Heron Isles Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2021

Heron Isles Community Development District ANNUAL FINANCIAL REPORT
September 30, 2021 TABLE OF CONTENTS

Page Number

REPORT OF INDEPENDENT AUDITORS	1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-8
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Position	9
Statement of Activities	10
Fund Financial Statements
Balance Sheet – Governmental Funds	11
Reconciliation of Total Governmental Fund Balances
to Net Position of Governmental Activities	12
Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds	13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities	14
Statement of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – General Fund	15
Notes to Financial Statements	16-29
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS	30-31
MANAGEMENT LETTER	32-35
INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH
SECTION 218.415, FLORIDA STATUTES	36

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
Heron Isles Community Development District Nassau County, Florida
Report on the Financial Statements

We have audited the accompanying financial statements of the Heron Isles Community Development District as of and for the year ended September 30, 2021, and the related notes to financial statements that collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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To the Board of Supervisors
Heron Isles Community Development District

Opinion

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and each major fund as of September 30, 2021, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Governmental accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures in accordance with governmental auditing standards generally accepted in the United States of America, which consisted principally of inquires of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued a report dated June 20, 2022 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations and contracts.

The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Heron Isles Community Development District’s internal control over financial reporting and compliance.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 20, 2022

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

OVERVIEW OF THE FINANCIAL STATEMENTS

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

The Government-wide financial statements are the statement of net position and the statement of activities. These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net position of governmental activities and the change in net position. Governmental activities are primarily supported by special assessments.

The statement of net position presents information on all assets and liabilities of the District, with the difference between assets and liabilities reported as net position. Net position is reported in three categories; 1) net investment in capital assets, 2) restricted, and 3) unrestricted. Assets, liabilities, and net position are reported for all Governmental activities.

The statement of activities presents information on all revenues and expenses of the District and the change in net position. Expenses are reported by major function and program revenues relating to those functions are reported, providing the net cost of all functions provided by the District. To assist in understanding the District’s operations, expenses have been reported as governmental activities. Governmental activities financed by the District include general government, physical environment and interest on long term debt.

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

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

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

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

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

Financial Highlights

The following are the highlights of the financial activity for the year ended September 30, 2021.

The District’s total liabilities exceeded total assets by $(706,775) (net position). Unrestricted net position for Governmental Activities was $250,152. Restricted net position-debt service was $5,398. Net investment in capital assets was $(962,325).

Governmental activities revenues totaled $658,193 while governmental activities expenses totaled $517,526.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District

The following schedule provides a summary of the assets, liabilities and net position of the District and is presented by category for comparison purposes.
Net Position
Governmental Activities 2021	2020

Current assets	$	270,741	$	221,917	
Prepaid bond insurance	63,000	67,296	
Restricted assets	91,915	99,252	
Capital assets	1,358,037	1,399,424	

Total Assets	1,783,693	1,787,889

Current liabilities	185,535	177,762	
Non-current liabilities	2,304,933	2,457,569	

in capital assets	(962,325)	(887,244)	
Net position - restricted	5,398	73,709	
Net position - unrestricted	250,152	(33,907)	

Total Liabilities	2,490,468	2,635,331 Net position - net investment

Total Net Position	$	(706,775)	$	(847,442)

The increase in current assets is primarily related to revenues exceeding expenditures in the General Fund in the current year.

The decrease in total liabilities is related primarily to the principal payments in the current year. The decrease in capital assets is primarily related to current year depreciation.
The increase in net position is related to revenues exceeding expenses.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District (Continued)

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

Change in Net Position

	Governmental	Activities	
	2021	2020	
Program Revenues			
Charges for services	$	658,171	$	673,621	
General Revenues Miscellaneous revenues	
-	
29,445	
Investment earnings		22 		302 	
Total Revenues		658,193 		703,368 	

Expenses
General government	

109,307	

110,049	
Physical environment	313,228	280,802	
Interest and other charges		94,991 		99,510 	
Total Expenses		517,526 		490,361 	
Change in Net Position	140,667	213,007	
Net Position - Beginning of Year		(847,442)		(1,060,449)	
Net Position - End of Year	 $	(706,775)	 $	(847,442)	

The decrease in miscellaneous revenues is related to a landscape enhancement project in the prior year.

