Blackburn Creek Community Development District
FINANCIAL STATEMENTS

September 30, 2018

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REPORT
Independent Auditors' Report
FINANCIAL STATEMENTS

Blackburn Creek Community Development District
Table of Contents September 30, 2018
PAGE

Management's Discussion And Analysis (required supplemental information)	3
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position	8
Statement of Activities	9
Fund Financial Statements
Balance Sheet -Governmental Funds	10
Reconciliation of the Balance Sheet of Governmental Funds to the Statement
of Net Position	11
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds	12
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities	13
Notes to Financial Statements	14
Required Supplemental Information (other than MD&A)
Budget to Actual Comparison Schedule - General Fund	25
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	26
Management Letter	28
Independent Accountants' Report on Compliance with Section 218.415 Florida Statutes	30

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2018, 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.
Correction of an Error

As discussed in Note 11 to the financial statements, during the current year management determined that certain prior year retainage payable amounts were incorrectly recorded in the Capital Projects Fund. Our opinion is not modified with respect to this matter.
Other Matters

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally acceptedin the United States of America, whichconsisted 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 August 1, 2019, 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 solely 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 effectiveness of the District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government AuditingStandards in considering the District's internal control over financial reporting and compliance.

CARR, RIGGS & INGRAM, LLC
Miramar Beach, Florida August 1, 2019
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I	Management's Discussion And Analysis
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I	Blackburn Creek Community Development District Management's Discussion and Analysis

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Our discussion and analysis of the Blackburn Creek Community Development District's financial performance provides an overview of the District's financial activities for the fiscal year ended September 30, 2018. Pleaseread it in conjunction with the District's financialstatements, which begin on page 8.

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FINANCIAL HIGHLIGHTS

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At September 30, 2018, the assets of the District exceed its liabilities and deferred inflows of resources by approximately $4.9 million.

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During the fiscal year ended September 30, 2018, the District issued Series 2018A-1 and 2018A-2 Bonds totaling $9,715,000 and $2,880,000, respectively. These funds will be used to acquire and construct all or a portion of the 2018 project. The District incurred $398,473 of bond issue costs related to the Series 2018A-1 and 2018A-2 issue.

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During the fiscal year ended September 30, 2018, the District incurred additional capital outlay expenditures of approximately $7.2 million, incurred approximately $814,000 of interest expenditures and repaid approximately $2 million of outstanding long-term bond
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USING THE ANNUAL REPORT

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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.

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Reporting the District as a Whole

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Our analysis of the District as a whole begins on page 4. 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.

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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
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Blackburn Creek 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 6. 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.

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Governmentalfunds - 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. We describe the relationship {or differences) between governmental activities and governmental funds in a reconciliation with the fund financial statements.

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THE DISTRICT AS A WHOLE
The following table reflects the condensed Statement of Net Position and is compared to the prior year.

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September 30,	2018	2017	Change	
Assets
Current and other assets	$	7,937,252	$	2,917,480	$	5,019,772	
Capital assets, net	22,096,177	15,625,860	6,470,317	
Total assets	$	30,033,429	$ 18,543,340	$ 11,490,089	
Liabilities				
Current liabilities	$	1,316,294	$	1,236,687	$	79,607	
Other liabilities	23,777,510	13,231,915	10,545,595	
Total liabilities	25,093,804	14,468,602	10,625,202	
Deferred inflows of resources
Deferred revenue	
13,827	
13,827	
Total deferred inflows of resources	13,827	13,827	
Net position
Net investment in capital assets	
7,931,862	
6,567,522	
1,364,340	
Restricted for:
Debt service	
1,204,575	
1,073,118	
131,457	
Capital projects	567,618	623,885	{56,267)	
Unrestricted	{4,778,257)	{4,203,614)	(574,643)	
Total net position	4,925,798	4,060,911	864,887	

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Total liabilities, deferred inflows of
resources and net position	$	30,033,429 $ 18,543,340 $ 11,490,089
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Blackburn Creek Community Development District Management's Discussion and Analysis
For more detailed information, see the accompanying Statement of Net Position.
During the fiscal year ended September 30, 2018, total assets and liabilities increased from the prior year by approximately $11.5 million and $10.6 million, respectively, while deferred inflows of resources did not change from the prior year. The increase in both is largely the result of the issuance of the Series 2018A-1 and 2018A-2 bonds in the current year to fund the construction and acquisition of the 2018 project.
The following schedule compares the Statement of Activities for the current and previous fiscal year.

