Bannon Lakes 
Community Development District 

ANNUAL FINANCIAL REPORT 

September 30, 2022 

Bannon Lakes Community Development District 
 
ANNUAL FINANCIAL REPORT 
 
September 30, 2022 
 
TABLE OF CONTENTS 
       
                                                                                                                                          Page 
  Number 
FINANCIAL SECTION 

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 34-37 
 
INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH 
      SECTION 218.415, FLORIDA STATUTES      38 

 

 

 

 

REPORT OF INDEPENDENT AUDITORS  

To the Board of Supervisors 
Bannon Lakes 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 Bannon Lakes 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 Bannon Lakes 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 
Bannon Lakes 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 
Bannon Lakes 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 July 13, 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 Bannon Lakes Community Development District’s internal control over financial reporting and compliance. 

 

Berger, Toombs, Elam, Gaines & Frank 
Certified Public Accountants PL 
Fort Pierce, Florida 
 
July 13, 2023 
Management’s discussion and analysis of Bannon Lakes Community Development District's (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities.  The analysis provides summary financial information for the District and should be read in conjunction with the District’s financial statements. 
 
OVERVIEW OF THE FINANCIAL STATEMENTS 
 
The District’s basic financial statements comprise three components; 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to financial statements.  The Government-wide financial statements present an overall picture of the District’s financial position and results of operations.  The Fund financial statements present financial information for the District’s major funds.  The Notes to financial statements provide additional information concerning the District’s finances. 
 
The Government-wide financial statements are the statement of net position and the statement of activities.  These statements use accounting methods similar to those used by the private-sector.  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 are 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 funded 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. 
 
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 balances of spendable resources available at the end of the year.  Such information may be useful in evaluating a government'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 statement of revenues, expenditures, and changes in fund balances provide reconciliations to facilitate this comparison between governmental funds and governmental activities. 
 
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 $(5,153,471) (net position).  Net investment in capital assets was $(1,235,479) and restricted net position was $693,901.  Unrestricted net position was $(4,611,893).  

• Governmental activities revenues totaled $1,881,476 while governmental activities expenses totaled $2,280,989. 

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) 
 
Financial Analysis of the District 
 
The following schedule provides a summary of the assets, deferred outflows of resources, liabilities and net position of the District.  
 
The increase in current assets is related to revenues exceeding expenditures at the fund level in the current year. 

The increase in capital assets is related to the increase to construction in progress in the current year. 
 
The decrease in current liabilities is mainly related to the decrease in contracts payable in the current year. 
 
The increase in non-current liabilities is related to the long-term debt issuance in the current year.  

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. 
 
The increase in charges for services is primarily related to the increase in debt service special assessments in the current year. 

The increase in miscellaneous revenues is related to monies received from the homeowner’s association in relation to a joint project in the current year.  
 
The increase in physical environment is related to the increase in repair and maintenance expenses in the current year. 
 
The increase in culture/recreation is primarily related to the increase in special events and amenity maintenance expenses in the current year. 
 
The increase in interest and other charges is related to the initial year of interest on the Series 2021 bonds. 

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. 

During the year, depreciation was $310,919 and additions to construction in progress was $1,807,262. 
 
General Fund Budgetary Highlights 

The budgeted expenditures exceeded actual expenditures primarily because reclaimed water expenditures were less than anticipated. 
 
The September 30, 2022 budget was amended because reclaimed water and amenity electric expenditures were more than originally anticipated.  
 
Debt Management 
 
Governmental Activities debt includes the following:  

♦ In January 2016, the District issued $11,850,000 Special Assessment Bonds, Series 2016. The Bonds were issued to provide funds to finance the cost of acquisition, construction, installation, and equipping of the 2016 Project. The balance outstanding at September 30, 2022 was $10,825,000. 

♦ In January 2021, the District issued $7,415,000 Special Assessment Bonds, Series 2021. The Bonds were issued to provide funds to finance the cost of acquisition, construction, installation, and equipping of the 2021 Project. The balance outstanding at September 30, 2022 was $7,265,000. 

