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Resolution 2015-05 RESOLUTION 2015-5 A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE HERITAGE BAY COMMUNITY DEVELOPMENT DISTRICT APPROVING THE BUDGET FOR FISCAL YEAR 2016 AND SETTING A PUBLIC HEARING THEREON PURSUANT TO FLORIDA LAW WHEREAS,the District Manager has heretofore prepared and submitted to the Board a proposed operating and/or debt service budget for Fiscal Year 2016;a copy of which is attached hereto,and WHEREAS,the Board of Supervisors has considered said proposed budget and desires to set the required public hearing thereon; NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE HERITAGE BAY COMMUNITY DEVELOPMENT DISTRICT; 1. The budget proposed by the District Manager for Fiscal Year 2016 is hereby approved as the basis for conducting a public hearing to adopt said budget. 2. A public hearing on said approved budget is hereby declared and set for the following date,hour and place: Date: faty20Is Au&• 2_06- Hour: 9:00 a.m. Place: Heritage Bay Clubhouse 10154 Heritage Bay Boulevard Naples,Florida Notice of this public hearing shall be published in the manner prescribed in Florida Law. tet� Adopted this,7tfiday of May,2015. Edwin B.Hubbard Chairman / IM Calvin Tea:j Secretary HERITAGE BAY Community Development District Annual Operating and Debt Service Budget Fiscal Year 2016 Version 6-Proposed Budget (Updated 05/23/15 11:40 am) Prepared by: SEVERN TRENT SERVICES HERITAGE BAY Community Development District Table of Contents Page# OPERATING BUDGET General Fund Summary of Revenues,Expenditures and Changes in Fund Balances ........................... 1-2 Amortization Schedule 3-4 Budget Narrative 5-7 Exhibit A-Alloctation of Fund Balances 8 DEBT SERVICE BUDGET Series 2014 Summary of Revenues,Expenditures and Changes in Fund Balances 9 Amortization Schedule 10 Budget Narrative 11 SUPPORTING BUDGET SCHEDULES 2015-2016 Non-Ad Valorem Assessment Summary 12 Heritage Bay Community Development District Operating Budget Fiscal Year 2016 HERITAGE BAY Community Development District General Fund Summary of Revenues, Expenditures and Changes in Fund Balances Fiscal Year 2016 Proposed Budget ADOPTED ACTUAL PROJECTED TOTAL ANNUAL ACTUAL BUDGET THRU MAY PROJECTED BUDGET ACCOUNT DESCRIPTION FY 2014 FY 2015 APR-2015 SEP-2015 FY 2015 FY 2016 REVENUES Interest-Investments $ 960 $ 500 $ 305 $ 218 $ 523 $ 500 SpecialAssmnts-Tax Collector 156,250 249,995 248,845 1,155 250,000 250,000 Special Assrnnts-Wall Repair Project - - - - 62,500 Special Assmnts-Reserve Appropriation - - - - - 31,250 Special Assmnts-Discounts (5,640) (10,000) (9,130) - (9,130) (13,750) TOTAL REVENUES 151,570 240,495 240,020 1,373 241,393 330,500 EXPENDITURES Administrative P/R-Board of Supervisors 4,400 4,800 4,200 3,000 7,200 8,000 FICA Taxes 367 367 321 230 551 612 ProfServ-Arbitrage Rebate 600 600 600 - 600 - ProfServ-Dissemination Agent 1,000 1,000 1,000 - 1,000 - ProfServ-Engineering 16,485 15,000 9,615 6,830 16,445 14,000 ProfSery-Legal Services 6,134 7,000 9,945 2,000 11,945 5,000 ProfServ-Mgmt Consulting Sery 37,132 38,246 22,310 15,936 38,246 39,393 ProfServ-Property Appraiser 2,393 3,750 3,750 - 3,750 5,158 Profserv-Special Assessment 5,000 5,000 5,000 - 5,000 5,150 ProfServ-Trustee Fees 5,926 6,815 - 6,815 6,815 - ProfServ-Web Site Maintenance - - 306 219 525 750 Auditing Services 3,400 3,600 1,500 2,100 3,600 3,600 Postage and Freight 2,327 1,300 750 536 1,286 