Year ended September 30,
Revenues:
Program revenues: Charges for services
Capital grants and contributions General revenues:

2018

$	2,434,235	$
733,378

2017

3,317,706	$
5,005

Change

{883,471)
728,373

Interest and other revenues	22,411	4,893	17,518	
Total revenues	3,190,024	3,327,604	(137,580)	
Expenses:				
General government	136,159	66,380	69,779	
Maintenance and infrastructure	198,172	110,088	88,084	
Interest	1,065,824	768,766	297,058	
Bond issuance costs	398,473		398,473	
Total expenses	2,325,137	945,234	1,379,903	
Change in net position	864,887	2,382,370	(1,517,483)	
Net position, beginning of year, as restated	4,060,911	1,678,541	2,382,370	
Net position, end of year	$	4,925,798	$	4,060,911	$	864,887	

For more detailed information, see the accompanying Statement of Activities.
Revenues decreased, while expenses increased from the prior year by approximately $138,000 and
$1.4 million, respectively. Revenues decreased due to fewer lotclosings occurring in the current year. Expenses increased due to the issuance of Series 2018A-1 and Series 2018A-2 bonds in the current year. The overall result was an $864,887 increase in net position for the fiscal year 2018.

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Blackburn Creek 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
reported a combined fund balance of approximately $7.4 million, which is an increase from prior year's restated balance that totaled approximately $2.1 million. Significant transactions are discussed below.
During the fiscal year ended September 30, 2018, the District issued Series 2018A-1 and 2018A-2 Bonds totaling $9,715,000 and $2,880,000, respectively. These funds will be used to acquire and construct all or a portion of the 2018 project. The District incurred $398,473 of bond issue costs related to the Series 2018A-1 and 2018A-2 issue.
During the fiscal year ended September 30, 2018, the District incurred additional capital outlay expenditures of approximately $7.2 million, incurred approximately $814,000 of interest expenditures and repaid approximately $2 million of outstanding long-term bond principal.
The overall increase in fund balance for the year ended September 30, 2018 totaled approximately
$5.3 million.

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At September 30, 2018, the District had approximately $22.1 million invested in capital assets (net of accumulated depreciation). This amount represents a net increase of approximately $6.5 millionfrom the fiscal year 2017 total.
A listing of capital assets by major category for the current and prior year follows:

September 30,	2018	2017	Change	

Capital assets not being depreciated	$	18,771,349	$ 12,102,860	$	6,668,489	
Capital assets being depreciated	3,853,264	3,853,264		
Total, prior to depreciation	22,624,613	15,956,124	6,668,489	
Accumulated depreciation	528,436	330,264	198,172	
Net capital assets	$	22,096,177	$ 15,625,860	$	6,470,317	
More information about the District's capital assets is presented in Note 4 to the financial statements.
Debt
At September 30, 2018, the District had approximately $24 million of long-term debt outstanding. This amount represents a net increase of approximately $10.7 million from the fiscal year 2017 total.

Blackburn Creek Community Development District Management's Discussion and Analysis
A listing of debt amounts outstanding for the current and prior year is as follows:

September 30,	2018	2017	Change	
Series 2013A	$	4,570,000	$	4,725,000	$	(155,000)	
Series 201SA-1	3,155,000	3,335,000	(180,000)	
Series 201SA-2	1,865,000	3,455,000	(1,590,000}	
Series 2018A-1	9,715,000		9,715,000	
Series 2018A-2	2,838,000		2,838,000	
Due to Developer	1,899,510	1,851,915	47,595	
	$	24,042,510	$ 13,366,915	$ 10,675,595	
More information about the District's long-term debt is presented in Note 5 to the financial statements.

