Poinciana West

Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2017

Poinciana West Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2017

TABLE OF CONTENTS

	Page	
	Number	
REPORT OF INDEPENDENT AUDITORS	1-2	
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-8	
BASIC FINANCIAL STATEMENTS:		
Government-wide Financial Statements		
Statement of Net Position	9	
Statement of Activities	10	
Fund Financial Statements:		
Balance Sheet – Governmental Funds	11	
Reconciliation  of  Total  Governmental  Fund  Balances  to  Net		
Position of Governmental Activities	12	
Statement of Revenues, Expenditures and Changes in Fund		
Balances – Governmental Funds	13	
Reconciliation of the Statement of Revenues, Expenditures and		
Changes in Fund Balances of Governmental Funds to the		
Statement of Activities	14	
Statement of Revenues, Expenditures and Changes in Fund		
Balances – Budget and Actual – General Fund	15	
Notes to Financial Statements	16-30	
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	31-32	
MANAGEMENT LETTER	33-34	
INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH		
SECTION 218.415, FLORIDA STATUTES	35	

Poinciana West Community Development District

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Year Ended September 30, 2017

Management’s discussion and analysis of Poinciana West Community Development District (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 private-sector companies. Emphasis is placed on the net position of governmental activities and the change in net position. Governmental activities are primarily supported by special assessments.

The statement of net position presents information on all position and liabilities of the District, with the difference between position 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 financed by the District include general government, physical environment and interest on long term debt.

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.

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Poinciana West Community Development District

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances – budget and actual is provided for the District’s General Fund. Fund financial statements provide more detailed information about the District’s activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements.

The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District’s financial standing. These statements are comparable to private-sector companies and give a good understanding of the District’s overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of the District, including land, infrastructure and improvements are reported in the statement of net position. All liabilities, including principal outstanding on bonds are included. The statement of activities includes depreciation on all long-lived assets of the District, but transactions between the different functions of the District have been eliminated in order to avoid “doubling up” the revenues and expenses. The fund financial statements provide a picture of the major funds of the District. In the case of governmental activities, outlays for long lived assets are reported as expenditures and long-term liabilities, such as general obligation bonds, are not included in the fund financial statements. To provide a link from the fund financial statements to the government-wide financial statements, a reconciliation is provided from the fund financial statements to the government-wide financial statements.

Notes to financial statements provide additional detail concerning the financial activities and financial balances of the District. Additional information about the accounting practices of the District, investments of the District, capital assets and long-term debt are some of the items included in the notes to financial statements.

Financial Highlights

The following are the highlights of financial activity for the year ended September 30, 2017.

♦	The District’s total assets exceeded total liabilities by $2,852,994 (net position). Unrestricted net position for Governmental Activities were $577,149. Net investment in capital assets was $2,240,856. Restricted net position was $34,989.

♦	Governmental activities revenues totaled $1,514,257 while governmental activities expenses totaled $1,558,666.

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Poinciana West Community Development District

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District

The following schedule provides a summary of the assets, liabilities and net position of the District and is presented by category for comparison purposes.

Net Position						
		Governmental	Activities	
		2017				2016	
Current assets	$	900,771			$	605,440	
Restricted assets		788,258				1,497,976	
Capital assets, net	14,385,054			14,515,733	
Deferred outflows		399,075				-	
Total Assets and Deferred Outflows	16,473,158			16,619,149	
Current liabilities		701,802				679,343	
Non-current liabilities	12,918,362			13,042,403	
Total Liabilities	13,620,164			13,721,746	
Net investment in capital assets		2,240,856				1,138,330	
Net position - restricted		34,989				1,166,510	
Net position - unrestricted		577,149				592,563	
Total Net Position	$	2,852,994			$	2,897,403	

The decrease in capital assets is mainly related to depreciation on those assets in the current year net of capital additions.

The decrease in restricted assets and restricted net position is related to the use of available funds for the bond refunding that occurred in the current year.

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Poinciana West Community Development District

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District (Continued)

The following schedule provides a summary of the changes in net position of the District and is presented by category for comparison purposes.