♦ In March 2022, the District issued $9,135,000 Special Assessment Bonds, Series 2022. The Bonds were issued to provide funds to finance the cost of acquisition, construction, installation, and equipping of the 2022 Project. The balance outstanding at September 30, 2022 was $9,135,000. 

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) 
 
Economic Factors and Next Year’s Budget 
 
Bannon Lakes Community Development District does not expect any economic factors to have a significant effect on the financial position or the results of operations of the District in fiscal year 2023. 
 
Request for Information 
 
The financial report is designed to provide a general overview of 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 Bannon Lakes Community Development District, c/o Governmental Management Services, 475 West Town Place, Suite 114, St. Augustine, Florida  32092. 

 

						Governmental Activities	

						ASSETS		
Current Assets	
Cash and cash equivalents	
	Investments	
	Due from other governments	
	Prepaid expenses	
	Deposits	

						266,619$         	
102,486           	
13,184             	
	28,095             	
	50                    	
	410,434           	

						Total Current Assets	

						Non-Current Assets					
Restricted assets	
Cash and investments	
	Capital assets, not being depreciated	
	Construction in progress	
	Capital assets, being depreciated	
	Infrastructure	
	Buildings and improvements	
			Equipment	
Less: accumulated depreciation	
	Total Non-Current Assets	
		Total Assets	

						3,177,030        	

						11,788,700      	

						4,721,061        	
3,713,738        	
190,914           	
	(1,235,479)       	
	22,355,964      	
	22,766,398      	

						LIABILITIES		
Current Liabilities	
Accounts payable and accrued expenses	
	Contracts/retainage payable	
	Accrued interest	
	Bonds payable	

						9,496               	
87,559             	
478,142           	
	355,000           	
	930,197           	

						Total Current Liabilities	

						Non-Current Liabilities		
Bonds payable, net	

						26,989,672      	
27,919,869      	

						Total Liabilities	

						NET POSITION	
Net investment in capital assets	
Restricted for debt service	
	Unrestricted 	

						(1,235,479)       	
693,901           	
(4,611,893)       	
	(5,153,471)$     	

						Total Net Position	

						Net (Expense)	
						Revenues and	
				Changes in	
				Net Position	
Governmental Activities	

						Program 	
						Revenues	
				Charges for Services	

						Functions/Programs	
						Primary government	
				   Governmental Activities	
				       General government	
       Physical environment	
       Culture and recreation	
       Interest and other charges	
         Total Governmental Activities	

						Expenses	

						(102,150)$      	
						(574,006)        	
				(258,143)        	
				(1,346,690)     	
(2,280,989)$   	

						83,601$                   	
						240,268                   	
				186,311                   	
				1,189,786                	
1,699,966$              	

						(18,549)$           	
						(333,738)           	
				(71,832)              	
				(156,904)           	
(581,023)           	

						General Revenues	
						   Investment earnings	
				   Miscellaneous revenues	
				Total General Revenues	

						6,014                 	
						175,496             	
				181,510             	

						Changes in Net Position	

						(399,513)           	

						Net Position - October 1, 2021	

						(4,753,958)        	

						Net Position - September 30, 2022	

						(5,153,471)$      	

											Total	
							Governmental	
					Funds	

											Debt	
							Service	

											Capital	
							Projects	

											General	

											ASSETS			
							Cash and cash equivalents	
					Investments	
Due from other funds	
Due from other governments	
Prepaid expenses	
Deposits	
Restricted assets	
Cash and investments	
Total Assets	

											266,619$      	
							102,486        	
					-                   	
4,411            	
28,095          	
50                 	

											-$                  	
							-                   	
					1,852            	
8,773            	
-                   	
-                   	

											-$                  	
							-                   	
					-                   	
-                   	
-                   	
-                   	

											266,619$      	
							102,486        	
					1,852            	
13,184          	
28,095          	
50                 	

											-                   	
							401,661$      	

											2,000,093     	
							2,010,718$   	

											1,176,937     	
							1,176,937$   	

											3,177,030     	
							3,589,316$   	

											LIABILITIES AND FUND BALANCES			
							Liabilities:	
					Accounts payable and accrued expenses	
Contracts/retainage payable	
Due to other funds	
Total Liabilities	