GOVERNMENTAL FUNDS BUDGETARY HIGHLIGHTS
An Operating budget was established 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 25.
The District experienced an unfavorable variance expenditures as compared to the budget in the amount of $36,559, while revenues materially agreed to budget. The variance in expenditures occurred primarily due to unanticipated engineering and legal expenditures that were incurred during the year.

FUTURE FINANCIAL FACTORS

Blackburn Creek 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 2019 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 Blackburn Creek Community Development District's management company at 12051 Corporate Blvd., Orlando, Florida 32817.

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Basic Financial Statements

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September 30,

Blackburn Creek Community Development District
Statement of Net Position
2018
Governmental

Assets
Cash and cash equivalents	
$	7,143,442	
Investments	577,462	
Accounts receivable	211,894	
Interest receivable	2,521	
Prepaid expenses	1,933	
Capital Assets:
Not being depreciated	
18,771,349	
Depreciable, net	3,324,828	

Total assets	
30,033,429	

Liabilities		
Accounts payable	372,998	
Accrued interest payable	551,033	
Retainage payable	127,263	
Non-current liabilities:
Due within one year	
265,000	
Due in more than one year	23,777,510	

Total liabilities	
25,093,804	

 	Activities	

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Deferred inflows of resources Deferred revenue

13,827

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Total deferred inflows of resources	13,827

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Net position

Debt service	1,204,575	
Capital projects	567,618	
Unrestricted	(4,778,257)	

Net investment in capital assets Restricted for:
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I	The accompanying notes are an integral part of thesefinancial statements.

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7,931,862

4,925,798

Year ended September 30,

Blackburn Creek Community Development District
Statement of Activities
2018

Program Revenues

Net (Expense) Revenue and Changes in Net Position

Functions/Programs Primary government:
Governmental activities:

Expenses

Capital
Charges for		Grants and	Governmental Services	Contributions		Activities

General government Unallocated depreciation

$	(136,159) $
(198,172)

95,634	$	-	$	(40,525)
733,378	535,206

Interest	(1,065,824)	2,338,601		1,272,777	
Bond issuance costs	(398,473)			{398,473)	
Asset conveyance	(526,509)			{526,509)	
Total governmental activities	$ (2,325,137)	$ 2,434,235	$	733,378	842,476	

General revenues
Interest and other revenues			22,411 Change in net position		864,887 Net position - beginning of year, as restated 4,060,911 Net position - end ofyear	$ 4,925,798

The accompanying notes are an integral part ofthese financial statements.
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September 30,

Blackburn Creek Community Development District Balance Sheet - Governmental Funds
2018

Total

General	Debt Service	Capital
Projects	Governmental
Funds	
Assets			
Cash and cash equivalents	$ 132,009	$ 1,829,712	$ 5,181,721	$	7,143,442	
Investments		560,612	16,850	577,462	
Accounts receivable		211,894		211,894	
Interest receivable		1,157	1,364	2,521	
Prepaid expenditures	1,933			1,933	
Due from other funds		20,609		20,609	
Total assets	$ 133,942	$ 2,623,984	$ 5,199,935	$	7,957,861	
Liabilities, Deferred Inflows of					

Resources and Fund Balances Liabilities
Accounts payable Retainage payable

$   30,304	$	-	$	342,694	$	372,998
127,263	127,263

Due to other funds	20,609		20,609	
Total liabilities	50,913	469,957	520,870	
Deferred inflows of resources				
Deferred revenue	13,827	13,827	
Total deferred inflows of resources	13,827	13,827	
Fund balances				
Nonspendable	1,933	1,933	
Restricted for debt service
Restricted for capital projects		2,623,984
4,716,151	2,623,984
4,716,151	
Unassigned	81,096			81,096	
Total fund balances	83,029	2,623,984	4,716,151	7,423,164	
Total liabilities, deferred inflows of					
resources and fund balances	$ 133,942	$ 2,623,984	$ 5,199,935	$	7,957,861	

