DURBIN CROSSING COMMUNITY DEVELOPMENT DISTRICT Fiscal Year 2023 Summary of Series 2017A1-2 & O&M Assessment Receipts ASSESSED # UNITS ASSESSED SERIES 2017A1- 2 DEBT NET O&M NET TOTAL NET ASMTS 44,561 29,572.19 19,588.37 49,160.56 44,561 29,572.19 19,588.37 49,160.56 RECEIVED SERIES 2017A1- 2 DEBT PAID O&M PAID TOTAL ASMTS PAID BALANCE DUE DATE O&M PAID THROUGH 22,179.14 19,588.37 41,767.51 7 ,393.05 22,179.14 19,588.37 41,767.51 7,393.05 ASSESSED TO DURBIN CROSSING PROPERTIES, LLC VILLAGE CTR T COMM. ( NET ASSESSMENTS DIRECT BILL NET ASSESSMENTS TAX ROLL 101,916 3,025,303.86 2,231,190.29 5,256,494.15 3,036,632.56 2,239,545.29 5,276,177.85 (19,683.70) TOTAL DISTRICT 146,477 3,054,876.05 2,250,778.66 5,305,654.71 3,058,811.70 2,259,133.66 5,317,945.36 (12,290.65) DIRECT BILL % COLLECTED TAX ROLL % COLLECTED TOTAL % COLLECTED 75% 100% 85% 100% 100% 100% 100% 100% 100% (1) Bulk land owners are on a payment plan. O&M Installments due 50% due 12/1, 25% due 2/1, and 25% due 5/1. Debt Service is due 75% 4/1 and 25% 9/30 Units include 144,153 square feet of Commercial/Retail/Office EAST NASSAU STEWARDSHIP DISTRICT DETAIL OF TAX ROLL RECEIPTS ST JOHNS COUNTY DISTRIBUTION DATE AMOUNT DEBT O&M 1 11/2/2022 15,773.00 9,077.94 6,695.06 2 11/17/2022 175,865.65 101,217.09 74,648.56 3 11/28/2022 212,653.89 122,390.06 90,263.83 4 12/12/2022 482,011.26 277,415.04 204,596.22 5 12/15/2022 596,203.72 343,136.96 253,066.76 6 1/20/2023 3 ,419,441.62 1 ,968,013.21 1 ,451,428.41 INTEREST 2/1/2023 7,034.30 4,048.50 2,985.80 7 2/21/2023 249,196.12 143,421.44 105,774.68 8 3/30/2023 22,941.24 13,203.52 9,737.72 INTEREST 4/6/2023 4,053.74 2,333.08 1,720.66 9 5/8/2023 83,884.86 48,278.79 35,606.07 TAX CERTIFICATES 6/15/2023 7,118.45 4,096.93 3,021.52 - - - - - - - - TOTAL TAX ROLL RECEIPTS 5,276,177.85 3,036,632.56 2,239,545.29 Durbin Crossing Community Development District ANNUAL FINANCIAL REPORT September 30, 2022 Durbin Crossing Community Development District ANNUAL FINANCIAL REPORT Fiscal Year Ended September 30, 2022 TABLE OF CONTENTS Page Number REPORT OF INDEPENDENT AUDITORS 1-3 MANAGEMENT’S DISCUSSION AND ANALYSIS 4-9 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements Statement of Net Position 10 Statement of Activities 11 Fund Financial Statements: Balance Sheet – Governmental Funds 12 Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities 13 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 15 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund 16 Notes to Financial Statements 17-31 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 32-33 MANAGEMENT LETTER 34-36 INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES 37 REPORT OF INDEPENDENT AUDITORS To the Board of Supervisors Durbin Crossing Community Development District St. Johns County, Florida Report on Audit of the Financial Statements Opinion We have audited the financial statements of the governmental activities and each major fund of Durbin Crossing Community Development District (the “District”), as of and for the year ended September 30, 2022, and the related notes to financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of Durbin Crossing Community Development District as of September 30, 2022, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS), and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management 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; and for 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. To the Board of Supervisors Durbin Crossing Community Development District In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for one year beyond the financial statement date, including currently known information that may raise substantial doubt thereafter. Auditor’s Responsibility for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore, is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgement and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 District’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. To the Board of Supervisors Durbin Crossing Community Development District Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated June 30, 2023 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations and contracts. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Durbin Crossing Community Development District’s internal control over financial reporting and compliance. Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL Fort Pierce, Florida June 30, 2023 Management’s discussion and analysis of Durbin Crossing Community Development District (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities for the fiscal year ended September 30, 2022. The analysis provides summary financial information for the District and should be read in conjunction with the District’s financial statements. OVERVIEW OF THE FINANCIAL STATEMENTS The District’s basic financial statements comprise three components; 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to financial statements. The Government-wide financial statements present an overall picture of the District’s financial position and results of operations. The Fund financial statements present financial information for the District’s major funds. The Notes to financial statements provide additional information concerning the District’s finances. This report also contains other supplementary information in addition to the basic financial statements. The Government-wide financial statements are the statement of net position and the statement of activities. These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net position of governmental activities and the change in net position. Governmental activities are primarily supported by special assessments. The statement of net position presents information on all assets and liabilities of the District, with the difference between assets and liabilities reported as net position. Net position is reported in three categories; 1) net investment in capital assets, 2) restricted, and 3) unrestricted. Assets, liabilities, and net position are reported for all Governmental activities. The statement of activities presents information on all revenues and expenses of the District and the change in net position. Expenses are reported by major function and program revenues relating to those functions are reported, providing the net cost of all functions provided by the District. To assist in understanding the District’s operations, expenses have been reported as governmental activities. Governmental activities financed by the District include general government, physical environment, culture/recreation and debt service. Fund financial statements present financial information for governmental funds. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources. OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances – budget and actual is provided for the District’s General Fund. Fund financial statements provide more detailed information about the District’s activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements. The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District’s financial standing. These statements are comparable to private-sector companies and give a good understanding of the District’s overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of the District, including capital assets are reported in the statement of net position. All liabilities, including principal outstanding on bonds are included. The statement of activities includes depreciation on all long-lived assets of the District, but transactions between the different functions of the District have been eliminated in order to avoid “doubling up” the revenues and expenses. The fund financial statements provide a picture of the major funds of the District. In the case of governmental activities, outlays for long lived assets are reported as expenditures and long-term liabilities, such as general obligation bonds, are not included in the fund financial statements. To provide a link from the fund financial statements to the government-wide financial statements, a reconciliation is provided from the fund financial statements to the governmentwide financial statements. Notes to financial statements provide additional detail concerning the financial activities and financial balances of the District. Additional information about the accounting practices of the District, investments of the District, capital assets and long-term debt are some of the items included in the notes to financial statements. Financial Highlights The following are the highlights of financial activity for the year ended September 30, 2022. . The District’s total assets were exceeded by total liabilities by $(23,089,577) (net position). Unrestricted net position for governmental activities was $(19,024,428). Net investment in capital assets was $(5,828,632). Governmental activities restricted net position was $1,763,483. . Governmental activities revenues totaled $5,344,690 while governmental activities expenses totaled $3,932,499. OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Financial Analysis of the District The following schedule provides a summary of the assets, liabilities and net position of the District and is presented by category for comparison purposes. Net Position The decrease in current assets and current liabilities is related to the decrease in accounts payable in the current year. 2022 2021 Current assets $ 5 96,414 $ 6 74,049 Restricted assets 3,587,504 3,756,937 Capital assets 6,483,130 6,943,897 Total Assets 10,667,048 11,374,883 Current liabilities 2,300,809 2,435,662 Non-current liabilities 31,455,816 33,440,989 Total Liabilities 33,756,625 35,876,651 Net Position Net investment in capital assets (5,828,632) (5,367,865) Restricted 1,763,483 1,908,333 Unrestricted ( 19,024,428) ( 21,042,236) Total Net Position $ ( 23,089,577) $ ( 24,501,768) Governmental Activities The decrease in capital assets is the result of current year depreciation. The decrease in non-current liabilities is due to the principal payments on the bonds in the current year. The increase in net position is related to current year revenues in excess of current year expenses. OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Financial Analysis of the District (Continued) The following schedule provides a summary of the changes in net position of the District and is presented by category for comparison purposes. It is not intended to be a complete presentation of District-wide financial activity. Change in Net Position The decrease in charges for services is the result of the prepayments received in the prior year. 2022 2021 Program Revenues Charges for services $ 5 ,215,146 $ 5,298,782 Operating grants and contributions 8 4,859 70,863 General Revenues Investment earnings 1 2,612 1,936 Miscellaneous 3 2,073 11,896 Total Revenues 5 ,344,690 5,383,477 Expenses General government 2 13,343 163,873 Physical environment 1 ,297,741 1,374,219 Culture/recreation 1 ,068,468 1,015,819 Interest and other charges 1 ,352,947 1,401,202 Total Expenses 3 ,932,499 3,955,113 Change in Net Position 1 ,412,191 1,428,364 Net Position - Beginning of Year (24,501,768) ( 25,930,132) Net Position - End of Year $ (23,089,577) $ ( 24,501,768) The increase in general government is related to the increase in legal fees in the current year. The decrease in physical environment is related to decreased landscape maintenance costs in the current year. The increase in culture/recreation was related to the increase in amenity manager and pool attendants expenses in the current year. OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Capital Assets Activity The following schedule provides a summary of the District’s capital assets as of September 30, 2022 and 2021. The activity for the year consisted of $460,767 in depreciation. General Fund Budgetary Highlights Description 2022 2021 Buildings $ 6,741,826 $ 6,741,826 Improvements other than buildings 5,509,669 5,509,669 Equipment 60,267 60,267 Accumulated depreciation (5,828,632) (5,367,865) Total Capital Assets (Net) $ 6,483,130 $ 6,943,897 Governmental Activities Budgeted expenditures exceeded actual expenditures because reserve and reclaimed water expenditures were less than anticipated. The September 30, 2022 budget was not amended. Debt Management Governmental Activities debt includes the following: . In February 2017, the District issued $37,825,000 Series 2017A-1 Senior Special Assessment Refunding Bonds and $4,580,000 2017A-2 Subordinate Special Assessment Refunding Bonds. These bonds were issued to refund and redeem the outstanding Series 2005A Special Assessment Bonds. The balance outstanding of the Series 2017A-1 and Series 2017A-2 Bonds at September 30, 2022 was $30,010,000 and $3,440,000, respectivley. OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Economic Factors and Next Year’s Budget Durbin Crossing Community Development District does not expect any economic factors to have any significant effect on the financial position or results of operations of the District in fiscal year 2023. Request for Information The financial report is designed to provide a general overview of Durbin Crossing Community Development District’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Durbin Crossing Community Development District, Governmental Management Services, 475 West Town Place, Suite 114, St. Augustine, Florida 32092. Durbin Crossing Community Development District STATEMENT OF NET POSITION September 30, 2022 Governmental Activities ASSETS Current Assets Cash $ 323,908 Investments 190,009 Prepaid expenses 5,000 Deposits 200 Due from other 1,091 Assessments receivable 76,206 Total Current Assets 596,414 Non-current Assets Restricted assets Investments 3,587,504 Capital assets Assets being depreciated Buildings 6,741,826 Improvements other than buildings 5,509,669 Equipment 60,267 Less: accumulated depreciation (5,828,632) Total Non-current Assets 10,070,634 Total Assets 10,667,048 LIABILITIES Current Liabilities Accounts payable and accrued expenses 47,752 Accrued interest 543,057 Bonds payable - current portion 1,710,000 Total Current Liabilities 2,300,809 Non-current liabilities Bonds payable, net 31,455,816 Total Liabilities 33,756,625 NET POSITION Net investment in capital assets (5,828,632) Restricted for debt service 231,727 Restricted for capital projects 1,531,756 Unrestricted (19,024,428) Total Net Position $ (23,089,577) See accompanying notes to financial statements. -10 STATEMENT OF ACTIVITIES For the Year Ended September 30, 2022 Durbin Crossing Community Development District Program Revenues Net (Expense) Revenues and Changes in Net Position Functions/Programs Expenses Charges for Services Operating Grants and Contributions Governmental Activities Governmental Activities General government Physical environment Culture/recreation Interest and other charges Total Governmental Activities (213,343) $ 225,196 $ (1,297,741) 1,072,287 (1,068,468) 826,953 (1,352,947) 3,090,710 $ (3,932,499) $ 5,215,146 $ $ -- 84,859 - 84,859 11,853 $ (225,454) (156,656) 1,737,763 1,367,506 General revenues: Investment earnings Miscellaneous revenues Total General Revenues 12,612 32,073 44,685 Change in Net Position 1,412,191 Net Position - October 1, 2021 Net Position - September 30, 2022 (24,501,768) $ (23,089,577) See accompanying notes to financial statements. - 11 Durbin Crossing Community Development District BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2022 Total Debt Capital Governmental ASSETS General Service Projects Funds Cash $ 155,988 $ -$ 167,920 $ 323,908 Investments, at fair