The increase in physical environment is related to increased repairs and maintenance expenses in the current year.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Capital Assets Activity

The following schedule provides a summary of the District’s capital assets activity as of September 30, 2021 and 2020:

	Governmental Activities	
	Description			2021			2020		
Land and improvements	$	46,653	$	46,653	
Construction in progress	-	12,583	
Infrastructure	2,273,975	2,227,432	
Accumulated depreciation		(962,591)		(887,244)	
Capital assets, net	 $	1,358,037 	 $	1,399,424 	

Depreciation was $75,347 in the current year and additions to infrastructure was $46,543 which included transfers from construction in progress of $12,583.

General Fund Budgetary Highlights

Budgeted expenditures exceeded actual expenditures primarily due to lower landscaping, contingency and water/sewer expenditures than were anticipated.

The September 30, 2021 budget was amended for capital reserves.

Debt Management

Governmental Activities debt includes the following:

In June 2017, the District issued $2,315,000 Series 2017A-1 Senior Capital Improvement Revenue Refunding Bonds and $850,000 Series 2017A-2 Subordinate Capital Improvement Revenue Refunding Bonds. These bonds were issued to refund and redeem the Series 2005 Capital Improvement Revenue Bonds. The balance of the Series 2017A-1 and Series 2017A-2 Bonds were $1,790,000 and $680,000, respectively.

Economic Factors and Next Year’s Budget

Heron Isles Community Development District does not expect any economic factors to have any significant effect on the financial position or results of operations of the District in fiscal year 2022.

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Request for Information

The financial report is designed to provide a general overview of Heron Isles Community Development District’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Heron Isles Community Development District, Governmental Management Services, 475 West Town Place, Suite 114, St. Augustine, Florida 32092.

Heron Isles Community Development District	
STATEMENT OF NET POSITION	
September 30, 2021	

ASSETS	
Current Assets:	
Cash and cash equivalents	
Investment	
Assessments receivable	
Prepaid expenses	
Deposits	
Total Current Assets	
Non-current Assets:	
Prepaid bond insurance	
Restricted assets:	
Investments	
Capital assets not being depreciated	
Land and improvements	
Capital assets being depreciated	
Infrastructure	
Accumulated depreciation	
Total Non-current Assets	
Total Assets	

Governmental	
Activities	

$	156,034	
96,710	
2,631	
13,786	
	1,580 	
	270,741 	
63,000	
91,915	
46,653	
2,273,975	
	(962,591)	
	1,512,952 	
	1,783,693 	

LIABILITIES		
Current Liabilities:		
Accounts payable	19,667	
Accrued interest payable	35,868	
Bonds payable		130,000 	
Total Current Liabilities		185,535 	
Non-current Liabilities:		
Bonds payable, net		2,304,933 	
Total Liabilities		2,490,468 	

NET POSITION		
Net investment in capital assets	(962,325)	
Restricted-debt service	5,398	
Unrestricted		250,152 	
Total Net Position	 $	(706,775)	

See accompanying notes to financial statements.