											9,496$          	
							-                   	
					1,852            	
11,348          	

											-$                  	
							-                   	
					-                   	
-                   	

											-$                  	
							87,559          	
					-                   	
87,559          	

											9,496$          	
							87,559          	
					1,852            	
98,907          	

											Fund Balances:				
							Nonspendable - prepaid expenses	
					Restricted - capital projects	
Restricted - debt service	
Assigned capital projects	
Unassigned	
Total Fund Balances	
Total Liabilities and Fund Balances	

											28,145          	
							-                   	
					-                   	
33,766          	
328,402        	
390,313        	
401,661$      	

											-                   	
							-                   	
					2,010,718     	
-                   	
-                   	
2,010,718     	
2,010,718$   	

											-                   	
							1,089,378     	
					-                   	
-                   	
-                   	
1,089,378     	
1,176,937$   	

											28,145          	
							1,089,378     	
					2,010,718     	
33,766          	
328,402        	
3,490,409     	
3,589,316$   	

Total Governmental Fund Balances	

3,490,409$     	

Amounts reported for governmental activities in the Statement of Net Position	
							are different because:	

Capital assets, construction in progress, $11,788,700, buildings and 	
							improvements, $3,713,738, infrastructure, $4,721,061,  and equipment, $190,914, net of accumulated depreciation, $(1,235,479), used in governmental activities are not financial resources and; therefore, are not reported 	

							at the fund level.		

19,178,934	

Long-term liabilities, including bonds payable, $(27,225,000), and bond premium,	
							net, $(205,326), net of bond discount, net, $85,654, are not due and payable 		
in the current period and; therefore, are not reported at the fund level.	

(27,344,672)    	

Accrued interest expense for long-term debt is not a current financial use and;	
							therefore, is not reported in the funds.	

(478,142)         	

Net Position of Governmental Activities	

(5,153,471)$    	

											Total	
							Governmental	
					Funds	

											Debt	
							Service	

											Capital	
							Projects	

											General	

											Revenues		
							Special assessments	
					Investment earnings	
Miscellaneous revenues	

											510,180$     	
							865              	
					175,496       	
686,541       	

											1,189,786$      	
							4,157               	
					-                       	
1,193,943        	

											-$                  	
							992                	
					-                    	
992                	

											1,699,966$      	
							6,014               	
					175,496           	
1,881,476        	

											Total Revenues	

											Expenditures				
							Current	
					General government	
Physical environment	
	Culture and recreation	
	Capital outlay	
	Debt service	
			Principal	
												Interest		
Other	
	Total Expenditures	

											102,150       	
							293,579       	
					227,651       	
-                  	

											-                       	
							-                       	
					-                       	
-                       	

											-                    	
							-                    	
					-                    	
1,807,262      	

											102,150           	
							293,579           	
					227,651           	
1,807,262        	

											-                  	
							-                  	
					-                  	
623,380       	

											395,000           	
							858,928           	
					-                       	
1,253,928        	

											6,788,205      	
							-                    	
					349,950         	
8,945,417      	

											7,183,205        	
							858,928           	
					349,950           	
10,822,725      	

											Excess of revenues over expenditures	

											63,161         	

											(59,985)            	

											(8,944,425)    	

											(8,941,249)       	

											Other Financing Sources/(uses)	
							  Issuance of long-term debt	
					  Bond premium	
Total Other Financing Sources/(Uses)	

											-                  	
							-                  	
					-                  	

											837,704           	
							-                       	
					837,704           	

											8,297,296      	
							127,231         	
					8,424,527      	

											9,135,000        	
							127,231           	
					9,262,231        	

											Net change in fund balances	

											63,161         	

											777,719           	

											(519,898)       	

											320,982           	

											Fund Balances - October 1, 2021	

											327,152       	

											1,232,999        	

											1,609,276      	

											3,169,427        	

											Fund Balances - September 30, 2022	

											390,313$     	

											2,010,718$      	

											1,089,378$    	

											3,490,409$      	

Net Change in Fund Balances - Total Governmental Funds	

320,982$      	

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 are allocated over their estimated useful lives 	
as depreciation.  This is the amount that depreciation, $(310,919), was exceeded by 	
	1,496,343     						capital outlay, $1,807,262, in the current period.	

