Rolling Hills Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2017

Rolling Hills Community Development District ANNUAL FINANCIAL REPORT
Fiscal Year Ended 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 Balance
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 the 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

���l Berger, Toombs, Elam,
-v-' Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950

7721461-6120 II 461-1155

FAX: 7721468-9278

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
Rolling Hills Community Development District Clay County, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of Rolling Hills Community Development District as of and for the year ended September 30, 2017, and the related notes to financial statements, which collectively comprise the District's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Member AICPA

Fort Pierce I Stuart
- 1 -
Member AICPA Division For CPA Firms Private Companies Practice Section

Member FICPA

f�P,

Berger, Toombs, Elam, t)J Gaines & Frank
Certified PublicAca>unLmtS Pt.

To the Board of Supervisors
Rolling Hills Community Development District
Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and each major fund of Rolling Hills Community Development District as of September 30, 2017, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Governmental accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and budgetary comparison be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by 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 in accordance with governmental auditing standards generally accepted in the United States of America, which consisted principally of inquires of management regarding 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 a report dated June 19, 2018 on our consideration of the District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations and contracts.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an

Community Development District's internal control over financial reporting and compliance.

audit performed in accordance with Government Auditing Standards in considering Rolling Hills

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2� Jam�
Berge , ��. itJs.  Elam, G,a1in1ecsa�. FAr.a./nk Certified Public Accountants PL
Fort Pierce, Florida June 19, 2018

Management’s discussion and analysis of Rolling Hills Community Development District’s (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities. The analysis provides summary financial information for the District and should be read in conjunction with the District’s financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

The District’s basic financial statements comprise three components; 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to financial statements. The Government-wide financial statements present an overall picture of the District’s financial position and results of operations. The Fund financial statements present financial information for the District’s major funds. The Notes to financial statements provide additional information concerning the District’s finances.

The Government-wide financial statements are the statement of net position and the statement of activities. These statements use accounting methods similar to those used by 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 assets and liabilities of the District, with the difference between assets and liabilities reported as net position. Net position is 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, culture recreation, physical environment, transportation and debt service.

Fund financial statements present financial information for governmental funds. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

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

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, buildings and improvements other than buildings 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 $4,668,513 (net position). The District’s net investment in capital assets was $4,692,537. Restricted net position was
$0. Unrestricted net position was $(24,024).

Governmental activities revenues totaled $2,302,396 while governmental activities expenses totaled $1,546,027.

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	
$	118,116		
$	206,358	
Restricted assets	455,498		574,922	
Capital assets	 	12,115,096 		 	12,578,655 	
Total Assets	 	12,688,710 		 	13,359,935 	
Deferred outflows of resources	 	40,743 		 	42,832 	
Current liabilities	555,940		1,750,623	
Non-current liabilities	 	7,505,000 		 	7,740,000 	
Total Liabilities	 	8,060,940 		 	9,490,623 	
Net investment in capital assets	4,692,537		3,666,825	
Net position - restricted	-		215,994	
Net position - unrestricted	 	(24,024) 		 	29,325 	
Total Net Position	  $ 4,668,513 		  $ 3,912,144 	

The decrease in current assets is primarily due to an decrease in assessments receivable and prepaid expenses in the current year.
The decrease in restricted assets is primarily the result of the prepayments of principal in the current year.
The decrease in capital assets is due to current year depreciation.
The decrease in current liabilities is primarily due to the reduction in the current portion of bonds payable.
The decrease in restricted net position is related to principal prepayments in the current year.
The increase in net investment in capital assets is the result of principal payments in excess of depreciation in the current year.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Financial Analysis of the District (Continued)
The following schedule provides a summary of the changes in net position of the District and is presented by category for comparison purposes.