Heron Isles Community Development District STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2021

Net (Expense) Revenues and
	Program		Changes in	
	Revenues		Net Position	
	Charges for		Governmental	
Functions/Programs		Expenses		Services		Activities	
Primary government							
Governmental Activities							
General government		$	(109,307)		$	132,050		$	22,743	
Physical environment		(313,228)		287,375		(25,853)	
Interest and other charges			(94,991)			238,746 			143,755 	
Total Governmental Activities		 $	(517,526)		 $	658,171 		140,645	

General revenues:	
Investment earnings	

	22 

Change in Net Position	140,667

Net Position - October 1, 2020	
Net Position - September 30, 2021	

	(847,442)	
 $	(706,775)	

Heron Isles Community Development District	
BALANCE SHEET –	
GOVERNMENTAL FUNDS	
September 30, 2021	

Total	
Governmental	
Funds	

Debt	
Service	

Cash and cash equivalents	
Investment	
Assessments receivable	
Prepaid expenses	
Deposits	
Restricted assets:	
Restricted investments	
Total Assets	

$  156,034	
96,710	
1,709	
13,786	
1,580	

$	-	
-	
922	
-	
-	

$	156,034	
96,710	
2,631	
13,786	
1,580	

ASSETS	General

-		91,915		91,915	
 $ 	269,819 	 $		92,837 	 $		362,656 	

LIABILITIES AND FUND BALANCES

LIABILITIES	
Accounts payable	

$	19,667	$	-	$	19,667

FUND BALANCES	
Nonspendable-prepaids/deposits	
Restricted for:	
Debt Service	
Assigned for capital reserves	
Unassigned	
Total Fund Balances	
Total Liabilities and Fund Balances	

15,366	-	15,366

-	92,837	92,837	
124,034	-	124,034	
110,752	-	110,752	

250,152	
92,837	
342,989	

$  269,819	
$	92,837	
$	362,656	

Heron Isles Community Development District	
RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES	
TO NET POSITION OF GOVERNMENTAL ACTIVITIES	
September 30, 2021	

Total Governmental Fund Balances	$

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

Prepaid bond insurance was recognized as an other debt service cost at the	
fund level in the year the debt was issued, however, at the government-wide	
level it is recognized as an asset and amortized over the life of the bonds.	

342,989

Capital assets, land and improvements, $46,653, and infrastructure,	
$2,273,975, net of accumulated depreciation, $(962,591) used in	
governmental activities are not current financial resources; and therefore,	
are not reported at the fund level.	1,358,037	

63,000

Long-term liabilities, including bonds payable, $(2,470,000), net of net bond		
discount, $35,067, are not due and payable in the current period; therefore,
are not reported at the governmental fund level.	
(2,434,933)	

Accrued interest expense for long-term debt is not a current financial use;	
therefore, it is not reported at the governmental fund level.	

(35,868)

Net Position of Governmental Activities	 $	(706,775)

Heron Isles Community Development District	
STATEMENT OF REVENUES, EXPENDITURES	
AND CHANGES IN FUND BALANCES –	
GOVERNMENTAL FUNDS	
For the Year Ended September 30, 2021	

-	
       - 	
   381,148 	

155,000	
     90,169 	
    245,169 	

155,000	
     90,169 	
    626,317 	

Revenues	
Special assessments	
Investment earnings	
Total Revenues	

$ 419,425	
      14 	
   419,439 	

$	238,746	
        8 	
    238,754 	

$	658,171	
       22 	
    658,193 	

Expenditures	
Current	
General government	
Physical environment	
Capital outlay	
Debt service	
Principal	
Interest	
Total Expenditures	

109,307	
237,881	
33,960	

-	
-	
-	

109,307	
237,881	
33,960	

Total	
Governmental	
	Funds		

Debt	
   Service		

	General	

Net Change in Fund Balances	38,291	(6,415)	31,876	
Fund Balances - October 1, 2020		211,861 		99,252 		311,113 	
Fund Balances - September 30, 2021	 $ 250,152 	 $	92,837 	 $	342,989 	

Heron Isles Community Development District	
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND	
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE	
STATEMENT OF ACTIVITIES	
For the Year Ended September 30, 2021	

Net Change in Fund Balances - Total Governmental Funds	$

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

Governmental funds report capital outlays as expenditures. However, at the	
government-wide level, the cost of those assets is allocated over their estimated	
useful lives as depreciation. This is the amount that depreciation, $(75,347)	
exceeded capital outlay, $33,960, in the current year.	