Change in Net Position				
				Governmental	Activities		
Program Revenues	2017				2016		
	$ 1,507,363			$	1,450,372		
Charges for services							
General Revenues									
Investment earnings	6,837				2,503		
Miscellaneous	57				-		
Total Revenues		1,514,257				1,452,875		
Expenses									
General government	163,326				173,730		
Physical environment	479,508				429,349		
Interest on long-term debt	915,832				813,913		
Total Expenses			1,558,666				1,416,992		
Change in Net Position	(44,409)				35,883		
Net Position - Beginning of Year		2,897,403				2,861,520		
Net Position - End of Year	$ 2,852,994			$	2,897,403		

The increase in interest on long-term debt is related to the bond refunding in the current year.

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Poinciana West Community Development District

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Capital Assets Activity

The following schedule provides a summary of the District’s capital assets activity as of September 30, 2017 and 2016:

			Governmental Activities		
Description			2017			2016		
Capital assets not being depreciated:							
Land improvements	$	6,645,273	$	6,645,273		
Capital assets being depreciated:					10,216,336		
Infrastructure		10,446,892					
Accumulated depreciation		(2,707,111)			(2,345,876)		
Total Capital Assets, depreciated		7,739,781			7,870,460		
Total Capital Assets	$	14,385,054	$	14,515,733		

During the year, depreciation was $361,235 and capital additions were $230,556.

General Fund Budgetary Highlights

The budget exceeded governmental expenditures primarily because of lower repairs and maintenance and contingency expenditures than were expected.

The budget was amended for increased landscape and aquatics maintenance expenditures.

Debt Management

Governmental Activities debt includes the following:

♦	In October 2007, the District issued $15,860,000 Series 2007 Special Assessment Bonds. The Bonds were issued to finance the acquisition and construction of certain improvements within the District. The Series 2007 Bonds were refunded and redeemed during the current fiscal year

♦	In February 2017, the District issued $11,215,000 Series 2017-1 Senior Special Assessment Refunding Bonds and $2,945,000 Series 2017-2 Subordinate Special Assessment Refunding Bonds. These bonds were issued to refund and redeem the Series 2007 Special Assessment Bonds. The balance of the Series 2017-1 and Series 2017-2 Bonds were $10,730,000 and $2,820,000, respectively at September 30, 2017.

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Poinciana West Community Development District

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Year Ended September 30, 2017

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Economic Factors and Next Year’s Budget

The District does not expect any economic factors to affect operations during the year ended September 30, 2018.

Request for Information

The financial report is designed to provide a general overview of Poinciana West Community Development District’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Poinciana West Community Development District, Governmental Management Services-CF, LLC, 1412 S Narcoossee Rd., St. Cloud, FL 34771.

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Poinciana West Community Development District

STATEMENT OF NET POSITION

September 30, 2017

	Governmental		
ASSETS		Activities		
				
Current Assets:				
Cash and cash equivalents	$	567,180		
Accounts receivable		4,987		
Assessments receivable		2,678		
Prepaid expenses		325,926		
Total Current Assets		900,771		
Non-current Assets:				
Restricted assets:				
Investments		788,258		
Capital assets not being depreciated:				
Land improvements		6,645,273		
Capital assets being depreciated:				
Infrastructure		10,446,892		
Less: accumulated depreciation		(2,707,111)		
Total Non-current Assets		15,173,312		
Total Assets		16,074,083		
DEFERRED OUTFLOW OF RESOURCES		399,075		
Deferred amount on refunding				
Total Assets and Deferred Outflow of Resources		16,473,158		
LIABILITIES				
Current Liabilities:				
Accounts payable		6,680		
Accrued interest payable		230,122		
Bonds payable		465,000		
Total Current Liabilities		701,802		
Non-current liabilities:				
Bonds payable		12,918,362		
Total Liabilities		13,620,164		
NET POSITION				
Net investment in capital assets		2,240,856		
Restricted for debt service		34,989		
Unrestricted		577,149		
Total Net Position	$	2,852,994		

See accompanying notes.

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Poinciana West Community Development District

STATEMENT OF ACTIVITIES

For the Year Ended September 30, 2017

							Net (Expense)		
							Revenues and		
					Program			Changes in		
					Revenues		Net Position		
					Charges for		Governmental		
Functions/Programs		Expenses			Services			Activities		
Governmental Activities	$	(163,326)		$	151,197	$	(12,129)		
General government									
Physical environment		(479,508)			109,490			(370,018)		
Interest on long-term debt		(915,832)			1,246,676			330,844		
Total Governmental Activities	$	(1,558,666)		$	1,507,363			(51,303)		
	General revenues:							
		Investment earnings				6,837		
		Miscellaneous					57		
		Total General Revenues			6,894		
	Change in Net Position				(44,409)		
	Net Position - October 1, 2016			2,897,403		
	Net Position - September 30, 2017		$	2,852,994		

See accompanying notes.