The accompanying notes are an integral part of these financial statements.
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Blackburn Creek Community Development District Reconciliation of the Balance Sheet of Governmental Funds to the Statement of
Net Position
September 30,	2018

Total fund balances, governmental funds	$

Capital assets used in governmental activities are not financial resources and therefore are not reported in the fund financial statements.

Liabilities not due and payable from current resources, including accrued interest, are not reported in the fund level statements.
Total net position - governmental activities	$

7,423,164

22,096,177

(24,593,543)
4,925,798

The accompanying notes are an integralpart ofthese financialstatements.
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Blackburn Creek Community Development District Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds

Year ended September 30,	2018

Total Capital	Governmental

General	Debt Service	Projects	Funds
Revenues
Assessment revenue	$  95,634	$	539,205	$	-	$	634,839
Prepayment revenue	1,799,396	1,799,396
Developer contributions	733,378	733,378
Interest and other revenues	17	10,941	11,453	22,411
Total revenues	95,651	2,349,542	744,831	3,190,024

Expenditures
Current:
General government	136,159	136,159 Debt service:
Principal	1,967,000	1,967,000
Interest	814,234	814,234
Bond issue costs	398,473	398,473
Capital outlay	7,194,998	7,194,998
Total expenditures	136,159	2,781,234	7,593,471	10,510,864
Excess {deficit) of revenues over
expenditures	(40,508}	(431,692)	(6,848,640)	(7,320,840)
Other financing sources (uses)
Transfers in	907,071	1,924	908,995

Transfers out	(1,924)
Bond proceeds

(907,071)	(908,995)
-	12,595,000	12,595,000

Developer advance	47,595	47,595
.,	Total other financing sources (uses)	(1,924)	907,071	11,737,448	12,642,595

year, as restated	125,461	2,148,605	(172,657)	2,101,409	
Fund balances, end of �ear	$ 83,029	$ 2,623,984	$ 4,716,151	$	7,423,164	

Net change in fund balances	(42,432)	475,379	4,888,808	5,321,755 Fund balances (deficit), beginning of
,

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The accompanying notes ore on integral port of thesefinancial statements.
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Blackburn Creek Community Development District Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Year ended September 30,	2018	

Net change in fund balances - governmental funds	
$	5,321,755	
Capital outlay, reported as expenditures in the governmental funds, is		
shown as capital assets on the Statement of Net Position, whereas the		
conveyance of fixed assets is recorded as an expense on the Statement of		
Activities, but not in the fund financial statements.	7,194,998	
Depreciation on capital assets is not recognized in the fund financial		
statements but is reported as an expense in the Statement of Activities.	(198,172)	
Repayment of long-term liabilities are reported as expenditures in the		
governmental fund statement but such repayments reduce liabilities in		
the Statement of Net Position and are eliminated in the Statement of		
Activities.	1,967,000	
The change in accrued interest between the current and prior year is		
recorded on the Statement of Activities but not on the fund level		
statements.	(251,590)	
Activity with developer advances is reported as other financing sources		

and expenditures in the governmental funds, but impact liability balances in the Statement of Net Position.

Bond proceeds which are reported as other financing sources in the governmental funds are recognized as long-term liabilities in the

(47,595)

Statement of Net Assets.	(12,595,000)	
The conveyance of capital assets has no impact on the fund level financial statements but is treated as an expense in the government-wide
Statement of Activites.	

