CELEBRATION POINTE

COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED

SEPTEMBER 30, 2017

CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA 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	11		
Reconciliation of the Balance Sheet – Governmental Funds			
to the Statement of Net Position	12		
Statement of Revenues, Expenditures and Changes in Fund Balances –			
Governmental Funds	13		
Reconciliation of the Statement of Revenues, Expenditures and Changes in			
Fund Balances of Governmental Funds to the Statement of Activities	14		
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 COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT			
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH	23- 24		
GOVERNMENT AUDITING STANDARDS			
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 REQUIRED BY CHAPTER 10.550 OF THE RULES			
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	26- 27		

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

To the Board of Supervisors
Celebration Pointe Community Development District No. 1
Alachua County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of Celebration Pointe Community Development District No. 1, Alachua County, Florida ("District") as of and for the fiscal year ended September 30, 2017, 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, 2017, and the respective changes in financial position thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

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

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 26, 2018, 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 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 the District’s internal control over financial reporting and compliance.

Report on Other Legal and Regulatory Requirements

We have also issued our report dated June 26, 2018, on our consideration of the District’s compliance with the requirements of Section 218.415, Florida Statutes, as required by Rule 10.556(10) of the Auditor General of the State of Florida. The purpose of that report is to provide an opinion based on our examination conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.

June 26, 2018

2

MANAGEMENT’S DISCUSSION AND ANALYSIS

The management of the Celebration Pointe Community Development District No. 1, Alachua County, Florida (“District”) would like to offer the readers of the District’s financial statements this discussion and analysis of the District’s financial activities for the fiscal year ended September 30, 2017. 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 ($5,530,844).

•	The change in the District’s total net position in comparison with the prior fiscal year was ($1,533,145), a decrease. The key components of the District’s net position and change in net position are reflected in the table in the government-wide financial analysis section.

•	At September 30, 2017, the District’s governmental funds reported combined ending fund balances of $5,882,555, an increase of $3,050,711 in comparison with the prior fiscal year. A portion of fund balance is restricted for debt service, non-spendable for prepaid items, and ($477,650) is unassigned, deficit fund balance.

OVERVIEW OF FINANCIAL STATEMENTS

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

Government-Wide Financial Statements

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

The statement of net position presents information on all the District’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.

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

The government-wide financial statements include all governmental activities that are principally supported by assessments and Developer contributions. The District does not have any business-type activities. The governmental activities of the District include the general government (management) and maintenance 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 balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains three 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, debt service fund and capital projects fund, all 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,	2017		2016		
Assets, excluding capital assets							
	$	10,595,329	$	3,031,469		
Capital assets, not being depreciated			52,219,685		26,710,320		
Total assets			62,815,014		29,741,789		
Liabilities, excluding long-term liabilities			5,990,237		926,763		
Long-term liabilities			62,355,621		32,812,725		
Total liabilities			68,345,858		33,739,488		
Net Position							
Net investment in capital assets	(10,605,054)		(6,102,405)		
Restricted for debt service			5,074,210		2,290,343		
Unrestricted			-		(185,637)		
Total net position		$	(5,530,844)	$	(3,997,699)		

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.

4

GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)

The District’s net position decreased during the most recent fiscal year. The majority of the decrease was due to bond issue costs and interest 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,

2017	2016

Revenues:					
Program revenues					
Charges for services	$	1,476,768	$	-	
Operating grants and contributions		123,028		86,971	
Capital grants and contributions		7,464		34,851	
Total revenues		1,607,260		121,822	
Expenses:					
General government		90,701		106,338	
Maintenance and operations		8,289		8,109	
Interest		2,281,818		1,729,416	
Bond issue costs		759,597		-	
Total expenses		3,140,405		1,843,863	
Change in net position		(1,533,145)		(1,722,041)	
Net position - beginning		(3,997,699)		(2,275,658)	
Net position - ending	$	(5,530,844)	$	(3,997,699)	

As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2017 was $3,140,405. The costs of the District’s activities were partially funded by program revenues. Program revenues are comprised primarily of assessments and Developer contributions. Expenses increased from the prior year mainly as a result of interest expense and bond issuance costs.