1,300 Insurance-General Liability 12,430 13,673 12,754 - 12,754 13,000 Printing and Binding 868 1,400 734 524 1,258 1,000 Legal Advertising 2,679 1,400 404 289 693 1,200 Misc-Bank Charges 648 750 414 296 710 750 Misc-Assessmnt Collection Cost 1,896 5,000 4,794 23 4,817 6,875 Office Supplies 371 550 248 177 425 550 Annual District Filing Fee 175 175 200 - 200 175 Total Administrative 104,231 110,426 78,845 38,973 117,818 106,511 Field ProfSery-Field Management - - 7,000 5,000 12,000 12,360 R&M-Contingency - - - - - 2,000 Wall Improvements - - 14,400 27,850 42,250 218,500 Total Field 21,400 32,850 54,250 232,860 Lakes&Ponds Contracts-Lake and Wetland 52,318 55,944 32,634 25,310 57,944 60,744 R&M-Aquascaping 17,561 24,125 12,415 9,500 21,915 5,000 R&M-Lake 15,543 - - - - - R&M-Lake Erosion 89,475 35,000 708 39,375 40,083 35,000 R&M-Contingency 3,263 15,000 3,500 4,500 8,000 5,000 Misc Improvements - - - - - 2,000 Reserve-Lakes&Ponds - - - - - 32,509 Total Lakes&Ponds 178,180 130,069 49,257 78,685 127,942 140,253 Annual Operating and Debt Service Budget Fiscal Year 2016 Page 1 HERITAGE BAY Community Development District General Fund Summary of Revenues,Expenditures and Changes in Fund Balances Fiscal Year 2016 Proposed Budget ADOPTED ACTUAL PROJECTED TOTAL ANNUAL ACTUAL BUDGET THRU MAY PROJECTED BUDGET ACCOUNT DESCRIPTION FY 2014 FY 2015 APR-2015 SEP-2015 FY 2015 FY 2016 Debt Service Principal Payment - - 50,000 Interest Expense - - - - - xp 9,651 Total Debt Service - - - - 59,651 TOTAL EXPENDITURES 282,411 240,495 149,502 150,508 300,010 539,276 1 Excess(deficiency)of revenues Over(under)expenditures (130,841) - 90,518 (149,136) (58,618) (208,776) OTHER FINANCING SOURCES(USES) Loan/Note Proceeds - - 250,000 250,000 - Contribution to(Use of)Fund Balance - - - - - (208,776) TOTAL OTHER SOURCES(USES) - - - 250,000 250,000 (208,776) Net change in fund balance (130,841) - 90,518 100,864 191,382 (208,776) FUND BALANCE,BEGINNING 281,645 150,804 150,804 - 150,804 342,186 FUND BALANCE,ENDING $ 150,804 $ 150,804 $ 241,322 $ 100,864 $ 342,186 $ 133,411 Annual Operating and Debt Service Budget Fiscal Year 2016 Page 2 HERITAGE BAY Community Development District $250,000 Loan, 5 years, 4.25% Amortization Schedule Principal Date Payment Principal Interest Balance i i $250,000.00 _ 2/1/2016' $5,052.09 $4,166.67 $885:42 $245,833.33 3/1/2016 5,037.33 4,166.67 870.66 $241,666.66 4/1/2016: 5,022.57 4,166.67 855.90 $237,499.99 5/1/2016; 5,007.82 4,166.67 841.15 $233,333.32 6/1/2016; 4,993.06 4,166.67 826.39 $229,166.65 7/1/20161 4,978.30 4,166.67 811.63 $224,999.98 8/1/2016 4,963.54 4,166.67 796.87 $220,833.31 9/1/2016: 4,948.79 4,166.67 782.12 $216,666.64 10/1/2016: 4,934.03 4,166.67 767.36 $212,499.97 11/1/2016 4,919.27 4,166.67 752.60 $208,333.30 12/1/2016 L 4,904.52 4,166.67 737.85 $204,166.63 1/1/2017' 4,889.76 4,166.67 723.09 $199,999.96 2/1/20171 4,875.00 4,166.67 708.33 $195,833.29 3/1/2017; 4,860.25 4,166.67 693.58 $191,666.62 4/1/20171 4,845.49 4,166.67 678.82 $187,499.95 5/1/2017' 4,830.73 4,166.67 664.06 $183,333.28 6/1/20171 4,815.98 4,166.67 649.31 $179,166.61 7/1/20171 4,801.22 4,166.67 634.55 $174,999.94 8/1/2017i 4,786.46 4,166.67 619.79 $170,833.27 9/1/2017; 4,771.70 4,166.67 605.03 $166,666.60 10/1/20171 4,756.95 4,166.67 590.28 $162,499.93 11/1/20171 4,742.19 4,166.67 575.52 $158,333.26 12/1/2017 4,727.43 4,166.67 560.76 $154,166.59 1/1/2018; 4,712.68 4,166.67 546.01 $149,999.92 2/1/2018', 4,697.92 