Ranches at Lake McLeod Community Development District

FINANCIAL STATEMENTS

September 30, 2022

Table of Contents

Page
REPORT
Independent Auditors’ Report ..............................................................................................	1
FINANCIAL STATEMENTS
Management’s Discussion and Analysis (required supplemental information) ...............	4
Basic Financial Statements Government‐Wide Financial Statements
Statement of Net Position ........................................................................................	8
Statement of Activities .............................................................................................	9
Fund Financial Statements
Balance Sheet – Governmental Funds......................................................................	10
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds ................................................................................................	11
Reconciliation of the Statement of Revenue, Expenditures and Changes in
Fund Balances – Governmental Funds to the Statement of Activities.....................	12
Notes to Financial Statements ........................................................................................	13
Required Supplemental Information (other than MD&A)
Budget to Actual Comparison Schedule ‐ General Fund .............................................	19
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..................................	20
Management Letter ........................................................................................................	23
Independent Accountants’ Report on Compliance with Section 218.415,
Florida Statutes ...............................................................................................................	26

INDEPENDENT AUDITORS’ REPORT

To the Board of Supervisors
Ranches at Lake McLeod Community Development District Polk County, Florida

Opinions

We have audited the accompanying financial statements of the governmental activities and each major fund of Ranches at Lake McLeod Community Development District (hereinafter referred to as “District”), as of and for the year ended September 30, 2022, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

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 Ranches at Lake McLeod Community Development District as of September 30, 2022, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

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. Our responsibilities under those standards are further described in the Auditors’ 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 audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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.
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 twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors’ Responsibilities 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 opinions. 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 generally accepted auditing standards 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 would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:

Exercise professional judgment 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 judgment, 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.

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 on pages 4 ‐ 7 and 19 be presented to supplement the basic financial statements. Such information is the responsibility of

‐ 2 ‐

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 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 November 16, 2023, on our consideration of the District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and 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 the 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.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida November 16, 2023

Management’s Discussion and Analysis

Ranches at Lake McLeod Community Development District
Management’s Discussion and Analysis

Our discussion and analysis of the Ranches at Lake McLeod Community Development District’s financial performance provides an overview of the District’s financial activities for the fiscal year ended September 30, 2022. Please read it in conjunction with the District’s financial statements, which begin on page 8.

FINANCIAL HIGHLIGHTS

At September 30, 2022, the liabilities and deferred inflows of resources of the District exceed its assets by approximately $23,000 (deficit net position).

During the year ended September 30, 2022, the Developer contributed approximately
$53,000 to fund the general operations of the District.

USING THE ANNUAL REPORT

This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities on pages 8 – 9 provide information about the activities of the District as a whole and present a longer‐term view of the District’s finances. Fund financial statements start on page 10. For governmental activities, these statements tell how these services were financed in the short‐term as well as what remains for future spending. Fund financial statements also report the District’s operations in more detail than the government‐wide statements by providing information about the District’s most significant funds.

Reporting the District as a Whole

Our analysis of the District as a whole begins on page 5. One of the most important questions asked about the District’s finances is, “Is the District as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the District as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private‐sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the District’s net position and related changes during the current year. You can think of the District’s net position – the difference between assets and liabilities – as one way to measure the District’s financial health, or financial position. Over time, increases or decreases in the District’s net position is one indicator of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors; however, such as changes in the District’s assessment base and the condition of the District’s infrastructure, to assess the overall health of the District.

Ranches at Lake McLeod Community Development District
Management’s Discussion and Analysis

Reporting the District’s Most Significant Funds

Our analysis of the District’s major funds begins on page 7. The fund financial statements begin on page 10 and provide detailed information about the most significant funds – not the District as a whole. Some funds are required to be established by State law and by bond covenants. All of the District’s funds are governmental fund‐types.

Governmental funds – All of the District’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year‐ end that are available for spending. The governmental fund statements provide a detailed short‐term view of the District’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs.

THE DISTRICT AS A WHOLE

The following table reflects the condensed Statement of Net Position and is compared to the prior year.

September 30,	2022	2021	Change Assets

Current and other assets

$	41,007

10,787	$

30,220

Total assets	41,007	10,787	30,220
Liabilities

Current liabilities	$	46,296	$	31,618	$	14,678	
Total liabilities		46,296	31,618	14,678	

Deferred inflows of resources

Deferred revenue	17,276	‐	17,276	
Total deferred inflows of resources	17,276	‐	17,276	
Net position				
Unrestricted		(22,565)		(20,831)		(1,734)	
Total net position (deficit)		(22,565)		(20,831)		(1,734)	
Total liabilities and net position (deficit)	$	41,007	$	10,787	$	30,220	

For more detailed information, see the accompanying Statement of Net Position.