value 190,009 --190,009 Assessments receivable 22,837 53,369 -76,206 Prepaid items 5,000 --5,000 Deposits 200 --200 Due from other 1,091 --1,091 Restricted assets Investments, at fair value -2,223,668 1,363,836 3,587,504 Total Assets $ 375,125 $ 2,277,037 $ 1,531,756 $ 4,183,918 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable and accrued expenses $ 47,752 $ -$ -$ 47,752 FUND BALANCES Nonspendable Prepaid items/deposits 5,200 --5,200 Restricted Debt service -2,277,037 -2,277,037 Capital projects --1,531,756 1,531,756 Unassigned 322,173 --322,173 Total Fund Balances 327,373 2,277,037 1,531,756 4,136,166 Total Liabilities and Fund Balances $ 375,125 $ 2,277,037 $1,531,756 $ 4,183,918 See accompanying notes to financial statements. -12 Durbin Crossing Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES September 30, 2022 Total Governmental Fund Balances $ 4,136,166 Amounts reported for governmental activities in the statement of net position are different because: Capital assets being depreciated, buildings, $6,741,826, improvements other than buildings, $5,509,669, and equipment, $60,267, net of accumulated depreciation, $(5,828,632), used in governmental activities are not current financial resources and are not reported at the fund level. 6,483,130 Long-term liabilities, such as bonds payable, $(33,450,000), net of bond discounts, net, $284,184, are not due and payable in the current period, and therefore, (33,165,816) are not reported at the fund level. Accrued interest expense for long-term debt is not a current financial use, and therefore, is not reported at the funds statement level. (543,057) Net Position of Governmental Activities $ (23,089,577) See accompanying notes to financial statements. - 13 Durbin Crossing Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended September 30, 2022 Total Debt Capital Governmental General Service Projects Funds Revenues Special assessments $ 2,113,644 $ 3,090,710 $ -$ 5,204,354 Impact fees --84,859 84,859 Charges for services 10,792 --10,792 Miscellaneous 32,073 --32,073 Investment earnings 154 1,603 10,855 12,612 Total Revenues 2,156,663 3,092,313 95,714 5,344,690 Expenditures Current General government 213,343 --213,343 Physical environment 1,015,848 -106,167 1,122,015 Culture/recreation 783,427 --783,427 Debt service Principal -1,975,000 -1,975,000 Interest -1,357,394 -1,357,394 Total Expenditures 2,012,618 3,332,394 106,167 5,451,179 Revenues over/(under) expenditures 144,045 (240,081) (10,453) (106,489) Other Financing Sources/(Uses) Transfers in --78,200 78,200 Transfers out (78,200) --(78,200) Total Other Financing Sources/(Uses) (78,200) -78,200 - Net change in fund balances 65,845 (240,081) 67,747 (106,489) Fund Balances - October 1, 2021 261,528 2,517,118 1,464,009 4,242,655 Fund Balances - September 30, 2022 $ 327,373 $ 2,277,037 $ 1,531,756 $ 4,136,166 See accompanying notes to financial statements. - 14 Durbin Crossing Community Development District RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30, 2022 Net Change in Fund Balances - Total Governmental Funds $ (106,489) Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures, however, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation. This is the amount of depreciation in the current period. (460,767) Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. 1,975,000 At the fund level bond discounts are reported as expenditures. However, at the government-wide level, the cost is amotized as interest expense. (19,827) In the Statement of Activities, interest is accrued on outstanding bonds; whereas the net amount between the prior year and the current year accruals. in governmental funds, interest expenditures are reported when due. This is 24,274 Change in Net Position of Governmental Activities $ 1,412,191 See accompanying notes to financial statements. - 15 Durbin Crossing Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND For the Year Ended September 30, 2022 Variance Original Final Favorable Budget Budget Actual (Unfavorable) Revenues Special assessments $ 2,099,514 $ 2,099,514 $ 2,113,644 $ 14,130 Charges for services --10,792 10,792 Miscellaneous 20,000 20,000 32,073 12,073 Investment earnings 30 30 154 124 Total Revenues 2,119,544 2,119,544 2,156,663 37,119 Expenditures Current General government 184,701 184,701 213,343 (28,642) Physical environment 1,060,980 1,060,980 1,015,848 45,132 Culture/recreation 793,863 793,863 783,427 10,436 Total Expenditures 2,039,544 2,039,544 2,012,618 26,926 Revenues over/(under) expenditures 80,000 80,000 144,045 (64,045) Other Financing Sources/(Uses) Transfers out (80,000) (80,000) (78,200) 1,800 Net change in fund balances --65,845 65,845 Fund Balances - October 1, 2021 --261,528 261,528 Fund Balances - September 30, 2022 $ --$ 327,373 $ 327,373 $ See accompanying notes to financial statements. - 16 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Durbin Crossing Community Development District (the District) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The District's more significant accounting policies are described below. 1. Reporting Entity The District was established on November 5, 2003 by Rule 42MM-1 by the Florida Land and Water Adjudicatory Commission, under the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the "Act"), as a Community Development District. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is governed by a five-member Board of Supervisors, who is elected by the qualified electors within the District for terms of four years. The District operates within the criteria established by Chapter 190, Florida Statutes. 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, and financing improvements. The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility. Oversight responsibility includes, but is not limited to, financial interdependency, designation of management, significant ability to influence operations and accountability for fiscal matters. As required by GAAP, these financial statements present the Durbin Crossing Community Development District (the primary government) as a stand-alone government. Based upon the application of the above-mentioned criteria as set forth in principles established by the Governmental Accounting Standards Board, the District has identified no component units. 2. Measurement Focus and Basis of Accounting The basic financial statements of the District are composed of the following: • Government-wide financial statements • Fund financial statements • Notes to financial statements NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Measurement Focus and Basis of Accounting (Continued) a. Government-wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Government-wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include the governmental activities of the primary government. The effect of interfund activity has been removed from these statements. Governmental activities are supported by special assessments and interest. Program revenues include charges for services, and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure. b. Fund Financial Statements The underlying accounting system of the District is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the primary government’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Measurement Focus and Basis of Accounting (Continued) b. Fund Financial Statements (Continued) Governmental Funds The District has implemented the Governmental Accounting Standards Board Statement 54 – Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The District has various policies governing the fund balance classifications. Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact. Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by the state constitution, external resource providers, or through enabling legislation. Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company. Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance is considered to be utilized first when expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Measurement Focus and Basis of Accounting (Continued) b. Fund Financial Statements (Continued) Governmental Funds (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered to be available when they are collected within the current period, or soon thereafter, to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period. Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as another financing source rather than as a fund liability. Debt service expenditures are recorded only when payment is due. 3. Basis of Presentation a. Governmental Major Funds General Fund – The General Fund is the District’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3. Basis of Presentation (Continued) a. Governmental Major Funds (Continued) Debt Service Fund – Accounts for debt service requirements to retire certain capital improvement revenue bonds which were used to finance the construction of District infrastructure improvements and finance certain additional improvements. The bond series is secured by a pledge of debt service special assessment revenues in any fiscal year related to the improvements. A lien is placed on all benefited land in relationship to the debt outstanding. Capital Projects Fund – The Capital Project Fund accounts for construction of infrastructure improvements within the boundaries of the District, which are funded by bond proceeds. A lien is placed on all benefited land in relationship to the debt outstanding. b. Non-current Governmental Assets/Liabilities GASB Statement 34 requires that non-current governmental assets, such as land and buildings, and non-current governmental liabilities, such as special assessment bonds, be reported in the governmental activities column in the government-wide statement of net position. 4. Assets, Liabilities and Net Position or Equity a. Cash and Investments Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral from their deposits of public funds. This pool is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions, providing full insurance for public deposits. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Assets, Liabilities and Net Position or Equity (Continued) a. Cash and Investments (Continued) The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of: 1. Direct obligations of the United States Treasury; 2. The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969; 3. Interest-bearing time deposits or savings accounts in authorized qualified public depositories; 4. Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency. Cash equivalents include time deposits and certificates of deposit with original maturities of three months or less and held in a qualified public depository as defined by Florida Statute 280.02. b. Receivables and Payables Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds”. Any residual balances outstanding between the governmental activities and business-type activities are reported as “internal balances”. c. Restricted Assets Certain assets of the District and a corresponding liability or portion of net position is classified as restricted assets on the statement of net position because their use is limited either by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors. In a fund with both restricted and unrestricted assets, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position. d. Capital Assets Capital assets, which include buildings, improvements other than buildings and equipment, are reported in the applicable governmental activities column. The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. The valuation basis for all assets is historical cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Assets, Liabilities and Net Position or Equity (Continued) d. Capital Assets (Continued) Major outlays for capital assets and improvements are capitalized as projects are constructed. Depreciation of capital assets is computed and recorded by utilizing the straight-line method. Estimated useful lives of the various classes of depreciable capital assets are as follows: Buildings 30 years Improvements other than buildings 10-30 years Equipment 5-7 years e. Budgets Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to Chapter 190, Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general and debt service funds. As a result, deficits in the budget variance columns of the accompanying financial statements may occur. f. Bond Discounts Bond discounts are amortized over the life of the bonds. NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS 1. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position “Total fund balances” of the District’s governmental funds, $4,136,166, differs from “net position” of governmental activities, $(23,089,577), reported in the statement of net position. This difference primarily results from the long-term economic focus of the statement of net position versus the current financial resources focus of the governmental fund balance sheet. The effect of the differences is illustrated on the next page. NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) 1. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position (Continued) Capital related items When capital assets (building improvements and equipment that are to be used in governmental activities) are purchased or constructed, the cost of those assets is reported as expenditures in governmental funds. However, the Statement of Net Position included those capital assets among the assets of the District as a whole. Buildings $ 6,741,826 Improvements other than buildings 5,509,669 Equipment 60,267 Accumulated depreciation (5,828,632) Total $ 6,483,130 Long-term debt transactions Long-term liabilities applicable to the District’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position. Balances at September 30, 2022 were: Bonds payable $ (33,450,000) Bond discount 284,184 Total $ (33,165,816) Accrued interest Accrued liabilities in the Statement of Net Position differ from the amount reported in governmental funds due to accrued interest on bonds. Accrued interest on bonds payable $ (543,057) NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) 2. Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities The “net change in fund balances” for government funds, $(106,489), differs from the “change in net position” for governmental activities, $1,412,191, reported in the statement of activities. The differences arise primarily from the long-term economic focus of the statement of activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below. Capital related items When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation. As a result, fund balances decreased by the amount of financial resources expended, whereas net position decreased by the amount of depreciation charged for the year. Depreciation $ (460,767) Long-term debt transactions Repayments of bond principal are reported as an expenditure in the governmental funds and, thus, have the effect of reducing fund balance because current financial resources have been used. Debt principal payments $ 1,975,000 Some expenses reported in the Statement of Activities do not require the use of current financial resources, therefore, are not reported as expenditures in governmental funds. Net change in accrued interest payable $ 24,274 Bond discount amortization $ (19,827) NOTE C – CASH AND INVESTMENTS All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash and investments. Custodial Credit Risk – Deposits Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not have a formal deposit policy for custodial credit risk; however, they follow the provisions of Chapter 280, Florida Statutes regarding deposits and investments. As of September 30, 2022, the District's bank balance was $401,080 and carrying value was $323,908. Exposure to custodial credit risk was as follows. The District maintains all deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes. Investments As of September 30, 2022, the District had the following investments and maturities: The District categorizes its fair value measurements within the fair value hierarchy recently established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The District uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities, or groups of assets and liabilities. Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable and uses significant unobservable inputs that use the best information available under the circumstances, which includes the District’s own data in measuring unobservable inputs. Based on the criteria in the preceding paragraph, the investments in First American Treasury Obligation Fund and US Bank Money Market Fund are Level 1 assets. Investment Maturities Fair Value First American Treasury Obligation Fund 9 days* $ 84,308 Florida PRIME 21 days* 1,279,528 US Bank Money Market Fund N/A 2,413,677 Total Investments $ 3,777,513 * Weighted Average Maturity NOTE C – CASH AND INVESTMENTS (CONTINUED) Investments (Continued) The District’s investment policy allows management to invest funds in investments permitted under Section 218.415, Florida Statutes. The investment in Florida PRIME is measured at amortized cost. Florida PRIME has established policies and guidelines regarding participant transactions and the authority to limit or restrict withdrawals or impose a penalty for an early withdrawal. As of September 30, 2022, there were no redemption fees, maximum transaction amounts, or any other requirements that would limit daily access to 100 percent of the account value. Interest Rate Risk The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk The District's investments in government obligations, money market funds and the Florida PRIME investment pool are limited by state statutory requirements and bond compliance. The District has no investment policy that would further limit its investment choices. Florida PRIME is an authorized investment under Section 218.415, Florida Statutes. District had monies invested with Florida PRIME, at September 30, 2022. This investment met the requirements of a “2-7a like pool” as defined in Government Accounting Standards Board, Statement 31.As of September 30, 2022, the District's investment in Florida PRIME and the First American Treasury Obligation Fund were rated AAAm by Standard & Poor's. The District’s investment in U.S. Bank Money Market Fund was not rated. Concentration of Credit Risk The District places no limit on the amount it may invest. The investment in First American Treasury Obligation Fund represents 2% of the District’s total investments. The investment in Florida PRIME represents 34% of the District’s total investments. The investment in US Bank Money Market Fund represents 64% of the District’s total investments. The types of deposits and investments and their level of risk exposure as of September 30, 2022 were typical of these items during the fiscal year then ended. The District considers any decline in fair value for certain investments to be temporary. NOTE D – CAPITAL ASSETS Capital Asset activity for the year ended September 30, 2022 was as follows: Depreciation of $175,726 was charged to physical environment and $285,041 was charged to culture and recreation. NOTE E – LONG-TERM DEBT The following is a summary of activity for long-term debt of the District for the year ended: Long-term debt at October 1, 2021 $ 35,425,000 Principal payments (1,975,000) Balance Balance October 1, September, 30 2021 Additions Deletions 2022 Governmental Activities: Capital assets, being depreciated: Buildings $ 6,741,826 $ - $ - $ 6,741,826 Improvements other than buildings 5,509,669 - - 5,509,669 Equipment 60,267 - - 60,267 Total Capital Assets Depreciated 12,311,762 - - 12,311,762 Less accumulated depreciation for: Buildings (3,009,605) (224,729) - (3,234,334) Improvements other than buildings (2,296,073) (224,615) - (2,520,688) Equipment (62,187) (11,423) - (73,610) Total Accumulated Depreciation (5,367,865) (460,767) - (5,828,632) Governmental Activities Capital Assets $ 6,943,897 $ (460,767) $ - $ 6,483,130 Long-term debt at September 30, 2022 $ 33,450,000 Less: bond discount, net (284,184) Bonds Payable, net at September 30, 2022 $ 33,165,816 NOTE E – LONG-TERM DEBT (CONTINUED) Long-term debt for Governmental Activities is comprised of the following: Special Assessment Refunding Bonds $37,825,000 Series 2017A-1 Senior Special Assessment Refunding Bonds are due in annual principal installments beginning May 2018 maturing May 2037. Interest at various rates between 2% and 5% is due May and November beginning November 2017. Current portion is $1,555,000. $ 30,010,000 $4,580,000 Series 2017A-2 Subordinate Special Assessment Refunding Bonds are due in annual principal installments beginning May 2017 and maturing May 2037. Interest at various rates between 5% and 6.25% is due May and November beginning November 2017. Current portion is $155,000. 3,440,000 Bonds Payable $ 33,450,000 The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2022 are as follows: Year Ending September 30, Principal Interest Total 2023 $ 1,710,000 $ 1,303,338 $ 3,013,338 2024 1,755,000 1,254,331 3,009,331 2025 1,810,000 1,202,031 3,012,031 2026 1,875,000 1,143,994 3,018,994 2027 1,935,000 1,081,525 3,016,525 2028-2032 10,820,000 4,285,375 15,105,375 2033-2037 13,545,000 1,729,488 15,274,488 Totals $ 33,450,000 $ 12,000,082 $ 45,450,082 NOTE E – LONG-TERM DEBT (CONTINUED) Summary of Significant Bonds Resolution Terms and Covenants Significant Bond Provisions The Series 2017A-1 Bonds maturing after May 1, 2028, are subject to redemption at the option of the District prior to their maturity, in whole or in part, at any time after May 1, 2027 at a redemption price set forth in the Trust Indenture. The Series 2017A-2 Bonds are subject to redemption at the option of the District prior to their maturity, in whole or in part, at any time after May 1, 2027 at a redemption price set forth in the Trust Indenture. The Series 2017 Bonds are subject to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Trust Indenture. The Trust Indenture established certain amounts be maintained in a reserve account. In addition, the Trust Indenture has certain restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. Depository Funds The bond resolution establishes certain funds and determines the order in which revenues are to be deposited into these funds. A description of the significant funds, including their purposes, is as follows: Reserve Fund – The Series 2017A-1 Reserve Account was funded from the proceeds of the Series 2017A-1 Bonds in an amount equal to 50 percent of the maximum annual debt service of the Series 2017A-1 Bonds. The Series 2017A-2 Bond 1 Reserve Account was funded from the proceeds of the Series 2017A-2 Bond 1 Bonds in an amount equal to 50 percent of the maximum annual debt service of the Series 2017A-2 Bond 1 Bonds. The Series 2017A-2 Bond 2 Reserve Account was funded from the proceeds of the Series 2017A-2 Bond 2 Bonds in an amount equal to $40,000. Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture. The following is a schedule of required reserve deposits as of September 30, 2022: Reserve Reserve Special Assessment Refunding Bonds Balance Requirement Series 2017A-1 (Senior Bond) $ 1,343,722 $ 1,332,153 Series 2017A-2 (Subordinate Bond) Bond 1 $ 132,938 $ 130,100 Series 2017A-2 (Subordinate Bond) Bond 2 $ 40,000 $ 40,000 NOTE F – SPECIAL ASSESSMENT REVENUES Assessments are non-ad valorem assessments on benefitted property within the District. Operating and Maintenance Assessments are based upon adopted budget and levied annually. Debt Service Assessments are levied when bonds are issued and collected annually. The District may collect assessments directly or utilize the uniform method of collection (Chapter 197.3632, Florida Statutes). Direct collected assessments are due as determined by annual assessment resolution adopted by the Board of Supervisors. Assessments collected under the uniform method are mailed by County Tax Collector on November 1 and due on or before March 31 of each year. Property owners may prepay a portion or all of the Debt Service Assessments on their property subject to various provisions in the bond documents. Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. NOTE G – RISK MANAGEMENT The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. These risks are covered by commercial insurance from independent third parties. There were no claims or settled claims from these risks for each of the past three years. NOTE H – INTERFUND TRANSFERS Interfund transfers for the year-ended September 30, 2020, consisted of the following: Transfers Out General Transfers In Fund Capital Projects Fund $ 78,200 Interfund transfers between the General Fund and the Capital Projects Fund relates to budgeted capital reserve funding for the fiscal year. NOTE I – SUBSEQUENT EVENT In May 2023, the District made prepayments of $120,000, and $95,000 on the Series 2017A-2 Term 1, Series 2017A-2 Term 2, Special Assessment Refunding Bonds, respectively. INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Supervisors Durbin Crossing Community Development District St. Johns 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, as listed in the table of contents, of Durbin Crossing Community Development District, as of and for the year ended September 30, 2022, and the related notes to the financial statements, which collectively comprise the basic financial statements and have issued our report thereon dated June 30, 2023. Report on Internal Control Over Financial Reporting In planning and performing our audit, we considered Durbin Crossing Community Development District's internal control over financial reporting (internal control) as a basis for designing 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 Durbin Crossing Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Durbin Crossing Community Development 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 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 or significant deficiencies may exist that have not been identified. To the Board of Supervisors Durbin Crossing Community Development District Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether Durbin Crossing Community Development District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL Fort Pierce, Florida June 30, 2023 MANAGEMENT LETTER To the Board of Supervisors Durbin Crossing Community Development District St. Johns County, Florida Report on the Financial Statements We have audited the financial statements of the Durbin Crossing Community Development District as of and for the year ended September 30, 2022, and have issued our report thereon dated June 30, 2023. Auditor’s Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Chapter 10.550, Rules of the Florida Auditor General. Other Reporting Requirements We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and our Independent Auditor’s Report on an examination conducted in accordance with AICPA Professionals Standards, AT-C Section 315 regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in that report, which is dated June 30, 2023, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding financial audit report. There were no findings or recommendations made in the preceding financial audit report. Financial Condition and Management Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, requires that we apply appropriate procedures and communicate the results of our determination as to whether or not Durbin Crossing Community Development District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific conditions met. In connection with our audit, we determined that the Durbin Crossing Community Development District did not meet any of the conditions described in Section 218.503(1), Florida Statutes. To the Board of Supervisors Durbin Crossing Community Development District Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial conditions assessment procedures as of September 30, 2022 for Durbin Crossing Community Development District. It is management’s responsibility to monitor the Durbin Crossing Community Development District’s financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same. Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Specific Information The information provided below was provided by management and has not been audited; therefore, we do not express an opinion or provide any assurance on the information. As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the Auditor General, the Durbin Crossing Community Development District reported: 1) The total number of district employees compensated in the last pay period of the District’s fiscal year: 0 2) The total number of independent contractors to whom nonemployee compensation was paid in the last month of the District’s fiscal year: 15 3) All compensation earned by or awarded to employees, whether paid or accrued, regardless of contingency: $0 4) All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of contingency: $1,683,948 5) Each construction project with a total cost of at least $65,000 approved by the District that is scheduled to begin on or after October 1, 2021, together with the total expenditures for such project: The District did not have any construction projects. 6) A budget variance based on the budget adopted under Section 189.016(4), Florida Statutes, before the beginning of the fiscal year being reported if the District amends a final adopted budget under Section 189.016(6), Florida Statutes: The budget was not amended. As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)8, Rules of the Auditor General, the Durbin Crossing Community Development District reported: 1) The rate or rates of non-ad valorem special assessments imposed by the District: The General Fund, $.43 - $1,330.62 and Debt Service, $.71 - $2,164.34. 2) The amount of special assessments collected by or on behalf of the District: Total special assessments collected was $5,204,354. 3) The total amount of outstanding bonds issued by the District and the terms of such bonds: Series 2017 Bonds, $33,450,000, maturing May 2037. To the Board of Supervisors Durbin Crossing Community Development District Additional Matters Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not note any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL Fort Pierce, Florida June 30, 2023 INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES To the Board of Supervisors Durbin Crossing Community Development District St. Johns County, Florida We have examined Durbin Crossing Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2022. Management is responsible for Durbin Crossing Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on Durbin Crossing Community Development District’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about Durbin Crossing Community Development District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on Durbin Crossing Community Development District’s compliance with the specified requirements. In our opinion, Durbin Crossing Community Development District complied, in all material respects, with the aforementioned requirements during the year ended September 30, 2022. Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL Fort Pierce, Florida June 30, 2023 A logo for a landscape company Description automatically generated Durbin Crossing Landscape Update for July 2023 • General Maintenance o The team has continued to conduct the maintenance per scope. This includes all mowing, and detailing. The weather has provided some challenges, but the team has been able to navigate through these challenges. o Roses throughout the community are being cutback, and bonemeal is being applied throughout. We should see some nice blooms in the coming weeks. o Shrubs throughout the community are being pruned to provide a neat and formed appearance. • Irrigation o Monthly inspections & repairs are being completed per scope. The team has been chipping away at general repairs, and mainline breaks. o The irrigation head replacement project has been completed on Longleaf parkway. • Chemical & Fertilizer Application o Our blanket turf application was completed in last month. We should have chinch bug control for the next 2-3 months. Spot treatments for weeds, and pest will be conducted as needed. o Bonemeal fertilizer is being applied to all roses throughout the property. Seasonal flowers will be fertilized. • Projects o We are meeting with our Tree/Shrub manager Rae Roberts and consulting with outside experts to make sure treatments of the Holly trees are at the best interest of the community. We should have answers by the end of the month. o Renderings for under the live oaks at the phase 2 sod project have been submitted. o All smaller projects that have been previously approved will be completed by the end of the month. Image result for durbin crossing logo General Manager’s Report Date of report: 7-24-2023 Submitted by: Margaret Alfano NEWEST TEAM MEMBER / No Board action required: We are very proud to announce that Vesta has added a new team member to our Durbin Crossing crew. We would like to welcome ToniAnn DeRenzo to the Durbin family. ToniAnn has worked for Vesta for over a year at the Rivertown community. We were thrilled when she applied to make the transfer and fill our open Assistant Supervisor position. From her first day at Durbin, she has fit right in. ToniAnn understands the importance of the high level of customer service that we strive to provide and has a keen eye for being resort ready as well. If you have not had a chance to meet ToniAnn yet, please stop by the South office and introduce yourself. WELCOME ABOARD! COMMUNICATION / SOUND SYSTEM / No Board action required: We are in the final phases of installation and this project should be completed by our next meeting. We continue to receive compliments from the residents regarding the sound quality. However, most of the compliments are related to the variety of music being played. Our new vendor has so many choices and genres we have something for everyone. BACK TO SCHOOL PREPARATIONS / No Board action required: As we do annually, it is time to prepare for back-to-school bikers and increased pedestrian traffic. Currently, we are focusing our attention on preparing the cul-de-sac and bike access path located on Forest Edge, across from POA. We are working with the District Engineer to make sure the area is not only clean and aesthetically pleasing but in accordance with any and all county guidelines. DURBIN CROSSING APP FEATURES / No Board action required: Our Lucky Duck contest for the months of June and July has been very well received. It is not only an attempt to engage with our residents, provide some summer fun that can’t be spoiled by the rain, and a chance to introduce our app as well. We have added the necessary links/icons to the homepage, as requested. We have also brought back our storm icon which we hope we will not be needed this year. This storm icon will be one click away informing residents of severe weather preparations and amenity closures as they arise. Hard to type with our fingers crossed! Should you have any comments or questions feel free to contact me directly. JBE / NG Image result for durbin crossing logo Field Operations Report Date of report: 7-24-2023 Submitted by: Zach Davidson STORM REPORT JUNE 27 / No Board action required: There was a quick but severe storm that came through our community on June 27th. The storm caused damage that was addressed immediately. There were four trees that came down and Yellowstone was able to cut and clean up all debris. The North Amenity Center tennis fencing on court #5 suffered the worst of the damage. We are working with our fencing vendor to get this area repaired asap. We will update the community and the Board once a firm scheduling date has been finalized. We also lost three of the umbrellas at the North pool. We were able to purchase and replace these umbrellas the same day as the storm to keep our residents cool and protected from the sun. SOCIAL HALL A/C UNIT / No Board action required: We noticed that the emergency condensation pan underneath the unit was collecting water. We were able to remove the water and contact our vendor for repair. The unit is still under warranty and the technician was able to clear the blockage, refill the refrigerant to proper levels and the unit is back up and running. NORTH PLAYGROUND INSPECTION / No Board action required: During our playground inspection it was discovered that there was damage to our double swing, to the seat and the frame. We contacted our playground vendor, and a complete replacement swing has been ordered. This piece of equipment is still under warranty and will be replaced at no additional cost to the District. Once we receive the part our maintenance staff will install. SOLITUDE LAKE MAINTENANCE / No Board action required: Solitude was out this month and treated all ponds. They are continuing to keep a close eye on and treat any algae issues due to the extreme heat. FIELD OPERATIONS UPDATES / No Board action required: • Replaced failed photocell on Saddlestone monument lighting. • Pressure washed and applied scotch guard to all canopies on the North and South pool decks. • Removed all chipped safety paint at Cloisterbane entrance and area was repainted. • Replaced caulk at all toilets at the North and South Amenity Centers. • Deep cleaned all bathrooms to include walls, light fixtures, stalls, and doors. • Pressure washed North and South Amenity buildings and removed all bug nests/webs. • Continuing to monitor and remove all pine straw from storm drains after rain to prevent flooding. • Cleaned all AC ceiling returns at the North Amenity Center. • Replaced broken changing table at the North Amenity Center. Should you have any comments or questions feel free to contact me directly. Image result for durbin crossing logo Amenity Manager’s Report Date of report 7-24-2023 Submitted by: Danelle DeMarco JULY 4TH CELEBRATION RECAP Our Fourth of July event on Tuesday, July 4th, from 11am-2pm was a great success on many levels. The weather cooperated and we had sunny skies and no rain! Storms have been an obstacle this summer for sure, so we planned for an early event time, and it worked. The heat has been another factor, so we kept it inside the pool area, to make cooling off and hydrating a priority. We were excited to see a record number of families who came to enjoy some Fourth of July fun with us, play some games, eat, and then get to their favorite spot to watch some evening fireworks. DJ Vince, with Progressive Entertainment did a great job with coordinating music, trivia, and keeping the crowd engaged in our super fun games. We kicked off the day with “Let Freedom Ring” ice game for the kids. We froze a bell into a ball off ice and the first one to melt the ice and ring the bell was the winner. This was the perfect game for the very hot days that we have been