4,166.67 531.25 $145,833.25 3%72018 4,683.16 4,166.67 516.49 $141,666.58 4/1/2018f 4,668.41 4,166.67 501.74 $137,499.91 5/1/20181 4,653.65 4,166.67 486.98 $133,333.24 6/1/2018; 4,638.89 4,166.67 472.22 $129,166.57 7/1/2018 4,624.13 4,166.67 457.46 $124,999.90 8/1/2018 _ 4,609.38 4,166.67 442.71 $120,833.23 9/1/2018 4,594.62 4,166.67 427.95 $116,666.56 10/1/2018, 4,579.86 4,166.67 413.19 $112,499.89 11/1/2018: 4,565.11 4,166.67 398.44 $108,333.22 12/1/2018' 4,550.35 4,166.67 383.68 $104,166.55 1/1/2019' 4,535.59 4,166.67 368.92 $99,999.88 2/1/2019; 4,520.84 4,166.67 354.17 $95,833.21 3/1/2019i 4,506.08 4,166.67 339.41 $91,666.54 4/1/2019 4,491.32 4,166.67 324.65 $87,499.87 5/1/20191 4,476.57 4,166.67 309.90 $83,333.20 6/1/2019' 4,461.81 4,166.67 295.14 $79,166.53 7/1/2019 4,447.05 4,166.67 280.38 $74,999.86 8/1/2 19 4,432.29 4,166.67 265.62 $70,833.19 9/1/2019; 4,417.54 _ 4,166.67 250.87 $66,666.52 Annual Operating and Debt Service Budget Fiscal Year 2016 Page 3 HERITAGE BAY Community Development District $250,000 Loan, 5 years, 4.25% Amortization Schedule Principal Date Payment Principal Interest Balance 10/1/2019, 4,402.78 4,166.67 236.11 $62,499.85 11/1/2019; 4,388.02 4,166.67 221.35 $58,333.18 12/1/2019! 4,373.27 4,166.67 206.60 $54,166.51 1/1/2020, 4,358.51 4,166.67 191.84 $49,999.84 2/1/2020; 4,343.75 4,166.67 177.08 $45,833.17 3/1/2020' 4,329.00 4,166.67 162.33 $41,666.50 4/1/2020L 4,314.24 4,166.67 147.57 $37,499.83 5/1/2020: 4,299.48 4,166.67 132.81 $33,333.16 6/1/2020! 4,284.72 4,166.67 118.05 $29,166.49 7/1/2020: 4,269.97 4,166.67 103.30 $24,999.82 8/1/2020; 4,255.21 4,166.67 88.54 $20,833.15 9/1/20201 4,240.45 4,166.67 73.78 $16,666.48 10/1/2020; 4,225.70 4,166.67 59.03 $12,499.81 11/1/2020 4,210.94 4,166.67 44.27 $8,333.14 12/1/20201 4,196.18 4,166.67 29.51 $4,166.47 1/1/20211 4,181.23 4,166.47 14.76 ($0.00) $277,005.19 $250,000.00 $27,005.19 Annual Operating and Debt Service Budget Fiscal Year 2016 Page 4 HERITAGE BAY Community Development District General Fund Budget Narrative Fiscal Year 2016 REVENUES Interest-Investments The District earns interest on the monthly average collected balance for their operating and money market accounts. Special Assessments-Tax Collector The District will levy a Non-Ad Valorem assessment on all sold and platted parcels(using the uniform method)within the District in order to pay for the operating expenditures during the Fiscal Year. Special Assessments-Wall Repair Project The District will levy a Non-Ad Valorem assessment on all sold and platted parcels(using the uniform method)within the District in order to pay for the repair of the wall embankment and any impending debt associated with making repairs. Assessment will be$60 per parcel and it will be levied until the loan being used to make the repairs is repaid which is expected to be in 2021. Special Assessments-Reserve Appropriation The District will levy a Non-Ad Valorem assessment on all sold and platted parcels(using the uniform method)within the District in order reestablish reserves which were depleted due to the District having to address numerous lake bank erosion issues. The assessment will be $15 per parcel and dedicated specifically to reserves until the reserves are reestablished at an appropriate level. Special Assessments-Discounts Per Section 197.162 and Section 197.3632 of the Florida Statutes, discounts are allowed for early payments of assessments collected by the Tax Collector