Reunion East Community Development District Agenda July 11, 2024 219 E. Livingston Street, Orlando FL, 32801 Phone: 407-841-5524 – Fax: 407-839-1526 July 3, 2024 Board of Supervisors Reunion East Community Development District Dear Board Members: The regular meeting of the Board of Supervisors of the Reunion East Community Development District will be held Thursday, July 11, 2024 at 1:00 PM at the Heritage Crossing Community Center, 7715 Heritage Crossing Way, Reunion, FL. Zoom Information for Members of the Public: Link: https://us06web.zoom.us/j/81019901423 Dial-in Number: (646) 876-9923 Meeting ID: 810 1990 1423 Following is the advance agenda for the meeting: 1. Roll Call 2. Public Comment Period 3. Approval of Minutes of the June 13, 2024 Board of Supervisors Meeting 4. Organizational Matters A. Acceptance of Resignation of Steven Goldstein, Seat #2 B. Appointment of Individual to Fulfill Board Vacancy in Seat #2 with a Term Ending November 2024 C. Administration of Oath of Office to Newly Appointed Board Member D. Consideration of Resolution 2024-07 Electing Officers 5. Consideration of Resolution 2024-05 Approving Entering into a Contract with All County Paving, Inc. to Provide Paving and Related Services 6. Review and Acceptance of Fiscal Year 2023 Audit Report 7. Staff Reports A. Attorney B. Engineer i. Review and Acceptance of Annual Engineer’s Report C. Field Manager Updates i. Review of Fitness Center Costs – ADDED D. District Manager’s Report i. Review of Sidewalk Project ii. Action Items iii. Approval of Check Register iv. Balance Sheet and Income Statement v. Replacement and Maintenance Plan E. Security Report 8. Other Business 9. Supervisor’s Requests 10. Next Meeting Date: August 15, 2024 at 2pm 11. Adjournment MINUTES OF MEETING REUNION EAST COMMUNITY DEVELOPMENT DISTRICT The regular meeting of the Board of Supervisors of the Reunion East Community Development District was held on Thursday, June 13, 2024 at 1:00 p.m. via Zoom Communication Media Technology and at the Heritage Crossing Community Center, 7715 Heritage Crossing Way, Reunion, Florida. Present and constituting a quorum: Mark Greenstein Chairman Steven Goldstein Vice Chairman Trudy Hobbs Assistant Secretary John Dryburgh Assistant Secretary June Wispelwey Assistant Secretary Also present were: Tricia Adams District Manager Kristen Trucco District Counsel James Curley District Engineer Alan Scheerer Field Manager Victor Vargas Reunion Security Garrett Huegel Yellowstone Landscape Pete Whitman Yellowstone Landscape Graham Staley Reunion East CDD Board Member Residents The following is a summary of the discussions and actions taken at the June 13, 2024 Reunion East Community Development District regular Board of Supervisors meeting. FIRST ORDER OF BUSINESS Roll Call Ms. Adams called the meeting to order at 1:01 p.m. and called the roll. All Supervisors were present. SECOND ORDER OF BUSINESS Public Comment Period There being no comments, the next item followed. THIRD ORDER OF BUSINESS Approval of the Minutes of the May 9, 2024 Board of Supervisors Meeting Ms. Adams presented the minutes of the May 9, 2024 Board of Supervisors meeting, a draft of which were included in the agenda package. Corrections were received from Mr. Greenstein prior to the meeting. On Page 7 of 16, Mr. Greenstein clarified the Osceola County Sheriff's Office Memorandum of Understanding (MOU), on Page 10, “Ms. Trucco” should be “Ms. Hobbs” and there were some clarifications on Page 8, during the discussion on the Traffic Enforcement Agreement. On MOTION by Mr. Goldstein seconded by Mr. Dryburgh with all in favor the Minutes of the May 9, 2024 Board of Supervisors Meetings were approved as amended. FOURTH ORDER OF BUSINESS Notice of Termination of Management Services Agreement with Kingwood Orlando Reunion Resort Ms. Adams recalled that there was a Management Services Agreement (MSA) with Kingwood Orlando Reunion Resort (KORR), to manage the Heritage Crossings Community Center (HCCC), and The Stables building. Mr. Anthony Carll, KORR’s Vice President of Operations, sent an email to the District Management Team on May 30th, to terminate the MSA, with 30 days’ notice. Staff reviewed the MSA, including the provisions for termination, which was included in the agenda package as a reference, along with the email. The termination in Section 12, required a 180-day notice from KORR, in order to terminate the agreement, to allow for the transition of management. Currently, the day-to-day services such as utilities, landscape maintenance, and custodial services, were managed under the MSA. The District will need to make arrangements for these services and the Board will need to approve agreements for these services. Because of the administrative work and the work required for the Field Manager, Ms. Adams requested that the Board consider a termination not before October 1, 2024, which was less than the required period, but it would allow time for staff to gather information on the services that were required and have them authorized by the Board. Mr. Dryburgh felt that there was no reason to give them less than 180 days and was not satisfied with the October 1st termination date. He noted someone ran into the building while KORR was managing it and they were responsible for a certain amount of the repair. In his opinion, there was a contract and contracts should be abided to. Therefore, if it says 180 days, KORR should manage it for 180 days, so that KORR would absorb those expenses. Ms. Wispelwey agreed, but voiced concern about making it longer, as KORR may not perform. Mr. Dryburgh questioned their responsibilities and damages if they did not perform. Ms. Adams confirmed that the agreement was in place and KORR was expected to perform to the standards of the agreement, but if they do not perform, the Board may want to expedite the termination. Because of the amount of weddings that the Resort would have, Mr. Dryburgh recommended that the Board increase their rental fees. Mr. Goldstein was of the opinion, if the MSA said 180 days, they should have 180 days of services, but agreed with the concern that KORR would not perform. Ms. Wispelwey asked if there would be any impact on the dumpsters. Mr. Dryburgh was surprised to hear that KORR managed the HCCC dumpster, but there were two other dumpsters. Ms. Adams explained that KORR was required to maintain The Stables dumpster area to a satisfactory standard, per the MSA, but the trash services were funded by the Master Association. Mr. Greenstein questioned whether there was a separate Licensing Agreement with the Master HOA that was separate from the MSA, to allow them to have the dumpster there. Ms. Adams confirmed that there was a separate License Agreement for the dumpster with the Master Association at The Stables. Ms. Wispelwey questioned the cleaning of the pool bathrooms. Ms. Adams stated there would be no impact at this time. Mr. Greenstein pointed out that the termination would only effect the HCCC and The Stables and did not want to enforce the 180 days, unless the conditions were that they had to do it, with the immediate 30-day termination, because a revenue stream was connected with the MSA. Mr. Dryburgh noted it was not a significant amount of money. Mr. Greenstein agreed, but they must transition to an environment where the facility was managed the way they used to manage it and they had to know what it would cost financially. Mr. Goldstein recommended inspecting it to ensure that things were completed properly. Ms. Trucco advised that once the Board decided on the date, she would email Mr. Carll and set up an inspection and request any records. Ms. Hobbs proposed agreeing to the October 1st deadline, pending the inspection and any repairs. As long as everything was repaired, the Board could terminate the MSA, but if not, it would not be terminated until the end of the year. Ms. Adams confirmed that 180 days’ notice would be on Tuesday, November 26th. Mr. Greenstein was in favor of having the MSA in place until the end of the fiscal year, with the expenses covered by KORR and unless something radically changed between now and the end of the fiscal year, they would start off the new fiscal year, with the District operating the facility. Mr. Goldstein felt that the budget for next fiscal year should be adjusted. Ms. Adams pointed out that there would be a time between the Proposed Budget and the Adopted Budget, to adjust it. Ms. Hobbs asked if KORR used The Stables. Mr. Greenstein confirmed that KORR did not use it. Ms. Wispelwey asked if anyone spoke to Mr. Carll about why they were doing this. Ms. Adams was not told why it was being terminated. Ms. Wispelwey felt at some point, it was worth having a conversation with Mr. Carll. Mr. Greenstein recalled when the Seven Eagles pool transitioned several years ago, it was a business decision and believed it was the same case here. Ms. Wispelwey wanted to know out of curiosity. The Board agreed. Mr. Greenstein requested that District Counsel inform KORR that the Board accepted their decision to terminate the MSA, after the close of business on September 30th, subject to inspection. In addition, the HCCC was an amenity that was covered under their Amenity Policy and if KORR wanted to hold events and activities at the facility, it must be handled on a case-by-case basis and they would pay the District fees to use it. Mr. Dryburgh had an objection to KORR terminating the MSA, as it looked like this was what they wanted to do, but voiced concern that residents that lived in the community, would be paying for this process. Mr. Greenstein clarified that the amount of money involved, was not substantial and assessments would not increase. Ms. Wispelwey felt that they needed more time, as they may have issues getting contractors. Mr. Dryburgh suggested holding KORR to the duration of the contract and if they were able to identify and convert everything over sooner, the contract would be modified. Mr. Greenstein asked Mr. Scheerer if four months was a reasonable period of time to accommodate all of the contractual changes and transfer management of the HCCC. Mr. Scheerer did not feel it was unreasonable to attain the October 1st deadline, if there was cooperation between the District and KORR and had no reason to believe, within the next four months, they could not perform a site inspection and an overall evaluation of both facilities. There was some damage to the walls and some janitorial work. The District already spent money on new air walls, brand new air conditioning, roof and painting the exterior of the building. Mr. Greenstein was in favor of making the termination contingent on satisfactory inspection, correction and anything costing more than $2,500 or more, would be the responsibility of the CDD and minor issues would be the responsibility of KORR. There would also be a punch list that must be corrected before closing the deal. Ms. Hobbs was in favor of a termination of October, as long as they had the inspection. Ms. Wispelwey would be happier with more time. Ms. Adams noted that the meeting prior to October 1st, was September 12, 2024 and recommended having the punch list completed by September 11th. Mr. Goldstein agreed with calling Mr. Carll to find out why he wanted to terminate it and see if there was a possibility to work it out. Mr. Dryburgh was in favor of Ms. Wispelwey making the call. Mr. Greenstein preferred that it be the District Manager, as it was an administrative decision. Mr. Dryburgh requested that Ms. Adams update the Board after she speaks to Mr. Carll. Ms. Wispelwey voiced concern that they would lose Kingwood’s oversight of the dumpsters. Ms. Adams pointed out that there was a License Agreement with the Master Association, which included some controls for the dumpster area, but under the MSA, KORR maintained both The Stables and HCCC. There should be no impact other than keeping the area neat and tidy. Ms. Wispelwey felt this was another reason to have this discussion with Mr. Carll, as Mr. Carll was also the President of the Master Association. Ms. Adams would include this item on the Action Items List, so that staff could provide an update on the status of the transition each month. On MOTION by Ms. Hobbs seconded by Ms. Wispelwey with all in favor terminating the Management Services Agreement with Kingwood Orlando Reunion Resort effective October 1, 2024, contingent on