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Poinciana West Community Development District

BALANCE SHEET

GOVERNMENTAL FUNDS

September 30, 2017

								Total		
					Debt		Governmental		
ASSETS		General		Service 01			Funds		
Cash and cash equivalents	$	567,180	$	-	$	567,180		
Accounts receivable		4,987			-			4,987		
Assessments receivable		484			2,194			2,678		
Due from other funds		11,178			-			11,178		
Restricted assets - investments at fair value		-			788,258			788,258		
Total Assets	$	583,829	$	790,452	$	1,374,281		
LIABILITIES AND FUND BALANCES										
										
LIABILITIES										
Accounts/contracts payable	$	6,680	$	-	$	6,680		
Due to other funds		-			11,178			11,178		
Total Liabilities		6,680			11,178			17,858		
FUND BALANCES										
Reserved for:										
Debt service		-			779,274			779,274		
Assigned - operating reserve		65,156			-			65,156		
Unreserved and undesignated		511,993			-			511,993		
Total Fund Balances		577,149			779,274			1,356,423		
Total Liabilities and Fund Balances	$	583,829	$	790,452	$	1,374,281		

See accompanying notes.

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Poinciana West Community Development District

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES
TO NET POSITION OF GOVERNMENTAL ACTIVITIES

September 30, 2017

Total Governmental Fund Balances	$	1,356,423		
Amounts reported for governmental activities in the Statement of Net Position				
are different because:				
Capital assets not being depreciated (land improvements ($6,645,273)				
used in governmental activities are not current financial resources				
and are not reported at the fund statement level.		6,645,273		
Capital assets being depreciated, infrastucture ($10,446,892) net of				
net of accumulated depreciation ($(2,707,111)), used in				
governmental activities are not current financial resources and				
therefore, are not reported at the fund level.		7,739,781		
Deferred outflow of resources are not current financial resources and therefore,				
are not reported at the fund level.		399,075		
Prepaid bond insurance, Net ($325,926) are not current financial resources				
and therefore, are not reported at the fund level.		325,926		
Long-term liabilities, including bonds payable ($(13,550,000)), less net bond				
discount ($166,638) are not due and payable in the current period and		(13,383,362)		
therefore, are not reported at the fund level.				
Accrued interest expense for long-term debt is not a current financial use				
and therefore, is not reported at the fund statement level.			(230,122)		
Net Position of Governmental Activities	$	2,852,994		

See accompanying notes.

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Poinciana West Community Development District

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES -

GOVERNMENTAL FUNDS

For the Year Ended September 30, 2017

													Total		
					Debt			Debt			Capital		Governmental		
Revenues		General			Service			Service 01			Projects		Funds		
															
Special assessments	$	260,687	$	1,073,324	$	173,352	$	-	$ 1,507,363		
Investment earnings		5,441			628			764			4	6,837		
Miscellaneous		57			-			-			-	57		
Total Revenues		266,185			1,073,952			174,116			4		1,514,257		
Expenditures															
Current															
General government		163,326			-			-			-	163,326		
Physical environment		118,273			-			-			-	118,273		
Capital outlay		-			223,343			-			7,213	230,556		
Debt service															
Principal		-			688,867			13,325,076			1,057	14,015,000		
Interest		-			784,068			142,178			-	926,246		
Other debt service		-			39,109			746,714			-	785,823		
Total Expenditures		281,599			1,735,387			14,213,968			8,270		16,239,224		
Revenue over/under expenditures		(15,414)			(661,435)	(14,039,852)			(8,266)	(14,724,967)		
Other financing sources/(uses)															
Issuance of long-term debt		-			-			14,160,000			-	14,160,000		
Bond discount		-			-			(171,602)			-	(171,602)		
Transfers in		-			-			830,728			-	830,728		
Transfers out		-			(830,726)			-			(2)	(830,728)		
Total Other Financing Sources/(Uses)		-			(830,726)			14,819,126			(2)		13,988,398		
Net change in fund balances		(15,414)	(1,492,161)			779,274			(8,268)	(736,569)		
Fund Balances - October 1, 2016		592,563			1,492,161			-			8,268		2,092,992		
Fund Balances - September 30, 2017	$	577,149	$	-	$	779,274	$	-	$ 1,356,423		

See accompanying notes.