and only when the Tax Collector is using the uniform methodology. The budgeted amount for the fiscal year is calculated at 4%of the anticipated Non-Ad Valorem assessments. EXPENDITURES Administrative PR-Board of Supervisors Chapter 190 of the Florida Statutes allows for members of the Board of Supervisors to be compensated$200 per meeting at which they are in attendance. The amount for the Fiscal Year is based upon all supervisors attending all of the meetings. Professional Services-Engineering The District's engineer provides general engineering services to the District, i.e. attendance and preparation for board meetings when requested,review of invoices,and other specifically requested assignments. Professional Services-Legal Services The Districts attorney provides general legal services to the District, i.e.,attendance and preparation for Board meetings, review of contracts, review of agreements and resolutions, and other research as directed or requested by the Board of Supervisors and the District Manager. Professional Services-Management Consulting Services The District receives Management, Accounting and Administrative services as part of a Management Agreement with Severn Trent Environmental Services,Inc. Severn Trent manages all of the District's financial activities such as accounts payable, financial statements, auditing and budgeting in accordance with the management contract in effect An increase f 3%is projected for the next fiscal year to cover operating expenses. Annual Operating and Debt Service Budget Fiscal Year 2016 Page 5 HERITAGE BAY Community Development District General Fund Budget Narrative Fiscal Year 2016 EXPENDITURES Administrative(continued) Professional Services-Property Appraiser The Property Appraiser provides the District with a listing of the legal description of each property parcel within the District boundaries,and the names and addresses of the owners of such property.The District reimburses the Property Appraiser for necessary administrative costs incurred to provide this service which is based upon 1.5%of the anticipated Non-Ad Valorem assessment collections. Professional Services-Special Assessment This is the Administrative fees to prepare the District's special assessment roll. Professional Services-Web Site Maintenance The cost of web hosting and regular maintenance of the District's website by Severn Trent Services. Auditing Services The District is required to conduct an annual audit of its financial records by an Independent Certified Public Accounting Firm. The budgeted amount for the fiscal year is based on contracted fees from an existing engagement letter. Postage and Freight Actual postage used for District mailings including agenda packages,vendor checks and other correspondence. Insurance-General Liability The District's General Liability&Public Officials Liability Insurance policy is with Public Risk Insurance Agency, Inc. They specialize in providing governmental insurance coverage.The budgeted amount projects a 15%increase in the premium. Printing and Binding Copies used in the preparation of agenda packages, required mailings,and other special projects. Legal Advertising The District is required to advertise various notices for Board meetings and other public hearings in a newspaper of general circulation. Miscellaneous-Bank Charges This includes monthly bank charges for the maintenance of the operating accounts. Miscellaneous-Assessment