Repayments of bond principal are expenditures in the governmental funds, but the	
							repayments reduce long-term liabilities in the Statement of Net Position.			7,183,205     	

The issuance of new long-term debt, $(9,135,000) and bond premium, $(127,231) are	
							reflected as other financing sources at the fund level, however, they increase	
liabilities at the government-wide level.	

(9,262,231)    	

Amortization of bond premium/discount reported at the government-wide level does not 	
							require the use of current financial resources and therefore, is not reported	
as an expenditure at the fund level. This is the current net change.	

1,840            	

The change in accrued interest on long-term liabilities is recorded in the Statement	
							of Activities but not in the fund financial statements.	

(139,652)       	

Change in Net Position of Governmental Activities	

(399,513)$     	

											Variance with	
								Final Budget	
					Positive	
					(Negative)	

											  		

					Actual	

											Original	
								Budget	

											Final	
								Budget	

											Revenues		
								Special assessments	
					Developer contributions	
					Investment earnings	
Miscellaneous revenues	

											504,753$    	
								105,308      	
					150            	
					300            	
610,511      	

											504,753$    	
								105,308      	
					150            	
					175,300      	
785,511      	

											510,180$      	
								-                    	
					865               	
					175,496        	
686,541        	

											5,427$          	
								(105,308)       	
					715               	
					196               	
(98,970)         	

											Total Revenues	

											Expenditures				
								Current	
					General government	
					Physical environment	
Culture and recreation	
	Capital outlay	
	Total Expenditures	

											108,616      	
								267,056      	
					232,175      	
					15,000        	
622,847      	

											108,616      	
								307,019      	
					232,175      	
					-                 	
647,810      	

											102,150        	
								293,579        	
					227,651        	
					-                    	
623,380        	

											6,466            	
								13,440          	
					4,524            	
					-                   	
24,430          	

											Net change in fund balances	

											(12,336)      	

											137,701      	

											63,161          	

											(74,540)         	

											Fund Balances - October 1, 2021	

											31,713        	

											33,767        	
								 	
					171,468$    	

											327,152        	

											293,385        	

											Fund Balances - September 30, 2022	

											19,377$      	

											390,313$      	

											218,845$      	

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
The financial statements of 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 September 21, 2015, by Ordinance 2015-60 of the St. Johns County, Florida Board of County Commissioners, pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes.  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 authorized to issue bonds for the purpose, among others, of financing, funding, planning, establishing, acquiring, constructing or re-constructing, enlarging or extending, equipping, operating and maintaining water management, bridges or culverts, district roads, landscaping, street lights and other basic infrastructure projects within or without the boundaries of the Bannon Lakes Community Development District.  The District is governed by a five-member Board of Supervisors who are elected for four year terms.  The District operates within the criteria established by Chapter 190, Florida Statutes. 
 
As required by GAAP, these financial statements present Bannon Lakes Community Development District (the primary government) as a local unit of special-purpose government.  The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility including, but not limited to, financial interdependency, selection of governing authority, designation of management, significant ability to influence operations and accountability for fiscal matters. 
 
Based upon the application of the above-mentioned criteria, as set forth in Governmental Accounting Standards, 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 all 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, developer contributions, intergovernmental revenues and interest.  Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program. 
 
Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure.  Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financing source. 
 
Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure. 
 
  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.  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 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 classifications include non-spendable, restricted, committed, assigned and unassigned. 
 
The District has various policies governing the fund balance classifications. 
 
Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.  
 
Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.    
 
Committed Fund Balance – This classification consists of amounts that can only be used for specific purposes pursuant to the constraints imposed by a formal action of the government’s highest level of decision making authority. 
 
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 an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.  
 
Fund Balance Spending Hierarchy – When restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances. 
 
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.  Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period.   
 
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 
 
2.  Measurement Focus and Basis of Accounting (Continued) 
 
  b. Fund Financial Statements (Continued) 
 
Governmental Funds (Continued) 
 
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 are expended, rather than as fund assets.  In addition, the proceeds of long-term debt are recorded as an other 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. 
 