items being complied to by September 11, 2024, but if not, the termination would be effective on November 26, 2024 was approved. Ms. Trucco asked if the conditions were that there would be a walkthrough inspection with Mr. Scheerer, turnover of any records, accounting, event schedule and any necessary repairs. Ms. Trucco felt that Kingwood had a duty to provide their public records to the District upon termination. Mr. Dryburgh requested that KORR notify the District of any weddings scheduled after October 1st and the District adjust their fees accordingly. Mr. Greenstein indicated that KORR must apply to the CDD for use of the space, just like any other entity and the fees would be adjusted, in order to recoup their expenses. FIFTH ORDER OF BUSINESS Consideration of Letter Regarding Debt Assessment for Bonds Ms. Adams presented a letter dated May 20, 2024, from Mr. Brian Crumbaker, Bond Trustee’s Counsel at Greensburg Traurig, regarding the levy of debt assessments for the bonds. Ms. Trucco confirmed that Mr. Brian Crumbaker, was Bond Trustee’s Counsel and this was a demand letter, stating that due to material changes in the development of property owned by KORR and its affiliates, the CDD needed to commence assessment proceedings to determine the amount of benefit, as the parcels owned by KORR and its affiliates were receiving from the 2002 and 2005 project bonds. Since there were material changes in the development of property owned by KORR, the CDD had a duty under its Trust Indenture, the contract for the bonds, to proceed with an assessment proceeding, in order to determine what amount of benefit those parcels were receiving. As part of that process, there would be a resolution setting a public hearing and staff would bring back an Assessment Methodology Report. The District Engineer and the District Management Company would also look at the development and the approvals that were received for these particular parcels, that were part of the 2002 and 2005 project areas, make an amendment or revision to the Assessment Methodology Report and provide it to the Board. At that public hearing, the Board, members of the public and Trustees Counsel, would be able to review the Assessment Methodology Report and determine if the benefits that were being received required any revisions to the amount of assessments collected. Ms. Trucco and Ms. Carpenter reviewed the demand letter and recommended that the Board authorize staff to let Mr. Crumbaker know that staff would proceed with the assessment proceeding. On MOTION by Mr. Greenstein seconded by Mr. Dryburgh with all in favor authorization for staff to proceed with the assessment process due to determine the amount of benefit that the parcels owned by KORR and its affiliates received from the 2002 and 2005 project bonds was approved. SIXTH ORDER OF BUSINESS Consideration of Easement Variance Agreement on Radiant Drive for Lots 303 and 304 Ms. Adams recalled that she was contacted a few weeks ago, by a Preferred Builder at Reunion, on behalf of a client who had new residential construction planned on a double lot. The home design had been through the approval processes with the Architectural Review Committee (ARC) with the Master Association. The new construction plan and was submitted to Osceola County. However, when the County reviewed the plan, they had some comments regarding the driveway construction. For Board member review, the approval provided by the ARC was included in the agenda package, as well as the comments from the County. The County’s comments prompted the builder to reach out to the CDD. The County requested that the CDD approve the driveway design because it would impact Radiant Street, which was owned by the CDD. The District engineer reviewed the construction plans and had no objection to the plan. The engineer provided a diagram, which was included in the agenda package, showing the impact to the CDD right-of-way (ROW). There must be curb cuts in the ROW, to allow for the driveway and the driveway apron to be installed. They also provided a diagram showing the direction of travel for the alley, to demonstrate that it was far enough away from corners and intersections to provide for safe free flow of traffic. The recommendation from the District Management team, was that the Board approve the easement variance and delegate authority to the Chair to execute the form of agreement required by the County. Mr. Goldstein asked if the CDD ever approved a side driveway like that before. Mr. Greenstein recalled that there were two similar properties where corner lots had driveway access, at Loxahatchee Court and Golden Bear Drive. Ms. Adams recalled that to her knowledge nothing was presented to the District previously, but perhaps there was not always consistency with the County review process. With double lot builds, there was a history of the District approving an easement vacation. Mr. Goldstein wanted to ensure that they were not setting a precedent that could affect the District in the future. Ms. Wispelwey noted this one was not problematic, as there was a one-way street and the house was at the end of the street. Mr. Greenstein pointed out that all of the houses on the south side of Radiant Street, were 55-foot-wide lots with driveways facing Radiant Street, but all the houses on the interior side, were alley lots. The covenants technically say that there was supposed to be a garage going to an alley. What happened in this case, was the ARC approved the variance, but when the County reviewed it, they noticed that it was impacting or crossing CDD property and wanted CDD approval. Ms. Adams pointed out that the Board could authorize, whatever form of approval the county was requiring. Regarding the Board setting a precedent, the Board always had right to deny something based on input from the District Engineer or District Counsel. On MOTION by Ms. Hobbs seconded by Mr. Dryburgh with all in favor the Easement Variance Agreement on Radiant Drive for Lots 303 and 304 for a curb cut and authorization for the Chairman to execute the form of approval required by the county was approved. SEVENTH ORDER OF BUSINESS Consideration of Resolution 2024-05 Approving Entering into a Contract with All County Paving Inc. to Provide Paving and Related Services Ms. Adams recalled that the District was considering milling and resurfacing roadway improvements over several months. For discussion purposes, the District Engineer provided a diagram of potential locations of speed tables, which was included in the agenda package, along with Resolution 2024-05, Entering into a Contract with All County Paving Inc. (All County), to provide paving and related services. Mr. Curley indicated that the diagrams were where they initially proposed installing speed tables, to even the space and make break up the longer runs of roadways and wanted the Board to review it to see if they had the right locations or if adjustments needed to be made. Ms. Wispelwey expected to see the speed tables on the map. Mr. Goldstein agreed, as the maps did not tell them anything. Ms. Wispelwey wanted to know where the speed tables were on Excitement Drive, as the pricing included two speed tables on Excitement Drive. Mr. Greenstein noted that was a good point, as there was good discussion at the Reunion West CDD meeting on the proximity of speed tables to golf cart crossings and locations to slow people down when they get up to a certain speed. There was Board consensus to defer this item to the July meeting, in order to get clarification of the speed tables that were in the proposal and how they correlated to the speed tables on the maps, especially the two speed tables on Excitement Drive. EIGHTH ORDER OF BUSINESS Consideration of Resolution 2024-06 Approving the Proposed Fiscal Year 2024 Budget and Setting a Public Hearing Ms. Adams presented Resolution 2024-06, approving the Proposed Budget for Fiscal Year (FY) 2025 and setting the public hearing for August 15, 2024 at 11:00 a.m. at this location, which was included in the agenda package. Each year CDDs in Florida, were required to approve a Proposed Budget no later than June 15th. The CDD’s regular meeting that falls in August, would be on August 8th, however, Florida Statutes require 60 days between approval of the Proposed Budget and the public hearing to adopt the budget and requested that the Board schedule the public hearing for August 15, 2024 at 2:00 p.m. This would allow for the budget to be approved prior to the statutory deadline of September 15th and for staff to finalize the Assessment Roll and provide it to Osceola County. However, if this was not possible, it could be scheduled for the September 12th meeting. All Board Members confirmed that they were available on August 15th. Ms. Adams would cancel the August 8th meeting and highlighted the following with the Proposed Budget: . “Special Assessments” remained the same as the prior year. There were separate categories for “Special Assessments”; “Special Assessments – Tax Collector” and “Special Assessments – Direct Billed,” which was $2,008,852. “Interest” was $24,000, if the current interest rate held. There was “Rental Income” of $6,000. “Carry Forward Surplus” of $1,069,5611 was recognized, to balance the budget. Since the recognition of Surplus Funds, was a sign that there could be stress on the assessment level, staff recommended recognizing a surplus amount for FY 2025 and be mindful that a balanced budget would be presented in future years, that did not include the recognition of “Carry Forward Surplus”. Ms. Wispelwey asked if everything was the same next year, whether they would have to increase assessments. Ms. Adams confirmed assessments would likely increase for fiscal year 2026. . “Administrative Expenses,” were the costs to operate the District, in accordance with Florida Statutes. Due to actuals for the current fiscal year, there was an increase in “Engineering Fees” to $30,000, “Attorney” to $60,000 and “Management Fees” from $49,278 to $52,974. “Management Fees” included District management services, accounting services, recording services, meeting preparation and attendance, etc. Overall, “Total Administrative” was $203,691 and the proposed amount was $223,212. The narrative explained each line item and explanation of what was covered. “Maintenance Expenses” were the shared expenses, based on the Amenity Reciprocity Agreement between the Reunion East and Reunion West CDDs. . For “Shared Costs,” under a Cost Sharing Agreement, the current cost share was 56% for Reunion East and 44% for Reunion West, but next year, because of the increased number of platted lots in Reunion East, the cost share would be 57% for Reunion East and 43% for Reunion West. Mr. Dryburgh pointed out for “Electric” and “Water & Sewer,” due to the population growth, the Utility Commission had numerous requests for substantial increases in electricity and water for next year. Their plan was to have residents reduce their usage, which made sense; however, it would impact their budget and the budget did not reflect that. Ms. Adams explained for “Electric”, the end of year projection was $361,000 and the Proposed Budget amount was $376,200, for “Water & Sewer,” the end of year projection was $35,518 and the Proposed Budget amount was $41,262 and for “Gas,” $40,000 was spent and there was a proposed $48,450, to account for increases. If Board Members felt that any item should be increased more than the proposed amount, they had the opportunity to revise the proposed budget at any duly noticed Board meeting up through the adoption. Mr. Dryburgh questioned the percentage of growth on their projections, as in talking with Duke Energy, they were looking for a 30% increase next year and wondered if this was reflected and if they should have a more traditional 12%, 14% or 16% increase. Ms. Hobbs recalled that it would be spread over three years. Ms. Wispelwey felt that since the cost of oil decreased, it did not make sense that Duke would get 30%. Mr. Greenstein believed that they would get half or a third of what they were asking for. Ms. Adams confirmed that the increase was close to 20%, but it was a good point, as staff was cognizant of utility inflation and would be fine tuning the budget, moving towards the budget adoption. . “Pool & Fountain Maintenance”, increased to $205,428, but it was not a significant increase over the current