Ranches at Lake McLeod Community Development District
Management’s Discussion and Analysis

During the fiscal year ended September 30, 2022, total assets, liabilities and deferred inflows of resources increased by approximately $30,000, respectively. The increase in assets, liabilities and deferred inflows of resources is due to an increase in District activity and timing of receipt of funding as the Developer is funding the general operations of the District.

The following schedule compares the Statement of Activities for the current and previous fiscal year.

For the year ended September 30,		2022		2021	Change	
Revenue:
Program revenue:
Grants and contributions	

$		

53,170	

$	38,453	

$	14,717	

Total revenue			
53,170	
38,453	
14,717	
Expenses:						
General government		53,504	43,639	9,865	
Cost of issuance		1,400	15,645	(14,245)	

Total expenses		
54,904	
59,284	
(4,380)	

Change in net position		
(1,734)	
(20,831)	
19,097	
Net position (deficit), beginning of year		(20,831)	‐	(20,831)	

Net position (deficit), end of year	
$	
(22,565)	
$	(20,831)	
$	(1,734)	

For more detailed information, see the accompanying Statement of Activities.

Revenue increased over the prior year by approximately $14,700 while expenses decreased by approximately $4,400. The increase in revenue is primarily due to an increase in general government activity following the first full year of District operations, while the decrease in expenses is due to certain cost of issuance related expenses incurred in the prior year to prepare for future bond issuance. The overall result was a decrease of $1,734 in net position for fiscal year 2022.

Ranches at Lake McLeod Community Development District
Management’s Discussion and Analysis

THE DISTRICT’S FUNDS

As the District completed the year, its governmental funds (as presented in the balance sheet on page 12) reported a combined deficit fund balance of $22,565, which is a decrease from last year’s fund balance deficit that totaled $28,267. Significant transactions are discussed below.

During the year ended September 30, 2022, the Developer contributed approximately
$61,000 to fund the general operations of the District.

The overall increase in fund balance for the year ended September 30, 2022 totaled approximately
$5,700.

GOVERNMENTAL FUNDS BUDGETARY HIGHLIGHTS

An Operating budget was established in the current year by the governing board for the District pursuant to the requirements of Florida Statutes. The budget to actual comparison for the general fund, including the original budget and final adopted budget, is shown at page 19.

The District experienced an unfavorable variance in revenue and a favorable variance in expenditures as compared to the budget in the amounts of $26,684 and $33,786, respectively. The variance in revenue and expenditures is due to lower professional fees incurred as bonds were not issued until subsequent to fiscal year end and the Developer is funding the general operations of the District.

FUTURE FINANCIAL FACTORS

Ranches at Lake McLeod Community Development District is an independent special district that operates under the provisions of Chapter 190, Florida Statutes. The District operates under an elected Board of Supervisors, which establishes policy and sets assessment rates. Assessment rates for fiscal year 2023 were established to provide for the operations of the District as well as the necessary debt service requirements.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide a general overview of the District’s finances. If you have questions about this report or need additional financial information, contact the Ranches at Lake McLeod Community Development District’s management company at 6200 Lee Vista Boulevard, Suite 300, Orlando, FL, 32822.

Basic Financial Statements

Ranches at Lake McLeod Community Development District
Statement of Net Position

September 30,	2022
Governmental Activities

Assets
Cash and cash equivalents

$	9,469

Due from developer	31,388
Prepaid expenses	150

Total assets	41,007

Liabilities

Accounts payable	30,496	
Due to developer	15,800	

Total liabilities	
46,296	

Deferred inflows of resources
Deferred revenue	17,276

Total deferred inflows of resources	17,276

Net position
Unrestricted	(22,565)

Total net position (deficit)	$	(22,565)

The accompanying notes are an integral part of these financial statements.