Change in Net Position

Governmental Activities

 	2017		2016
 
Program Revenues
Charges for services	$	2,173,080	$	2,743,594	
Operating grants and contributions	123,254	414,318	
General Revenues			
Investment earnings	1,031	540	
Miscellanous revenues	5,031	6,070	
Gain on forgiveness of debt	 	- 	 	1,439,383 	
Total Revenues	 	2,302,396 	 	4,603,905 	
Expenses			
General government	112,447	102,306	
Physical environment	451,025	429,000	
Culture/recreation	404,326	408,911	
Interest on long-term debt	 	578,229 	 	1,041,634 	
Total Expenses	 	1,546,027 	 	1,981,851 	
Change in Net Position	756,369	2,622,054	
Net Position - Beginning of Year	 	3,912,144 	 	1,290,090 	
Net Position - End of Year	  $	4,668,513 	  $	3,912,144 	

The decrease in charges for services is due to a budgeted decrease in debt service special assessments in the current year.
The decrease in operating grant and contributions is primarily due to a contribution received from the developer in the prior year as part of the refunding and exchange of debt.
The decrease in gain on forgiveness is the result of interest and principal forgiven at the time of the refunding and exchange in the prior year.
The decrease in interest on long-term debt is the result of the refunding and exchange of debt during the prior year.

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	
Improvements other than buildings		$	1,269,084	$ 1,269,084	
Infrastructure		9,650,172	9,650,172	
Building		4,898,886	4,898,886	
Less: accumulated depreciation		 	(3,703,046)	 	(3,239,487)	
Total Capital Assets, Net		  $	12,115,096	 $ 12,578,655 	

Capital asset activity consisted of $463,559 in depreciation in the current year.

General Fund Budgetary Highlights

Budgeted expenditures exceeded actual expenditures primarily due to less repairs and maintenance expenditures and use of reserves than were anticipated.

There were no amendments to the budget for the year ended September 30, 2017.

Debt Management

Governmental Activities debt includes the following:

In November 2015, the District issued $2,500,000 Series 2015A-1 Capital Improvement Revenue Refunding Bonds to refund and exchange a portion of the Series 2006A Capital Improvement Bonds. The balance outstanding on the Series 2015A-1 Capital Improvement Revenue Refunding Bonds at September 30, 2017 was $2,110,000.

In November 2015, the District issued $1,930,000 Series 2015A-2 Capital Improvement Revenue Refunding Bonds to refund and exchange a portion of the Series 2006A Capital Improvement Bonds. The balance outstanding on the Series 2015A-2 Capital Improvement Revenue Refunding Bonds at September 30, 2017 was $1,835,000.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Debt Management (Continued)

In November 2015, the District issued $2,245,000 Series 2015B Capital Improvement Revenue Refunding Bonds to refund and exchange the Series 2006B Capital Improvement Bonds. The Series 2015B Capital Improvement Revenue Refunding Bonds were paid off during the current year.

In November 2015, the District issued $3,850,000 Series 2015A-3 Capital Improvement Revenue Refunding Bonds to refund and exchange a portion of the Series 2006A Capital Improvement Bonds. The balance outstanding on the Series 2015A-3 Capital Improvement Revenue Refunding Bonds at September 30, 2017 was $3,765,000.

Economic Factors and Next Year’s Budget

Rolling Hills Community Development District does not expect any economic factors to have any significant effect on the financial position or results of operations of the District in fiscal year 2018.

Request for Information

The financial report is designed to provide a general overview of Rolling Hills 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 Rolling Hills Community Development District, Governmental Management Services, LLC, 475 West Town Place, Suite 114, St. Augustine, FL 32092.