fiscal year. “Building Repairs & Maintenance,” increased by $6,000, based on projected spending for the current year. “Gate & Gatehouse Repairs & Maintenance,” substantially increased, as the current budget was $28,000, but they were tracking to spend closer to $43,000 by the end of the year. Most line items were adjusted based on projections and anticipated increased costs with service providers. . Under Reserves, there was a “Transfer Out - R&M Fund” of $1,014,628. Reunion East was on track for the reserve fund planning meeting the reserve balance recommendations and recommended contribution for the Reserve Fund. “Total Revenue” was $3,108,413 and “Total Expenditures” was $3,108,414, which indicated a balanced budget. . The “Gross Assessment Per Unit,” was the amount that was added to the property Tax Bill in the non-ad valorem section. It accounted for early payments discounts, as well as the fees collected by the county. The District would receive the Net Assessment. For FY 2025, there were 3,379 units, whereas in FY 2024, there were 3,371 units. The budget was based on Equivalent Assessment Units (EAUs) assigned to each unit, which translated to a gross amount assessed per unit. The commercial gross per unit that would be placed on the Tax Bill was $423.03, $423.03 for hotel condos, $634.55 for multi multifamily units, $846.07 for single family homes and $423 for the golf units. . The narrative was updated each year in accordance with the Proposed Budget and did a great job of explaining what comprised the line items. . For “Replacement & Maintenance Fund (R&M),” the proposed “Transfer In” for next fiscal year was $1,014,628. The District was earning good interest and was projected by the end of this year, to earn almost $150,000 and was anticipating about that same amount next year. Similar to last year, they were going to provide a Proposed R&M Project List in July for FY 2025, which would include updated projections for the current fiscal year, on what they reasonably anticipate having as a completed project by the end of the year and what to defer until next year and account for in the budget. . For the Series 2015A Debt Service Fund,” there were interest and principal payments due in November and May 1, based on the Amortization Schedule, which also identified the retirement date for the bond debt. For the debt that was issued 2003, the retirement date was 2033. There were also similar Amortization Schedules for the Series 2021 bond issue, which retired in 2046, the Series 2017 debt, which retired in 2047, the Series 2019 debt, which retired in 2050 and the Series 2022 debt, which the Board refunded, due to lower interest rates, to lower the debt service payment, which would retire in 2036. Ms. Adams reiterated that the Board was setting the assessment level, which was proposed to be the same as the prior year. There was room in the budget, regarding the amount transferred out to the R&M Fund, but if adjustments needed to be before the budget was adopted, based on proposed costs to operate Heritage Crossings and The Stables, those would be accounted for. There were no further questions from the Board. On MOTION by Mr. Greenstein seconded by Mr. Goldstein with all in favor Resolution 2024-06 Approving the Proposed Fiscal Year 2025 Budget and Setting a Public Hearing for August 15, 2024 at 2:00 p.m. at this location was adopted. NINTH ORDER OF BUSINESS Staff Reports A. Attorney – Memorandum Regarding Recently Enacted Legislation - ADDED Ms. Trucco presented a Memorandum regarding the following recently enacted Legislation, House Bill (HB) 7013, which passed in the last Legislative Session and would go into effect on July 1, 2024 and applied to Special Districts. There were two provisions that applied to CDDs. One was there was now a new requirement by October 1st of each year, starting with October 1, 2024, for each CDD to prepare a report of their goals and objectives and the standards by which the CDD would measure whether they achieve those goals and objectives. Then by December 1st of each year, beginning December 1, 2025, an Annual Report must be prepared and published on the CDD's website, listing those goals and objectives, whether or not the CDD feels that those goals and objectives were met and by which standard the CDD used in order to measure whether they met those goals and objectives. All District Managers would prepare draft goals, objectives and standards for the CDD and bring it back sometime before the September meeting. Since this was the first time everyone was going through this, Ms. Trucco suggested preparing a general table of goals and objectives. Ms. Adams confirmed that GMS was aware of this new law and prepared to be in compliance. Ms. Trucco reported that the HB also repealed Chapter 190.047, which required CDDs to hold a referendum at a General Election before incorporating. Under the new law, CDDs could incorporate into their own cities, under Chapter 190, which govern CDDs. However, this was not relevant to this CDD. If there were further changes in the law, Ms. Trucco would update the Board. Ms. Trucco recalled at the last meeting, discussion regarding the Traffic Enforcement Agreement. A current draft was included in the agenda package. She also reached out to the Legal Department at the Osceola County Sheriff's Department, to request in writing, whether or not they were not going to provide traffic enforcement services without that agreement being in place. There were multiple verbal discussions, but Ms. Trucco preferred to have this in writing. At this time, she had not received a response, but once she received one, she would bring it back to the Board. Mr. Goldstein asked since they were taxpayers, whether it was their responsibility to take care of the taxpayers. Ms. Trucco explained that this argument was made, because the Statute could be interpreted to not require CDDs or Special Districts to enter into this type of agreement with the county. Thus far, there was no confirmation of any CDD in Osceola County, being required to enter into such an agreement and it was that's always been an included service in resident’s taxes. Revisions were made in the last draft provided to the Board and once the county responded, Ms. Trucco would inform the Board. Ms. Wispelwey pointed out that she did not receive a draft of the Traffic Enforcement Agreement. Ms. Trucco would circulate it again. B. Engineer Mr. Curley reported that the paving contract was on a per unit basis, which was $1.5 million for Reunion East and West. Regarding the Spine Road gates, Mr. Curley spoke to Meyer and they were still trying to get the work scheduled with the subcontractor for the directional drilling. As a result, Mr. Curley were trying to find another subcontractor; however, it was a small job and they were having trouble finding contractors. Mr. Goldstein agreed that the work was taking a long time. Mr. Scheerer pointed out that the gates were still in permitting with the county and they have not issued the permit, due to some reviewer issues. C. Field Manager Updates Mr. Scheerer recalled that UCC Group was the contractor that the Board chose to do the renovation of the first fountain in Linear Park. They were on-site last Friday with their contractors and were getting ready to apply for an electrical permit. They did not feel they needed a construction permit, because it was just a cleanup and redesign; however, because they were adding a filtration system, they had to apply for an electrical permit. If that changes, Mr. Scheerer would inform the Board. Once UCC received the permit, they would provide a construction schedule, which Mr. Scheerer requested at least 30 days in advance, so it could be circulated to the Resort for their events in Linear Park, the homeowners, the Board and staff as well. Recently Yellowstone completed all of the Palm tree trimming around the swimming pools. They started with the large Date Palm trees in Seven Eagles and asked them to focus on the resurfacing. All of the Palms were completed and they started on the last two pools in Heritage Crossing. There were some new annuals, that looked beautiful. Mr. Scheerer received a phone call from Mr. Dryburgh regarding Proximity Cards and RFID transponders not working. They were working with ACT, who transitioned to Guardian Access Systems (Guardian), after the previous owner retired and the new owner purchased an interest in ACT. However, the employees were the same. The issue was with the software system that they were using, which got hacked and could not be repaired. A new software system called RS2 was installed, but it was not accepting all of the data from the newer cards and transponders. A conference call was held between Mr. Scheerer, Mr. Vargas, IT and Mr. Matt Gittler, who presented the Board with the proposals to the Spine Road gate. They reassured Mr. Scheerer that they would make one last change by using a system called, PDK, which should work fine, but he was not familiar with it. They also were on-site today and gathered the databases, in order to upload the new PDK system that would be installed in each of the gates. Hopefully by next week, the current cards and transponders and any new cards and transponders, would work as intended. The District did not have a contract with ACT or Guardian, but Mr. Scheerer was working with their Service Manager for 15 years. All he had to do was call them and authorize the repair. He asked them to keep him and Mr. Vargas updated. Once they get everything up and running next week, if they still had issues, they could try to draft something to send out to residents. Mr. Greenstein asked if there were currently issues and if they should be putting something out from the Master Association, telling residents that they may be experiencing difficulty in getting through the gates and what to do if they had an issue, since this was an ongoing issue. Mr. Scheerer offered to prepare something and provide it to Artemis. Ms. Wispelwey questioned the amount of complaints received. Mr. Dryburgh confirmed that he received 20 phone calls last week. Mr. Goldstein pointed out that he received six yesterday. Mr. Greenstein requested that residents be informed that it was a system upgrade, which was being corrected, but asked if someone contacted Mr. Vargas about a problem that they were having at the gate and verified that they lived in the community. Mr. Vargas explained that someone would have to open the gate. Mr. Scheerer confirmed that he could open it manually. Mr. Greenstein asked if they planned to replace the signage and the lighting at the Liberty Bluff gate. Mr. Scheerer stated that the signs were ordered and would replace them, once construction was completed. Mr. Scheerer reported that there was a leak in the Seven Eagles Gym. The issue was with the decorative railing. A proposal was provided to the Board from Advantage Roofing, as well as a diagram of the top of the roof and a photo of the decorative railing and the EFIS or foam column, which was where the leaks were coming from. The proposal was in the amount of $16,750, to remove the railing, install new flashing all the way around and seal it. The decorative railings in the front would remain and the ones on the side and in the back would be removed. There was funding in the R&M Budget and a contingency line item that could be used. Mr. Scheerer requested that the Board approve it today, rather than wait until 2025. Mr. Dryburgh agreed with the repair, as when he was at the health club, water was pouring in. Mr. Scheerer explained that there were 20 EFIS columns around the perimeter and water was coming through one side and getting through the rafters. They were sealing them in one place and moving to the next place, but it was at the point where this repair needed to be made. Ms. Adams pointed out that the Board could take action, but because this item was not on the agenda that was posted on the website seven days in advance, they were required to take public comment. Hearing no comments, Ms. Adams requested a motion from the Board to replace the decorative rail. Mr. Greenstein asked if it would look the same. Mr. Scheerer confirmed that only the railings on the side and back would be replaced and it would look the same in the front. Mr. Dryburgh felt that the work needed to be done. Mr. Greenstein did not have a problem with it, but voiced concern