South Village. Community Development District. June 7, 2016

Transcription

1 South Village Community Development District June 7, 2016

2 South Village Community Development District 475 West Town Place, Suite 114 Phone: Fax: June 2, 2016 Board of Supervisors South Village Community Development District Dear Board Members: The meeting of the Board of Supervisors of the South Village Community Development District will be held Tuesday, June 7, 2016 at 6:30 p.m. at the Eagle Landing Residents Club, 3975 Eagle Landing Parkway, Orange Park, Florida Following is the advance agenda for this meeting: I. Roll Call II. Audience Comments III. Approval of Minutes of the May 3, 2016 Meeting and the May 17, 2016 Continued Meeting IV. Update Regarding Golf Course Purchase, Due Diligence Process, Agreement with APGM, Vendor Leases & Agreements and Transition Planning V. Update on Issuance of Series Bonds A. Consideration of Developer Financing Agreements 1. Acquisition Agreement 2. Collateral Assignment 3. Completion Agreement 4. Declaration of Consent 5. True Up Agreement VI. Consideration of Matters Related to Phase 5 Infrastructure A. Review of Proposals VII. Consideration of Resolution , Approving the Proposed Budget for Fiscal Year 2017 and Setting a Public Hearing Date for Adoption VIII. Consideration of Committee Rankings of Proposals to Perform the Audit for Fiscal Year 2016 IX. Acceptance of Fiscal Year 2015 Audit Report X. Other Business XI. Staff Reports A. Attorney B. Engineer C. Manager D. Director of Aquatics & Recreation

3 E. Operations Manager - Report XII. Supervisor s Request and Audience Comments XIII. Financial Reports A. Balance Sheet as of April 30, 2016 and Statement of Revenues and Expenses for the Period Ending April 30, 2016 B. Assessment Receipt Schedule C. Approval of Check Register XIV. Next Scheduled Meeting: 6:30 p.m.@ Eagle Landing Residents Club XV. Adjournment Enclosed for your review and approval are the minutes of the May 3, 2016 meeting and the May 17, 2016 continued meeting. The fifth order of business is update on issuance of series bonds. Copies of the documents listed above are enclosed for your review. The sixth order of business is consideration of matters related to Phase 5 Infrastructure. Enclosed is a copy of the ranking sheet. The seventh order of business is approval of the proposed budget for Fiscal Year 2017 and consideration of Resolution , which are enclosed for your review. Approval of the proposed budget begins the budget process, allowing in excess of 60 days for Board and staff input prior to a public hearing and adoption of the budget. The eighth order of business is consideration of committee rankings for audit proposals. Enclosed is a copy of the ranking sheet. Copies of the proposals were previously sent to you via Fed Ex. The ninth order of business is acceptance of the Fiscal Year 2015 audit report, which is enclosed for your review. Enclosed under the Operations Manager s Report is a memorandum. Enclosed for your review and approval is a copy of the balance sheet and income statement, assessment receipt schedule and the check registers. The balance of the agenda is routine in nature and any additional support material will be presented and discussed at the meeting. If you have any questions, please feel free to contact me. Sincerely, James Oliver James Oliver District Manager cc: Katie Buchanan Rachael Welch Keith Hadden Chris Badura Danny Tyler Linda Prior Deborah Axman Matt Biagetti 2

4 AGENDA

5 South Village Community Development District Agenda Tuesday Eagle Landing Residents Club June 7, Eagle Landing Parkway 6:30 p.m. Orange Park, Florida Call In # Code I. Roll Call II. Audience Comments III. Approval of Minutes of the May 3, 2016 Meeting and the May 17, 2016 Continued Meeting IV. Update Regarding Golf Course Purchase, Due Diligence Process, Agreement with APGM, Vendor Leases & Agreements and Transition Planning V. Update on Issuance of Series Bonds A. Consideration of Developer Financing Agreements 1. Acquisition Agreement 2. Collateral Assignment 3. Completion Agreement 4. Declaration of Consent 5. True Up Agreement VI. Consideration of Matters Related to Phase 5 Infrastructure A. Review of Proposals VII. Consideration of Resolution , Approving the Proposed Budget for Fiscal Year 2017 and Setting a Public Hearing Date for Adoption VIII. Consideration of Committee Rankings of Proposals to Perform the Audit for Fiscal Year 2016 IX. Acceptance of Fiscal Year 2015 Audit Report

6 X. Other Business XI. Staff Reports A. Attorney B. Engineer C. Manager D. Director of Aquatics & Recreation E. Operations Manager - Report XII. Supervisor s Request and Audience Comments XIII. Financial Reports A. Balance Sheet as of April 30, 2016 and Statement of Revenues and Expenses for the Period Ending April 30, 2016 B. Assessment Receipt Schedule C. Approval of Check Register XIV. Next Scheduled Meeting: 6:30 p.m.@ Eagle Landing Residents Club XV. Adjournment