(526,509)	
Change in net position of governmental activities	$	864,887	

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The accompanying notes are an integral part of thesefinancial statements.
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NOTE 1: NATURE OF ORGANIZATION

Blackburn Creek Community Development District
Notes to Financial Statements

The Blackburn Creek Community Development District (the "District") was established on November 9, 2010 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, by Sarasota County Ordinance 2010-070. 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 expanded by approximately 190 acres in December 2014 by Ordinance No. 2014-094, and by approximately 119 acres in March 2018 by Ordinance No. 2018-004.
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 Supervisors are elected on an at large basis by the owners of the property within the District. The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2018 certain Board members were affiliated with Resource Conservation of Sarasota, LLC ("the Developer'').
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.

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Blackburn Creek 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, 2018, 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 ofAccounting and Basis ofPresentation

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.
Assessments, including debt service assessments along with operation and maintenance assessments, are non-ad valorem special assessments imposed on all lands located within the District and benefited by the District's activities. Assessments are levied and certified for collection by the District prior to the start of the fiscal year which begins October 1st and ends on September 30th• Operation and maintenance special assessments are imposed upon all benefited lands located in the District. Debt service special assessments are imposed upon certain lots and lands as described in each resolution imposing the special assessment for each series of bonds issued by the District.

Blackburn Creek Community Development District
Notes to Financial Statements
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues 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 theprimary operating fund ofthe District. It is usedto 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.
Capital Project Fund-This fund accounts for the financial resources to be used for the acquisition or construction of major infrastructure within the District.
For the year ended September 30, 2018, the District does not report any proprietary funds.

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

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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.

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Cash, Deposits and Investments

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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 ofGASB, Statement Number 3).

Blackburn Creek Community Development District
Notes to Financial Statements
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The District is authorized to invest in financial instruments as established by Section 218.415, Florida Statutes. The authorized investments include among others direct obligations of the United States Treasury; 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.

Capital Assets

Capital assets, which include primarily infrastructure assets (e.g., roads, sidewalks, water management systems and similar items), are reported in the governmental activities column in the government-wide financial statements. Capital assets are defined by the District as assets with an initial/individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost and estimated historical cost if purchased or constructed. Donated assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant and equipment of the primary government are depreciated using the straight-line method over the estimated useful lives. Estimated useful lives for financial reporting purposes are as follows: Infrastructure: 25 years.
In the governmental fund financial statements, amounts incurred for the acquisition of capital assets are reported as fund expenditures. Depreciation expense is not reported in the governmental fund financial statements.

Long-Term Obligations

In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line or effective interest method. Bonds payable are reported net of these premiums or discounts. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as current period expenses.
In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

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Blackburn Creek Community Development District
Notes to Financial Statements
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Deferred Outflows/Inflows ofResources

In addition to assets, the Statement of Net 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, 2018.
In addition to liabilities, the Statement of Net 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 recorded $13,827 of prepayment revenues received in advance for specific lot closings at September 30, 2018.

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.

Prepaid Expenses

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenditures on the Statement of Net Position. These items will be expensed over the applicable usage period.
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Blackburn  Creek  Community Development District
Notes to Financial Statements

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 GMP 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. For the year ended September 30, 2018, actual expenditures exceeded budget appropriations due to unanticipated engineering and legal expenditures.

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.
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

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.

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NOTE 3: INVESTMENTS

The District's investments consist of money market funds and similar instruments in which shares are owned in the fund rather than the underlying investments. In accordance with GASB 72, Fair Value Measurement and Application, these amounts are reported at amortized cost.
The following is a summary of the District's investments:

September 30,	2018	Credit Risk	Maturities	
First American Government Obligations	$	577,462	S&P AAAm	24 days	
	$	577,462			

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NOTE 3: INVESTMENTS (Continued)

Blackburn  Creek Community Development District
Notes to  Financial Statements

Custodial credit risk - For an investment, custodial credit risk is the risk that the District will not be able to recover the value of the investments or collateral securities that are in the possession of an outside party. The District has no formal policy for custodial risk. At September 30, 2018, the money market funds are not exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form.