that there were four sides to the building and they were removing the rails. Mr. Goldstein pointed out they did not need the rails in the back and sides anyway. Mr. Greenstein questioned the cost not to replace the rails. Mr. Scheerer confirmed this was the price not to replace the rails, except for the front. Ms. Wispelwey recalled that this area of the building had more problems than any other. Mr. Scheerer estimated that it would cost $28,000 to put all of the railings back. Mr. Greenstein stated the building was designed by the developer and they spruced it up by adding railings and recommended not putting the railings back, install new flashing all the way around and seal it up. Mr. Goldstein requested a price to not put any railing back. Mr. Scheerer estimated a few dollars less and suggested that the Board approve a notto- exceed amount. Ms. Adams recommended delegating authority to the Chairman to approve the proposal. There was Board consensus to remove all of the railings. On MOTION by Mr. Dryburgh seconded by Ms. Hobbs with all in favor delegating authority to the Chairman to approve the Advantage Roofing proposal to remove the railings from the roof at the Seven Eagles Gym, install new flashing all the way around and seal it was approved. D. District Manager’s Report i. Action Items List 1. Seven Eagles Fountain Replacement: The Board approved a proposal at the March 2024 meeting for fountain refurbishment at Fountain #1. UCC Group executed the agreement and the work was pending. The Garden re-design for Fountain #2 was approved. The Agreement was cancelled by KORR. Ms. Adams recalled that subsequent to the last meeting, the UCC Group Agreement was executed and Mr. Scheerer was facilitating the work on Fountain #1. For Fountain #2, a decision was made to enter into an Agreement with KORR to remove the fountain and re-design the garden area. They were in receipt of the agreement, but ultimately KORR changed their mind and refused to execute it. She spoke to Mr. Scheerer about it and were currently focusing on completing Fountain #1 and then coming back with options for Fountain #2. Mr. Goldstein questioned the location of Fountain #2 and the cost to have it refurbished. Mr. Scheerer indicated that it was closest to the pool and cost $65,000 to refurbish it. Mr. Dryburgh recalled that they were going to share the expenses with KORR. Mr. Goldstein recalled that KORR was going to rip out the fountain and install flowers. Ms. Adams stated that they would re-design it and the Board had some options, recommending that they focus on Fountain #1 and coming back with a concept for Fountain #2, rather than discussing it now. The Board agreed. Mr. Scheerer reported that Fountain #2 was working and had water. Regarding the Action Items List, Ms. Adams reported that the majority of items for Reunion East and West were discussed. The transition for Heritage Crossings and The Stables management would be added. • Security Report (Item 9E) Mr. Dryburgh questioned whether the car that was smashed in the front and had yellow tape on it on Gathering Court, was towed from the tow yard and put in front of the house, as it was there for at least two weeks. Ms. Adams confirmed that it would be addressed. Mr. Goldstein noted that the rental car was back in the owner’s driveway and another one was sitting in the street. Mr. Vargas reported that the owner had several vehicles, as they ran a rental car business and all of this information was provided to the HOA, in order to tow the vehicles. Mr. Dryburgh asked if this was the same owner that lived on Gathering Court. Mr. Goldstein did not believe so. Mr. Vargas placed his business card on the door of the home and the vehicles, so that the owner could contact him. Mr. Goldstein felt that Mr. Scheerer and Yellowstone did an amazing job on the dog park when it was closed. A new gate was installed, so that people could not climb over the top, all of the sod, was replaced, flea treatment was applied and mulch was replaced around the fence with nice big stones. Mr. Dryburgh agreed that they did a great job. Mr. Greenstein appreciated it. ii. Approval of Check Register Ms. Adams presented the Check Register from May 1, 2024 through May 31, 2024 in the amount of $378,889.14, which was included in the agenda package, along with a detailed register. On MOTION by Mr. Dryburgh seconded by Mr. Greenstein with all in favor the May Check Register was approved as presented. iii. Balance Sheet and Income Statement Ms. Adams presented the Unaudited Financial Statements through April 30, 2024, which was included in the agenda package. It was for informational purposes and no Board action was required. The same numbers were used for the Proposed Budget. The Unassigned Balance and prorated budget compared to the actual spending to date, were monitored, as well as the Debt Service Fund that was managed by the Trustee. In cases where items were running over budget, staff made those corrections for FY 2025. iv. Replacement and Maintenance Plan Ms. Adams presented the R&M Plan, which was included in the agenda package and was for informational purposes. Spending projections for this month were removed and there were only estimated dates for when proposals would be presented to the Board. For the remainder of this fiscal year, the only new project, would be the exercise equipment replacement for Seven Eagles, to replace the most popular pieces of cardio that aged out of service. Other projects such as rightof- way repairs, the Board was well aware of. v. Reminder of Form 1 Filing Requirement Deadline – July 1, 2024 Ms. Adams reminded Board Members to file Form 1 by July 1st. An email from the Florida Commission on Ethics, was sent to the Board, showing how to complete the filing, electronically. This was also the week to qualify to be on the ballot for the General Election. E. Security Report Mr. Vargas provided the May Security Reports from Reunion Security, under separate cover. Ms. Hobbs reported that the gate off of Old Lake Wilson Road by CVS, was not working properly. The bar went up, but did not close, when she drove through. Mr. Dryburgh pointed out that it takes between a minute and two minutes to go down. Ms. Adams indicated that a system upgrade was in process. Mr. Vargas witnessed owners getting stuck between the gates in the middle gate. TENTH ORDER OF BUSINESS Other Business There being no comments, the next item followed. ELEVENTH ORDER OF BUSINESS Supervisor’s Requests Ms. Adams asked if Ms. Hobbs wanted to provide an update on her meeting with Mr. Scheerer to review strategic sidewalk locations. Ms. Hobbs replied affirmatively, indicating that she would provide the primary and secondary locations next month, similar to what Mr. Mike Barry did on the west side. It was provided in an electronic format to Mr. Scheerer. In addition, Ms. Hobbs would highlight the lots where the house had two lots, with a paved sidewalk in front of the property, but the second lot had no pavement. Some were improved with fencing. Ms. Wispelwey recalled that there were two houses that put in sidewalks, but there was a gap with grass and questioned which house was supposed to pave that area. Ms. Adams confirmed that they were still taking preliminary steps on this project. Board Members would review the locations that were selected by Ms. Hobbs and provide feedback at a future meeting. In the meantime, some funding would be set aside in the R&M Fund, as this would be a potential project for next fiscal year. Mr. Dryburgh and Mr. Greenstein thanked Ms. Hobbs for her hard work. A. Discussion of Future Meeting Times Ms. Adams received a request from Mr. Goldstein regarding the meeting time. Mr. Goldstein recalled that the Board used to meet earlier, but the Reunion West CDD Board met at 11:00 a.m. and this Board met at 1:00 p.m. However, recently by the time when they met at 1:00 p.m., the Reunion West CDD Board already discussed items that were affecting the east side as well and preferred to meet at 11:00 a.m. and have the Reunion West CDD Board meet in the afternoon for a year and see what happens. Ms. Adams pointed out that the meeting schedules were at the pleasure of the Boards and if there was a proposed change for FY 2025, it would also need to be presented to the Reunion West CDD Board. Board Members had the option to meet on the same dates consecutively, on different dates or to schedule joint meetings throughout the year. Typically, District management would recommend the same meeting schedule, unless there was Board direction to change it. Mr. Greenstein pointed out that there were many overlapping issues or joint interest and any decision made by this Board or by the Reunion West CDD Board, only pertained to that Board and felt that it worked both ways, recalling at one time that the timing switched. Ms. Adams recalled that the Reunion West CDD Board met at 12:30 p.m. and the Reunion East CDD Board met at 1:00 p.m., but eventually because the meeting agendas expanded for Reunion West, the meeting time was moved earlier. Mr. Greenstein did not think that the Board would resolve this matter at this point but was glad that Mr. Goldstein brought it up. The easy thing to do, which would cause him the most impact, was to have the meetings on different dates, as he just went through that on the west side, in order to get the draft budget approved. Mr. Greenstein indicated that many times, final action was not taken by either Board until it was discussed by both Boards. There was discussion, some analysis and then he would bring that information to this Board, in order to be in sync with the approach. Ms. Adams recalled that during any discussion at the Reunion West CDD meetings, oftentimes there was a deference to community standards, overall cohesiveness, and moving in tandem with the priorities for the Reunion East CDD. Mr. Greenstein asked if the issue was the Reunion East CDD having their meeting first or meeting at 11:00 a.m. Mr. Goldstein preferred to meet at 11:00 a.m. Ms. Wispelwey felt that the benefit in having a joint meeting would be to discuss the Pavement Management Plan and speed tables, as there should be consensus. Mr. Greenstein pointed out that was where the District Engineer comes in, to explain what happened or what the concerns were. However, because there was so much commonality, at some point in time, there would be discussion about consolidation of the Districts and having one CDD, but it was only brought up as an administrative convenience, as Mr. Greenstein felt that until the Board was constituted with publicly elected officials, it was premature to even think about it. In the future, it may become an issue, but at this time, they would continue to have discussions. Mr. Staley was not bothered by this, as there were good arguments, as to why the Reunion West CDD Board would come to the different decision than the Reunion East CDD Board and would hope that it would go back to the Reunion East CDD Board to rethink their decision. However, if the Reunion West CDD made a decision first and the Reunion East CDD Board did not like it, the Reunion West CDD would revisit their decision, because at the end of the day, they were one big community with common standards. Mr. Greenstein felt that it was a good discussion and appreciated Mr. Staley’s input. Board Members would continue to discuss this matter individually with Ms. Adams and go from there. Mr. Goldstein was not in favor of having a combined meeting. Mr. Staley pointed that there were times that the Boards dealt with the same issues. Mr. Goldstein felt in that case, there should be a joint meeting, which could be every couple of months. Ms. Adams suggested having a joint meeting on an as needed basis. TWELFTH ORDER OF BUSINESS Next Meeting Date: July 11, 2024 Ms. Adams stated that the next meeting was scheduled for July 11, 2024 at 1:00 p.m. THIRTEENTH ORDER OF BUSINESS Adjournment On MOTION by Ms. Wispelwey seconded by Mr. Goldstein with all in favor the meeting was adjourned. Secretary/Assistant Secretary Chairman/Vice Chairman RESOLUTION 2024-07 A RESOLUTION ELECTING OFFICERS OF THE REUNION EAST COMMUNITY DEVELOPMENT DISTRICT WHEREAS, the Board of Supervisors of the Reunion East Community Development District at a regular business meeting held on July 11, 2024 desires to elect the below recited persons to the offices specified. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE REUNION EAST COMMUNITY DEVELOPMENT DISTRICT: 1. The following persons were elected to the offices shown, to wit: Chairman Vice Chairman Treasurer Assistant Treasurer Assistant Treasurer Secretary Assistant Secretary Assistant Secretary Assistant Secretary Assistant Secretary PASSED AND ADOPTED THIS 11th DAY OF JULY, 2024. Chairman / Vice Chairman Secretary / Assistant Secretary RESOLUTION 2024-05 A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE REUNION EAST COMMUNITY DEVELOPMENT DISTRICT APPROVING ENTERING INTO A CONTRACT WITH ALL COUNTY PAVING, INC. TO PROVIDE PAVING AND RELATED SERVICES; PROVIDING FOR IMPLEMENTING ADMINSITRATIVE ACTIONS; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Reunion East Community Development District ("District") is a local unit of special purpose government created and existing pursuant to Chapter 190, Florida Statutes, and located in Osceola County, Florida; WHEREAS, Chapter 190, Florida Statutes, authorizes the District to adopt rules and procedures to govern the administration of the District and to adopt resolutions as may be necessary for the conduct of District business; WHEREAS, Chapter 190, Florida Statutes, and the District’s previously adopted Rules of Procedure (collectively referred to herein as the “Rules”) require the District to follow a procedure, which includes satisfying an advertising requirement, in order to procure contracts for certain services; WHEREAS, the District is seeking paving services for a number of roadways within the District’s boundaries (“Paving Services”); WHEREAS, after completing the requirements set forth in the Rules to procure bids from companies to complete the Paving Services, the District received zero responsive bids; WHEREAS, the Rules permit the District to take whatever steps are reasonably necessary in order to proceed with the procurement of a contract for services in the event the District receives no responsive bids after completing the procurement requirements set forth in the Rules; WHEREAS, the District’s Board of Supervisors (the “Board”) deems it to be in the best interests of the District to approve the District entering into a contract with All County Paving, Inc. to complete the Pavement Services. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE REUNION EAST COMMUNITY DEVELOPMENT DISTRICT: SECTION 1. The Board acknowledges that the District received no responsive bids after completing the procurement process set forth in the Rules for obtaining bids for a contract for the Pavement Services. The Board deems it to be in the best interests of the District to approve the District entering into a contract with All County Paving, Inc. to complete the Pavement Services. SECTION 2. The Board authorizes the District’s Staff to take the measures necessary to effectuate the contract with All County Paving, Inc. for completion of the Pavement Services, and authorizes the Board’s Chairman or Vice Chairman to execute such contract. SECTION 3. In the event any section or part of this Resolution is declared invalid or unconstitutional, the validity, force and effect of any other section or part of this Resolution shall not thereby Resolution 2024-05 Approving Pavement Services Contractor Reunion East Community Development District be affected or impaired unless it clearly appears that such other section or part of this Resolution is wholly or necessarily dependent upon the section or part so held to be invalid or unconstitutional. SECTION 4. This Resolution shall become effective upon its passage and shall remain in effect unless rescinded or repealed. PASSED AND ADOPTED this 11th day of July, 2024. ATTEST: REUNION EAST COMMUNITY DEVELOPMENT DISTRICT Print Name: Tricia Adams Secretary Chairman/Vice Chairman REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA TABLE OF CONTENTS Page INDEPENDENT AUDITOR’S REPORT 1-3 MANAGEMENT’S DISCUSSION AND ANALYSIS 4-7 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 – 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 14-24 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund 25 Notes to Required Supplementary Information 26 OTHER INFORMATION Data Elements required by FL Statute 218.39 (3) (c) 27 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 28-29 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10) OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA 30 MANAGEMENT LETTER REQUIRED BY CHAPTER 10.550 OF THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA 31-33 INDEPENDENT AUDITOR’S REPORT To the Board of Supervisors Reunion East Community Development District Osceola County, Florida Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities and each major fund of Reunion East Community Development District, Osceola County, Florida (“District”) as of and for the fiscal year ended September 30, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2023, and the respective changes in financial position, thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As discussed in Notes 6 and other notes to the basic financial statements, the debt service fund had a deficit fund balance of ($14,413,217) at September 30, 2023. The District was unable to make debt service payments on the Series 2002 and 2005 Bonds since there are no special assessment revenues pledged to the Series 2002 and 2005 Bonds. The District’s failures to make its scheduled debt service payments when they are due are considered events of default. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Included in the Financial Report Management is responsible for the other information included in the financial report. The other information comprises the information for compliance with Section 218.39(3)(c), Florida Statutes, but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 26, 2024, 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, contracts, 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 Auditing Standards in considering the District’s internal control over financial reporting and compliance. June 26, 2024 MANAGEMENT’S DISCUSSION AND ANALYSIS Our discussion and analysis of Reunion East Community Development District, Osceola County, Florida (“District”) provides a narrative overview of the District’s financial activities for the fiscal year ended September 30, 2023. Please read it in conjunction with the District’s Independent Auditor’s Report, basic financial statements, accompanying notes and supplementary information to the basic financial statements. FINANCIAL HIGHLIGHTS • The liabilities of the District exceeded its assets at the close of the most recent fiscal year resulting in a net position deficit balance of ($1,403,575). • The change in the District’s total net position in comparison with the prior fiscal year was ($383,453), a decrease. The key components of the District’s net position and change in net position are reflected in the table in the government-wide financial analysis section. • At September 30, 2023, the District’s governmental funds reported combined ending fund balances of ($7,756,253), a decrease of ($9,824,735) in comparison with the prior fiscal year. The total fund balance is restricted for capital projects, non-spendable for prepaid items and deposits, assigned for maintenance reserves, and unassigned deficit fund balance in the debt service fund, and the remainder is unassigned fund balance in the general fund which is available for spending at the District’s discretion. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis are intended to serve as the introduction to the District’s basic financial statements. The District’s basic financial statements are comprised of three components: 1) governmentwide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business. The statement of net position presents information on all the District’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the residual amount being reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. The government-wide financial statements include all governmental activities that are principally supported by assessments. The District does not have any business-type activities. The governmental activities of the District include the general government (management), recreation, public safety, roads and streets and maintenance functions. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has one fund category: governmental funds. OVERVIEW OF FINANCIAL STATEMENTS (Continued) Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a District’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District maintains three governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, debt service and capital projects funds which are major funds. The District adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of an entity’s financial position. In the case of the District, liabilities exceeded assets at the close of the fiscal year. Key components of the District’s net position are reflected in the following table: The District’s net position reflects its investment in capital assets (e.g., land, land improvements, and infrastructure) less any related debt used to acquire those assets that is still outstanding. These assets are used to provide services to residents; consequently, these assets are not available for future spending. Although the District’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued) The District’s net position decreased during the most recent fiscal year. The majority of the decrease was due to an increase in maintenance costs during the current fiscal year. Key elements of the change in net position are reflected in the following table: As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2023, was $6,606,929. The costs of the District’s activities were partially funded by program revenues. Program revenue was comprised primarily of assessments. The increase in program revenues is primarily due to investment earnings received during the current fiscal year. In total, expenses increased due to increase in maintenance costs, professional services including the landscape maintenance and repairs. GENERAL BUDGETING HIGHLIGHTS An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2023. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At September 30, 2023, the District had $81,822,455 invested in capital assets for its governmental activities. In the government-wide financial statements depreciation of $31,803,121 has been taken, which resulted in a net book value of $50,019,334. More detailed information about the District’s capital assets is presented in the notes of the financial statements. Capital Debt At September 30, 2023, the District had $39,715,000 in Bonds outstanding for its governmental activities. In addition, the District has not paid the $12,715,000 of the unexchanged Bonds. More detailed information about the District’s capital debt is presented in the notes of the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND OTHER EVENTS The District anticipates that operations will be consistent with the prior year, however construction will continue on the Series 2021 project. CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, landowners, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact the Reunion East Community Development District’s Finance Department at 219 E. Livingston Street, Orlando, Florida 32801. REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2023 See notes to the financial statements REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 See notes to the financial statements REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2023 See notes to the financial statements REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2023 See notes to the financial statements REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 See notes to the financial statements REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 See notes to the financial statements REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE 1 – NATURE OF ORGANIZATION AND REPORTING ENTITY Reunion East Community Development District ("District") was established on September 24, 2001, by the Board of County Commissioners of Osceola County, Osceola County Ordinance 01-31, pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes and expanded by Osceola County Ordinance 05-26. The Act provides, among other things, the power to manage basic services for community development and to levy and assess non-ad valorem assessments for the financing and maintenance of improvements. 