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 for the fiscal year ended September 30, 2017 exceeded appropriations by $5,490.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At September 30, 2017, the District had $52,219,685 invested in capital assets for its governmental activities. More detailed information about the District’s capital assets is presented in the notes of the financial statements.

Capital Debt

At September 30, 2017, the District had $63,425,000 in Bonds outstanding for its governmental activities. More detailed information about the District’s capital debt is presented in the notes of the financial statements.

5

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

The District does anticipate the continued construction of its infrastructure for subsequent fiscal years, and expects to convey certain property to other governmental entities. In addition, it is anticipated that the general operations of the District will increase.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide property 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 Celebration Pointe Community Development District No. 1’s Finance Department at 12051 Corporate Boulevard, Orlando, Florida 32817.

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CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

STATEMENT OF NET POSITION

SEPTEMBER 30, 2017

	Governmental		
ASSETS		Activities		
				
Cash	$	19,080		
Accounts receivable		50		
Interest receivable		2,677		
Prepaids and deposits		8,532		
Restricted assets:				
Cash		10,564,990		
Capital assets:				
Nondepreciable		52,219,685		
Total assets		62,815,014		
LIABILITIES				
Accounts payable		3,467,689		
Contracts and retainage payable		1,230,500		
Unearned revenue		14,585		
Accrued interest payable		1,277,463		
Non-current liabilities:				
Due within one year		575,000		
Due in more than one year		61,780,621		
Total liabilities		68,345,858		
NET POSITION				
Net investment in capital assets		(10,605,054)		
Restricted for debt service		5,074,210		
Total net position	$	(5,530,844)		

See notes to the financial statements

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CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

STATEMENT OF ACTIVITIES

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

									Net (Expense)	
										Revenue and	
									Changes in Net	
				Program Revenues				Position	
				Charges		Operating		Capital			
				for		Grants and		Grants and	Governmental	
Functions/Programs		Expenses		Services	Contributions	Contributions		Activities	
Primary government:											
Governmental activities:											
General government	$	90,701	$	-	$	111,432	$	-	$	20,731	
Maintenance and operations		8,289		-		-		7,464		(825)	
Interest on long-term debt		2,281,818		1,476,768		11,596		-		(793,454)	
Bond issue costs		759,597		-		-		-		(759,597)	
Total governmental activities		3,140,405		1,476,768		123,028		7,464		(1,533,145)	
						Change in net position		(1,533,145)	
						Net position - beginning		(3,997,699)	
						Net position - ending	$	(5,530,844)	

See notes to the financial statements

8

CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

BALANCE SHEET

GOVERNMENTAL FUNDS

SEPTEMBER 30, 2017

						Major Funds				Total	
							Debt		Capital	Governmental	
					General		Service		Projects		Funds	
ASSETS									
Cash	$	19,080	$	6,349,981	$	4,215,009	$	10,584,070	
Accounts receivable		50		-		-		50	
Interest Receivable		-		1,692		985		2,677	
Prepaids and deposits		8,532		-		-		8,532	
Total assets	$	27,662	$	6,351,673	$	4,215,994	$	10,595,329	
												
LIABILITIES AND FUND BALANCES									
Liabilities:									
Accounts payable	$	13,077	$	-	$	3,454,612	$	3,467,689	
Contracts and retainage payable		-		-		1,230,500		1,230,500	
Unearned revenue		14,585		-		-		14,585	
Total liabilities			27,662		-		4,685,112		4,712,774	
Fund balances:									
Nonspendable:									
Prepaid items		8,532		-		-		8,532	
Restricted for:									
Debt service		-		6,351,673		-		6,351,673	
Unassigned		(8,532)		-		(469,118)		(477,650)	
Total fund balances			-		6,351,673		(469,118)		5,882,555	
Total liabilities and fund balances	$	27,662	$	6,351,673	$	4,215,994	$	10,595,329	

See notes to the financial statements

9

CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

RECONCILIATION OF THE BALANCE SHEET –

GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION

SEPTEMBER 30, 2017

Total fund balances - governmental funds	$	5,882,555	
Amounts reported for governmental activities in the statement of net			
position are different because:			
resources and,  therefore, are not reported as assets  in the			
governmental funds.  The statement  of net  position includes			
those capital assets in the net position of the government as a			
whole.			
Cost of capital assets		52,219,685	
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		(1,277,463)	
Bonds payable		(63,425,000)	
Unamortized bond issuance discount		1,069,379	
Net position of governmental activities	$	(5,530,844)	

