of the special assessments for operations and maintenance imposed and levied by this Resolution shall be effective upon passage of this Resolution. Moreover, pursuant to Section 197.3632(4), Florida Statutes, the lien amount shall serve as the “maximum rate” authorized by law for operation and maintenance assessments.

SECTION 3.	COLLECTION AND ENFORCEMENT; PENALTIES; INTEREST.

Tax Roll Assessments. The operations and maintenance special assessments and previously levied debt service special assessments imposed on the Tax Roll Property shall be collected at the same time and in the same manner as County taxes in accordance with the Uniform Method, as set forth in Exhibits “A” and “B.”

Direct Bill Assessments. The operations and maintenance special assessments and previously levied debt service special assessments imposed on the Direct Collect Property shall be collected directly by the District in accordance with Florida law, as set forth in Exhibits “A” and “B.” Assessments directly collected by the District are due in full on December 1, 2020; provided, however, that, to the extent permitted by law, the assessments due may be paid in several partial, deferred payments and according to the following schedule: 50% due no later than December 1, 2020, 25% due no later than February 1, 2021 and 25% due no later than May 1, 2021. In the event that an assessment payment is not made in accordance with the schedule stated above, the whole assessment – including any remaining partial, deferred payments for Fiscal Year 2020/2021, shall immediately become due and payable; shall accrue interest, penalties in the amount of one percent (1%) per month, and all costs of collection and enforcement; and shall either be enforced pursuant to a foreclosure action, or, at the District’s sole discretion, collected pursuant to the Uniform Method

on a future tax bill, which amount may include penalties, interest, and costs of collection and enforcement. Any prejudgment interest on delinquent assessments shall accrue at the rate of any bonds secured by the assessments, or at the statutory prejudgment interest rate, as applicable. In the event an assessment subject to direct collection by the District shall be delinquent, the District Manager and District Counsel, without further authorization by the Board, may initiate foreclosure proceedings pursuant to Chapter 170, Florida Statutes, or other applicable law to collect and enforce the whole assessment, as set forth herein.

Future Collection Methods. The decision to collect special assessments by any particular method – e.g., on the tax roll or by direct bill – does not mean that such method will be used to collect special assessments in future years, and the District reserves the right in its sole discretion to select collection methods in any given year, regardless of past practices.

SECTION 4. ASSESSMENT ROLL. The Assessment Roll, attached to this Resolution as Exhibit “B,” is hereby certified for collection. That portion of the Assessment Roll which includes the Tax Roll Property is hereby certified to the County Tax Collector and shall be collected by the County Tax Collector in the same manner and time as County taxes. The proceeds therefrom shall be paid to the District.

SECTION 5. ASSESSMENT ROLL AMENDMENT. The District Manager shall keep apprised of all updates made to the County property roll by the Property Appraiser after the date of this Resolution, and shall amend the Assessment Roll in accordance with any such updates, for such time as authorized by Florida law, to the County property roll. After any amendment of the Assessment Roll, the District Manager shall file the updates in the District records.

SECTION 6. SEVERABILITY. The invalidity or unenforceability of any one or more provisions of this Resolution shall not affect the validity or enforceability of the remaining portions of this Resolution, or any part thereof.

SECTION 7. EFFECTIVE DATE. This Resolution shall take effect upon the passage and adoption of this Resolution by the Board.

PASSED AND ADOPTED this 10th day of August, 2020.

ATTEST:	SOMERSET COMMUNITY
DEVELOPMENT DISTRICT

Secretary / Assistant Secretary

By:	 Its: 	

Exhibit A:	Budget
Exhibit B:	Assessment Roll (Uniform Method) Assessment Roll (Direct Collect)

EXHIBIT A

EXHIBIT B

Assessment Roll

Assessment roll is maintained in the District’s official records and is available upon request. Certain exempt information may be redacted prior to release in compliance with Chapter 119, Florida Statutes

Tab 5

AGREEMENT BY AND BETWEEN THE SOMERSET COMMUNITY DEVELOPMENT DISTRICT AND EBSCO GULF COAST DEVELOPMENT, INC., REGARDING THE DIRECT COLLECTION OF SPECIAL ASSESSMENTS FOR FISCAL YEAR 2020-2021

This Agreement is made and entered into as of this         day of 	, 2020, by and between:

Somerset Community Development District, a local unit of special-purpose government established pursuant to Chapter 190, Florida Statutes, and located in Walton County, Florida (hereinafter “District”), and

EBSCO Gulf Coast Development, Inc., a Delaware corporation and the owner of a portion of the property located within the boundaries of the District (hereinafter, the “Property Owner”). For purposes of this agreement, Property Owner’s property is more particularly described in Exhibit “A” attached hereto (the “Property”).