Payment of long-term liabilities are reported as expenditures in the	
governmental fund statement but such repayments reduce long-term liabilities in the	
Statement of Net Position.	

Prepaid bond insurance was recognized as an expenditure at the fund level the year	
the bond was issued, at the government-wide level it was recorded as an asset and	
is amortized over the life of the bond. This is the current year amortization.	

Amortization expense of bond discounts does not require the use of current	
resources and therefore, is not reported at the fund level. This is the amount	
of amortization in the current period.	

31,876

(41,387)

155,000

(4,296)

(2,364)

In the Statement of Activities, interest is accrued on outstanding bonds;		
whereas at the fund level, interest expenditures are reported when due.		
This is the change in accrued interest from the prior year.		1,838 	

Change in Net Position of Governmental Activities	 $	140,667 

Heron Isles Community Development District	
STATEMENT OF REVENUES, EXPENDITURES AND	
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL –	
GENERAL FUND	
For the Year Ended September 30, 2021	

	27,670 	
 $  45,711 	

Variance with	
Final Budget	
Positive	
(Negative)	

Original	
Budget	

Final	
Budget	

Actual

Revenues	
Special assessments	
Miscellaneous revenues	
Interest earnings	
Total Revenues	

 	
$ 412,343	$ 412,343	$ 419,425	$	7,082	
100	100	-	(100)	
	450 		403 		14 		(389)	
	412,893 		412,846 		419,439 		6,593 	

Expenditures	
Current	
General government	
Physical environment	
Capital outlay	
Total Expenditures	

119,505	
230,602	
   40,000 	
  390,107 	

119,505	
255,300	
   20,000 	
  394,805 	

109,307	
237,881	
   33,960 	
  381,148 	

10,198	
17,419	
    (13,960)	
     13,657 	

Net Change in Fund Balances	22,786	18,041	38,291	20,250	
Fund Balances - October 1, 2020		35,552 			211,861 		184,191 	
Fund Balances - September 30, 2021	 $  58,338 		 $ 250,152 	 $	204,441 	

See accompanying notes to financial statements.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the District have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The District's more significant accounting policies are described below.

Reporting Entity

The District was established on September 1, 2004, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes and Nassau County, Florida Ordinance 2004-41. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is authorized to issue bonds for the purpose, among others, of financing, funding, planning, establishing, acquiring, constructing or re-constructing, enlarging or extending, equipping, operating and maintaining water management, bridges or culverts, district roads, landscaping, street lights and other basic infrastructure projects within or without the boundaries of the Heron Isles Community Development District. The District is governed by a five-member Board of Supervisors who are elected on an at-large basis by registered voters within the District. The District operates within the criteria established by Chapter 190, Florida Statutes.

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

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

Measurement Focus and Basis of Accounting

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

Government-wide financial statements

Fund financial statements

Notes to financial statements

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

Government-wide Financial Statements

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Government-wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include all the governmental activities of the primary government. The effect of interfund activity has been removed from these statements.

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

Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financing source.

Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.

Fund Financial Statements

The underlying accounting system of the District is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

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

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.  Measurement Focus and Basis of Accounting (Continued)
b. Fund Financial Statements (Continued) Governmental Funds
The District implemented the Governmental Accounting Standards Board Statement 54 – Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
The District has various policies governing the fund balance classifications.
Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.
Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company.
Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.
Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered to be available when they are collected within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

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

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

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources are expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability.

Debt service expenditures are recorded only when payment is due.

Basis of Presentation

Governmental Major Funds

General Fund – The General Fund is the District’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Debt Service Fund – Accounts for debt service requirements to retire the capital improvement bonds which were used to finance the construction of District infrastructure improvements.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation (Continued)

Non-current Governmental Assets/Liabilities

GASB Statement 34 requires that non-current governmental assets, such as land and buildings, and non-current governmental liabilities, such as general obligation bonds, be reported in the governmental activities column in the government-wide Statement of Net Position.