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 the Board of Supervisors ("Board"), which is composed of five members. The Supervisors are elected on at large basis by the qualified electors of the property within the District. The Board of Supervisors of the District exercise all powers granted to the District pursuant to Chapter 190, Florida Statutes. The Board has the responsibility for: 1. Allocating and levying assessments. 2. Approving budgets. 3. Exercising control over facilities and properties. 4. Controlling the use of funds generated by the District. 5. Approving the hiring and firing of key personnel. 6. Financing improvements. The financial statements were prepared in accordance with Governmental Accounting Standards Board (“GASB”) Statements. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District Board of Supervisors is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Government-Wide and Fund Financial Statements The basic financial statements include both government-wide and fund financial statements. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment. Operating-type special assessments for maintenance and debt service are treated as charges for services; and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Other items not included among program revenues are reported instead as general revenues. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and 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 government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. Assessments Assessments are non-ad valorem assessments on benefited property within the District. Operating and maintenance assessments are based upon the adopted budget and levied annually at a public hearing of the District. Debt service assessments are levied when Bonds are issued and assessed and collected on an annual basis. The District may collect assessments directly or utilize the uniform method of collection under 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 the 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 considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. The portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. The District reports the following major governmental funds: General Fund The general fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund. 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 Projects Fund This fund accounts for the financial resources to be used for the acquisition or construction of major infrastructure within the District. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first for qualifying expenditures, then unrestricted resources as they are needed. Assets, Liabilities and Net Position or Equity Restricted Assets These assets represent cash and investments set aside pursuant to Bond covenants or other contractual restrictions. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position or Equity (Continued) Deposits and Investments The District’s cash and cash equivalents are considered to be cash on hand and demand deposits (interest and non-interest bearing). The District has elected to proceed under the Alternative Investment Guidelines as set forth in Section 218.415 (17) Florida Statutes. The District may invest any surplus public funds in the following: a) The Local Government Surplus Trust Funds, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; b) Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; c) Interest bearing time deposits or savings accounts in qualified public depositories; d) Direct obligations of the U.S. Treasury. The State Board of Administration’s (“SBA”) Local Government Surplus Funds Trust Fund (“Florida PRIME”) is a “2a-7 like” pool. A “2a-7 like” pool is an external investment pool that is not registered with the Securities and Exchange Commission (“SEC”) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a-7 of the Investment Company Act of 1940, which comprises the rules governing money market funds. Thus, the pool operates essentially as a money market fund. The District has reported its investment in Florida PRIME at amortized cost for financial reporting purposes. Securities listed in paragraph c and d shall be invested to provide sufficient liquidity to pay obligations as they come due. In addition, surplus funds may be deposited into certificates of deposit which are insured, and any unspent Bond proceeds are required to be held in investments as specified in the Bond Indenture. The District records all interest revenue related to investment activities in the respective funds. Investments are measured at amortized cost or reported at fair value as required by generally accepted accounting principles. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Capital Assets Capital assets which include property, plant and equipment, and infrastructure assets (e.g., roads, sidewalks and similar items) are reported in the government activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition 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 assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant and equipment of the District are depreciated using the straight-line method over the following estimated useful lives: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position or Equity (Continued) Capital Assets (Continued) 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. Unearned Revenue Governmental funds report unearned revenue in connection with resources that have been received, but not yet earned. 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. Bonds payable are reported net of applicable premiums or discounts. Bond issuance costs are expensed when incurred. In the fund financial statements, governmental fund types recognize premiums and discounts, as well as issuance costs, during the current period. The face amount of 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. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position 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. In addition to liabilities, the statement of financial position 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. Fund Equity/Net Position In the fund financial statements, governmental funds report non spendable and restricted fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Assignments of fund balance represent tentative management plans that are subject to change. The District can establish limitations on the use of fund balance as follows: Committed fund balance – Amounts that can be used only for the specific purposes determined by a formal action (resolution) of the Board of Supervisors. Commitments may be changed or lifted only by the Board of Supervisors taking the same formal action (resolution) that imposed the constraint originally. Resources accumulated pursuant to stabilization arrangements sometimes are reported in this category. Assigned fund balance – Includes spendable fund balance amounts established by the Board of Supervisors that are intended to be used for specific purposes that are neither considered restricted nor committed. The Board may also assign fund balance as it does when appropriating fund balance to cover differences in estimated revenue and appropriations in the subsequent year’s appropriated budget. Assignments are generally temporary and normally the same formal action need not be taken to remove the assignment. The District first uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position or Equity (Continued) Fund Equity/Net Position (Continued) Net position is the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources. Net position in the government-wide financial statements are categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents net position related to infrastructure and property, plant and equipment. Restricted net position represents the assets restricted by the District’s Bond covenants or other contractual restrictions. Unrestricted net position consists of the net position not meeting the definition of either of the other two components. Other Disclosures Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. NOTE 3 – BUDGETARY INFORMATION The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. All annual appropriations lapse at fiscal year-end. The District follows these procedures in establishing the budgetary data reflected in the financial statements. a) Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1. b) Public hearing(s) are conducted to obtain comments. c) Prior to October 1, the budget is legally adopted by the District Board. d) All budget changes must be approved by the District Board, unless otherwise delegated by the District Board. e) The budgets are adopted on a basis consistent with generally accepted accounting principles. f) Unused appropriation for annually budgeted funds lapse at the end of the year. NOTE 4 – DEPOSITS AND INVESTMENTS Deposits The District’s cash balances were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer. Chapter 280, Florida Statutes "Florida Security for Public Deposits Act", requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral equal to various percentages of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally, U.S. Governmental and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository's financial history and its compliance with Chapter 280, Florida Statutes. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses. NOTE 4 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) The District’s investments were held as follows at September 30, 2023: Credit risk – For investments, credit risk is generally the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Investment ratings by investment type are included in the preceding summary of investments. Concentration risk – The District places no limit on the amount the District may invest in any one issuer. Interest rate risk – The District does not have a formal policy that limits investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates. However, the Bond Indenture limits the type of investments held using unspent proceeds. Fair Value Measurement – When applicable, the District measures and records its investments using fair value measurement guidelines established in accordance with GASB Statements. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques. These guidelines recognize a three-tiered fair value hierarchy, in order of highest priority, as follows: • Level 1: Investments whose values are based on unadjusted quoted prices for identical investments in active markets that the District has the ability to access; • Level 2: Investments whose inputs - other than quoted market prices - are observable either directly or indirectly; and, • Level 3: Investments whose inputs are unobservable. The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the entire fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs. Money market investments that have a maturity at the time of purchase of one year or less and are held by governments other than external investment pools should be measured at amortized cost. For external investment pools that qualify to be measured at amortized cost, the pool’s participants should also measure their investments in that external investment pool at amortized cost for financial reporting purposes. Accordingly, the District’s investments have been reported at amortized cost above. NOTE 4 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) External Investment Pool – With regard to redemption gates, Section 218.409(8)(a), Florida Statutes, states that “The principal, and any part thereof, of each account constituting the trust fund is subject to payment at any time from the moneys in the trust fund. However, the Executive Director may, in good faith, on the occurrence of an event that has a material impact on liquidity or operations of the trust fund, for 48 hours limit contributions to or withdrawals from the trust fund to ensure that the Board can invest moneys entrusted to it in exercising its fiduciary responsibility. Such action must be immediately disclosed to all participants, the Trustees, the Joint Legislative Auditing Committee, the Investment Advisory Council, and the Participant Local Government Advisory Council. The Trustees shall convene an emergency meeting as