See notes to the financial statements

10

CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

								Major Funds				Total		
								Debt		Capital	Governmental		
REVENUES		General		Service		Projects		Funds		
										
Developer contributions	$	111,432	$	-	$	-	$	111,432		
Special assessments		-		1,476,768		-		1,476,768		
Interest income		-		11,596		7,464		19,060		
Total revenues			111,432		1,488,364		7,464		1,607,260		
EXPENDITURES										
Current:										
General government		90,701		-		-		90,701		
Maintenance and operations		8,289		-		-		8,289		
Debt service:										
Principal		-		550,000		-		550,000		
Interest		-		1,696,656		-		1,696,656		
Bond issue costs		-		493,906		265,691		759,597		
Capital outlay		12,500		-		25,496,865		25,509,365		
Total expenditures			111,490		2,740,562		25,762,556		28,614,608		
Excess (deficiency) of revenues										
over (under) expenditures		(58)		(1,252,198)		(25,755,092)		(27,007,348)		
OTHER FINANCING SOURCES (USES)										
Interfund transfers		58		(1,898)		1,840		-		
Bonds issued		-		4,775,229		25,469,771		30,245,000		
Discount on bonds issued		-		(186,941)		-		(186,941)		
Total other financing sources (uses)			58		4,586,390		25,471,611		30,058,059		
Net change in fund balances		-		3,334,192		(283,481)		3,050,711		
Fund balances - beginning			-		3,017,481		(185,637)		2,831,844		
Fund balances - ending	$	-	$	6,351,673	$	(469,118)	$	5,882,555		

See notes to the financial statements

11

CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

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, 2017

Net change in fund balances - total governmental funds

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 eliminated and is capitalized in the statement of net position as capital assets.

Repayment of long-term liabilities are reported as expenditures in the governmental fund statement but such repayments reduce liabilities in the statement of net position and are eliminated in the statement of activities.

Governmental funds report the face amount of Bonds issued as financial resources when debt is first issued, whereas these amounts are eliminated in the statement of activities and recognized as long-term liabilities in the statement of net position.

In connection with the issuance of the Bonds, the original issue discount is reported as a financing use when debt is first issued, whereas this amount is eliminated in the statement of activities and reduces long-term liabilities in the statement of net position.

Amortization of Bond discounts is not recognized in the governmental fund financial statements, but is reported as an expense in the statement of activities.

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.

Change in net position of governmental activities

$  3,050,711

25,509,365

550,000

(30,245,000)

186,941

(34,837)

(550,325)

$  (1,533,145)

See notes to the financial statements

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CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – NATURE OF ORGANIZATION AND REPORTING ENTITY

Celebration Pointe Community Development District No. 1 ("District") was established by Ordinance No. 2012-17, adopted by Alachua County, Florida on December 11, 2012 and amended by Ordinance No. 2014-03, adopted by the Alachua County, Florida on January 28, 2014 and created 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 by the owners of the property within the District. The Board exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2017 all of the Board

members are affiliated with Celebration Pointe Partners, LLC (“Developer”).

The Board has the final responsibility for:
1.	Assessing and levying assessments.
2.	Approving budgets.
3.	Exercising control over facilities and properties.
4.	Controlling the use of funds generated by the District.
5.	Approving the hiring and firing of key personnel.
6.	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.

13

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting; however, debt service expenditures are recorded only when payment is due.

Assessments

Assessments are non-ad valorem assessments on all assessable property within the District. Assessments are levied to pay for the operations and maintenance and debt service of the District. The fiscal year for which annual assessments are levied begins on October 1 and, if collected using the Uniform Method of Collection, with discounts available for payments through February 28 and become delinquent on April 1. Alternatively, the District adopts a resolution providing for the collection dates and directly collects the assessments.

The District reports the following major governmental funds:

General Fund

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

Debt Service Fund

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

Capital Projects Fund

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

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

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

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Assets, Liabilities and Net Position or Equity

Restricted Assets

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

Deposits and Investments

The District’s cash 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:

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

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

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

Prepaid Items

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

Capital Assets

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

No depreciation has been taken in the current fiscal year as the District’s infrastructure and other capital assets are under construction.