Recitals

WHEREAS, the District was established by an ordinance adopted by Walton County, Florida, for the purpose of planning, financing, constructing, operating and/or maintaining certain infrastructure; and

WHEREAS, the District, pursuant to Chapter 190, Florida Statutes, is authorized to levy such taxes, special assessments, fees and other charges as may be necessary in furtherance of the District's activities and services; and

WHEREAS, the Property will benefit from the timely construction and acquisition of the District's facilities, activities and services and from the continued operations of the District; and

WHEREAS, pursuant to section 197.3632, Florida Statutes, the District intends to utilize the uniform method of levying, collecting and enforcing the special assessments against the Property once platted and collect such special assessments on the Walton County tax roll for platted lots; and

WHEREAS, the District and Property Owner desire to arrange for the direct collection of the District’s special assessments prior to platting of the Property; and

WHEREAS, Property Owner desires to provide for the direct payment of special assessments.

NOW, THEREFORE, based upon good and valuable consideration and the mutual covenants of the parties, the receipt of which and sufficiency of which are hereby acknowledged, the parties agree as follows:

Assessment Payment. Property Owner agrees to pay the special assessments necessary to fund the District’s operation and maintenance costs for fiscal year 2020-2021 and its previously levied debt service assessments attributable to the Property, regardless of whether Property Owner owns the Property at the time of such payment. Nothing herein shall prohibit Property Owner from prorating or otherwise collecting these special assessments from subsequent purchasers of the Property. The District shall send a bill to Property Owner on or about September 15, 2020, indicating the exact amount of the special assessment payment for operation and maintenance for fiscal year 2020-2021 and its previously levied debt service. If Property Owner does not pay such invoice in full prior to December 1, 2020, then to the extent permitted by law, Property Owner may pay the assessments in several partial, deferred payments and according to the following schedule: 50% due no later than December 1, 2020, 25% due no later than February 1, 2021, and 25% due no later than May 1, 2021. The District’s decision to collect special assessments by any particular method – e.g., on the tax roll or by direct bill – does not mean that such method will be used to collect special assessments in future years, and the District reserves the right in its sole discretion to select collection methods in any given year, regardless of past practices.

Enforcement. This Agreement shall serve as an alternative method for collection of the special assessments. This Agreement shall not affect the District’s ability to collect and enforce its special assessments by any other method authorized by Florida law. Property Owner acknowledges that the failure to pay the special assessments

1

may result in the initiation of a foreclosure action, or, at the District’s sole discretion, delinquent assessments may be certified for collection on a future Walton County tax bill. In the event that an assessment payment is not made in accordance with the schedule stated above, the whole assessment – including any remaining partial, deferred payments for Fiscal Year 2020-2021, as well as any future installments of special assessments securing debt service – shall immediately become due and payable; shall accrue interest, penalties in the amount of one percent (1%) per month, and all costs of collection and enforcement; and shall either be enforced pursuant to a foreclosure action, or, at the District’s sole discretion, collected pursuant to the Uniform Method on a future tax bill, which amount may include penalties, interest, and costs of collection and enforcement. Any prejudgment interest on delinquent assessments shall accrue at the applicable rate of any bonds or other debt instruments secured by the special assessments, or, in the case of operations and maintenance assessments, at the applicable statutory prejudgment interest rate. In the event an assessment subject to direct collection by the District shall be delinquent, the District Manager and District Counsel, without further authorization by the Board, may initiate legal proceedings pursuant to Chapter 170, Florida Statutes, or other applicable law to collect and enforce the whole assessment, as set forth herein.

Notice. All notices, payments and other communications hereunder (“Notices”) shall be in writing and shall be delivered, mailed by First Class Mail, postage prepaid, or telecopied to the parties, as follows:

If to Property Owner:	EBSCO Gulf Coast Development, Inc.
Post Office Box 1943 Birmingham, Alabama 35201
Attn:  	

If to the District:		Somerset Community Development District 120 Richard Jackson Blvd, Suite 220 Panama City Beach, Florida 32407
Attn: District Manager

With a copy to:	Hopping Green & Sams, P.A.
119 South Monroe Street, Suite 300
Tallahassee, Florida 32301 Attn: Tucker F. Mackie

Amendment. This instrument shall constitute the final and complete expression of the agreement between the parties relating to the subject matter of this Agreement. Amendments to and waivers of the provisions contained in this Agreement may be made only by an instrument in writing which is executed by both of the parties hereto.