	Governmental
Activities	
ASSETS		
Current Assets		
Cash and equivalents	$	3,564	
Assessments receivables	61,605	
Due from developer	 	52,947 	
Total Current Assets	 	118,116 	
Non-current Assets		
Restricted		
Investments, at fair value	455,498	
Capital assets, being depreciated		
Improvements other than building	1,269,084	
Infrastructure	9,650,172	
Building	4,898,886	
Less: accumulated depreciation	 	(3,703,046)	
Total Non-Current Assets	 	12,570,594 	
Total Assets	 	12,688,710 	
DEFERRED OUTFLOWS OF RESOURCES		
Deferred amount on refunding, net	 	40,743 	
LIABILITIES		
Current Liabilities		
Accounts payable and accrued expenses	79,698	
Accrued interest	271,242	
Bonds payable	 	205,000 	
Total Current Liabilities	 	555,940 	
Non-current Liabilities		
Bonds payable	 	7,505,000 	
Total Liabilities	 	8,060,940 	
NET POSITION		
Net investment in capital assets	4,692,537	
Unrestricted	 	(24,024)	
Total Net Position	  $	4,668,513 	

See accompanying notes.

						Net (Expense)	
						Revenue and	
						Changes in	
			Program Revenues		Net Position	

Functions/Programs	

   Expenses 		
Charges for Services	Operating
Grants and Contributions		
Governmental Activities	
Primary Government							
Governmental Activities							
General government	$	(112,447)		$	60,729	$	23,142		$	(28,576)	
Physical environment	(451,025)		118,373	45,108		(287,544)	
Culture and recreation	(404,326)		144,340	55,004		(204,982)	
Interest on long-term debt	(578,229)		1,849,638	-		1,271,409	
Total Governmental Activities	  $(1,546,027)		
  $	2,173,080       	$	123,254 		750,307	

General Revenues				
	Investment earnings			1,031	
	Miscellaneous revenues			5,031	
	Total General Revenues			6,062	
	
Change in Net Position			
756,369	
	Net Position - October 1, 2016			3,912,144	
	Net Position - September 30, 2017			$	4,668,513	

See accompanying notes.

Rolling Hills Community Development District BALANCE SHEET - GOVERNMENTAL FUNDS
September 30, 2017

													Total	
			Debt	Service		Debt	Service		Debt	Service		Debt	Service		Capital Projects		Governmental	
	 	General			Series 2006A/B		 Series 2015A-1		Series 2015A-1/B		 Series 2015A-3		Series 2006A/B		 	Funds		
ASSETS														
Cash and cash equivalents	$	3,564		$	-		$	-		$	-		$	-		$	-		$	3,564	
Assessments receivables	-		-		-		-		61,605		-		61,605	
Due from developer	52,947		-		-		-		-		-		52,947	
Restricted														
Investments, at fair value	 	- 		 	6,807 		 	157,403 		 	155,012 		 	121,216 		 	15,060 		 	455,498 	
Total Assets	  $		56,511 		$	6,807		$	157,403		$	155,012		$	182,821		$	15,060		$	573,614	

LIABILITIES AND FUND BALANCES														
Liabilities														
Accounts payable and accrued expenses	  $		57,819 		  $		- 		  $		- 		  $		- 		  $		- 		 	21,879 		  $		79,698 	
Fund Balances														
Restricted														
Debt service	-		6,807		157,403		155,012		182,821		-		502,043	
Unassigned	 	(1,308)		 	- 		 	- 		 	- 		 	- 		 	(6,819)		 	(8,127)	
Total Fund Balances	 	(1,308)		 	6,807 		 	157,403 		 	155,012 		 	182,821 		 	(6,819)		 	493,916 	
Total Liabilities and Fund Balances	  $		56,511 		$	6,807		$	157,403		$	155,012		$	182,821		$	15,060		$	573,614	

Rolling Hills Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCE
TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2017

Total Governmental Fund Balances	$	493,916	
Amounts reported for governmental activities in the Statement of Net Position		
are different because:		
Capital assets being depreciated, improvements other than building ($1,269,084),	
infrastructure ($9,650,172), building ($4,898,886), net of accumulated depreciation	
($(3,703,046)), used in governmental activities are not current financial resources	
and therefore, are not reported at the governmental fund level.	12,115,096	
Long-term liabilities, including bonds payable, are not due and payable in the current	
period and therefore, are not reported at the governmental fund level.	(7,710,000)	
Deferred outflows of resources are not current financial resources and therefore,	
are not reported at the governmental fund level.	40,743	
Accrued interest expense is not a current financial use and; therefore, is not reported	
at the governmental fund level.	(271,242)	