Debt Service Funds – Accounts for debt service requirements to retire the special assessment bonds.  The bond series are secured by a pledge of all available special assessment revenues in any fiscal year related to the improvements and a first lien on the special assessment revenues from the District lien on all acreage of benefited land. 
 
Capital Projects Fund – Accounts for construction of infrastructure improvements within the District.   

 
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 
 
3.  Basis of Presentation (Continued) 
 
 b. Non-current Governmental Assets/Liabilities 
 
GASB Statement 34 requires that non-current governmental assets, such as infrastructure and improvements, and non-current governmental liabilities, such as general obligation 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.  
 
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 Section 280.02, Florida Statutes. 
 
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 
 
4. Assets, Liabilities, and Net Position or Equity (Continued) 
 
 b. 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. 
 
 c. Capital Assets 
 
Capital assets, which include construction in progress, buildings and improvements, infrastructure, and equipment are reported in the governmental activities column in the government-wide statements. 
 
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 two years.  The valuation basis for all assets is historical cost.   
 
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized. 
 
Major outlays for capital assets and improvements are capitalized as projects are constructed.   
 
Depreciation of capital assets is computed and recorded by utilizing the straight-line method.  Estimated useful lives of the various classes of depreciable capital assets are as follows: 
   
Infrastructure      30 years 
Buildings and improvements 10-30 years 
Equipment        7 years 
 
 d. Budgets 
 
Budgets are prepared and adopted after a public hearing 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. 
 
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 
 
4. Assets, Liabilities, and Net Position or Equity (Continued) 
 
 e. Unamortized Bond Premium/Discount 
 
Bond premiums/discounts are presented on the government-wide financial statements.  The premium/discount is amortized over the life of the bonds.  For financial reporting, the unamortized bond premium/discount is netted with the applicable long-term debt. 

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, $3,490,409, differs from “net position” of governmental activities, $(5,153,471), reported in the Statement of Net Position.  This difference primarily results from the long-term economic focus of the Statement of Net Position versus the current financial resources focus of the Governmental Fund Balance Sheet.  The effect of the differences is illustrated below. 
 
Capital related items 
 
When capital assets (infrastructure and improvements 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. 
   
  Construction in progress   $      11,788,700  
  Buildings and improvements             3,713,738  
  Infrastructure               4,721,061  
  Equipment                  190,914  
  Accumulated depreciation                   (1,235,479) 
   Total                 $      19,178,934    
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) 

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.   
   
  Bonds payable          $   (27,225,000)  
  Bond discount, net                     85,654  
  Bond premium, net                  (205,326)  
   Total         $   (27,344,672)  
 
Accrued interest 
 
Accrued liabilities in the Statement of Net Position differ from the amount reported in governmental funds due to the accrued interest on bonds. 
 
  Accrued interest         $        (478,142) 
 
2. Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities 
 
The “net change in fund balances” for government funds, $320,982, differs from the “change in net position” for governmental activities, $(399,513), 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 are allocated over their estimated useful lives as depreciation.  The following is the amount of depreciation in excess of current year capital asset acquisitions: 
 
 Depreciation  $          (310,919)   
 Capital outlay           1,807,262   
           Total $        1,496,343   
NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) 
 
2. Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities (Continued) 
 
Long-term debt transactions  
 
The issuance of new long-term debt and repayments of bond principal are reported as an other financing source or expenditures at the fund level and, thus, have the effect of affecting fund balance because current financial resources have been provided or used. 
  
 Issuance of long-term debt         $          (9,135,000) 
 Bond premium                            (127,231) 
   Total             $          (9,262,231)  
 
 Bond principal payments          $           7,183,205  
 
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. 
 
 Change in accrued interest payable       $             (139,652)  
 
 Amortization of bond premium/discount, net     $                  1,840         
 
NOTE C – CASH AND INVESTMENTS 
 
All deposits are held in qualified public depositories and are included on the accompanying balance sheet and statement of net position 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. The investment policy of the District follows the provisions of Chapter 280, Florida Statutes regarding deposits and investments. As of September 30, 2022, the District’s bank balance was $277,241 and the carrying value was $266,619. The District controls its exposure to custodial credit risk because it 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. 
 