Unearned Revenue

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

15

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Assets, Liabilities and Net Position or Equity (Continued)

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

Deferred outflows of resources represent a consumption of net position that applies to future reporting period(s). For example, the District would record deferred outflows of resources on the statement of net position related to debit amounts resulting from current and advance refundings resulting in the defeasance of debt (i.e. when there are differences between the reacquisition price and the net carrying amount of the old debt).

Deferred inflows of resources represent an acquisition of net position that applies to future reporting period(s). For example, when an asset is recorded in the governmental fund financial statements, but the revenue is unavailable, the District reports a deferred inflow of resources on the balance sheet until such times as the revenue becomes available.

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 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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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

NOTE 4 – DEPOSITS

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

NOTE 5 – CAPITAL ASSETS

Capital asset activity for the fiscal year ended September 30, 2017 was as follows:

		Beginning						Ending		
Governmental activities			Balance		Additions	Reductions		Balance		
											
Capital assets, not being depreciated											
Land	$	6,908,486	$	1,871,312	$	-	$	8,779,798		
Construction in progress			19,801,834		23,638,053		-		43,439,887		
Total capital assets, not being depreciated			26,710,320		25,509,365		-		52,219,685		
Governmental activities capital assets		$26,710,320	$25,509,365	$	-	$52,219,685		

17

NOTE 5 – CAPITAL ASSETS (Continued)

The infrastructure intended to serve the District has been estimated at a total cost of $125,651,114. The infrastructure will include rights of way acquisitions, roadways, master stormwater facilities including wetland mitigation, trail improvements, and water and wastewater systems that will be constructed by the District or constructed by the Developer and its affiliates and then purchased by the District. In addition, upon completion, certain improvements are to be conveyed to other governments. Also, the project will include a bridge, parking facilities, other roadways, other water and waste water systems, and other improvements that will be funded by the Developer and its lenders, constructed by the Developer and owned and operated by others.

The public portions of the total project described above to be implemented as part of Phase I of the Development and financed by the District through proceeds of the 2014 Bonds are referred to collectively as the "2014 Project". As part of the improvement plan certain right - of way acquisitions are required. These right-of-ways are needed for the transportation-related components of the improvement plan. Certain right-of-way acquisitions have been completed by the District, using the proceeds of the 2014 Bonds. This includes a portion of SW43rd/32nd Street that was acquired through eminent domain which resulted in a mediated settlement agreement. As part of the mediated settlement agreement the District agreed to pay the owners of the property ("Defendants") total compensation of $6,200,000 for the taking of parcels 1,2,I,J and K which include the right- of-way required for construction on SW43rd/32nd Street. As part of the agreement the District paid $1,250,000 for the right- of-way during fiscal year 2016 which granted them a Temporary Construction Easement for a period of two years.

The public portions of the total project described above to be implemented as part of Phase II of the Development and financed by the District through proceeds of the 2017 Bonds are referred to collectively as the "2017 Project". The total cost of the 2017 Project is estimated at $25,155,275.

In connection with the 2014 and 2017 projects, if the amount by which the cost of the 2014 or 2017 projects or portion thereof to be conveyed by the Developer to the District pursuant to the Acquisition Agreement exceeds the amount actually paid by the District for the 2014 or the 2017 project or portion thereof from proceeds of the Series 2014 or 2017 Bonds, it may be determined that deferred obligations/costs exist. Upon completion of the project, certain funds available from the Bonds may be used to pay deferred obligations/costs, as outlined in the Bond Indenture. At September 30, 2017, the District has not yet determined if a liability exists for deferred obligations/costs.

NOTE 6 – LONG-TERM LIABILITIES

Series 2014

On December 12, 2014, the District issued $33,730,000 of Special Assessment Revenue Bonds, Series 2014 consisting of $5,200,000 Term Bonds Series 2014 due on May 1, 2024 with a fixed interest rate of 4.75%, $10,005,000 Term Bonds Series 2014 due on May 1, 2034 with a fixed interest rate of 5.00% and $18,525,000 Term Bonds Series 2014 due in May 1, 2045 with a fixed interest rate of 5.125%. 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, 2017 through May 1, 2045.