Concentration risk - The District's investment policy requires diversification, but does not specify limits on types of investments.

Interest rate risk - The District does not have a formal policy for addressing interest rate risk; however, investments are made with discretion, to seek reasonable returns, preserve capital, and in general, avoid speculative investments. The District manages its exposure to declines in fair values from interest rate changes by reviewing the portfolio on an ongoing basis for changes in effective yield amounts.

NOTE 4: CAPITAL ASSETS

The following is a summary of changes in the capital assets for the year ended September 30, 2018:
Beginning		Conveyances/		Ending Balance	Additions		Transfers	Balance
Governmental Activities:
Capital assets not being depreciated
    Infrastructure under construction	$ 12,102,860	$ 7,194,998	$	(526,509) $ 18,771,349
Total capital assets, not being
depreciated	12,102,860	7,194,998	(526,509)	18,771,349
Capital assets being depreciated
Infrastructure	3,853,264	3,853,264
Total capital assets, being
depreciated	3,853,264	3,853,264
Less accumulated depreciation
Infrastructure	330,264	198,172	528,436	
Total accumulated depreciation	330,264	198,172	528,436	
Total capital assets, being depreciated, net	
3,523,000	
(198,172)	
3,324,828	
Governmental activities capital
assets, net	$ 15,625,860	$ 6,996,826	$	!526,509� $ 22,096,177
Depreciation expense of $198,172 was recorded as unallocated depreciation on the accompanying Statement of Activities.

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I	Blackburn Creek Community Development District
Notes to Financial Statements

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NOTE 4: CAPITAL ASSETS (Continued)

The total projected cost of the infrastructure has been estimated at approximately $33 million, of which approximately $13.S million is expected to be financed with the proceeds from the issuance of Bonds with the remainder to be funded by additional bond issuances or the Developer. The infrastructure will include potable water and wastewater systems, storm water drainage system improvements, offsite roadimprovements and utility extensions. Upon completion certain assets will be conveyed to other entities for ownership and/or maintenance. During the year ended September 30, 2018, the District conveyed completed infrastructure totaling approximately $526,500.

NOTE 5: LONG-TERM LIABILITIES

On March 28, 2013 the District issued $5,455,000 of Special Assessment Bonds, Series 2013A due on May 1, 2043 with a fixed interest rate of 6.00%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Bonds is to be paid serially commencing May 1, 2014 through May 1, 2043.

On October 14, 2015, the District issued $8,765,000 of Special Assessment Bonds, Series 2015 consisting of $1,575,000 Series 2015A-1 Term Bonds, $1,945,000 Series 2015A-1 Term Bonds and
$5,245,000 of Series 2015A-2 with interest rates of 6.25%, 6.50% and 6.25%, respectively. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the
$1,575,000Term Bonds is to be paid serially commencing May 1, 2016 through May 1, 2035. Principal on the $1,945,000 Term Bonds is to be paid serially commencing May 1, 2016 through May 1, 2045. Principal on the $5,245,000 Term Bonds is to be paid serially commencing May 1, 2016 through May 1, 2045.

On February 22, 2018, the District issued$12,595,000 of Capital Improvement Revenue Bonds, Series 2018 consisting of $1,660,000 Series 2018A-1 Term Bonds, $2,890,000 Series 2018A-1 Term Bonds,
$5,165,000 Series 2018A-1 Term Bonds and $2,880,000 of Series 2018A-2 with interest rates of 5.25%, 5.75%, 5.90% and 5.90%, respectively. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the $1,660,000 Term Bonds is to be paid serially commencing May 1, 2019 through May 1, 2028. Principal on the $2,890,000 Term Bonds is to be paid serially commencing May 1, 2029 through May 1, 2038. Principal on the $5,165,000 Term Bonds is to be paid serially  commencing  May 1, 2021 through May 1,  2048.   Principal on the
$2,880,000 Term Bonds is to be paid serially commencing May 1, 2021 through May 1, 2048.