The District also had $1,924,131 in restricted cash with BNY Mellon as of September 30, 2022. 
 
NOTE C – CASH AND INVESTMENTS 
 
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 Dreyfus Treasury Securities Cash Management is a Level 1 assets.  

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 requirement that would limit daily access to 100 percent of the account value.   
NOTE C – CASH AND INVESTMENTS (CONTINUED) 
 
Interest Rate Risk 
 
The District monitors 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 treasury funds, and government loans are limited by state statutory requirements and bond compliance.  The District has no investment policy that would further limit its investment choices. the District’s investment in Dreyfus Treasury Securities Cash Management and Florida PRIME were rated AAAm by Standard & Poor’s.  
 
Concentration of Credit Risk 
 
The District places no limit on the amount it may invest in any one fund. The investment in Florida PRIME was 8% of the District's total investments as of September 30, 2022. The investment in Dreyfus Treasury Securities Cash Management was 92% of the District's 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.  In addition, the District has the ability to hold investments to maturity which may have fair values less than cost.  The District’s investments are recorded at fair value.  
 
NOTE D – SPECIAL ASSESSMENT REVENUES 
 
Special assessment revenues recognized for the 2021-2022 fiscal year were levied in August 2021.  All assessments are payable on November 1 or as soon as the assessment roll is certified and delivered to the Tax Collector.  Per Section 197.162, Florida Statutes, discounts are allowed for early payment at the rate of 4% in November, 3% in December, 2% in January, and 1% in February.  Assessments paid in March are without discount.  All unpaid assessments become delinquent as of April 1.  Virtually all unpaid assessments that were on the assessment roll certified and delivered to the Tax Collector are collected via the sale of tax certificates on or prior to June 1.  For certain parcels, the District bills and collects the annual assessments.  
NOTE E – CAPITAL ASSETS 
 
Capital Asset activity for the year ended September 30, 2022 was as follows: 
 
Depreciation of $280,427 was charged to physical environment and $30,492 to culture/recreation during the year. 
NOTE F – LONG-TERM DEBT 
 
The following is a summary of activity in the long-term debt of the District for the year ended September 30, 2022: 
 
Long-term debt is comprised of the following:    

Long-term debt at October 1, 2021  $    25,273,205 
   Issuance of long-term debt       9,135,000 
  Principal payments          (7,183,205) 
Long-term debt at September 30, 2022         27,225,000  
  Less: bond discount, net               (85,654) 
  Plus: bond premium, net               205,326   
   Bonds Payable, Net at September 30, 2022  $     27,344,672   
 
Long-term debt for Governmental Activities is comprised of the following: 
 
$11,850,000 Special Assessment Bonds, Series 2016 due in annual principal installments beginning November 2019. Interest rates ranging from 4.50% to 5.00% is due May 1 and November 1 beginning May 2016. Current portion is $200,000. $      10,825,000 
 
$7,415,000 Special Assessment Bonds, Series 2021 are due in annual principal installments beginning May 2022 maturing May 2051. Interest at various rates between 2.50% and 4.00% is due May and November beginning May 2021. Current portion is $155,000.          7,265,000 
 
$9,135,000 Special Assessment Bonds, Series 2022 are due in annual principal installments beginning May 2024 maturing May 2053. Interest at various rates between 2.875% and 4.00% is due May and November beginning May 2022.          9,135,000 
 
 Bond Payable at September 30, 2022 $     27,225,000  

NOTE F – LONG-TERM DEBT (CONTINUED) 
 
The annual requirements to amortize the principal and interest of long-term debt outstanding as of September 30, 2022 are as follows:  

Summary of Significant Bonds Resolution Terms and Covenants  
 
The Series 2016 Bonds are subject to redemption at the option of the District prior to their maturity, in whole or in part, at any time after November 1, 2028 at a redemption price equal to the principal amount of the Series 2016 Bonds, together with accrued interest to the date of redemption.   
 