Collection Costs The District reimburses the Collier County Tax Collector for her or his necessary administrative costs. Per the Florida Statutes,administrative costs shall include,but not be limited to,those costs associated with personnel,forms,supplies, data processing, computer equipment, postage, and programming. The District also compensates the Tax Collector for the actual cost of collection or 2%on the amount of special assessments collected and remitted, whichever is greater. The assessment collection cost is based on a maximum of 2%of the anticipated assessment collections Office Supplies Supplies used in the preparation and binding of agenda packages,required mailings,and other special projects. Annual District Filing Fee The District is required to pay an annual fee of$175 to the Department of Economic Opportunity Division of Community Development. Annual Operating and Debt Service Budget Fiscal Year 2016 Page 6 HERITAGE BAY Community Development District General Fund Budget Narrative Fiscal Year 2016 [EXPENDITURES Field Professional Services-Field Management Services Field Management Services for the District is performed by Severn Trent Services. This includes the regular inspection of all District assets and contractor performance monitoring. Items include but are not limited to: irrigation systems, ponds, wetlands, preserves, roads, street signs, sidewalks and drainage systems. A monthly report is provided for the Board's review to allow for their consideration of issues and action to consider. R&M-Contingency All other expenses that do not fall into the categories described above will be expensed to contingency. Wall Improvements Improvements that are necessary to stabilize the lake bank near the bridge structure as determined by engineering reports. These improvement measures are necessary to avoid a catastrophic failure of lakes 30A&306 lake banks along Heritage Bay Boulevard. Lakes&Ponds Contracts-Lake&Wetland A contract was negotiated with Lake&Wetland Management for monthly lake maintenance of the District's 31 lakes and littoral shelf maintenance which includes approximately 14.52 acres. Services began February 2014. R&M-Aquascaping This is for any repair and maintenance expenses pertaining to the District's lakes that are not covered in the contract. R&M-Lake Erosion This is for any repair and maintenance expenses pertaining to erosion control that are not covered in the contract. R&M-Contingency All other expenses that do not fall into the categories described above will be expensed to contingency. Misc-Improvements This is for lake improvements specifically_ Reserve—Lakes&Ponds This is for lake improvement expenses that are projected to occur in the future. Debt Service Principal Debt Retirement During FY2015,the District is in the process of procuring a 5 year loan for$250,000 with a projected APR of 4.25%. Beginning in FY16,monthly principal payments will be made towards the loan balance. Interest Expense The District will make monthly interest payments on the loan balance. Annual Operating and Debt Service Budget Fiscal Year 2018 Page 7 HERITAGE BAY Community Development District General Fund Exhibit"A" Allocation of Fund Balances AVAILABLE FUNDS Amount Beginning Fund Balance-Fiscal Year 2016 $ 133,411 Net Change in Fund Balance-Fiscal Year 2016 - Reserves-Fiscal Year 2016 Additions 32,509 (Total Funds Available(Estimated)-9/30/2016 165,920 I ALLOCATION OF