Assets, Liabilities, and Net Position or Equity

Cash and Investments

Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral from their deposits of public funds. This pool is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions, providing full insurance for public deposits.

The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of:

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

Restricted Assets

Certain net position of the District will be classified as restricted assets on the statement of net position because their use is limited either by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors. In a fund with both restricted and unrestricted assets, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4. Assets, Liabilities, and Net Position or Equity (Continued)
Capital Assets
Capital assets, which include land improvements and infrastructure, are reported in governmental activities.
The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. The valuation basis for all assets is historical cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.
Depreciation of capital assets is computed and recorded by utilizing the straight-line method over the infrastructure assets’ estimated useful lives ranging from 10 to 30 years.
Bond Discounts
Bond discounts are amortized over the life of the bonds.
Prepaid Bond Insurance
Prepaid bond insurance associated with the issuance of refunding bonds are presented on the financial statements as a non-current asset and amortized over the life of the bonds using the straight-line method.
Budgets
Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to Chapter 190, Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. Formal budgets are adopted for the general fund. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general and debt service funds. As a result, deficits in the budget columns of the accompanying financial statements may occur.
Net Position
Net position represents the difference between assets and liabilities and is reported in three categories. Net investment in capital assets, represents capital assets, net of accumulated depreciation and any outstanding debt related to those assets. Net position is reported as restricted when there are legal limitations imposed on their use by legislation, or external restrictions imposed by other governments, creditors, or grantors. Unrestricted net position is assets that do not meet definitions of the classifications previously described.

NOTE	B	–		RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS
Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net position
“Total fund balances” of the District’s governmental funds, $342,989, differs from “net position” of governmental activities, $(706,775), reported in the Statement of Net Position. This difference primarily results from the long-term economic focus of the Statement of Net position versus the current financial resources focus of the Governmental Fund Balance Sheet. The effect of the differences is illustrated below.
Capital related items
When capital assets (land improvements and infrastructure that are to be used in governmental activities) are purchased or constructed, the cost of those assets is reported as expenditures in governmental funds. However, the Statement of Net Position included those capital assets among the assets of the District as a whole.

Land and improvements		$	46,653	
Infrastructure		2,273,975	
Accumulated depreciation			(962,591)	
Net Capital Assets		$	1,358,037	
Prepaid bond insurance			
Prepaid bond insurance is recognized	as an	asset at the government-wide level and	
amortized over the life of the long-term debt.
Prepaid bond insurance	$	63,000
Long-term debt transactions
Long-term liabilities and the deferred amount on refunding applicable to the District’s governmental activities are not current uses or resources and accordingly are not reported at the fund level. All uses and resources (both current and long-term) are reported in the Statement of Net Position. Balances at September 30, 2021 were:

Bonds payable		$	(2,470,000)	
Bond discount, net			35,067	
Total

Accrued interest

Accrued liabilities in the Statement	

of Net Position differ from	$	(2,434,933)

the amount reported in	
governmental funds due to the accrued interest on bonds.
Accrued interest	$	(35,868)

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

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

The “net change in fund balances” for government funds, $31,876, differs from the “change in net position” for governmental activities, $140,667, reported in the Statement of Activities. The differences arise primarily from the long-term economic focus of the Statement of Activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below.

Capital related items

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

Depreciation	$	(75,347)	
Capital outlay		33,960	
Total	$	(41,387)	

Long-term debt transactions
Repayment of long-term liabilities are reported as expenditures at the fund level but such repayments reduce liabilities at the government-wide level.
Debt principal payments	$	155,000

Amortization of the bond discount and prepaid bond insurance does not require the use of current resources and therefore is not reported at the fund level.

Bond discount	$	(2,364)

Prepaid bond insurance	$	(4,296)

Some expenses reported in the Statement of Activities do not require the use of current financial resources, therefore, are not reported as expenditures in governmental funds.
Change in accrued interest payable	$	1,838

NOTE C – CASH AND INVESTMENTS
All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash and investments.