The Bond Indenture requires that the District maintain adequate funds in reserve accounts to meet the debt service reserve requirements as defined in the Indenture. The requirements have been met for the fiscal year ended September 30, 2018.

Blackburn Creek Community Development District
Notes to Financial Statements

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NOTE 5: LONG-TERM LIABILITIES (Continued)

The Bond Indenture has certain restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedure to be followed by the District on assessments to property owners. The District agreed to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District is in compliance with the requirements of the Bond Indenture.

Long-term liability activity for the year ended September 30, 2018, was as follows:

	Beginning Balance	
Additions	
Reductions	Ending Balance	Due Within
One Year	
Governmental Activities						
Bonds Payable:						
Series 2013A	$ 4,725,000	$	- $	(155,000)	$ 4,570,000	$	80,000	
Series 201SA-1	3,335,000		(180,000)	3,155,000	45,000	
Series 2015A-2	3,455,000		(1,590,000)	1,865,000		
Series 2018A-1 Series 2018A-2		9,715,000
2,880,000	
(42,000)	9,715,000
2,838,000	130,000	
Due to Developer	1,851,915	47,595		1,899,510		
	$ 13,366,915	$ 12,642,595	$ (1,967,000)	$ 24,042,510	$ 255,000	

At September 30, 2018, the scheduled debt service requirements on bonds payable were as follows:

Year Ending September 30,	
Principal	
Interest	Total Debt
Service	
2019	$	255,000	$	1,318,071	$	1,573,071	
2020	270,000	1,302,574	1,572,574	
2021	325,000	1,287,196	1,612,196	
2022	345,000	1,268,764	1,613,764	
2023	365,000	1,249,031	1,614,031	
2024 - 2028	2,190,000	5,905,926	8,095,926	
2029 - 2033	3,085,000	5,176,438	8,261,438	
2034 - 2038	4,390,000	4,111,544	8,501,544	
2039 - 2043	6,173,000	2,588,977	8,761,977	
2044 - 2048	4,745,000	801,796	5,546,796	
	$	22,143,000	$	25,010,317	$	47,153,317	

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NOTE 6: RISK MANAGEMENT

Blackburn Creek Community Development District
Notes to Financial Statements

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. There have been no settled claims in the previous three years.

NOTE 7: MANAGEMENT COMPANY

The District has contracted with a management company to perform management advisory services, which include financial and accounting advisory services. Certain employees of the management company also serve as officers (Board appointed non-voting positions) of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, and other administrative costs.

NOTE 8: RELATED PARTY TRANSACTIONS

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A significant portion of the District's activity is dependent upon the continued involvement of the Developer. The loss of significant involvement could have a material adverse effect on the District's operations.

During the year ended September 30, 2018, the Developer was assessed $24,962 and $106,711 for operations and maintenance and debt service costs, respectively. The Developer also remitted prepayment assessments totaling $1,799,396 to the District during the year. The District also purchased approximately $3.9 million of constructed assets from the Developer. The due to Developer amount of $1,899,510 is related to long-term developer advances to fund the construction of infrastructure. The activity for the year is detailed in Note 5.

NOTE 9: COMMITMENTS

The District has approximately $3.8 million remaining on open contracts for various construction projects. The original contracts totaled approximately $6.2 million. The District expects the projects to be completed in Fiscal Year 2019.

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l	NOTE 10: SUBSEQUENT EVENT

Blackburn Creek Community Development District
Notes to Financial Statements

I

In February 2019, the District issued $4,740,000 of Capital Improvement Revenue Refunding Bonds, Series 2019 consisting of $3,295,000 Series 2019 A-1 Bonds and $1,445,000 of Series 2019 A-2 with interest rates from 4.75% to 5.60% and 5.60%, respectively. The Series 2019 bonds were issued to finance the 2019 Capital Improvement Project. Interest is paid semiannually on each May 1 and November 1. Principal payments on the Series 2019 A-1 and A-2 Bonds are made serially commencing on May 1, 2020 through May 1, 2049.