Authority. The execution of this Agreement has been duly authorized by the appropriate body or official of all parties hereto, each party has complied with all the requirements of law, and each party has full power and authority to comply with the terms and provisions of this instrument.

Assignment. This Agreement may not be assigned, in whole or in part, by either party except upon the written consent of the other. Any purported assignment without such consent shall be void.

Default. A default by either party under this Agreement shall entitle the other to all remedies available at law or in equity, which shall include, but not be limited to, the right of damages, injunctive relief and specific performance and specifically including the ability of the District to enforce any and all payment obligations under this Agreement through the imposition and enforcement of a contractual or other lien on property owned by the Property Owner.

Attorneys’ Fees. In the event that either party is required to enforce this Agreement by court proceedings or otherwise, then the parties agree that the prevailing party shall be entitled to recover from the other all costs incurred, including reasonable attorneys' fees and costs for trial, alternative dispute resolution, or appellate proceedings.

2

Beneficiaries. This Agreement is solely for the benefit of the formal parties herein and no right or cause of action shall accrue upon or by reason hereof, to or for the benefit of any third party not a formal party hereto. Nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person or corporation other than the parties hereto any right, remedy or claim under or by reason of this Agreement or any provisions or conditions hereof; and all of the provisions, representations, covenants and conditions herein contained shall inure to the sole benefit of and shall be binding upon the parties hereto and their respective representatives, successors and assigns.

Applicable Law. This Agreement and the provisions contained herein shall be construed, interpreted and controlled according to the laws of the State of Florida.

Negotiation at Arm’s Length. This Agreement has been negotiated fully between the parties as an arm's length transaction. The parties participated fully in the preparation of this Agreement with the assistance of their respective counsel. In the case of a dispute concerning the interpretation of any provision of this Agreement, the parties are each deemed to have drafted, chosen and selected the language, and the doubtful language will not be interpreted or construed against any party.

Effective Date. The Agreement shall take effect as of October 1, 2020.

In witness whereof, the parties execute this agreement the day and year first written above.

Attest:	SOMERSET COMMUNITY
DEVELOPMENT DISTRICT

Secretary/Assistant Secretary	By:   	
Its:  	

EBSCO GULF COAST DEVELOPMENT, INC.,
A Delaware corporation

By: 	

Witness	Name:	 Title:  	

Exhibit A	Description of the Property

3

Tab 6

RESOLUTION 2020-08

A RESOLUTION OF THE BOARD OF SUPERVISORS OF SOMERSET COMMUNITY DEVELOPMENT DISTRICT DESIGNATING DATES, TIME AND LOCATION FOR REGULAR MEETINGS OF THE BOARD OF SUPERVISORS OF THE DISTRICT, AND PROVIDING FOR AN EFFECTIVE DATE

WHEREAS, Somerset Community Development District (hereinafter the “District”) is a local unit of special-purpose government created and existing pursuant to Chapter 190, Florida Statutes, being situated entirely within Walton County, Florida; and

WHEREAS, the District’s Board of Supervisors (hereinafter the “Board”) is statutorily authorized to exercise the powers granted to the District; and

WHEREAS, all meetings of the Board shall be open to the public and governed by the provisions of Chapter 286, Florida Statutes; and

WHEREAS, the Board is statutorily required to file annually, with the local governing authority and the Florida Department of Economic Opportunity, a schedule of its regular meetings.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF SOMERSET COMMUNITY DEVELOPMENT DISTRICT:

Section 1. Regular meetings of the Board of Supervisors of the District shall be held as provided on the schedule attached as Exhibit “A”.

Section 2. In accordance with Section 189.015(1), Florida Statutes, the District’s Secretary is hereby directed to file annually, with Walton County, a schedule of the District’s regular meetings.

Section 3. This Resolution shall become effective immediately upon its adoption.

PASSED AND ADOPTED THIS 10TH DAY OF AUGUST, 2020.