The 2014 Bonds are payable from and secured by the 2014 Pledged Revenues and the 2014 Pledged Funds. The 2014 Pledged Revenues consist of the revenues derived by the District from the 2014 Assessments and the Transportation Revenues. The Transportation Revenues are revenues pursuant to the Transportation Assignment Agreement. The Transportation Assignment Agreement is that certain Assignment of Contract Rights and Acknowledgement of Merger - Southwest District Transportation Agreement dated August 27, 2014 from the Developer to the District and consented to by Alachua County, Florida. The Series 2014 indenture provides for the Transportation Revenues to be deposited in the Transportation Improvement Fund and semi-annually applied, to the extent available, to pay debt service on the Series 2014 Bonds prior to the application of Series 2014 Bonds assessments for that purpose. See Note 7 for more information.

The Series 2014 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.

18

NOTE 6 – LONG-TERM LIABILITIES (Continued)

Series 2014 (Continued)

The Bond Indentures established debt service reserve requirements 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, 2017.

Series 2017

On May16, 2017, the District issued $30,245,000 of Special Assessment Revenue Bonds, Series 2017 consisting of $1,960,000 Term Bonds Series 2017 due on May 1, 2022 with a fixed interest rate of 4.00%, $6,875,000 Term Bonds Series 2017 due on May 1, 2032 with a fixed interest rate of 5.00%, and $21,410,000 Term Bonds Series 2017 due on May 1, 2048 with a fixed interest rate of 5.00%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Bonds is to be paid serially commencing May 1, 2019 through May 1, 2048.

The Series 2017 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.

A portion of the Transportation Revenues pledged to the payment of the 2014 Bonds pursuant to the First Supplemental Indenture is expected to be available to pay the 2017 Bonds. The Transportation Revenues are payable to the District pursuant to the Transportation Assignment Agreement. The Transportation Revenues and the Transportation Improvement Fund established under the First Supplemental Indenture into which Transportation Revenues are deposited are not part of the 2017 Trust Estate and the 2017 Bonds are not secured by a lien on or pledge of the Transportation Revenues and the Transportation Improvement Fund. Transportation Revenues may not be available to pay the 2017 Bonds under certain circumstances and are not expected to be available after September 30, 2035 under the terms of the Transportation Agreement.

The Bond Indentures established debt service reserve requirements 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, 2017.

Changes in long-term liability activity for the fiscal year ended September 30, 2017 were as follows:

			Beginning					Ending	Due Within		
Governmental activities	Balance		Additions	Reductions	Balance		One Year		
										
Series 2014 Bonds	$ 33,730,000	$	-	$	550,000	33,180,000	$	575,000		
Less: issuance discount	917,275		-		32,760	884,515		-		
Series 2017 Bonds	-		30,245,000		-	30,245,000		-		
Less: issuance discount	-		186,941		2,077	184,864		-		
Total		$ 32,812,725	$	30,058,059	$	515,163	$ 62,355,621	$	575,000		

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NOTE 6 – LONG-TERM LIABILITIES (Continued)

At September 30, 2017, the scheduled debt service requirements on the long-term debt were as follows:

Year ending		Governmental Activities			
		Principal		Interest		Total		
September 30:								
2018	$	575,000	$	3,071,964	$	3,646,964		
2019		1,065,000		3,135,869		4,200,869		
2020		1,110,000		3,088,731		4,198,731		
2021		1,160,000		3,039,606		4,199,606		
2022		1,215,000		2,988,256		4,203,256		
2023-2027		7,005,000		14,018,919		21,023,919		
2028-2032		8,950,000		12,088,281		21,038,281		
2033-2037		11,455,000		9,608,344		21,063,344		
2038-2042		14,710,000		6,395,700		21,105,700		
2043-2047		14,285,000		2,378,000		16,663,000		
2048		1,895,000		94,750		1,989,750		
	$	63,425,000	$	59,908,420	$123,333,420		

NOTE 7 - TRANSPORTATION ASSIGNMENT AGREEMENT

The County and the Developer have entered into that certain Southwest Transportation Improvement Agreement dated as of October 24, 2011 (the "Transportation Agreement") . Under that agreement the Developer is entitled to certain reimbursements for transportation mitigation credits. The Developer has assigned to the District its right to receive the first $8 million of funds generated by that agreement ("Transportation Revenues"). The Series 2014 bond indenture provides for the Transportation Revenues to be deposited in the Transportation Improvement Fund and semi-annually applied, to the extent available, to pay debt service on the Series 2014 Bonds prior to the application of Series 2014 Bonds assessments for that purpose.