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Poinciana West Community Development District

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES

For the Year Ended September 30, 2017

Net Change in Fund Balances - Total Governmental Funds	$   (736,569)

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

Capital outlay, reported as expenditures in the governmental funds, is shown as an addition to capital assets on the Statement of Net Position.

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation. This is the amount of depreciation in the current period.

Bond insurance is reflected as an other debt service cost at the fund level but is treated as a prepaid expense and amortized over the life of the bonds at the government-wide level.

Bond proceeds ($(14,160,000)) and bond discounts ($171,602) are recorded as an other financing sources(uses) at the fund level but increase liabilities at the government-wide level.

The deferred amount on refunding is recognized as an other debt service cost at the fund level, however since it is not a current use it is treated as a deferred outflow of resources at the government-wide level.

Repayment of long-term liabilities are reported as expenditures in the governmental fund statement, but such repayments reduce liabilities in the

Statement of Net Position.

Amortization expense of a bond discount and prepaid bond insurance does not require the use of current resources and therefore is not reported in the governmental funds. This is the amount of amortization in the current period.

The deferred amount of refunding is amortized in the Statement of Activities, but not in the governmental funds. This is the amount of amortization in the current year.

In the Statement of Activities, interest is accrued on outstanding bonds; whereas in governmental funds, interest expenditures are reported when due. This is the change in accrued interest from the prior year to the current year.

Change in Net Position of Governmental Activities

230,556

(361,235)

335,634

(13,988,398)

383,365

14,015,000

(14,672)

(11,887)

103,797

$	(44,409)

See accompanying notes.

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Poinciana West Community Development District

STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL -
GENERAL FUND
For the Year Ended September 30, 2017

							Variance with		
							Final Budget		
	Original		Final					Positive		
Revenues	Budget		Budget		Actual		(Negative)		
										
Special assessments	$ 259,623	$ 259,623	$ 260,687	$	1,064		
Investment earnings	1,000	1,000	5,441			4,441		
Miscellaneous	-	-	57			57		
Total Revenues	260,623		260,623		266,185			5,562		
Expenditures										
Current										
General government	161,333	161,333	163,326			(1,993)		
Physical environment	99,290	141,290	118,273			23,017		
Total Expenditures	260,623		302,623		281,599			21,024		
Net change in fund balances	-	(42,000)	(15,414)			26,586		
Fund Balances - October 1, 2016	592,562		592,562		592,563			1		
Fund Balances - September 30, 2017	$ 592,562	$ 550,562	$ 577,149	$	26,587		

See accompanying notes.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

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 October 6, 2006, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes and Polk County Ordinance 2006-052, as amended by Polk County Ordinances 2007-043 and 2016-043. 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 Poinciana West Community Development District. The District is governed by a five-member Board of Supervisors who are elected on an at- large basis in a general election by qualified electors within the District. The District operates within the criteria established by Chapter 190.

The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility. Oversight responsibility includes, but is not limited to, financial interdependency, designation of management, significant ability to influence operations and accountability for fiscal matters. As required by GAAP, these financial statements present the Poinciana West Community Development District (the primary government) as a stand-alone government.

Based upon the application of the above-mentioned criteria as set forth by the Governmental Accounting Standards Board, the District has identified no component units.

2.  Measurement Focus and Basis of Accounting

The basic financial statements of the District are composed of the following:

•	Government-wide financial statements

•	Fund financial statements

•	Notes to financial statements

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.	Measurement Focus and Basis of Accounting (Continued)

a.	Government-wide Financial Statements

	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. Program revenues include charges for services and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program.

	Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as 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 or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

	Fund financial statements for the primary government’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.	Measurement Focus and Basis of Accounting (Continued)

b.	Fund Financial Statements (Continued) Governmental Funds

	When both restricted and unrestricted resources are combined in a fund, qualified expenses are considered to be paid first from restricted resources, and then from unrestricted resources. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered to be available when they are collected within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

	Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period.

	Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

	Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

	Amounts expended to acquire capital assets are recorded as expenditures in the year that resources are expended, rather than as fund assets. 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.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 – Account for debt service requirements to retire the capital improvement revenue and refunding bonds which were used to refund the capital improvement bonds issued to finance the construction of District infrastructure improvements and fund the cost to acquire, construct and equip the Series 2016 Project.