SOMERSET COMMUNITY DEVELOPMENT DISTRICT

CHAIRMAN / VICE CHAIRMAN

ATTEST:

SECRETARY / ASST. SECRETARY

EXHIBIT “A”
BOARD OF SUPERVISORS MEETING DATES SOMERSET COMMUNITY DEVELOPMENT DISTRICT FISCAL YEAR 2020/2021

November 09, 2020
February 08, 2021
May 10, 2021
August 09, 2021

The above referenced meetings will convene at 2:00 p.m. (CDT) at the Alys Beach office located at 9581 County Highway 30A, Alys Beach, Florida 32413.

Tab 7

SOMERSET
COMMUNITY DEVELOPMENT DISTRICT WALTON COUNTY, FLORIDA FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019

SOMERSET COMMUNITY DEVELOPMENT DISTRICT WALTON COUNTY, FLORIDA

TABLE OF CONTENTS

	    Page		
INDEPENDENT AUDITOR’S REPORT	1-2	
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-6	
BASIC FINANCIAL STATEMENTS		
Government-Wide Financial Statements:		
Statement of Net Position	7	
Statement of Activities	8	
Fund Financial Statements:		
Balance Sheet – Governmental Funds	9	
Reconciliation of the Balance Sheet – Governmental Funds		
to the Statement of Net Position	10	
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds	
11	
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities	
12	
Notes to the Financial Statements	13-20	
REQUIRED SUPPLEMENTARY INFORMATION		
Schedule of Revenues, Expenditures and Changes in Fund Balance –
Budget and Actual – General Fund	
21	
Notes to Required Supplementary Information	22	
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	

23-24	
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10)
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	

25	
MANAGEMENT LETTER PURSUANT TO THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	
26-27	

INDEPENDENT AUDITOR’S REPORT

To the Board of Supervisors
Somerset Community Development District Walton County, Florida

Report on the Financial Statements

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

We have audited the accompanying financial statements of the governmental activities and each major fund of Somerset Community Development District, Walton County, Florida (“District”) as of and for the fiscal year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

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

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

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

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2019, and the respective changes in financial position thereof for the fiscal 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’s discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

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

June 15, 2020

2

MANAGEMENT’S DISCUSSION AND ANALYSIS

Our discussion and analysis of Somerset Community Development District, Walton County, Florida (“District”) provides a narrative overview of the District’s financial activities for the fiscal year ended September 30, 2019. Please read it in conjunction with the District’s Independent Auditor’s Report, basic financial statements, accompanying notes and supplementary information to the basic financial statements.

FINANCIAL HIGHLIGHTS

The liabilities of the District exceeded its assets at the close of the most recent fiscal year resulting in a net position deficit balance of ($4,675,336).
The change in the District’s total net position in comparison with the prior fiscal year was $169,252, an increase. The key components of the District’s net position and change in net position are reflected in the table in the government-wide financial analysis section.
At September 30, 2019, the District’s governmental funds reported combined ending fund balances of
$2,296,508, an increase of $145,915 in comparison with the prior fiscal year. The total fund balance is non-spendable for prepaid items, restricted for debt service, assigned to capital reserves, and the remainder is unassigned fund balance which is available for spending at the District’s discretion.

OVERVIEW OF FINANCIAL STATEMENTS

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

Government-Wide Financial Statements

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

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

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

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 the general government (management) and maintenance and operations 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: the governmental funds.

3

OVERVIEW OF FINANCIAL STATEMENTS (Continued)

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 District’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains two governmental funds for external reporting. 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 and debt service fund, both of which are considered 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 the Financial Statements

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

GOVERNMENT-WIDE FINANCIAL ANALYSIS

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

Key components of the District’s net position are reflected in the following table:

NET POSITION SEPTEMBER 30,

2019	2018

Current and other assets

$ 2,363,853

$ 2,180,460

Capital assets, net of depreciation	 	6,259,025	6,695,626 Total assets	 	8,622,878	8,876,086 

Current liabilities	353,214	325,674
Long-term liabilities	 	12,945,000	13,395,000 

Total liabilities	 	13,298,214	13,720,674 Net position
Net investment in capital assets	(5,823,894)	(1,359,441) Restricted		351,636		275,739
Unrestricted	 	796,922	(3,760,886) 

Total net position	 $  (4,675,336)    $  (4,844,588) 

4

GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)

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

The restricted portion of the District’s net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position may be used to meet the District’s other obligations.