soon as practicable from the time the Executive Director has instituted such measures and review the necessity of those measures. If the Trustees are unable to convene an emergency meeting before the expiration of the 48- hour moratorium on contributions and withdrawals, the moratorium may be extended by the Executive Director until the Trustees are able to meet to review the necessity for the moratorium. If the Trustees agree with such measures, the Trustees shall vote to continue the measures for up to an additional 15 days. The Trustees must convene and vote to continue any such measures before the expiration of the time limit set, but in no case may the time limit set by the Trustees exceed 15 days.” With regard to liquidity fees, Florida Statute 218.409(4) provides authority for the SBA to impose penalties for early withdrawal, subject to disclosure in the enrollment materials of the amount and purpose of such fees. At present, no such disclosure has been made. As of September 30, 2023, there were no redemption fees or maximum transaction amounts, or any other requirements that serve to limit a participant’s daily access to 100% of their account value. NOTE 5 – CAPITAL ASSETS Capital asset activity for the fiscal year ended September 30, 2023, was as follows: NOTE 5 – CAPITAL ASSETS (Continued) The Districts master infrastructure continues to be constructed in phases. During the prior fiscal year, the District issued the Series 2021 Bonds in order to finance infrastructure improvements associated with Phase 3. The total estimated costs to complete Phase 3 are $23,735,095. The Phase 3 infrastructure improvements will include roadways, potable water and wastewater systems, stormwater facilities, electrical utilities, irrigation, parks, recreational facilities, and a connector. A portion of the project costs was expected to be financed with the proceeds from the issuance of Bonds with the remainder to be funded by EHOF Acquisitions II LLC and conveyed to the District. Upon completion, the potable and wastewater systems, electrical utility systems, and connector are to be conveyed to others for ownership and maintenance responsibilities. Depreciation expense was charged to function/programs as follows: NOTE 6 – LONG-TERM LIABILITIES Series 2002 On August 8, 2002, the District issued $73,620,000 of Special Assessment Bonds, Series 2002 consisting of multiple Term Bonds with maturity dates from May 1, 2008, to May 1, 2033, and fixed interest rates ranging from 5.9% to 7.375%. The Bonds were issued to pay off the Bond Anticipation Notes issued on December 28, 2001, for $10,000,000 and 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 2002A Bonds is to be paid serially commencing May 1, 2005, through May 1, 2033. The Series 2002 Bonds were trifurcated in January 2012 and then restructured in 2015 resulting in a remaining balance of the Series 2002 Bonds of $6,275,000 (“Unexchanged Bonds”). All other remaining balances were either included in the new 2015 issues or were cancelled. Payment on the remaining Series 2002 Bonds is subordinate to the 2015 issues and is to be paid solely from the unexchanged 2002 Bond Assessments as defined in the bond indentures. The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District was not in compliance with the requirements at September 30, 2023. Series 2005 On March 1, 2005, the District issued $18,880,000 of Special Assessment Bonds, Series 2005, due on May 1, 2036, with a fixed interest rate of 5.80%. 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 2005 Bonds is to be paid serially commencing May 1, 2008, through May 1, 2036. The Series 2005 Bonds were trifurcated in January 2012 and then restructured in 2015 resulting in a remaining balance of the Series 2005 Bonds of $6,440,000 (“Unexchanged Bonds”). All other remaining balances were either included in the new 2015 issues or were cancelled. Payment on the remaining Series 2005 Bonds is subordinate to the 2015 issues and is to be paid solely from the unexchanged 2005 Bond Assessments as defined in the bond indentures. The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District was not in compliance with the requirements at September 30, 2023. NOTE 6 – LONG-TERM LIABILITIES (Continued) Both the Series 2002 and 2005 Bonds are in default. In accordance with the Bond Exchange discussed below, a portion of Series 2002 and 2005 Bonds were exchanged, and a portion are to remain outstanding as unexchanged Series 2002 and 2005 Bonds. There are no special assessment revenues pledged to the unexchanged Series 2002 and 2005 Bonds, therefore the District has missed its scheduled debt service payments on the Series 2002 and 2005 Bonds in the current fiscal year as well as previous fiscal years. The debt service fund has a deficit fund balance of ($14,413,217) as of September 30, 2023. Bond Exchange – Series 2015 Restructured Bonds In June 2015, $8,795,000 of the Series 2002 Bonds and $10,440,000 of the Series 2005 Bonds were exchanged for $7,245,000 Series 2015-1 Bonds, due May 1, 2033, with a fixed interest rate of 6.6%, $8,475,000 Series 2015-2 Bonds, due May 1, 2036, with a fixed interest rate of 6.6% and $3,515,000 Series 2015-3 Bonds, due May 1, 2033, with a fixed interest rate of 6.6%. The Series 2015 Bonds were paid off during a prior fiscal year. Series 2015A On June 30, 2015, the District issued $30,710,000 of Special Assessment Refunding Bonds, Series 2015A consisting of multiple Term Bonds with due dates from May 1, 2020, to May 1, 2033, and fixed interest rates ranging from 4.0% to 5.0%. The Bonds were issued to refund a portion of the Series 2002A-1 Bonds. 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, 2016, through May 1, 2033. The Series 2015A Bonds are subject to redemption at the option of the District prior to their maturity. The Bonds are subject to extraordinary mandatory redemption prior to their selected maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture. The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District was in compliance with the requirements at September 30, 2023. Series 2021 During July 2021, the District issued $20,355,000 of Special Assessment Bonds, Series 2021 consisting of Term Bonds due ranging from May 1, 2026, to May 1, 2051, and fixed interest rates ranging from 2.4% to 4.0%. 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, commencing November 1, 2021, and the principal on the bonds is to be paid serially commencing May 1, 2022 through May 1, 2051. The Series 2021 Bonds are subject to optional redemption, mandatory sinking fund and extraordinary mandatory redemption at the times, in the amounts, and at the redemption prices more fully described in the Redemption Provisions as outlined in the Bond Indenture. The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District was in compliance with the requirements at September 30, 2023. NOTE 6 – LONG-TERM LIABILITIES (Continued) Long-term Debt Activity Changes in long-term liability activity for the fiscal year ended September 30, 2023, were as follows: At September 30, 2023, the scheduled debt service requirements on the long-term debt were as follows: The unexchanged bonds are not included above as the Bonds have not been resized. NOTE 7 – LITIGATION & CLAIMS During a prior fiscal year, the District received correspondence dated May 4, 2016 regarding potential litigation involving the U.S. Bank Bond Trustee and a significant landowner (the former Developer) within the District regarding the possible imposition of debt assessments on certain unassessed parcels within the boundary of the District to pay the debt due on the Unexchanged Bonds (the 2002 and 2005 Bonds). The Trustee’s counsel and the landowner were unable to negotiate a settlement, which would have eliminated the District as a party. During a prior fiscal year, the original landowner sold its ownership interests in the land to the current Developer. The Trustee’s counsel contacted the District with questions regarding this matter and its allegation that the current Developer, as successor landowner, is responsible to pay the debt due on the Unexchanged Bonds. The District remains open to settling the default on the Unexchanged Bonds through negotiations with the current Developer and/or the Trustee for the Unexchanged Bonds. However, legal action could result if negotiations are unsuccessful.” In addition, the prior landowner failed to turnover certain irrigation improvements to the district prior to selling its interests to the new Developer. The District sent a demand letter to the Developer in February 2020 and the parties are continuing to negotiate a resolution to the issues of the ownership and operation of these improvements. If the negotiation are not successful, litigation could ensue. NOTE 8 – DEVELOPER TRANSACTIONS The Developer and EHOF Acquisitions II LLC own a portion of land within the District; therefore, assessment revenues in the general and debt service funds include the assessments levied on those lots owned by the Developer and EHOF Acquisitions II LLC. NOTE 9 – CONCENTRATION The District’s activity is dependent upon the continued involvement of the Developer and EHOF Acquisitions II LLC, the loss of which could have a material adverse effect on the District’s operations. NOTE 10 – MANAGEMENT COMPANY The District has contracted with a management company to perform management advisory services, which include financial and accounting services. Certain employees of the management company also serve as officers of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, computer and other administrative costs. NOTE 11 – RISK MANAGEMENT The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The District has obtained commercial insurance from independent third parties to mitigate the costs of these risks; coverage may not extend to all situations. There were no settled claims over the past three years. NOTE 12 – SHARED MAINTENANCE COSTS WITH REUNION WEST CDD The District has an agreement with Reunion West CDD to share certain maintenance costs, including utilities and pool maintenance costs. The shared costs are allocated on a similar percentage basis as shared infrastructure with 56% allocated to Reunion East and 44% allocated to Reunion West during the current fiscal year. The majority of the costs are paid by Reunion East which is then reimbursed by Reunion West for its proportionate share. The District’s portion of these shared costs for the fiscal year ended September 30, 2023 was approximately $1,700,078. Reunion West owed $655,242 to the District as of September 30, 2023 related to their share of the costs. NOTE 13 – SUBSEQUENT EVENTS As a follow-up to the first item in Note 7, that on September 7, 2023, Kingwood Orlando Reunion Resort, LLC (hereinafter referred to as “Kingwood”) requested the transfer of conservation land from the District in order to modify a golf course, to allow for the construction of a new multi-unit development. The District’s bond trustee’s counsel sent a letter to the District on May 24, 2024, demanding that the District immediately commence assessment proceedings in order to consider whether and to what extent real property owned by Kingwood benefits from the District’s bond-funded projects and the debt special assessment that should be collected by the District resulting therefrom, and objecting to the transfer of conservation land from the District to Kingwood on the purported basis that the sale would constitute a breach of the bond contract. The District agreed to commence assessment proceedings after receiving the letter from the bond trustee’s counsel, and the District Manager is currently working with the District Counsel and the District Engineer to begin that process. As a follow-up to the second item in Note 7, that as of December 5, 2023, the District entered into an agreement with the new Developer to resolve the second issue described in Note 7 related to the irrigation improvements. Missed Debt Service Payments The District had insufficient funds to make the November 1, 2023 and May 1, 2024 scheduled debt service payments due on both the Series 2002 and Series 2005 Bonds. Consequently, the payments were not made which is considered an event of default under the Bond Indenture. REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 See notes to required supplementary information REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION The District is required to establish a budgetary system and an approved Annual Budget for the general fund. The District’s budgeting process is based on estimates of cash receipts and cash expenditures which are approved by the Board. The budget approximates a basis consistent with accounting principles generally accepted in the United States of America (generally accepted accounting principles). The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2023. REUNION EAST COMMUNITY DEVELOPMENT DISTRICT OSCEOLA COUNTY, FLORIDA OTHER INFORMATION – DATA ELEMENTS REQUIRED BY FL STATUTE 218.39(3)(C) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 UNAUDITED 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 Reunion East Community Development District Osceola County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of Reunion East Community Development District, Osceola County, Florida (“District”) as of and for the fiscal year ended September 30, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our opinion thereon dated June 26, 2024, which includes an emphasis of a matter paragraph. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and 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. We noted certain matters that we reported to management of the District in a separate letter dated June 26, 2024. The District’s Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on the District’s response to the findings identified in our audit and described in the accompanying Management Letter. The District’s Response was not subjected to the other auditing procedures applied in the audit of the financial statements, and, accordingly, we express no opinion on the response. 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. June 26, 2024 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10) OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA To the Board of Supervisors Reunion East Community Development District Osceola County, Florida We have examined Reunion East Community Development District, Osceola County, Florida’s (“District”) compliance with the requirements of Section 218.415, Florida Statutes, in accordance with Rule 10.556(10) of the Auditor General of the State of Florida during the fiscal year ended September 30, 2023. Management is responsible for District’s compliance with those requirements. Our responsibility is to express an opinion on 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 perform the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced in Section 218.415, Florida Statutes. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the District’s compliance with specified requirements. We are required to be independent and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the examination engagement. In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2023. This report 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, management, and the Board of Supervisors of Reunion East Community Development District, Osceola County, Florida and is not intended to be and should not be used by anyone other than these specified parties. June 26, 2024 MANAGEMENT LETTER PURSUANT TO THE RULES OF THE AUDITOR GENERAL FOR THE STATE OF FLORIDA To the Board of Supervisors Reunion East Community Development District Osceola County, Florida Report on the Financial Statements We have audited the accompanying basic financial statements of Reunion East Community Development District, Osceola County, Florida ("District") as of and for the fiscal year ended September 30, 2023, and have issued our report thereon dated June 26, 2024, which includes an emphasis of a matter paragraph. Auditor’s Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Florida Auditor General. Other Reporting Requirements We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Auditor’s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 26, 2024, should be considered in conjunction with this management letter. Purpose of this Letter The purpose of this letter is to comment on those matters required by Chapter 10.550 of the Rules of the Auditor General for the State of Florida. Accordingly, in connection with our audit of the financial statements of the District, as described in the first paragraph, we report the following: I. Current year findings and recommendations. II. Status of prior year findings and recommendations. III. Compliance with the Provisions of the Auditor General of the State of Florida. 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, as applicable, management, and the Board of Supervisors of Reunion East Community Development District, Osceola County, Florida and is not intended to be and should not be used by anyone other than these specified parties. We wish to thank Reunion East Community Development District, Osceola County, Florida and the personnel associated with it, for the opportunity to be of service to them in this endeavor as well as future engagements, and the courtesies extended to us. June 26, 2024 REPORT TO MANAGEMENT I. CURRENT YEAR FINDINGS AND RECOMMENDATIONS 2023-01: Financial Condition Assessment Observation: The prior Developer failed to pay assessments on both the Series 2002 and 2005 Bonds and there are currently no special assessment revenues pledged to the Series 2002 and 2005 Bonds. The District did not make any of the schedule debt service payments on the Series 2002 and 2005 Bonds during the current fiscal year. Also, the District is not in compliance with the reserve requirements for the Series 2002 and 2005 Bonds. In addition, the debt service fund reported a deficit fund balance of ($14,413,217) at September 30, 2023. Recommendation: The District should continue to take the necessary steps to alleviate the situation. Management response: The Series 2015, Special Assessment Refunding Bonds ("Series 2015 Bonds") were collectively issued in order to refund defaulted Special Assessment Bonds, Series 2002A-2 and Series 2005 (Collectively "Prior Bonds"). However, at the request of the debt holders of the Prior Bonds, the Series 2015 Bonds did not refund 100% of the Prior Bonds leaving a portion of the Prior Bonds outstanding and in default (collectively "Un-exchanged Bonds"). The Un-exchanged Bonds debt holders have made a formal request to the District to review all properties within the District and determine if any of the Un-exchanged Bonds can be assigned to property within the District. The District Manager is currently working with District Counsel and the District Engineer to undertake this review. To the extent the Un-exchanged Bonds can be assigned to property they will. In the absence of the assignment of the Un-exchanged Bonds, the debt holders will need to cancel them to resolve the default. II. PRIOR YEAR FINDINGS AND RECOMMENDATIONS 2020-01: Financial Condition Assessment 2021-01: Financial Condition Assessment 2022-01: Financial Condition Assessment Current Status: Matter is not resolved. See current year finding above. III. COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA Unless otherwise required to be reported in the auditor’s report on compliance and internal controls, the management letter shall include, but not be limited to the following: 1. A statement as to whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no significant findings and recommendations made in the preceding annual financial audit report for the fiscal year ended September 30, 2022, except as noted above. 2. Any recommendations to improve the local governmental entity's financial management. There were no such matters discovered by, or that came to the attention of, the auditor, to be reported for the fiscal year ended September 30, 2023, except as noted above. REPORT TO MANAGEMENT (Continued) III. COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA (Continued) 3. 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. There were no such matters discovered by, or that came to the attention of, the auditor, to be reported, for the fiscal year ended September 30, 2023, except as noted above. 4. The name or official title and legal authority of the District are disclosed in the notes to the financial statements. 5. In connection with our audit, we determined that the District has met one or more of the financial emergency conditions described in Section 218.503(1), Florida Statutes. The District failed to make certain scheduled debt service payments due on the Series 2002 and Series 2005 Bonds, as a result of a lack of funds. We applied financial condition assessment procedures pursuant to Rule 10.556(7) and determined that a deteriorating financial condition was noted. See Findings section above for additional information. It is management’s responsibility to monitor 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. 6. Management has provided the specific information required by Section 218.39(3)(c) in the Other Information section of the financial statements on page 27. FITNESS CENTER COSTS Life Fitness Busy Body Aspire Treadmill (6) $44,970.00 $53,991.66 ARC Leg Press (1) $7,995.00 $8,422.67 Abductor/Adductor (1) $6,195.00 $6,321.33 Delivery and Installation $6,119.76 $6,000.00 Trade in of 6 Treadmills ($4,000.00) ($2,400.00) Total Cost $61,279.76 $72,335.66 The Reunion East CDD has a budget or $55,000.00 in the RM fund for 2024. I had a last-minute request to see if we could price an abduction/adduction machine which is included in the pricing above. If the abduction/adduction machine is removed from the pricing the Life Fitness Quote will keep us in our budget for 2024. The cost would be $55,084.76 Reunion East CDD sidewalk evaluation. The purpose of paving selected lots is to provide a continuous unbroken sidewalk allowing residents and visitors a safe walkway within each subdivision. To reduce costs, one side of the street was selected with the least number of empty lots. Other things taken into consideration included reducing the number of times pedestrians would need to cross the street at street junctions to remain on contiguous sidewalk. Identified as part of the lot review, are homes with adjoining lots that have been improved (fenced, grassed, etc.) but have not had sidewalk installed. Also identified, are corner lots that have installed sidewalk along the lot frontage but have not installed sidewalk on the long side of the lot adjacent to the street. These lots are listed below and should be raised with the Master Association Architecture Board for resolution. Homestead Recommended lots – 18 total • Watson Court, lots 196, 198, 199 • Gathering Drive, lots 3, 19, 29, 125, 292 294, 295, 303, 304 • Gathering Court, lots 280, 263 • Radiant Street, lots 304 (corner lot) • Sparkling Court, lots 314, 317, 307, 306 Remaining lots - 29 total • Watson Court, 5 lots • Gathering Drive, 1 lots • Gathering Loop, 2 lots • Gathering Court, 5 lots • Radiant Street, 4 lots • Sparkling Court, 5 lots • Astina Street, 1 lot • Molona Street, 5 lots • Oconee Street, 1 lot Lots with fencing or other wise improved with no sidewalk Watson Court • Lot 182 home with sidewalk, adjecnet lot 183 fenced in without sidewalk • Lot 191 home with sidewalk, adjacent lot 192 fenced in without sidewalk Liberty Bluff Recommended lots – 18 total • Excitement Drive, lots 27, 172, 174, 175, 180, 205, 218, 128, 129, 238 • Euston Drive, lots 94, 98, 105, 106, 114, • Corolla Drive, lots 33, 51 • Titian Court, lots 161 Remaining lots - 31 total • Excitement Drive, lots 22 • Euston Drive, lots 3 • Corolla Drive, lots 3 • Titian Court, lots 3 Lots with homes or other wise improved with no sidewalk. Corolla Court • Lots 83 and 84 have homes with sidewalk along frontage. However, there is a gap between the to pieces of sidewalk suggesting that one or both homes have not installed sidewalk across their full frontage. Patriots Landing Recommended lots – 15 total • Fairview Circle, lots 28, 33-36, 48, 119-125 • Linkside loop, lots 80, 184, Remaining lots - 11 total • Fairview Circle, 10 lots • Linkside loop, 1 lot Lots improved with no sidewalk Fairview Circle Note – the plait indicates/shows that the lots listed below should have sidewalk along the long side of the lot that abuts the street. • Lot 25 corner lot, home on lot with side walk across the frontage but no sidewalk along side of property • Lot 187 corner lot, home on lot with side walk across the frontage but no sidewalk along side of property