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I	NOTE 11: PRIOR PERIOD ADJUSTMENT

I

During the year ended September 30, 2018, management determined that certain prior year retainage payable amounts totaling $754,697 were incorrectly recorded in the Capital Projects Fund. As a result of correcting this error, the beginning deficit fund balance of the Capital Projects Fund of
$927,354, as originally reported, has been increased to a deficit balance of $172,657. In addition, beginning net  position for governmental activities of $3,306,214, as originally reported,  has been
I	increased to $4,060,911.

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Required Supplemental Information (Other Than MD&A)

...

Year ended September 30,

Revenues
Assessment revenue Interest and other revenues
Total revenues

Blackburn Creek Community Development District Budget to Actual Comparison Schedule - General Fund
2018
Original and		Actual	Variance with Final Budget	Amounts		Final Budget

$	99,600	$	95,634	$	(3,966)
17	17
99,600	95,651	(3,949)

Expenditures
General government
.,	Total expenditures
"'	Excess (deficit) of revenues over expenditures	$

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99,600	136,159	(36,559)
99,600	136,159	(36,559)

-	$	(40,508)  $	(40,508)

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IC2018-0l: Financial Statement Closing Procedures
Condition: As part of our audit procedures, we identified approximately $43,000 of prepaymentassessmentamounts receivable that were not recorded on the District's financial statements. The prepayment assessment amounts were for September 2018 and were collected by the District subsequent to year-end. We also identified approximately $252,000 of underwriter's discount that was not recorded on the District's financial statements as of September 30, 2018.
Criteria: Internal controls should be in place to provide reasonable assurance that all accounting transactions, including those items that do not directly impact cash, are properly recorded as part of the financial statement close process.
Cause: The District's staff apparently overlooked certain noncash related items when preparing its annual financial report.
Effect: The District's prepayment revenues and accounts receivable were understated by approximately $43,000. Bond issuance costs and long-term debt proceeds on the financial statements were understated by approximately $252,000.
Recommendation: We recommend the District review its financial statement closing procedures to ensure all noncash items are properly recorded.
Management response: The District will take steps to implement the aforementioned recommendation.
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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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 August 1, 2019

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CRI

�l:G: :
INGRAM 

Carr, Riggs & Ingram, LLC 500 Grand Boulevard
Suite 210

CPAs and Advisors

..	To the Board of Supervisors

MANAGEMENT LETTER

Miramar Beach, FL 32550
850.837.3141
850.654.4619 (fax)
CRlcpa.com

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Blackburn Creek Community Development District Sarasota County, Florida

Report on the Financial Statements

We have audited the financial statements of the Blackburn Creek Community Development District ("District") as of and for the fiscal year ended September 30, 2018, and have issued our report thereon dated August 1, 2019.

Auditors' Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the U nited 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 Reports and Schedule

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 Accountants' 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 ofthe Auditor General. Disclosures in those report, which are dated June XX, 2019, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554{1)(i)l., 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. There were no findings or recommendations made in the preceding annual audit report.

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.

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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.

Additional Matters

Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address 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 have 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 August 1, 2019

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CRI

�1:G: :
IN GRAM

Carr, Riggs & Ingram, UC
500 Grand Boulevard
Suite 210

CPAs and Advisors

..	INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Supervisors
Blackburn Creek Community Development District Sarasota County, Florida

Miramar Beach, FL 32550
850.837.3141
850.654.4619 (fax)
CRlcpa.com

..

We have examined Blackburn Creek Community Development District's compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2018. Management of Blackburn Creek Community Development 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 judgement, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
Our examination does not provide a legal determination on the District's compliance with specified requirements.
In our opinion, the District complied, in all material respects, with the aforementioned requirements for
:,	the year ended September 30, 2018.
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.

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,	CARR, RIGGS & INGRAM, LLC
Miramar Beach, Florida August 1, 2019

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