Ranches at Lake McLeod Community Development District
Statement of Activities

For the year ended September 30,

2022

Program Revenue

Net (Expense) Revenue and Changes in Net Position

Charges for	Governmental
Functions/Programs	Expenses	Services	Activities Primary government:
Governmental activities:

General government	$	(53,504)	$	53,170	$	(334)	
Cost of issuance		(1,400)		‐		(1,400)	

Total governmental activities	
$	
(54,904) $	
53,170	
(1,734)	

 Net position (deficit) ‐ beginning of year	(20,831)

 Net position (deficit) ‐ end of year	$	(22,565)

The accompanying notes are an integral part of these financial statements.
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Ranches at Lake McLeod Community Development District
Balance Sheet – Governmental Funds

September 30,		2022		
			Total	
			Governmental	
	General	Capital Projects	Funds	
Assets
Cash and cash equivalents	
$	9,469	
$	‐	
$	9,469	
Due from developer	31,388	‐	31,388	
Prepaid expenditures	150	‐	150	
Total assets	$	41,007	$	‐	$	41,007	

Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities

Accounts payable	$	29,251	$	1,245	$	30,496	
Due to developer	‐	15,800	15,800	
Total liabilities	29,251	17,045	46,296	

Deferred inflows of resources

Deferred revenue	17,276	‐	17,276	
Total deferred inflows of resources	17,276	‐	17,276	

Fund balances				
Nonspendable	150		‐	150	
Unassigned	(5,670)		(17,045)	(22,715)	
Total fund balance (deficit)	(5,520)		(17,045)	(22,565)	

Total liabilities, deferred inflows of resources and fund balance (deficit)	

$	41,007	

$	

‐	

$	41,007	

Ranches at Lake McLeod Community Development District Statement of Revenue, Expenditures and Changes in Fund Balances ‐
Governmental Funds

For the year ended September 30,		2022		
			Total	
		Capital	Governmental	
	General	Projects	Funds	
Revenue
Developer contributions	
$	60,606	
$	‐	
$	60,606	
Total revenue	60,606	‐	60,606	

Expenditures
Current:
General government	

53,504	

‐	

53,504	
Debt service:
Bond issue costs	
‐	
1,400	
1,400	
Total expenditures	53,504	1,400	54,904	

Excess (deficit) of revenue over expenditures	
7,102	
(1,400)	
5,702	
Fund balance (deficit), beginning of year	(12,622)	(15,645)	(28,267)	

Fund balance (deficit), end of year	
$	(5,520)	
$	(17,045)	
$	(22,565)	

Ranches at Lake McLeod Community Development District Reconciliation of the Statement of Revenue, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

For the year ended September 30,	2022	

Net change in fund balances ‐ governmental fund	
$	5,702	
Certain revenue amounts that did not represent current financial resources in the		
prior year were deferred in the fund level financial statements but were		
recognized as revenue in the government‐wide financial statements in the prior
year.	
(7,436)	

Change in net position of governmental activities	
$	(1,734)	

Ranches at Lake McLeod Community Development District
Notes to Financial Statements

NOTE 1: NATURE OF ORGANIZATION

The Ranches at Lake McLeod Community Development District (the “District”) was established on October 5, 2020 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, by City of Eagle Lake Ordinance O‐21‐01. 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 a Board of Supervisors (“Board”), which is comprised of five members. The current Supervisors have been elected by the landowners. At September 30, 2022, all of the Supervisors are affiliated with the developer of the community, Ranches at Lake McLeod, LLC. The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes.

The Board has the final responsibility for:
Assessing and levying assessments.
Approving budgets.
Exercising control over facilities and properties.
Controlling the use of funds generated by the District.
Approving the hiring and firing of key personnel.
Financing improvements.

In evaluating how to define the government, for financial reporting purposes, management has considered all potential component units. The decision to include or exclude a potential component unit in the reporting entity was made by applying the criteria set forth by Generally Accepted Accounting Principles (GAAP) as defined by the Governmental Accounting Standards Board (GASB). Based on the foregoing criteria, no potential component units were found.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the District conform to GAAP as applicable to governments in accordance with those promulgated by GASB. The following is a summary of the more significant policies:

Government‐wide and Fund Financial Statements

The basic financial statements include both government‐wide and fund financial statements.

Ranches at Lake McLeod Community Development District
Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The government‐wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the non‐fiduciary activities of the primary government. Governmental activities, which normally are supported by assessments, are reported separately from business‐type activities, which rely to a significant extent on fees and charges for support. The business‐type activities are reported separately in government‐wide financial statements; however, at September 30, 2022, the District did not have any significant business‐type activities. Therefore, no business‐type activities are reported. Assessments and other items not properly included as program revenues (i.e., charges to customers or applicants who purchase, use, or directly benefit from goods or services) are reported as general revenues.

Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting and Basis of 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 the related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and other 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 District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

Developer contributions associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenue of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental funds:

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

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.

Ranches at Lake McLeod Community Development District
Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For the year ended September 30, 2022, the District does not report any proprietary funds.

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, then unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for use in the governmental fund financial statements, it is the government’s policy to use committed resources first, followed by assigned resources, then unassigned resources as needed.

Cash, Deposits and Investments

The District maintains deposits with "Qualified Public Depositories" as defined in Chapter 280, Florida Statutes. All Qualified Public Depositories must place with the Treasurer of the State of Florida securities in accordance with collateral requirements determined by the State’s Chief Financial Officer. In the event of default by a Qualified Public Depository, the State Treasurer will pay public depositors all losses. Losses in excess of insurance and collateral will be paid through assessments between all Qualified Public Depositories.

Under this method, all the District's deposits are fully insured or collateralized at the highest level of security as defined by GASB, Statement Number 40, Deposits and Investment Disclosures (An Amendment of GASB, Statement Number 3).

The District is authorized to invest in financial instruments as established by Section 218.415, Florida Statutes. The authorized investments include among others negotiable direct or indirect obligations which are secured by the United States Government; the Local Government Surplus Trust Funds as created by Section 218.405, Florida Statutes; SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency; and interest‐bearing time deposits or savings accounts in authorized financial institutions.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position and balance sheet – governmental funds will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District does not have any of this type of item at September 30, 2022.

Ranches at Lake McLeod Community Development District
Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In addition to liabilities, the statement of financial position and balance sheet – governmental funds will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District only has one item that qualifies for reporting in this category: deferred revenue, which is reported in the Statement of Net Position and Balance Sheet – Governmental Funds. Deferred revenue resulted from funding requested from the developer prior to September 30, 2022 for expenditures related to fiscal year 2023.

Fund Equity

Net position in the government‐wide financial statements represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources and is categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents assets related to infrastructure and property, plant and equipment, net of any related debt. Restricted net position represents the assets restricted by the District’s bond covenants.

Governmental fund equity is classified as fund balance. Fund balance is further classified as nonspendable, restricted, committed, assigned, or unassigned. Nonspendable fund balance cannot be spent because of its form. Restricted fund balance has limitations imposed by creditors, grantors, or contributors or by enabling legislation or constitutional provisions. Committed fund balance is a limitation imposed by the District board through approval of resolutions. Assigned fund balance is a limitation imposed by a designee of the District board. Unassigned fund balance in the General Fund is the net resources in excess of what can be properly classified in one of the above four categories. Negative unassigned fund balance in other governmental funds represents excess expenditures incurred over the amounts restricted, committed, or assigned to those purposes.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Budgets

The District is required to establish a budgetary system and an approved annual budget. Annual budgets are legally adopted on a basis consistent with GAAP for the General Fund. Any revision to the budget must be approved by the District Board. The budgets are compared to actual expenditures. In instances where budget appropriations and estimated revenues have been revised during the year, budget data presented in the financial statements represent final authorization amounts.

Ranches at Lake McLeod Community Development District
Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1.
A public hearing is conducted to obtain comments.
Prior to October 1, the budget is legally adopted by the District Board.
All budget changes must be approved by the District Board, unless otherwise delegated by the District Board.
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

Subsequent Events

Management has evaluated subsequent events through the date that the financial statements were available to be issued, November 16, 2023, and determined there were no events that occurred that require disclosure. No subsequent events occurring after this date have been evaluated for inclusion in these financial statements.

NOTE 3: 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 maintains commercial insurance coverage to mitigate the risk of loss. Coverage may not extend to all situations. Management believes such coverage is sufficient to preclude any significant uninsured losses to the District. As of the date of this report, the District has not filed any claims against this commercial coverage.

NOTE 4: 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.

Ranches at Lake McLeod Community Development District
Notes to Financial Statements

NOTE 5: RELATED PARTY TRANSACTIONS

The Developer has agreed to fund the general operations of the District. For the year ended September 30, 2022, Developer contributions totaled $53,170. At September 30, 2022, the Developer owed the District $31,388, which is reported as Due from developer on the accompanying Statement of Net position and Balance Sheet – Governmental Funds. The District owed the Developer $15,800 for certain cost of issuance expenses which will be repaid upon issuance of bonds.