	Capital Projects Funds – The Capital Projects Funds account for the construction of improvements within the District.

b.	Non-current Governmental Assets/Liabilities

	GASB Statement 34 requires that non-current governmental assets, such as land and buildings, and non-current governmental liabilities, such as 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, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.	Assets, Liabilities, and Net Position or Equity (Continued)

b.	Restricted Net Position

	Certain net position of the District will be classified as restricted 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 net position, 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 land improvements, improvements other than buildings, and equipment are reported in governmental activities.

	The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. The valuation basis for all assets is historical cost.

	The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.

Depreciation of capital assets is computed and recorded by utilizing the straight-line method over the assets’ estimated useful lives ranging from 5 to 30 years.

d.  Bond Insurance

Bond insurance associated with the issuance of long-term debt is treated as a prepaid expense and amortized over the life of the debt.

e.	Deferred Outflows of Resources

	Deferred outflow of resources is the consumption of net position by the government that is applicable to a future reporting period. Deferred amount on refunding is amortized and recognized as a component of interest expense over the life of the bond.

f.	Bond Discounts

	Bond discounts associated with the issuance of bonds are amortized over the life of the bonds using the straight line method of accounting.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.	Assets, Liabilities, and Net Position or Equity (Continued)

g.	Budgets

	Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to Chapter 190 and Section 200.065, Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. Formal budgets are adopted for the general fund. The legal level of budgetary control is at the fund level. As a result, deficits in the budget columns of the accompanying financial statements may occur. All budgeted appropriations lapse at year end

h.	Net Position

	Net position represents the difference between assets and liabilities and are reported in three categories. Net investment in capital assets represents capital assets, net of accumulated depreciation and any outstanding debt related to those assets. Net position is reported as restricted when there are legal limitations imposed on their use by legislation, or external restrictions imposed by other governments, creditors, or grantors. Unrestricted net position are assets that do not meet definitions of the classifications previously described.

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 ($1,356,423) differs from “net position” of governmental activities ($2,852,994) 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 (improvements and equipment that are to be used in governmental activities) are purchased or constructed, the cost of those assets is reported as expenditures in governmental funds. However, the Statement of Net Position includes those capital assets among the assets of the District as a whole.

Land improvements	$	6,645,273	
Infrastructure			10,446,892	
Accumulated depreciation			(2,707,111)	
Total		$	14,385,054	
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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

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)

	Deferred amount on refunding

	The difference between the outstanding balance of the old debt and the cost of the new debt is a deferred outflow of resources. This balance is amortized over the life of the new debt. The unamortized balance is reflected as deferred amount on refunding.

Deferred amount on refunding	$	399,075

Long-term debt transactions

Long-term liabilities applicable to the District’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position. Balances at September 30, 2017 were:

Bonds payable	$	(13,550,000)	
Bond discount, net		166,638		
Total	$	(13,383,362)	

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	$	(230,122)

Prepaid bond insurance

The bond insurance purchased on the refunding bonds issued in the current year are not

current financial  resources and therefore are not reported at the fund level.		
Prepaid bond insurance, net	$	325,926	

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED)

2.	Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities

	The “net change in fund balances” for government funds ($(736,569)) differs from the “change in net position” for governmental activities ($(44,099)) reported in the Statement of Activities. The differences arise primarily from the long-term economic focus of the Statement of Activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below.

	Capital related items

	When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation. As a result, fund balances decrease by the amount of financial resources expended, whereas net position decrease by the amount of depreciation charged for the year.

Depreciation	$	(361,235)	
Capital outlay		230,556		
Total	$	(130,679)		

Amortization

Amortization expense of the deferred amount on refunding and prepaid bond insurance does not require the use of current resources and therefore is not reported in the governmental funds.

Amortization of prepaid bond insurance	$	(9,708)		
Amortization of bond discount			(4,964)		
Amortization of deferred amount on refunding			(11,887)	
Total	$	(26,559)		

Long-term debt transactions

Some expenses reported in the Statement of Activities do not require the use of current financial resources, therefore, are not reported as expenditures in governmental funds.

Net decrease in accrued interest payable	$	103,797

Deferred amount on refunding and prepaid bond insurance are recognized as other debt service costs at the fund level. Since they do not use current resources they are added to the balance sheet and expensed over the life of the new debt.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

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 (Continued)

	Deferred amount on refunding and prepaid bond insurance are recognized as other debt service costs at the fund level. Since they do not use current resources they are added to the balance sheet and expensed over the life of the new debt.