Custodial Credit Risk – Deposits
Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District follows the provisions of Chapter 280, Florida Statutes regarding deposits and investments to manage custodial credit risk. The District maintains all deposits in a qualified public depository, so that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes. As of September 30, 2021, the District's bank balance was $171,699 and the carrying value was $156,034.
As of September 30, 2021, the District had the following investments and maturities:

	Investment		  Maturities 	  Fair Value 	
Florida PRIME	49 Days*	$	2,216	
U S Bank Money Market	N/A		186,409 	
Total		 $	188,625 	
* Weighted Average Maturity
The District categorizes its fair value measurements within the fair value hierarchy recently established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The District uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities, or groups of assets and liabilities.
Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable and uses significant unobservable inputs that use the best information available under the circumstances, which includes the District’s own data in measuring unobservable inputs.
Based on the criteria in the preceding paragraph, the District the investment in the U S Bank Money Market is a level one asset.
Investments
The District’s investment policy allows management to invest funds in investments permitted under Section 218.415, Florida Statutes. The investment in Florida PRIME is measured at amortized cost. Florida PRIME has established policies and guidelines regarding participant transactions and the authority to limit or restrict withdrawals or impose a penalty for an early withdrawal. As of September 30, 2021, there were no redemption fees, maximum transaction amounts, or any other requirement that would limit daily access to 100 percent of the account value.

NOTE C – CASH AND INVESTMENTS (CONTINUED)
Interest Rate Risk
The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk
The District's investments in treasury funds, commercial paper, and government loans are limited by state statutory requirements and bond compliance. The District has no investment policy that would further limit its investment choices. As of September 30, 2021, the District's investment in Florida PRIME was rated AAAm by Standard & Poor's. The District’s investment in U.S. Bank Money Market is not rated.
Concentration of Credit Risk
The District places no limit on the amount it may invest. The investments in U S Bank Money Market represent 99% and the investments in Florida PRIME represent 1% of the District’s total investments.
The types of deposits and investments and their level of risk exposure as of September 30, 2021 were typical of these items during the fiscal year then ended. The District considers any decline in fair value for certain investments to be temporary.

NOTE D – SPECIAL ASSESSMENT REVENUES
Assessments are non-ad valorem assessments on benefitted property within the District. Operating and Maintenance Assessments are based upon adopted general fund budget and levied annually. Debt Service Assessments are levied when bonds are issued and collected annually. The District may collect assessments directly or utilize the uniform method of collection (Chapter 197.3632, Florida Statutes). Direct collected assessments are due as determined by annual assessment resolution adopted by the Board of Supervisors. Assessments collected under the uniform method are mailed by the Nassau County Tax Collector on November 1 and due on or before March 31 of each year.

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

NOTE E – CAPITAL ASSETS

Capital Asset activity for the year ended September 30, 2021 was as follows:

Balance	Balance
October 1,	September 30,
	2020		 Additions 	 Deletions 		2021	
Governmental Activities:
Capital assets, not depreciated		
Land and improvements	$	46,653	$	-	$	-	$	46,653	
Construction in progress		12,583 		33,960 		(46,543)		- 	
Total Capital assets, not depreciated		59,236 		33,960 		(46,543)		46,653 	
Capital assets, being depreciated: Infrastructure	
	2,227,432 	
	46,543 	
	- 	
	2,273,975 	
Less accumulated depreciation for: Infrastructure	
	(887,244)	
	(75,347)	
	- 	
	(962,591)	
Total Capital Assets Depreciated, Net		1,340,188 		(28,804)		- 		1,311,384 	
Governmental Activities, Capital Assets	 $ 1,399,424 	 $	5,156 	 $ (46,543)	 $	1,358,037 	

Depreciation of $75,347 was charged to physical environment.