AVAILABLE FUNDS Assigned Fund Balance Operating Reserve-First Quarter Operating Capital 95,412 (1) Reserves-Erosion Control 58,000 Reserves-Erosion Control(FY15) (20,000) 38,000 Reserves-Lakes&Ponds(FY16) 32,509 Subtotal 165,921 I Total Allocation of Available Funds 165,921 I Total Unassigned(undesignated)Cash $ 0 Notes (1)Represents approximately 2 months of operating expenditures Annual Operating and Debt Service Budget Fiscal Year 2016 Page 8 Heritage Bay Community Development District Debt Service Budget Fiscal Year 2016 HERITAGE BAY Community Development District Series 2014 Debt Service Fund Summary of Revenues,Expenditures and Changes in Fund Balances Fiscal Year 2016 Proposed Budget ADOPTED ACTUAL PROJECTED TOTAL ANNUAL ACTUAL BUDGET THRU MAY PROJECTED BUDGET ACCOUNT DESCRIPTION FY 2014 FY 2015 APR-2015 SEP-2015 FY 2015 FY 2016 REVENUES Interest-Investments $ 2 $ - $ 28 $ 28 5 56 $ - Special Assmnts-Tax Collector - 1,308,564 1,282,641 25,923 1,308,564 1,308,56664 Special Assmnts-Discounts - (52,343) (47,929) - (47,929) (52,343) I TOTAL REVENUES 2 1,256,221 1,234,740 25,951 1,260,691 1,256,221 I EXPENDITURES Administrative ProfServ-Arbitrage - - - - 600 ProfServ-Property Appraiser 1,181 19,628 19,628 - 19,628 19,628 ProfServ-Trustee - - - - - 6,815 Misc-AssessmntCollection Cost (10,632) 26,171 24,694 518 25,212 26,171 Total Administrative (9,451) 45,799 44,322 518 44,840 53,215 Debt Service Principal Debt Retirement - 270,000 - 270,000 270,000 545,000 Interest Expense - 476,311 - 476,311 478,311 654,360 Bond Issue Expense 251,406 - - - - - Total Debt Service 251,406 746,311 - 746,311 746,311 1,199,360 I TOTAL EXPENDITURES 241,955 792,110 44,322 746,829 791,151 1,252,575 I Excess(deficiency)of revenues Over(under)expenditures (241,953) 464,111 1,190,418 (720,879) 469,539 3,647 OTHER FINANCING SOURCES(USES) InterfundTransfer-In 1,215,975 - - - - - Proceeds of Refunding Bonds 17,490,000 - - - - Payment to Refunded Bond (17,840,043) - - - - Contribution to(Use of)Fund Balance - 464,111 - - - 3,647 TOTAL OTHER SOURCES(USES' 865,932 464,111 - - - 3,647 Net change in fund balance 623,979 464,111 1,190,418 (720,879) 469,539 3,647 FUND BALANCE,BEGINNING - 623,979 623,979 - 623,979 1,093,518 FUND BALANCE,ENDING $ 623,979 $ 1,088,090 $ 1,814,397 $ (720,879 $ 1,093,518 $ 1,097,165 Annual Operating and Debt Service Budget Fiscal Year 2016 Page 9 HERITAGE BAY Community Development District Amortization Schedule 2014 Refunding of Series 2005 Special Assessment Refunding Bonds Principal Year Principal special calls Interest Balance FY Total OS 11/1/2015 $ - $ 327,180.00 $ 17,220,000.00 5/1/2016 $ 545,000.00 $ - $ 327,180.00 $ 16,675,000.00 $ 1,199,360.00 11/1/2016 $ - $ 316,825.00 $ 16,675,000.00 5/1/2017 $ 565,000.00 $ - $ 316,825.00 $ 16,110,000.00 $ 1,198,650.00 11/1/2017 $ - $ 306,090.00 $ 16,110,000.00 5/1/2018 $ 585,000.00 $ - $ 306,090.00 $ 15,525,000.00 $ 1,197,180.00 11/1/2018 $ - $ 294,975.00 $ 15,525,000.00 5/1/2019 $ 610,000.00 $ - $ 294,975.00 $ 14,915,000.00 $ 1,199,950.00 11/1/2019 $ - $ 283,385.00 $ 14,915,000.00 5/1/2020 $ 635,000.00 $ - $ 283,385.00 $ 14,280,000.00 $ 1,201,770.00 11/1/2020 _ $ - $ 271,320.00 $ 14,280,000.00 5/1/2021 $ 660,000.00 $ - $ 271,320.00 $ 13,620,000.00 $ 1,202,640.00 11/1/2021 $ - $ 258,780.00 $ 13,620,000.00 5/1/2022 $ 680,000.00 $ - $ 258,780.00 $ 12,940,000.00 $ 1,197,560.00 11/1/2022 $ - $ 245,860.00 $ 12,940,000.00 5/1/2023 $ 710,000.00 $ - $ 245,860.00 $ 