The Series 2021 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, 2031 at a redemption price equal to the principal amount of the Series 2016 Bonds, together with accrued interest to the date of redemption.   

The Series 2022 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, 2032 at a redemption price equal to the principal amount of the Series 2016 Bonds, together with accrued interest to the date of redemption.   
 
The Series 2016, 2021, and 2022 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 Indentures.  
 
The Trust Indentures 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. 
NOTE F – LONG-TERM DEBT (CONTINUED) 
 
Depository Funds 
 
The bond resolutions establish 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: 

1. Reserve Fund – The Series 2016, 2021, and 2022 Reserve Accounts were funded  from the proceeds of the Series 2016, 2021, and 2022 Bonds, respectively, in amounts equal to 50% of the maximum annual debt service requirement for the Series 2016, 2021, and 2022 Bonds. Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture. 

 
NOTE G – RISK MANAGEMENT 
 
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters.  These risks are covered by commercial insurance from independent third parties.  Settled claims from these risks have not exceeded commercial insurance coverage over the past three years. 
 
NOTE H – SUBSEQUENT EVENT 

In May 2023, the District made a $5,000 prepayment on the Series 2016 Special Assessment Revenue Bonds.  
 
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 
Bannon Lakes 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 Bannon Lakes 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 July 13, 2023.  

Report on Internal Control Over Financial Reporting 

In planning and performing our audit, we considered Bannon Lakes 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 Bannon Lakes Community Development District’s internal control.  Accordingly, we do not express an opinion on the effectiveness of Bannon Lakes 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 
Bannon Lakes Community Development District 

Report on Compliance and Other Matters 
 
As part of obtaining reasonable assurance about whether Bannon Lakes 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 
 
July 13, 2023 

 

 
 
MANAGEMENT LETTER 
 
To the Board of Supervisors 
Bannon Lakes Community Development District 
St. Johns County, Florida 
 
Report on the Financial Statements 
 
We have audited the financial statements of the Bannon Lakes Community Development District as of and for the year ended September 30, 2022, and have issued our report thereon dated July 13, 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 those reports, which are dated July 13, 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 in the preceding financial audit report. 
 
Financial Condition and Management 
 
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not Bannon Lakes 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 Bannon Lakes Community Development District did not meet any of the conditions described in Section 218.503(1) Florida Statutes.  

To the Board of Supervisors 
Bannon Lakes Community Development District 
 
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for Bannon Lakes Community Development District.  It is management’s responsibility to monitor the Bannon Lakes Community Development District’s financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same as of September 30, 2022.  
 
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 Bannon Lakes 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: 14 

3) All compensation earned by or awarded to employees, whether paid or accrued, regardless of contingency: $924 

4) All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of contingency: $1,292,580 

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 in the current year. 

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  amended, see below.  

As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)8, Rules of the Auditor General, the Bannon Lakes Community Development District reported: 

1) The rate or rates of non-ad valorem special assessments imposed by the District: The General Fund, $882.95, and Debt Service Fund, $1,764.35 - $1,875.46. 

2) The amount of special assessments collected by or on behalf of the District: Total special assessments collected was $1,699,966. 

3) The total amount of outstanding bonds issued by the District and the terms of such   bonds: Series 2016 Bonds, $10,825,000, maturing November  2048, Series 2021 Bonds, $7,265,000, maturing May 2051, and Series 2022 Bonds, $9,135,000 maturing May 2053. 

To the Board of Supervisors 
Bannon Lakes 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 warrants the attention of those charged with governance.  In connection with our audit, we did not note any such findings.  
To the Board of Supervisors 
Bannon Lakes Community Development District 
 
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 
 
July 13, 2023 
INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE 
WITH SECTION 218.415, FLORIDA STATUTES 

To the Board of Supervisors 
Bannon Lakes Community Development District 
St. Johns County, Florida 

We have examined Bannon Lakes Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2022. Management is responsible for Bannon Lakes Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on Bannon Lakes 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 Bannon Lakes 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 Bannon Lakes Community Development District’s compliance with the specified requirements. 

In our opinion, Bannon Lakes 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 

July 13, 2023