NOTE F – LONG-TERM DEBT

The following is a summary of debt activity for the District for the year ended September 30, 2021:

Long-term debt at October 1, 2020	$	2,625,000	
Principal payments		(155,000)	
Long-term debt at September 30, 2021	$	2,470,000	
Less: bond discount, net		(35,067)	
Total long-term debt, September 30, 2021	$	2,434,933	

Long-term debt for Governmental Activities is comprised of the following:		
Capital Improvement Revenue Refunding Bonds		
$2,315,000 Series 2017A-1 Senior Capital Improvement Revenue Refunding Bonds due in annual principal installments maturing May 2036. Interest is due semi-annually on May 1 and November 1, at various rates between 2% and 3.375%. Current portion is $100,000.	

$	1,790,000	
$850,000 Series 2017A-2 Subordinate Capital Improvement Revenue Refunding Bonds due in annual principal installments maturing May 2036. Interest is due semi-annually on May 1 and November 1 with a fixed interest rate of 5%. Current portion is
$30,000.	

	680,000	
Bond payable	2,470,000	
Bond Discount, net		(35,067)	
Bonds Payable, Net	$	2,434,933	

NOTE F – LONG-TERM DEBT (CONTINUED)
The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2021 are as follows:

Year Ending
  September 30, 	
	Principal		
	Interest		
	Total		

2022	
$	130,000	
$	86,081	
$	216,081	
2023	135,000	82,581	217,581	
2024	135,000	78,831	213,831	
2025	140,000	74,831	214,831	
2026	150,000	70,588	220,588	
2027-2031	805,000	276,464	1,081,464	
2032-2036		975,000 		115,545 		1,090,545 	
Totals	$ 2,470,000	$	784,921	$ 3,254,921	

Summary of Significant Bond Resolution Terms and Covenants

Capital Improvement Revenue Refunding Bonds

Significant Bond Provisions

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

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

NOTE F – LONG-TERM DEBT (CONTINUED)

Depository Funds

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

Reserve Fund – The Series 2017A-1 and Series 2017A-2 Reserve Account requirements are equal to 50 percent of the maximum annual debt outstanding for Series 2017A-1 and Series 2017A-2 Bonds. The Series 2017A-1 Bonds Reserves are satisfied by the Reserve Insurance Policy which will terminate on the final maturity date or upon earlier, in full, payment of the Series 2017A-1 Bonds. The Series 2017A-2 Bonds were funded from the proceeds of the Series 2017A-2 Bonds in amounts. Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture.

The following is a schedule of required reserve deposits as of September 30, 2021:

Reserve	Reserve
 Capital Improvement Revenue Refunding Bonds			Balance		 Requirement 

Senior Series 2017A-1 Subordinate Series 2017A-2

$	81,258	$
$	33,688	$

81,258
33,313

NOTE G – RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. There were no claims or settled claims from these risks that exceeded commercial insurance coverage in the last three years.

NOTE H – SUBSEQUENT EVENT

In November 2021, the District made prepayments on the Series 2017A-1 and 2017A-2 Capital Improvement Revenue Refunding Bonds of $5,000 and $5,000, respectively. In May 2022, the District made a prepayment on the Series 2017A-2 Capital Improvement Revenue Refunding Bonds of $10,000.

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

To the Board of Supervisors
Heron Isles Community Development District Nassau 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 Heron Isles Community Development District, as of and for the year ended September 30, 2021, and the related notes to the financial statements, and have issued our report thereon dated June 20, 2022.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Heron Isles Community Development District's internal control over financial reporting (internal control) as a basis for designing 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 Heron Isles Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Heron Isles Community Development District's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control 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 may exist that have not been identified.

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To the Board of Supervisors
Heron Isles Community Development District

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Heron Isles Community Development District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 20, 2022

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MANAGEMENT LETTER

To the Board of Supervisors
Heron Isles Community Development District Nassau County, Florida

Report on the Financial Statements

We have audited the financial statements of the Heron Isles Community Development District as of and for the year ended September 30, 2021, and have issued our report thereon dated June 20, 2022.