Net Position of Governmental Activities	
  $ 4,668,513 	

Rolling Hills Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - GOVERNMENTAL FUNDS
September 30, 2017

															Total	
			Debt Service		Debt Service		Debt Service		Debt Service		Capital Projects		Capital Projects		Governmental	
	 	General			Series 2006A/B		Series 2015A-1		Series 2015A-1/B		Series 2015A-3		Series 2006A/B		Series 2015A-3		Funds	
Revenues																
Special assessments	$	323,442		$	-		$	266,864		$	1,239,136		$	343,638		$	-		$	-		$	2,173,080	
Developer contributions	123,254		-		-		-		-		-		-		123,254	
Investment earnings	-		25		342		482		127		55		-		1,031	
Miscellaneous	 	5,031 		 	- 		 	- 		 	- 		 	- 		 	- 		 	- 		 	5,031 	
Total Revenues	451,727		25		267,206		1,239,618		343,765		55		-		2,302,396	

Expenditures																
Current																
General government	90,568		-		-		-		-		21,879		-		112,447	
Physical environment	176,533		-		-		-		-		-		-		176,533	
Culture and recreation	215,259		-		-		-		-		-		-		215,259	
Debt service																
Principal	-		-		295,000		1,115,000		85,000		-		-		1,495,000	
Interest	 	- 		 	- 		 	122,937 		 	156,041 		 	257,950 		 	- 		 	- 		 	536,928 	
Total Expenditures	482,360		-		417,937		1,271,041		342,950		21,879		-		2,536,167	

Excess of revenue over/(under)																
expenditures	(30,633)		25		(150,731)		(31,423)		815		(21,824)		-		(233,771)	
Other Financing Sources/(Uses)																
Transfers in	-		-		-		28		53,002		-		-		53,030	
Transfers out	-		-		(28)		(53,000)		-		-		(2)		(53,030)	
Total Other Financing Sources/(Uses)	-		-		(28)		(52,972)		53,002		-		(2)		-	

Net change in fund balances	
(30,633)		
25		
(150,759)		
(84,395)		
53,817		
(21,824)		
(2)		
(233,771)	
Fund Balances - October 1, 2016	29,325		6,782		308,162		239,407		129,004		15,005		2		727,687	

Fund Balances - September 30, 2017	
   $	(1,308)		
$	6,807		
$	157,403		
$	155,012		
$	182,821		
$	(6,819)		
$	-		
$	493,916	

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	$	(233,771)	
Amounts reported for governmental activities in the Statement of Activities		
are different because:		
Governmental funds report capital outlays as expenditures. However, in		
the Statement of Activities, the cost of those assets is allocated over their	
estimated useful lives as depreciation. This is the amount of depreciation	
in the current period.	(463,559)	
Repayments of bond principal are expenditures in the governmental		
funds, but the repayment reduces long-term liabilities in the Statement		
of Net Position.	1,495,000	
Deferred amount on refunding is recognized as a component of interest on		
long-term debt in the Statement of Activities, but in the governmental funds.	
This is the amount of interest in the current period.	(2,089)	
In the Statement of Activities, interest is accrued on outstanding bonds; whereas	
in governmental funds, interest expenditures are reported when due. This is	
the net amount between the prior year and current year accruals.	(39,212)	

Change in Net Position of Governmental Activities	
  $	756,369 	

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	
	Budget		Budget		Actual		(Negative)	
Revenues								
Special assessments	$	320,107		$	320,107		$	323,442		$	3,335	
Developer contributions	217,007		217,007		123,254		(93,753)	
Miscellaneous revenues	8,260		8,260		5,031		(3,229)	
Total Revenues	545,374		545,374		451,727		(93,647)	

Expenditures								
Current								
General government	112,895		112,895		90,568		22,327	
Physical environment	170,250		170,250		176,533		(6,283)	
Culture and recreation	260,652		260,652		215,259		45,393	
Total Expenditures	543,797		543,797		482,360		61,437	

Net change in fund balances	
1,577		
1,577		
(30,633)		
(32,210)	
Fund Balances - October 1, 2016	-		-		29,325		29,325	

Fund Balances - September 30, 2017	
$	1,577		
$	1,577		
$	(1,308)		
$	(2,885)	

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.