The District’s net position increased during the most recent fiscal year. The majority of the increase represents the extent to which ongoing program revenues exceeded the cost of operations and depreciation expense.

Key elements of the change in net position are reflected in the following table:

CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,
2019	2018

Revenues:

Program revenues Charges for services

$ 1,734,892

$ 1,732,873

Operating grants and contributions	33,230	19,154 General revenues
Unrestricted investment earnings	 	11,331	3,187 

Total revenues	 	1,779,453	1,755,214 Expenses:
General government	82,253	91,614
Maintenance and operations	828,746	629,524
Interest on long-term debt	 	699,202	722,434 

Total expenses	 	1,610,201	1,443,572 

Change in net position			169,252		311,642 Net position - beginning	 	(4,844,588)	(5,156,230) 
Net position - ending	 $  (4,675,336)    $  (4,844,588) 

As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2019 was $1,610,201. The costs of the District’s activities were primarily funded by program revenues. Program revenues were comprised primarily of assessments during the current and prior fiscal years. The increase from the prior year is mainly an increase in interest earnings. In total, expenses increased from the prior fiscal year mainly from the District replacing the irrigation pump stations and filtration system.

GENERAL BUDGETING HIGHLIGHTS

An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2019.

5

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2019, the District had $10,915,038 invested in capital assets for its governmental activities. In the government-wide financial statements depreciation of $4,656,013 has been taken, which resulted in a net book value of $6,259,025. More detailed information about the District’s capital assets is presented in the notes to the financial statements.
Capital Debt

At September 30, 2019, the District had $12,945,000 Bonds outstanding for its governmental activities. More detailed information about the District’s capital debt is presented in the notes to the financial statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND OTHER EVENTS

The District does not anticipate any major projects or significant changes to its infrastructure maintenance program for the subsequent fiscal year. In addition, it is anticipated that the general operations of the District will remain fairly constant.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, land owners, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact the Somerset Community Development District’s Finance Department at 12750 Citrus Park Lane, Suite 115, Tampa, Florida 33625.

6

FINANCIAL STATEMENTS

STATEMENT OF NET POSITION SEPTEMBER 30, 2019		
	
Governmental	
	 	Activities		
ASSETS		
Cash	$	852,481	
Prepaid items	11,786	
Restricted assets:		
Investments	1,499,586	
Capital assets:		
Depreciable, net	 	6,259,025 	
Total assets	 	8,622,878 	
LIABILITIES		
Accounts payable and accrued expenses	67,345	
Accrued interest payable	285,869	
Non-current liabilities:		
Due within one year	440,000	
Due in more than one year	 	12,505,000 	
Total liabilities	 	13,298,214 	
NET POSITION		
Net investment in capital assets	(5,823,894)	
Restricted for debt service	351,636	
Unrestricted	 	796,922 	
Total net position	  $	(4,675,336)	

See notes to the financial statements

7

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019

Program Revenues

Net (Expense) Revenue and Changes in Net Position

Functions/Programs	Expenses Primary government:
Governmental activities:

Charges for Services

Operating Grants and Contributions

Governmental Activities

General government

$	82,253	$

82,253	$	-	$	-

Maintenance and operations	828,746	490,665	-	(338,081)	
Interest on long-term debt	699,202	1,161,974	33,230	496,002	
Total governmental activities	1,610,201	1,734,892	33,230	157,921	

General revenues:
Unrestricted investment earnings	 	11,331 	
Total general revenues	 	11,331 	
Change in net position	169,252	
Net position - beginning	 	(4,844,588)	
Net position - ending	  $	(4,675,336)	

See notes to the financial statements

8

BALANCE SHEET – GOVERNMENTAL FUNDS SEPTEMBER 30, 2019

 	Major Funds		Total

ASSETS

General

Debt Service

Governmental Funds

Cash

$	852,481	$

-	$	852,481

Investments	-	1,499,586	1,499,586
Prepaid items	 	11,786	-	11,786 
Total assets	 $	864,267	$  1,499,586	$	2,363,853 

LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accrued expenses

  $	67,345	$	-	$	67,345 

Total liabilities	 	67,345	-	67,345 

Fund balances:
Nonspendable:
Prepaid items	11,786	-	11,786 Restricted for:
Debt service	-	1,499,586	1,499,586 Assigned to:
Capital reserves	530,086	-	530,086
Unassigned	 	255,050	-	255,050 	
Total fund balances	 	796,922	1,499,586	2,296,508 	
Total liabilities and fund balances	  $	864,267	$  1,499,586	$	2,363,853 	