Prepaid bond insurance	$	335,634	
				
Deferred amount on refunding	$	383,365	

The issuance of new debt and the repayment of long-term liabilities is reported as an other financing source, net of bond discount and as an expenditure at the fund level, but such repayments reduce long-term liabilities at the government-wide level.

Issuance of long-term debt	$	(14,160,000)	
Bond discount		171,602	
Debt principal payments		14,015,000	
Total	$	26,602		

NOTE C – CASH AND DEPOSITS

All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash and investments.

Custodial Credit Risk – Deposits

Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District follows the provisions of Chapter 280, Florida Statutes regarding deposits and investments to manage custodial credit risk. The District maintains all deposits in a qualified public depository, so that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes. As of September 30, 2017, the District's bank balance was $583,598 and the carrying value was $567,180.

As of September 30, 2017, the District had the following investments and maturities:

Investment		Maturities		Fair Value	
US Bank NA Commercial Paper		N/A	788,258	

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE C – CASH AND DEPOSITS (CONTINUED)

Custodial Credit Risk – Deposits (Continued)

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 uses 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 investment in US Bank Commercial Paper is a Level 1 asset.

Investments

The District’s investment policy allows management to invest funds in investments permitted under Section 218.415, Florida Statutes. Among other investments, the policy allows the District to invest in the State Board of Administration Local Government Surplus Trust Funds.

Cash placed with the State Board of Administration represents the District’s participation in the Local Government Surplus Trust Funds Investment Pool and is reported at fair value. As a pool participant the District invests in pools of investments in which shares are owned in the pool rather than the underlying investments.

Interest Rate Risk

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

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE C – CASH AND DEPOSITS (CONTINUED)

Credit Risk

The District's investments in treasury funds, commercial paper, 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.

Concentration of Credit Risk

The District places no limit on the amount it may invest. The investment in US Bank Commercial Paper represents 100% of the District's total investments.

The types of deposits and investments and their level of risk exposure as of September 30, 2017 were typical of these items during the fiscal year then ended. As of September 30, 2017, the District's investment in the US Bank Commercial Paper was rated A- 1+ by Standard & Poor's. The District considers any decline in fair value for certain investments to be temporary.

NOTE D – SPECIAL ASSESSMENT REVENUES

Assessments are non-ad valorem assessments on benefitted property within the District. Operating and Maintenance Assessments are based upon adopted budget and levied annually. Debt Service Assessments are levied when bonds are issued and collected annually for the term of the bond. The District may collect assessments directly or utilize the uniform method of collection (Chapter 197.3632, Florida Statutes). Directly collected assessments are due as determined by annual assessment resolution adopted by the Board of Supervisors. Assessments collected under the uniform method are mailed by County Tax Collector on November 1 and due on or before March 31 of each year. Property owners may prepay a portion or all of the Debt Service Assessments on their property subject to various provisions in the bond documents.

Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE E – CAPITAL ASSETS

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

					Balance													Balance	
					10/1/16				Additions			Deletions					09/30/17		
Governmental Activities:																	
Capital assets, not depreciated:																	
Land and improvements		$	6,645,273		$	-			$	-			$	6,645,273		
Capital assets, being depreciated:																	
Infrastructure			10,216,336				230,556					-				10,446,892		
Less accumulated depreciation for:																	
Infrastructure		(2,345,876)				(361,235)					-				(2,707,111)		
Total Capital Assets Depreciated, Net			7,870,460				(130,679)					-				7,739,781		
Governmental Activities Capital Assets		$	14,515,733			$	(130,679)				$	-			$	14,385,054		

Depreciation of $361,235 was allocated to physical environment.