Reporting Entity

The District was established on March 14, 2006, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is authorized to issue bonds for the purpose, among others, of financing, funding, planning, establishing, acquiring, constructing or re- constructing, enlarging or extending, equipping, operating and maintaining water management, bridges or culverts, district roads, landscaping, street lights and other basic infrastructure projects within or without the boundaries of the Rolling Hills Community Development District. The District is governed by a five-member Board of Supervisors who were elected by landowners of the District for two and four year terms. The District operates within the criteria established by Chapter 190, Florida Statutes.

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

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

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

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 another 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.

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.

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 another financing source rather than as a fund liability. Debt service expenditures are recorded only when payment is due.

The District implemented the Governmental Accounting Standards Board Statement 54 - Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The classifications include non-spendable, restricted, committed, assigned and unassigned.

Governmental Funds (Continued)

The District has various policies governing the fund balance classifications.

Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.

Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.

Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company.

Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance is considered to be utilized first when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.

Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances.

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 Fund Series 2015A-1 – Accounts for debt service requirements to retire the Series 2015A-1 Capital Improvement Revenue Refunding Bonds. The Series 2015A-1 Bonds were issued to refund and exchange a portion of the Series 2006A Capital Improvement Bonds.

Governmental Major Funds (Continued)

Debt Service Fund Series 2015A-2 – Accounts for debt service requirements to retire the Series 2015A-2 Capital Improvement Revenue Refunding Bonds. The Series 2015A-2 Bonds were issued to refund and exchange a portion of the Series 2006A Capital Improvement Bonds.

Debt Service Fund Series 2015B – Accounts for debt service requirements to retire the Series 2015B Capital Improvement Revenue Refunding Bonds. The Series 2015B Bonds were issued to refund and exchange of the Series 2006B Capital Improvement Bonds.

Debt Service Fund Series 2015A-3 – Accounts for debt service requirements to retire the Series 2015A-3 Capital Improvement Revenue Refunding Bonds. The Series 2015A-3 Bonds were issued to refund and exchange a portion of the Series 2006A Capital Improvement Bonds.

Capital Projects Fund Series 2006A/B – Accounts for the financial resources used for the acquisition, construction, installation and equipping of infrastructure improvements.

Capital Projects Fund Series 2015A-3 – Accounts for the financial resources used for certain costs associated with the Series 2015 Bonds. This fund was discontinued.

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.

Cash and Investments

Chapter 280, 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:

Direct obligations of the United States Treasury;
The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969;
Interest-bearing time deposits or savings accounts in authorized qualified public depositories;
Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency.

Restricted Assets

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.

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 two years. The valuation basis for all assets is historical cost.

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

Depreciation of capital assets is computed and recorded by utilizing the straight-line method over the assets’ estimated useful lives ranging from 5 to 40 years.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Deferred Outflows of Resources

Deferred outflows of resources represent a consumption of net position/fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District only has one item that qualifies for reporting in this category. It is the deferred amount on refunding reported on the Statement of Net Position. A deferred amount on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

Net Position

Net position represents the difference between assets and liabilities and is reported in three categories. Net investment in capital assets, represent 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 is assets that do not meet definitions of the classifications previously described.

Budgets

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

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

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, $493,916, differs from “net position” of governmental activities, $4,668,513, 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, infrastructure, and buildings that are to be used in governmental activities) are purchased or constructed, the cost of those assets is reported as expenditures in governmental funds. However, the Statement of Net Position included those capital assets among the assets of the District as a whole.