Auditor’s Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Chapter 10.550, Rules of the Florida Auditor General.

Other Reporting Requirements

We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and our Independent Auditor’s Report on an examination conducted in accordance with AICPA Professionals Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 20, 2022, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding financial audit report. There were no findings or recommendations in the preceding audit.

Financial Condition and Management

Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not Heron Isles Community Development District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific conditions met. In connection with our audit, we determined that Heron Isles Community Development District did not meet any of the conditions described in Section 218.503(1) Florida Statutes.

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To the Board of Supervisors
Heron Isles Community Development District

Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for Heron Isles Community Development District. It is management’s responsibility to monitor the Heron Isles Community Development District’s financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same as of September 30, 2021.

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.

Specific Information

The information provided below was provided by management and has not been audited; therefore, we do not express an opinion or provide any assurance on the information.
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the Auditor General, the Heron Isles Community Development District reported:
The total number of district employees compensated for the purposes of the auditing disclosure requirements of employees and independent contractors, Board members that receive statutory compensation are reported herein in the last pay period of the District’s fiscal year: 0
The total number of independent contractors to whom nonemployee compensation was paid in the last month of the District’s fiscal year: 8
All compensation earned by or awarded to employees, for the purposes of the auditing disclosure requirements of employees and independent contractors, Board members that receive statutory compensation are reported herein, whether paid or accrued, regardless of contingency: $2,401
All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of contingency: $309,588
Each construction project with a total cost of at least $65,000 approved by the District that is scheduled to begin on or after October 1, 2020, together with the total expenditures for such project: The District had no construction projects during the year.
A budget variance based on the budget adopted under Section 189.016(4), Florida Statutes, before the beginning of the fiscal year being reported if the District amends a final adopted budget under Section 189.016(6), Florida Statutes: The budget was amended, see on the following page.
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)8, Rules of the Auditor General, the Heron Isles Community Development District reported:
The rate or rates of non-ad valorem special assessments imposed by the District: General Fund, $592.75, Debt Service, $447.30.
The amount of special assessments collected by or on behalf of the District: Total Special Assessments collected was $658,171.

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To the Board of Supervisors
Heron Isles Community Development District

The total amount of outstanding bonds issued by the District and the terms of such bonds: Series 2017A-1 Bonds, $1,790,000 maturing November 2036 and Series 2017A- 2 Bonds, $680,000 maturing November 2036.

Original
Budget	Actual

Variance with Original Budget Positive (Negative)

Revenues		
Special assessments	$	412,343	$	419,425	$	7,082	
Interest earning	450	14	(436)	
Miscellaneous revenues		100 		- 		(100)	
Total Revenues		412,893 		419,439 		6,546 	

Expenditures Current				
General government	119,505		109,307		10,198	
Physical environment	230,602		237,881		(7,279)	
Capital outlay		40,000 			33,960 			6,040 	
Total Expenditures		390,107 			381,148 			8,959 	
Net changes in fund balance		22,786 			38,291 			15,505 	
Fund Balances - October 1, 2020		35,552 			211,861 			176,309 	
Fund Balances - September 30, 2021	 $	58,338 		 $	250,152 		 $	191,814 	

Additional Matters						

Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but warrants the attention of those charged with governance. In connection with our audit, we did not note any such findings.

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To the Board of Supervisors
Heron Isles Community Development District

Purpose of this Letter

Our Management Letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 20, 2022

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INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES

To the Board of Supervisors
Heron Isles Community Development District Nassau County, Florida

We have examined Heron Isles Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2021. Management is responsible for Heron Isles Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on Heron Isles Community Development District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about Heron Isles Community Development District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on Heron Isles Community Development District’s compliance with the specified requirements.

In our opinion, Heron Isles Community Development District complied, in all material respects, with the aforementioned requirements during the year ended September 30, 2021.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 20, 2022

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