NOTE 8 – DEVELOPER TRANSACTIONS AND CONCENTRATION

The Developer has agreed to fund the general operations of the District. In connection with that agreement, Developer contributions to the District were $111,432 for the fiscal year ended September 30, 2017. The Developer owns a portion of land within the District; therefore, assessment revenues in the debt service funds include the assessments levied on those lots owned by the Developer. 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 – MANAGEMENT COMPANY

The District has contracted with a management company to perform management advisory services, which include financial and accounting advisory 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 10 – 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 11 – CONTINGENCIES

The District is involved in various litigation matters arising in the ordinary course of operations, none of which, in the opinion of the Board of Supervisors and District Manager, will have a material effect on the District’s financial position.

20

CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN

FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

												Variance		
												with Final		
						Budgeted						Budget -		
						Amounts			Actual		Positive		
					Original & Final			Amounts		(Negative)		
REVENUES											
Developer contribution	$	106,000	$	111,432		$	5,432		
Total revenues			106,000			111,432			5,432		
EXPENDITURES										
Current:										
General government		87,600			90,701			(3,101)		
Maintenance and operations		18,400			8,289			10,111		
Capital outlay		-			12,500			(12,500)		
Total expenditures			106,000			111,490			(5,490)		
Excess (deficiency) of revenues										
over (under) expenditures		-			(58)			(58)		
OTHER FINANCING SOURCES										
Transfer in (out)			-			58			58		
Net change in fund balances	$	-			-		$	-		
Fund balance - beginning					-					
										
Fund balance - ending				$	-					

See notes to required supplementary information

21

CELEBRATION POINTE COMMUNITY DEVELOPMENT DISTRICT NO. 1

ALACHUA COUNTY, FLORIDA

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 for the fiscal year ended September 30, 2017 exceeded appropriations by $5,490.

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
Celebration Pointe Community Development District No. 1
Alachua 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 Celebration Pointe Community Development District No. 1, Alachua County, Florida (“District”) as of and for the fiscal year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our opinion thereon dated June 26, 2018.

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 26, 2018

24

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 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
Celebration Pointe Community Development District No. 1
Alachua County, Florida

We have examined Celebration Pointe Community Development District No. 1, Alachua 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, 2017. Management is responsible for District’s compliance with those requirements. Our responsibility is to express an opinion on District’s compliance based on our examination.

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

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2017.

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 Celebration Pointe Community Development District No. 1, Alachua County, Florida and is not intended to be and should not be used by anyone other than these specified parties.

June 26, 2018

25

951 Yamato Road ▪ Suite 280

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

MANAGEMENT LETTER PURSUANT TO THE RULES OF

THE AUDITOR GENERAL FOR THE STATE OF FLORIDA

To the Board of Supervisors
Celebration Pointe Community Development District No. 1
Alachua County, Florida

Report on the Financial Statements

We have audited the accompanying basic financial statements of Celebration Pointe Community Development District No. 1, Alachua County, Florida ("District") as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated June 26, 2018.

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 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 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 26, 2018, 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 for 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:

I.	Current year findings and recommendations.

II.  Status of prior year findings and recommendations.

III. 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 Celebration Pointe Community Development District No. 1, Alachua County, Florida and is not intended to be and should not be used by anyone other than these specified parties.

We wish to thank Celebration Pointe Community Development District No. 1, Alachua 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 26, 2018

26

REPORT TO MANAGEMENT

I.	CURRENT YEAR FINDINGS AND RECOMMENDATIONS

	None

II.	PRIOR YEAR FINDINGS AND RECOMMENDATIONS

	None

III.	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:

1.	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, 2016.

2.	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, 2017.

3.	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, 2017.

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

5.	The financial report filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes agrees with the September 30, 2017 financial audit report.

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

7.	We applied financial condition assessment procedures and no deteriorating financial conditions were noted as of September 30, 2017. 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.

27