Improvements other than buildings	$ 1,269,084	
Infrastructure	9,650,172	
Building	4,898,886	
Accumulated depreciation	    (3,703,046)	
Total	$ 12,115,096 	
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	$ (7,710,000)

Deferred outflows of resources

Deferred outflows of resources applicable to the District’s governmental activities are not financial resources, and therefore, are not recognized at the governmental fund level.

Deferred amount on refunding, net	$	40,743

Accrued interest
Accrued liabilities in the Statement of Net Position differ from the accrued interest on bonds, which are not reported at the fund level because they do not use current resources.

Accrued interest	$	(271,242)

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

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

The “net change in fund balances” for government funds, ($233,771), differs from the “change in net position” for governmental activities, $756,369, 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 decreases by the amount that depreciation exceeds capital outlay.
Depreciation	$	(463,559)

Long-term debt transactions

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.

Debt principal payments	$	1,495,000

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 change in accrued interest payable	$	(39,212)	
Decrease in deferred amount on refunding	 	(2,089)	
Total	$	(41,301)	

NOTE C – CASH AND INVESTMENTS

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 does not have a formal deposit policy for custodial credit risk; however, they follow the provisions of Chapter 280, Florida Statutes regarding deposits and investments. As of September 30, 2017, the District's bank balance and carrying value were
$3,564. Exposure to custodial credit risk was as follows. The District maintains all deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes.

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

Investment	Maturities	Fair Value

Money Market Accounts	N/A	$	433,632	
Managed Money Market Accounts	N/A	 	21,866 	
Total		  $	455,498 	

The District categorizes its fair value measurements within the fair value hierarchy recently established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The District uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities, or groups of assets and liabilities.

Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable and uses significant unobservable inputs that use the best information available under the circumstances, which includes the District’s own data in measuring unobservable inputs.

Based on the criteria in the preceding paragraph, the Managed Money Market Account is a Level 1 asset.

NOTE C – CASH AND INVESTMENTS (CONTINUED)

Interest Rate Risk

The formal investment policy of the District conforms with State statutory requirements and bond indentures for investment maturities as a means of managing its exposure to increasing interest rates. Direct obligations of the United States Treasury are held in a money market fund that allows daily demand withdrawals at par in the event of a decrease in interest rates.

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 in any one fund. The investments in Money Market Accounts are 95% of the District’s total investments. The investments in Managed Money Market Accounts are 5% 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. The District considers any decline in fair value 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. The District may collect assessments directly or utilize the uniform method of collection (Chapter 197.3632, Florida Statutes). Direct 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.

NOTE E – CAPITAL ASSETS

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

Balance
October 1,		Balance
September 30,	
 	2016		    Additions		    Deletions	 	2017		
Governmental Activities:			
Capital Assets, Being Depreciated:
Improvements other than buildings	$ 1,269,084	
$	-	
$	-	$ 1,269,084	
Infrastructure	9,650,172	-	-	9,650,172	
Building	 	4,898,886 	 	- 	 	- 	4,898,886 	
Total Capital Assets, Being Depreciated 	15,818,142 	 	- 	 	- 	15,818,142 	
Less accumulated depreciation for:			
Improvements other than buildings	(438,757)	(63,454)	-	(502,211)	
Infrastructure	(1,921,443)	(274,492)	-	(2,195,935)	
Building	 	(879,287)	 	(125,613)	 	- 	(1,004,900)	
Total Accumulated Depreciation	 	(3,239,487)	 	(463,559)	 	- 	(3,703,046)	
Total Capital Assets Depreciated, Net	 	12,578,655 	 	(463,559)	 	- 	12,115,096 	
Governmental Activities Capital Assets $ 12,578,655 	  $ (463,559)	  $	- $ 12,115,096 	

Depreciation of $463,559 was allocated to the physical environment, ($274,492), and culture and recreation, ($189,067).