See notes to the financial statements

9

RECONCILIATION OF THE BALANCE SHEET – GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2019

Fund balance - governmental funds	$
Amounts reported for governmental activities in the  statement  of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in the governmental funds. The statement of net position includes those capital assets, net of any accumulated depreciation, in the net position of the government as a whole.
Cost of capital assets	10,915,038

2,296,508

Accumulated depreciation	 (4,656,013)	6,259,025

Liabilities not due and payable from current available resources are not reported as liabilities in the governmental fund statements. All liabilities, both current and long-term, are reported in the government-wide financial statements.
Accrued interest payable	(285,869)
Bonds payable	 (12,945,000)        (13,230,869)
Net  position of governmental activities	 $	(4,675,336)

See notes to the financial statements

10

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019

 	Major Funds	
Debt

Total Governmental

General

Service

Funds

REVENUES
Assessments	
$	
572,918	
$	
1,161,974	
$	
1,734,892	
Interest income	 	11,331	33,230	44,561 	
Total revenues	 	584,249	1,195,204	1,779,453 	
EXPENDITURES		
Current:
General government	
82,253	
-	
82,253	
Maintenance and operations Debt service:
Principal	392,145

-	-

450,000	392,145

450,000	
Interest	 	-	709,140	709,140 
Total expenditures	 	474,398	1,159,140	1,633,538 

Excess (deficiency) of revenues
over (under) expenditures	109,851	36,064	145,915

Fund balances - beginning	 	687,071	1,463,522	2,150,593 

Fund balances - ending	 $	796,922	$	1,499,586	$	2,296,508 

See notes to the financial statements

11

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019

Net change in fund balances - total governmental funds	$	145,915	
Amounts reported for governmental activities in the statement of activities are different because:		
Repayment of long-term liabilities are reported as expenditures in the governmental fund financial statements, but such repayments reduce liabilities in the statement of net position and are eliminated in the statement of activities.	

450,000	
Depreciation of capital assets is not recognized in the governmental fund financial statements, but is reported as an expense in the statement of activities.	

(436,601)	
The change in accrued interest on long-term liabilities between the current and prior fiscal year is recorded in the statement of activities but not in the fund financial statements.	

9,938	
Change in net position of governmental activities	  $	169,252 	

See notes to the financial statements

12

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – NATURE OF ORGANIZATION AND REPORTING ENTITY

Somerset Community Development District (the "District") was established by Walton County Ordinance No. 05-04 enacted on April 1, 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, power to borrow money and issue bonds, and to levy and assess non-ad valorem assessments for the financing and delivery of capital infrastructure.

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

The District is governed by the Board of Supervisors ("Board"), which is composed of five members. The Supervisors are elected on an at large basis by landowners of the District. The Board of Supervisors of the District exercise all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2019, certain Board members are affiliated with EBSCO Gulf Coast Development, Inc. (“Developer”).

The Board has the responsibility for:
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. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Government-Wide and Fund Financial Statements
The basic financial statements include both government-wide and fund financial statements.

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.

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

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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 to be recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

Assessments
Assessments are non-ad valorem assessments imposed on assessable lands located within the District. Assessments may be levied on property to pay for the operations and maintenance of the District. The fiscal year for which annual assessments may be levied begins on October 1 with discounts available for payments through February 28 and become delinquent on April 1. For debt service assessments, amounts collected as advance payments are used to prepay a portion of the Bonds outstanding. Otherwise, assessments are collected annually to provide funds for the debt service on the portion of the Bonds which are not paid with prepaid assessments.

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

The District reports the following major governmental funds:

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

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

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

When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first for qualifying expenditures, then unrestricted resources as they are needed.

Assets, Liabilities and Net Position or Equity

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

14

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

The District has elected to proceed under the Alternative Investment Guidelines as set forth in Section 218.415 (17) Florida Statutes. The District may invest any surplus public funds in the following:

The Local Government Surplus Trust Funds, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act;
Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency;
Interest bearing time deposits or savings accounts in qualified public depositories;
Direct obligations of the U.S. Treasury.

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

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

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

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

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend 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	
Erosion control structures	25	
Surface water treatment	25	

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

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

15

Long-Term Obligations
In the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized ratably over the life of the Bonds. Bonds payable are reported net of applicable premiums or discounts. Bond issuance costs are expensed when incurred.