NOTE F – LONG-TERM DEBT

Governmental Activities

The following is a summary of activity for long-term debt of the Governmental Activities for the year ended September 30, 2017:

Long-term debt at October 1, 2016	$	13,405,000	
Issuance of long-term debt		14,160,000	
Principal payments		(14,015,000)	
Long-term debt at September 30, 2017	$	13,550,000	
Less: bond discount, net		(166,638)	
Bonds payable, net at September 30, 2017	$	13,383,362	

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE F – LONG-TERM DEBT (CONTINUED)

Long-term debt for Governmental Activities is comprised of the following:

Special Assessment Refunding Bonds				
$11,215,000  Series  2017-1  Senior  Special  Assessment				
Refunding Bonds due in annual principal installments beginning				
May 2017.  Interest at various rates between 2% and 4.3% is				
due May and November beginning May 2017. Current portion is				
$385,000.	$	10,730,000		
$2,945,000 Series 2017-2 Subordinate Special Assessment				
Refunding Bonds due in annual principal installments beginning				
May 2017. Interest at various rates between 5.375% and 5.7%				
is due May and November beginning May 2017. Current portion				
is $80,000.		2,820,000		
Bond payable		13,550,000	
Bond discount, net		(166,638)	
Bonds Payable, Net	$	13,383,362		

The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2017 are as follows:

Year Ending														
September 30,				Principal				Interest					Total	
2018	$	465,000	$	552,294	$	1,017,294	
2019				480,000				540,294					1,020,294	
2020				495,000				527,331					1,022,331	
2021				510,000				512,774					1,022,774	
2022				525,000				496,463					1,021,463	
2023-2027				2,940,000				2,182,571					5,122,571	
2028-2032				3,605,000				1,535,518					5,140,518	
2033-2037				4,530,000				647,234					5,177,234	
Totals		$	13,550,000		$	6,994,479		$	20,544,479	

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE F – LONG-TERM DEBT (CONTINUED)

Summary of Significant Bond Resolution Terms and Covenants

Significant Bond Provisions

The Series 2017-1 and Series 2017- 2 Bonds are subject to redemption at the option of the District prior to their maturity, in whole or in part, at any time after May 1, 2027 at a redemption price equal to the principal amount of the Series 2017-1 Bonds to be redeemed, together with accrued interest to the date of redemption. The Series 2017-1 and Series 2017-2 Bonds are subject to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Trust Indenture.

The Trust Indenture established certain amounts be maintained in a reserve account. In addition, the Trust Indenture has certain restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements.

Depository Funds

The bond resolution establishes certain funds and determines the order in which revenues are to be deposited into these funds. A description of the significant funds, including their purposes, is as follows:

Reserve Fund – The Series 2017-1 and Series 2017-2 Reserve Accounts were funded from the proceeds of the Series 2017-1 and Series 2017-2 Bonds in amounts equal to 50 percent of the outstanding Series 2017-1 and Series 2017-2 Bonds at issuance. Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture.

The following is a schedule of required reserve deposits as of September 30, 2017:

		Reserve			Reserve	
		Balance		Requirement	
Senior Special Assessment Refunding Bonds, Series 2017-1	$	392,766	$	392,337	
Subordinate Special Assessment Refunding Bonds, Series 2017-2	$	121,959	$	121,826	

In February 2017, the District issued $14,160,000 of Series 2017 Special Assessment Refunding Bonds, which retired the Series 2007 Special Assessment Bonds. The current refunding of the Series 2007 Special Assessment Bonds resulted in a deferred amount on refunding of $410,962. As a result of this transaction, the District decreases its aggregate debt payment for Series 2017 Bonds by $1,198,450 over the next 20 years and realized an economic gain of approximately $44,343.

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Poinciana West Community Development District

NOTES TO FINANCIAL STATEMENTS

September 30, 2017

NOTE G – RELATED PARTIES

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 of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, computer, and other administrative costs.

NOTE H – 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 for which the government carries commercial insurance.

NOTE I – REUSE FACILITY AGREEMENT

On March 20, 2013 an agreement was signed between the Poinciana West Community Development District and the Solivita West Community Association, Inc. (the “Association”). Per the agreement, the Association shall be responsible for the management and maintenance of the Reuse Facilities. The Association shall be solely responsible for the staffing, budgeting, financing, billing and collection of fees, assessments, service charges, etc., necessary to perform the inspection, operation and maintenance responsibilities set forth per the Agreement. The District shall pay the Association the sum of $10 per year for the provision of services pursuant to the terms of this Agreement.

The term of this Agreement is for a period commencing as of March 20, 2013 and ending on September 30, 2022, and shall be automatically renewed for additional 5 year periods after September 30, 2022, unless either party provides the other party at least 180 days written notice of its intent to not renew. The District shall have a right to terminate this Agreement effective immediately at any time due to the Association’s failure to perform in accordance with the terms of this Agreement or upon 365 days’ notice without a showing of cause.

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