7 MINUTES

8 SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT The regular meeting of the Board of Supervisors of the South Village Community Development District was held Tuesday, May 3, 2016 at 6:30 p.m. at the Eagle Landing Residents Club, 3975 Eagle Landing Parkway, Orange Park, Florida Present and constituting a quorum were: Gary Cross Grant Krueger Richard Townsend Chris Payton Bobby J. Poole Chairman Vice Chairman Supervisor Supervisor Supervisor Also present were: Jim Oliver Katie Buchanan Jason Merritt Matt Biagetti Steve Andersen Josh Smith Patrick Metcalf Rob Dugan District Manager District Counsel Hopping Green & Sams by telephone Director of Aquatics & Recreation Operations Manager Arnold Palmer Golf Management Dream Finder Homes Arnold Palmer Golf Management The following is a summary of the minutes and actions taken at the May 3, 2016 meeting. A copy of the proceedings can be obtained by contacting the District Manager. FIRST ORDER OF BUSINESS Roll Call Mr. Cross called the meeting to order at 6:30 p.m. SECOND ORDER OF BUSINESS There being none, the next item followed. Audience Comments THIRD ORDER OF BUSINESS Approval of the Minutes of the April 5, 2016 Meeting Mr. Krueger asked did you get a response to the question I had?

9 May 3, 2016 South Village CDD Mr. Oliver stated on page 9 there is a discussion about the golf course operating at a profit right now. The minutes incorrectly shows Mr. Biagetti stated the golf course operating minus the social dues is basically break even. I believe that was one of the supervisors, this was about an hour and a half into the meeting. Does that sound familiar to either of you? Mr. Krueger stated I m not sure who that was. It just struck me as something Matt would not be talking about. Mr. Oliver stated I think it was the chairman. I had it narrowed down to you two. It is accurate by the way. On MOTION by Mr. Krueger seconded by Mr. Poole with all in favor the minutes of the April 5, 2016 meeting were approved as amended. FOURTH ORDER OF BUSINESS Acceptance of the Minutes of the April 5, 2016 Audit Committee Meeting On MOTION by Mr. Krueger seconded by Mr. Cross with all in favor the minutes of the April 5, 2016 audit committee meeting were accepted. FIFTH ORDER OF BUSINESS Update Regarding Golf Course Purchase, Due Diligence Process and Transition Planning Ms. Buchanan stated we have done a fair amount of due diligence on the property, the most extensive being the survey, which at this point is substantially complete. Our office is going through and comparing the information that the surveyor provided and identifying any potential encroachments on it. Jason can confirm that there isn t anything that is unusual or surprising. Mr. Merritt stated everything is good to this point and I hope to have the review completed later this week. Ms. Buchanan stated the next item we had is related to the inspection of the district s structures and facilities. I believe that was previously circulated and we discussed it at prior meetings but if you have any questions or concerns about those items we can talk about them as 2

10 May 3, 2016 South Village CDD a board. I suggest we run through and briefly summarize each of the things we have done and if there is a concern you have with any of the reports let s talk about them. As far as the building inspection there was approximately $70,000 in deferred maintenance items that were identified but there were no major structural issues. The third item is the NGF report and I believe you also had that prior to our last meeting. Mr. Merritt stated I don t have anything in addition to what was in my memo. There were several items identified as potential points of improvement for consideration including reconfiguration of the driving range, a suggestion to increase the annual budget by approximately $131,000, consideration of the need in the near term of the potential of having to refurbish the various bridges and approximately $474,000 of one time capital improvements to the clubhouse, tee boxes, bunkers and driving range to improve the course functionality and to reduce ongoing maintenance costs. Mr. Cross asked does the $474,000 include the improvement of removing the pond from the driving range? Mr. Merritt responded that was my understanding. Mr. Cross asked what about the bridges? Mr. Merritt responded the bridges may have been included in that although I think we had some question about whether that was included. We need to confirm. Mr. Cross asked was the seal coating of the parking lot included? Mr. Merritt responded that is not included. Ms. Buchanan stated the next item we undertook was the Phase 1 environmental assessment. There was a recommendation that we conduct a Phase 2 on one particular pond that is adjacent to the golf course maintenance house. I believe ESI is working on completing that right now and they are testing the water quality of that pond. Once we have the results back we will know more about what our next step might be. Last is the financial audit. Mr. Oliver stated the board selected Berger Toombs, the CPA firm you use for your annual audit to conduct a limited independent audit. They have been provided the documents they need to do the offsite work on the audit. The auditors with meet with Duggan and his staff onsite Thursday to review documents including play sheets daily receipts on a test basis. They are winding up their audit right now and we will have a report to you in the next few weeks. The auditors have noted no red flags at this point. 3