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

Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

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

The District can establish limitations on the use of fund balance as follows:

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

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

The District first uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.

Net position is the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources. Net position in the government-wide financial statements are categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents net position related to infrastructure and property, plant and equipment. Restricted net position represents the assets restricted by the District’s Bond covenants or other contractual restrictions. Unrestricted net position consists of the net position not meeting the definition of either of the other two components.

16

Other Disclosures

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

NOTE 3 – BUDGETARY INFORMATION

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

The District follows these procedures in establishing the budgetary data reflected in the financial statements.

Each year, the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1.
A public hearing is conducted to obtain comments.
Prior to October 1, the budget is legally adopted by the District Board.
All budget changes must be approved by the District Board.
The budgets are adopted on a basis consistent with generally accepted accounting principles.
Unused appropriation for annually budgeted funds lapse at the end of the year.

NOTE 4 – DEPOSITS AND INVESTMENTS

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

Investments
The District’s investments were held as follows at September 30, 2019:

First American Treasury Obligations

  Amortized Cost	Credit Risk	Maturities	

Weighted average of the fund

Fund Class Z
Total Investments

  $	1,499,586 

  $	1,499,586 

S&P AAAm

portfolio: 26 days

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

Concentration risk – The District places no limit on the amount the District may invest in any one issuer.

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

However, the Bond Indenture limits the type of investments held using unspent proceeds.

17

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

These guidelines recognize a three-tiered fair value hierarchy, in order of highest priority, as follows:

Level 1: Investments whose values are based on unadjusted quoted prices for identical investments in active markets that the District has the ability to access;
Level 2: Investments whose inputs - other than quoted market prices - are observable either directly or indirectly; and,
Level 3: Investments whose inputs are unobservable.

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

Money market investments that have a maturity at the time of purchase of one year or less and are held by governments other than external investment pools should be measured at amortized cost. Accordingly, the District’s investments have been reported at amortized cost above.

NOTE 5 – CAPITAL ASSETS

Capital asset activity for the fiscal year ended September 30, 2019 was as follows:

Beginning	Ending
 	Balance	Additions	Disposals	Balance	

Governmental activities
Capital assets, being depreciated
Erosion control structures
Surface w ater treatment	$	933,321	$	-	$	-	$	933,321
 	9,981,717	-	-	9,981,717 	
Total capital assets, being depreciated	 	10,915,038	-	-	10,915,038 	

Less accumulated depreciation for: Erosion control structures	

(410,663)	(37,333)	-	(447,996)	
Surface w ater treatment	 	(3,808,749)	(399,268)	-	(4,208,017) 	
Total accumulated depreciation	 	(4,219,412)	(436,601)	-	(4,656,013) 	

Total capital assets, being depreciated, net	
 	6,695,626	(436,601)	-	6,259,025 	

Governmental activities capital assets, net	
   $  6,695,626	$	(436,601)   $	-	$ 6,259,025 	

Depreciation expense was charged to the maintenance and operations function.

18

On July 12, 2005, the District issued $21,045,000 of Capital Improvement Revenue Bonds, Series 2005 consisting of $2,875,000 Term Bonds due on May 1, 2015 with a fixed interest rate of 5% and $18,170,000 Term Bonds due on May 1, 2037 with a fixed interest rate of 5.3%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Bonds is to be paid serially commencing May 1, 2008 through May 1, 2037.

The Bonds are subject to redemption at the option of the District prior to their maturity. 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. This occurred during the current fiscal year as the District collected assessments from lot closings and prepaid $30,000 of the Bonds. See Note 12 - Subsequent Events for additional call amounts subsequent to the fiscal year end.

The Bond Indenture established a debt service reserve requirement as well as other 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 agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District was in compliance with the requirements at September 30, 2019.