NOTE 6: SUBSEQUENT EVENTS

In June 2023, the District issued $5,665,000 of Series 2023 Special Assessment bonds with interest rates ranging from 4.625% to 5.50%. The bonds were issued to finance the acquisition and construction of the Assessment Area One Master Infrastructure Project. Interest is due semiannually on June 15 and December 15. Principal payments on the Series 2023 Bonds are made serially commencing on December 15, 2024 through December 15, 2053.

Required Supplemental Information (Other than MD&A)

Ranches at Lake McLeod Community Development District Budget to Actual Comparison Schedule – General Fund

For the year ended September 30,		2022		
	Original and	Actual	Variance with	
	Final Budget	Amounts	Final Budget	

Revenue
Developer contributions	

$	87,290	

$	60,606	

$	(26,684)	
Total revenue	87,290	60,606	(26,684)	

Expenditures
General government	

87,290	

53,504	

33,786	
Total expenditures	87,290	53,504	33,786	

Excess of revenue over expenditures	
$	‐	
$	7,102	
$	7,102	

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
Ranches at Lake McLeod Community Development District City of Eagle Lake, 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 Ranches at Lake McLeod Community Development District (hereinafter referred to as the “District”), as of and for the year ended September 30, 2022, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 16, 2023.

Report on 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 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 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify a deficiency in internal control described below as IC2022‐01 that we consider to be a material weakness.

IC 2022‐01: Financial Statement Close

Condition: The District did not accrue approximately $12,000 in general government and cost of issuance expenditures as of prior year‐end. In addition, the District did not record funding related to prior year expenses totaling approximately $6,000.

Criteria: Internal controls should be in place to provide reasonable assurance that payables and the related expenditures are appropriately accrued and that Developer contributions are recorded in the proper period.

Cause: The accrual of payables and developer funding appear to have been overlooked when the District staff was preparing its annual financial report.

Effect: Current year expenses were overstated by approximately $12,000. In addition, developer advances were overstated by $6,000.

Recommendation: We recommend the District review the general vendor activity within a reasonable timeframe from year‐end to ensure that all applicable liabilities are identified and recorded in the proper period. Further, we recommend the District compare invoices included with developer funding requests to ensure that developer contributions are recorded in the proper period.

The District’s response to the finding identified in our audit is described below. The District’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Management response: The District has already taken further steps to ensure that this oversight is avoided in the future.

Report on 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 grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 District’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 District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida November 16, 2023

MANAGEMENT LETTER

To the Board of Supervisors
Ranches at Lake McLeod Community Development District City of Eagle Lake, Florida

Report on the Financial Statements

We have audited the financial statements of the Ranches at Lake McLeod Community Development District (“District”) as of and for the fiscal year ended September 30, 2022, and have issued our report thereon dated November 16, 2023.

Auditors’ 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 Auditors’ Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards and Independent Accountant’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 November 16, 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 annual financial audit report. This is the first year the District was required to have an annual financial audit performed.

Official Title and Legal Authority

Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The information required is disclosed in the notes to the financial statements.

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

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 the District. It is management’s responsibility to monitor the District’s 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.

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

As required by section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the Auditor General, the Ranches at Lake McLeod Community Development District reported:

The total number of district employees compensated in the last pay period of the district’s fiscal year as 0.

The total number of independent contractors to whom nonemployee compensation was paid in the last month of the district’s fiscal year as 5.

All compensation earned by or awarded to employees whether paid or accrued, regardless of contingency as $0.

All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of contingency as $4,737.

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 of the fiscal year being reported, together with the total expenditures for such project as $0.

The District did not amend its final adopted budget under Section 189.016(6).

Additional Matters

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

Purpose of this Letter

Our management letter is intended solely for the information and use of 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.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida November 16, 2023

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Supervisors
Ranches at Lake McLeod Community Development District City of Eagle Lake, Florida

We have examined Ranches at Lake McLeod Community Development District’s compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2022. Management of the District is responsible for the District’s compliance with the specified requirements. Our responsibility is to express an opinion on the District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and performed the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced above. 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.

We are required to be independent and to meet our ethical responsibilities in accordance with relevant ethical requirements relating to the engagement.

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 year ended September 30, 2022.

This report is intended solely for the information and use of management and the State of Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties.

CARR, RIGGS & INGRAM, LLC

Miramar Beach, Florida November 16, 2023