NOTE F – LONG-TERM DEBT

The following is a summary of debt activity for the District for the year ended September 30, 2017:

Bonds Payable
Capital Improvement Revenue

Balance	Balance
October 1,	September 30,	Due Within
 	2016	 	Additions	 Deletions	 	2017	 One Year 

Refunding Bonds, Series 2015A-1 Capital Improvement Revenue

$ 2,405,000	$

-	$	295,000

$ 2,110,000	$

60,000

Refunding Bonds, Series 2015A-2	1,885,000	-	50,000	1,835,000	55,000
Capital  Improvement Revenue
Refunding Bonds, Series 2015B	1,065,000	-	1,065,000	-	- Capital Improvement Revenue
Refunding Bonds, Series 2015A-3 	3,850,000 	- 	85,000 	3,765,000 	90,000 
Bonds Payable	 $  9,205,000    $	-    $  1,495,000    $  7,710,000    $	205,000 

District debt is comprised of the following at September 30, 2017:

Capital Improvement Revenue Refunding Bonds		
$2,500,000 Series 2015A-1 Capital Improvement Revenue Refunding Bonds due in annual principal installments through May 1, 2037 at various interest rates between 3.3% and 5.6%, payable May 1 and November 1.	

$	2,110,000	
$1,930,000 Series 2015A-2 Capital Improvement Revenue Refunding Bonds due in annual principal installments through May 1, 2037 at various interest rates between 5.125% and 5.5%, payable May 1 and November 1.	

1,835,000	
$3,850,000 Series 2015A-3 Capital Improvement Revenue Refunding Bonds due in annual principal installments through May 1, 2037 at an interest rate of 6.7%, payable May 1 and
November 1.	

 	3,765,000	
Bonds Payable	$	7,710,000	

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	$	205,000	$	462,764	$	667,764	
2019	215,000	451,515	666,515	
2020	230,000	439,536	669,536	
2021	245,000	426,631	671,631	
2022	260,000	412,631	672,631	
2023-2027	1,595,000	1,807,438	3,402,438	
2028-2032	2,145,000	1,268,705	3,413,705	
2033-2037	 	2,815,000	 	539,965	 	3,354,965	
Totals	   $	7,710,000	   $	5,809,185	   $	13,519,185	

Significant Bond Provisions

The Series 2015A-1, 2015A-2, and 2015A-3 Bonds are subject to redemption at the option of the District prior to their maturity, in whole or in part, at a redemption price and date set in the Trust Indenture. The 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 Bond Indenture has certain restrictions, requirements, and procedures to be followed by the District on assessments to property owners. The District  agrees to levy special assessments  and collect such 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 2015 Reserve Accounts were funded from the proceeds of the Series 2015 Bonds in an amount established in the Trust Indenture. Monies held in the reserve and prepayment accounts will be used only for the purposes established in the Trust Indenture.

Reserve
 	Balance	

Reserve
  Requirement 

Series 2015A-1 Capital Improvement Revenue Refunding Bonds Series 2015A-2 Capital Improvement Revenue Refunding Bonds

$	93,698
$	153,000

$	93,698
$	153,000

NOTE G – RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the District carries commercial insurance.

Rolling Hills Community Development District NOTES TO FINANCIAL STATEMENTS
September 30, 2017

NOTE H – ECONOMIC DEPENDENCY AND RELATED PARTIES

A substantial portion of the District’s activity is dependent upon the continued involvement of the developer, the loss of which could have a materially adverse effect on the District. At  September 30, 2017, the developer held the majority of the assessable property located within District boundaries. The Developer pays special assessments on land it owns and has agreed to partially fund operations of the District where special assessments are not sufficient. The amount contributed by the developer for District operations during the year ended September 30, 2017 was $123,254. In addition, the Developer contributed $123,254 in connection with the bond refunding and exchange of the Series 2006A/B Capital Improvement Revenue Bonds.