having and another way to get cooled off. Another patriotic game we had for the kids was the “Grand Old Flag” competition. Each player was given a bag of red, white, and blue jellybeans and the first to replicate the American flag won a prize. We also brought back the Durbin version of the traditional American pie eating contest. We had 15 resident contestants sit down in front of a heaping pie plate of whipped cream and red and blue sprinkles. The first contestant to hold up a clean plate got to chose one of several great prizes. And last, but certainly not least, we introduced the most challenging game called, “Home of the Brave”. This game was for adults only because it was for only the bravest of the brave. Another 15 residents sat blind folded and were given ten different samples of bite sized food to consume. What’s so brave about that, you may ask? Well, some of those bite sized pieces packed an unexpected punch. A brownie or a twinkie, no problem! But the next bite was a cocktail onion, or a piece of salty seaweed snack, a soggy yam, or a sour war head gummy after that. You just didn’t know what you were going to bite into. I think the audience members had the most fun watching the hilarious faces made by the contestants. The winner got a shiny gold medal of bravery that was certainly well deserved. In the middle of the game show hilarity and poolside fun, we served Sonic hotdogs and chips, which was a great crowd pleaser. And red, white, and blue slushies from Rollin’ Ritas kept flowing throughout the day. One of our favorite things to do and one that has become a tradition at our Fourth of July events, is surprising the residents with a release of nearly one thousand small red, white, and blue beachballs down the slide. As the pool fills with these colors and the residents cheer, it fills your heart with pride in our country and our beautiful community. Moments and memories like that are what we hope to stay with our families for a lifetime. DIVE-IN MOVIES Our second poolside movie of the summer was Shark Boy and Lava Girl, rated PG. It will be shown on another actionpacked Friday at the South pool. After Friday food trucks have gone and the sun goes down, everyone will grab their favorite spot on the pool deck, and all get ready to kick off another Durbin tradition for Shark Week. Drive-In movies were all a part of our childhood memories that we hold near and dear and it is great fun to see families enjoying another version of the Drive-In movie experience with the pool movies. It doesn’t get much better than summer fun floating in the pool, watching a movie, eating freshly popped popcorn, and meeting up with friends. All this, and it happens in their own back yard! The next pool movie will be Super Mario on August 4th, as a pre-empt to our Bash on August 5th. SHARK WEEK We are having some fun activities planned during the week of July 17th- 21st for Shark Week. Those who come to the South Pool can enjoy some shark corn hole, pin the fin on the shark, shark plinko, and more. We will be passing out shark scratch off tickets where you will either be a winner, or you will be dinner. If you scratch off and find a fin, that means you lose and you are dinner. Whaa- whaa. But if you scratch off and there is no fin, you are a winner. And of course, we have a special prize for the winner which is a remote-control shark for their pool or bathtub. Along with these activities, we are having Karaoke on Thursday, July 20th. It is a request we get every summer, and time has gone so fast, but we can’t disappoint. Baby Shark song will be on the play list for sure! SUPER MARIO BROS BACK TO SCHOOL BASH The greatly anticipated Back to School Bash is happening on August 5th, from 4pm-7pm, at the South Amenity Center. Super Mario Bros are taking over Durbin Crossing for the evening and inviting all their Nintendo friends: Bowser, Toad, Princess Peach, Donkey Kong, Koopa Troopa, and more. The event will be on the South field and the pool will open for swimming. We have so many fun games, activities, and decorations in store for our back to schoolers. We just can’t wait to bring it to life and give them a big summer send-off. Spider Mountain is making its debut in the back field. It is a multiperson, five activity structure that includes a 2-station rock wall, 7 level spider climb, 3 pad monkey jump, a web crawl, and a 25 ft curve slide. Fourteen participants can have fun at one time, which is important so that everyone gets at least one turn on the structure within the three-hour event time. There will be food trucks, ice cream, and activities for all ages. AND we are excited to announce that the new principal of Patriot Oaks, Mr. Drew Chiodo, has graciously agreed to come to our event for a parent/student meet and greet. We also have several wonderful sponsors for this event: Julie Bentley with Slate Realty is donating some swag for take homes; Dr Cochran and Soares Pediatric Dentistry, are donating two Mario Back packs filled with school supplies, lunch bags, and a fun student take home activity; Laura Renneklev with Florida Welcome Home Realty is sponsoring the event with a generous monetary contribution; Gerri Cookies is donating over 400 chocolate chip cookies for our “Game Over” treat bags as we thank the residents as they leave for attending the event. We can’t thank them enough for their support for this event and all year round. We have dug deep into our pool of creativity and will be bringing some of our best game ideas to life and bringing the best of Mario Bros to Durbin. We will give a full recap of all the fun at the next CDD meeting in August. KINDERGARTEN KRAFT DAY Going off to kindergarten may be the biggest milestone, even before high school and college, for most parents and children. It’s a new beginning and a big transition that most parents never forget. It is also a time to celebrate these special 5-year-olds and give them a day of their very own. The South Social Hall will be open to our Kindergartners for a day of crafts, snacks, and fun! We will be taking pictures and giving them something fun to take home with them. The date and time in the August newsletter. Another summer is coming to an end, but still have so much to look forward to. CHAMPION SWIM SCHOOL We enjoyed seeing so many little swimmers in the pool week after week, working hard and doing their very best. Children who wouldn’t put their face in the water are now jumping in with confidence and saying, “that’s not so bad after all”. Watching from the beginning, clear to the end, is always a treat for us. What may take us a year to learn, these little ones are accomplishing in a week. Champion Swim is going to continue their program through August and September, Tuesday- Friday, 5pm-7pm. It is a challenge to find space in the pool for everyone, but the support for these lessons has been wonderful. They have carved out a little corner of the south pool and have not disrupted the enjoyment for others. July 28th concludes the summer day program, and we are happy to provide, for the first time, August and September evening class times. Should you have any comments or questions feel free to contact us directly. RED, WHITE and YOU! So many memories, so many games, so many prizes, so much food, so many smiles… Durbin Crossing at its BEST! LET FREEDOM RING! A bell was frozen in a cup of ice and teams of three had to pass the block of ice until it melted and the bell was FREE! GRAND OLD FLAG! The first to construct the flag out of jelly beans is a WINNER! GRAND OLD FLAG! It was a puzzler. The first to construct the flag out of jelly beans… WINNER! HOME OF THE BRAVE! The first adult to finish their cup of mystery foods, one by one, was most definitely the BRAVEST! RED, WHITE & BLUE SLUSHIES FOR YOU... AND YOU... AND YOU! BRAVE