Changes in long-term liability activity for the fiscal year ended September 30, 2019 were as follows:

Beginning

Ending

Due Within

Governmental activities Bonds payable:
Series 2004 Total

 	Balance	Additions	Reductions	Balance	One Year	

   $ 13,395,000	$	-	$	(450,000)	$ 12,945,000	$	440,000 

   $ 13,395,000	$	-	$	(450,000)	$ 12,945,000	$	440,000 

At September 30, 2019, the scheduled debt service requirements on the long-term debt were as follows:

Year ending,	 	Governmental Activities	

 	September 30:	Principal	Interest	Total	
2020	$	440,000	$	686,085	$ 1,126,085	
2021	465,000	662,765	1,127,765	
2022	490,000	638,120	1,128,120	
2023	520,000	612,150	1,132,150	
2024	545,000	584,590	1,129,590	
2025-2029	3,205,000	2,456,815	5,661,815	
2030-2034	4,185,000	1,509,440	5,694,440	
2035-2037	 	3,095,000	333,635	3,428,635 	
Total	$ 12,945,000	$	7,483,600	$ 20,428,600	

NOTE 7 – DEVELOPER TRANSACTIONS

The Developer owns a portion of the land within the District; therefore, assessment revenues in the general and debt service funds include the assessments levied on those lots owned by the Developer.

NOTE 8 – CONCENTRATION

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

NOTE 9 – COST SHARE AGREEMENT

The District entered into a cost share agreement with the ALYS Beach Neighborhood Association (“Association”), whereby the Association would contract a vendor for landscaping and related services and be reimbursed by the District. Pursuant to the agreement, the District reimbursed the Association $109,767 for current year services.

19

NOTE 10 – MANAGEMENT COMPANY

The District has contracted with a management company to perform management services, which include financial 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 11 – RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The District has obtained commercial insurance from independent third parties to mitigate the costs of these risks; coverage may not extend to all situations. There were no settled claims during the past three years.

NOTE 12 – SUBSEQUENT EVENTS

Bond Payments
Subsequent to fiscal year end, the District prepaid $25,000 of the Series 2005 Bonds. The prepayments were extraordinary mandatory redemptions as outlined in the Bond Indenture.

20

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019

Budgeted
 	Amounts		Actual

Variance with Final Budget - Positive

REVENUES
Assessments

Original & Final

$	566,775	$

Amounts

572,918	$

(Negative)

6,143

Interest Income	 	-	11,331	11,331 
Total revenues	 	566,775	584,249	17,474 

EXPENDITURES
Current:
General government	94,670	82,253	12,417
Maintenance and operations	 	472,105	392,145	79,960 
Total expenditures	 	566,775	474,398	92,377 

Excess (deficiency) of revenues over (under) expenditures

  $	-	

109,851	$

109,851

Fund balance - beginning	 	687,071 

Fund balance - ending	 $	796,922 

See notes to required supplementary information

21

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

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

The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2019.

22

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

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

To the Board of Supervisors
Somerset Community Development District Walton County, Florida

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of Somerset Community Development District, Walton County, Florida (“District”) as of and for the fiscal year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements and have issued our report thereon dated June 15, 2020.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.

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

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

Compliance and Other Matters

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

23

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

June 15, 2020

24

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

To the Board of Supervisors
Somerset Community Development District Walton County, Florida

We have examined Somerset Community Development District, Walton County, Florida’s (“District”) compliance with the requirements of Section 218.415, Florida Statutes, in accordance with Rule 10.556(10) of the Auditor General of the State of Florida during the fiscal year ended September 30, 2019. Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on the District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced in Section 218.415, Florida Statutes. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the District’s compliance with specified requirements.

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2019.

This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, management, and the Board of Supervisors of Somerset Community Development District, Walton County, Florida and is not intended to be and should not be used by anyone other than these specified parties.

June 15, 2020

25

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

To the Board of Supervisors
Somerset Community Development District Walton County, Florida

Report on the Financial Statements

We have audited the accompanying basic financial statements of Somerset Community Development District, Walton County, Florida ("District") as of and for the fiscal 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 of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General.

Other Reporting Requirements

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

Purpose of this Letter

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

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

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

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

June 15, 2020

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REPORT TO MANAGEMENT

CURRENT YEAR FINDINGS AND RECOMMENDATIONS

None

PRIOR YEAR FINDINGS AND RECOMMENDATIONS

None

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

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

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

There were no significant findings and recommendations made in the preceding annual financial audit report for the fiscal year ended September 30, 2018.

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

There were no such matters discovered by, or that came to the attention of, the auditor, to be reported for the fiscal year ended September 30, 2019.

Noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance.

There were no such matters discovered by, or that came to the attention of, the auditor, to be reported, for the fiscal year ended September 30, 2019.

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

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

We applied financial condition assessment procedures and no deteriorating financial conditions were noted as of September 30, 2019. It is management’s responsibility to monitor financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same.

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