12,230,000.00 $ 1,201,720.00 11/1/2023 $ - $ 232,370.00 $ 12,230,000.00 5/1/2024 $ 740,000.00 $ - $ 232,370.00 $ 11,490,000.00 $ 1,204,740.00 11/1/2024 $ - $ 218,310.00 $ 11,490,000.00 5/1/2025 $ 770,000.00 $ - $ 218,310.00 $ 10,720,000.00 $ 1,206,620.00 11/1/2025 $ - $ 203,680.00 $ 10,720,000.00 5/1/2026 $ 800,000.00 $ - $ 203,680.00 $ 9,920,000.00 $ 1,207,360.00 11/1/2026 $ - _ $ 188,480.00 $ 9,920,000.00 5/1/2027 $ 830,000.00 $ - $ 188,480.00 $ 9,090,000.00 $ 1,206,960.00 11/1/2027 $ - _ $ 172,710.00 $ 9,090,000.00 5/1/2028 $ 865,000.00 $ - $ 172,710.00 $ 8,225,000.00 $ 1,210,420.00 11/1/2028 $ - $ 156,275.00 $ 8,225,000.00 5/1/2029 $ 8,225,000.00 $ - $ 156,275.00 $ - $ 8,537,550.00 11/1/2029 $ - $ - $ - Totals $ 17,220,000.00 $ - $ 6,952,480.00 I $ 24,172,480.00 Annual Operating and Debt Service Budget Fiscal Year 2016 Page 10 HERITAGE BAY Community Development District Debt Service Fund Budget Narrative Fiscal Year 2016 REVENUES Interest-Investments The District earns interest on the monthly average collected balance for their trust accounts. Special Assessments-Tax Collector The District will levy a Non-Ad Valorem assessment on all sold and platted parcels(using the uniform method)within the District in order to pay for the operating expenditures during the Fiscal Year. Special Assessments-Discounts Per Section 197.162 and Section 197.3632 of the Florida Statutes, discounts are allowed for early payments of assessments collected by the Tax Collector and only when the Tax Collector is using the uniform methodology. The budgeted amount for the fiscal year is calculated at 4%of the anticipated Non-Ad Valorem assessments. EXPENDITURES Administrative Professional Services—Arbitrage Rebate The District contracted with an independent professional firm to annually calculate the District's Arbitrage Rebate Liability on its bonds. Professional Services-Property Appraiser The Property Appraiser provides the District with a listing of the legal description of each property parcel within the District boundaries,and the names and addresses of the owners of such property.The District reimburses the Property Appraiser for necessary administrative costs incurred to provide this service.The property appraiser cost is based upon 1.5%of the anticipated Non-Ad Valorem assessment collections. Professional Services-Trustee The District pays US Bank an annual fee for trustee services on the Series 2014 Special Assessment Bond. The budgeted amount for the fiscal year is based on standard fees charged plus any out-of-pocket expenses_ Miscellaneous-Assessment Collection Costs The District reimburses the Collier County Tax Collector for her or his necessary administrative costs. Per the Florida Statutes, administrative costs shall include,but not be limited to, those costs associated with personnel,forms,supplies, data processing, computer equipment, postage,and programming. The District also compensates the Tax Collector for the actual cost of collection or 2% on the amount of special assessments collected and remitted,whichever is greater. The assessment collection cost is based on a maximum of 2%of the anticipated assessment collections. Debt Service Principal Debt Retirement The District pays regular principal payments annually in order to pay down/retire the debt. Interest Expense The District pays interest expense on the debt twice during the year. Annual Operating and Debt Service Budget Fiscal Year 2016 Page 11