One member of the Board of Supervisors was employed by the developer or its affiliates at September 30, 2017.

NOTE I – DEFICIT FUND BALANCES

The General Fund and the 2006A/B Capital Projects Fund both had deficit fund balances at September 30, 2017.

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��tt Berger, Toombs, Elam, Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120 // 461-1155
FAX: 772/468-9278

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Supervisors
Rolling Hills Community Development District Clay County, Florida
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States the financial statements of Rolling Hills Community Development District (the "District") as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise Rolling Hills Community Development District's basic financial statements, and have issued our report thereon dated June 19, 2018.
Internal Control over Financial Reporting
In planning and performing our audit, we considered Rolling Hills Community Development District's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Rolling Hills Community Development District's internal control. Accordingly, we do not express an opinion on the effectiveness of Rolling Hills Community Development District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Member AICPA

Fort P-ierc1e /-Stuart

3

MejTiber AICPA Division For CPA Firms

Member FICPA

r�ti Berger, Toombs, Elam, Co,, Gaines & Frank

To the Board of Supervisors
Rolling Hills Community Development District

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported· under Government Auditing Standards.
Purpose of this report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

O.IJailuJ	,t/4fbdJ

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Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants, PL
Fort Pierce, Florida June 19, 2018

- 32 -

��tt Berger, Toombs, Elam,
,QI Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
7721461-6120 II 461-1155
FAX: 7721468-9278

To the Board of Supervisors

MANAGEMENT LETTER

Rolling Hills Community Development District Clay County, Florida
Report on the Financial Statements
We have audited the financial statements of the Rolling Hills Community Development District as of and for the year ended September 30, 2017, and have issued our report thereon dated June 19, 2018.
Auditor's Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Chapter 10.550, Rules of the Florida Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and our Independent Auditor's Report on an examination conducted in accordance with A/CPA Professionals Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 19, 2018, should be considered in conjunction with this Management Letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding financial audit report. There were no findings or recommendations in the preceding audit.
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 Rolling Hills Community Development District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific conditions met. In connection with our audit, we determined that Rolling Hills Community Development District did not meet any of the conditions described in Section 218.503(1) Florida Statutes.

Member AICPA

Fort Pierce I Stuart

-	-

33
Member AICPA Division For CPA Firms Private Companies Practice Section

Member FICPA

��ti

Berger, Toombs, Elam,

,t:)J Gaines & Frank

To the Board of Supervisors
Rolling Hills Community Development District
Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for Rolling Hills Community Development District. It is management's responsibility to monitor the Rolling Hills Community Development District's financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same as of September 30, 2017.
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.
Annual Financial Report
Section 10.554(1)(i)5.b. 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 the annual financial report for the Rolling Hills Community Development District for the fiscal year ended September 30, 2017, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2017. In connection with our audit, we determined that these two reports were in agreement.
Additional Matters

Section 10.554(1)(i)3., Rules of the Auditor General, requires us  to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but warrants the attention of those charged with governance. In connection with our audit, we did not note any such findings.
Purpose of this Letter
Our Management Letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

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Berge   ��•	m,"I-G}k.{l,-tt,i=i'?an/k
Certified Public Accountants PL Fort Pierce, Florida
June 19, 2018

- 34 -

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��tt Berger, Toombs, Elam, Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
7721461-6120 II 461-1155
FAX: 7721468-9278

INDEPENDENT ACCOUNTANT'S REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES

To the Board of Supervisors
Rolling Hills Community Development District Clay County, Florida

We have examined Rolling Hills Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2017. Management is responsible for Rolling Hills Community Development District's compliance with those requirements. Our responsibility is to express an opinion on Rolling Hills Community Development District's compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about Rolling Hills Community Development District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on Rolling Hills Community Development District's compliance with the specified requirements.

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In our opinion, Rolling Hills Community Development District complied, in all material respects, with the aforementioned requirements during the year ended September 30, 2017.

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Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 19, 2018

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