11 May 3, 2016 South Village CDD Mr. Poole asked are we still moving forward toward a May 18 th closing? Mr. Oliver stated no, it looks like June 17 th will be our target date right now. Mr. Poole asked the independent auditor will have a chance to present their findings to us before that time. Mr. Oliver stated the report will definitely be presented before closing. Mr. Poole asked would we expect any recommendations other than the ones that are in the report from the standpoint of how to handle the deferred maintenance as it relates to the market value of the course and the clubhouse? Mr. Oliver stated NGF doesn t talk in their report about the timing of those repairs. Clearly they come here as a consultant on a limited basis and probably this board and staff will rely more on working with Rob and his staff at the golf club to identify those things that are type A priorities you have to take care of right away. We will be able to work on that timeline in the coming months. When the sale does occur in mid June, we will have time to transition smoothly because you are retaining the same golf management company.. Mr. Poole asked who is going to pay for them and who should? Should that be a pro rata as it relates to what we are spending for the course? Mr. Oliver stated the board has previously discussed considering any material results of the due diligence if needed to go back to the table with the seller to negotiate responsibility for unanticipated costs that the Board feels the seller needs to cover. That is negotiable. I think you have always taken that stance. Mr. Payton asked when is the appropriate time to talk about that with the closing in mid June? Mr. Oliver stated I think we are going to be in good shape hopefully within the next couple of weeks. We are going to continue this meeting to two weeks down the road because there are some other actions that we need to take regarding the bond issue. We will have more information at that meeting so we may be in a position to talk about any changes to the bottom line. I don t advise talking specific strategies too much in a public meeting, but the Board can give a designated supervisor and staff you enough direction so we can start having that discussion if there is something that is clearly material that was not anticipated. Ms. Buchanan stated I do think if you would like to make a counter offer that is perfectly appropriate and we can do that under the contract documents. Ideally we will have that 4

12 May 3, 2016 South Village CDD information by May 17 th if not Jason can send a request to the seller to extend the due diligence period because it is set to expire on May 17 th but we would never be able to close before bonds are issued that was part of the contract. I don t foresee that to be a problem. What I suggest is that we wait until the audit findings are complete so that you have all of the information in front of you. That way we can go back with one thing instead of going back item by item. Mr. Poole stated I reviewed the management agreement that you sent to us for Arnold Palmer Golf and East West and in looking at that document there are several incentives in the agreement that we give consideration to how we handle those incentives going forward if we are going to honor the extension of that agreement for one year. Ms. Buchanan stated we can talk about that now or you can send them to me directly and I can incorporate them into a draft for everyone s review, whichever you prefer. I will say that based on the form of the agreement Arnold Palmer and my office had concluded that it is probably easier to start fresh than to try to take out all of the language that isn t appropriate for a government entity. Their general counsel is agreeable and working with us to try to come up with a document that is acceptable to both with the understanding that we will still honor that one year commitment. Rather than assigning the document that East West executed we will have a new one that is for a single year. If you have comments please send them to me or we can discuss them now. We will put together a draft based on what we think is appropriate and then we will come back for discussion with the board on the business points as to what you are comfortable with. Mr. Cross stated the equipment leases it says these are due May 7 th for renewal. Mr. Krueger stated I think it is Mr. Cross stated my point is we are not obligated to those leases. I was wondering if it would behoove us to look at going out with new leases at a better rate. I don t know that we can but who would do it, the management company? Mr. Merritt stated here is the timeline for your consideration. The contract contemplates that by the end of the inspection period we will let the seller know which leases we wish to assume. That is the present timeline we are working under and if we agree to assume those leases then we would step in the shoes of the seller and we would be subject to the existing terms of each of those leases, which may have termination dates as set forth in the lease summaries that we sent you towards the end of last week. One major caveat for all of that discussion assumes 5

13 May 3, 2016 South Village CDD the fact that the various lessors agreed to for the leases, which we did not receive the affirmative approval of any of them yet. We have asked the seller to initiate that process based on the assumption that we were assuming at least one or more of these leases. We want to make sure we are ready to close if that is the case but we do have to decide whether or not we wish to reject any of these leases before the end of the inspection period. Mr. Cross asked who would be responsible for going out and seeing if we are getting the best bang for our buck? Mr. Krueger stated I have already asked Jim in one of our conference calls to start looking at what is best for us. Mr. Poole asked can we ask the superintendent to bring us an assessment of the equipment that would be required for replacement and any recommendations associated with either new equipment or termination of any leases. Mr. Krueger stated I think that is something the superintendent would give to Rob and he would bring it to us. Mr. Merritt left the conference call at this time. Mr. Dugan stated I m sure you have an assessment of the equipment and I think the NGF report talked about the equipment as well. I think that is where it originally came from as far as what he would need. When it comes to leases I think as a government entity you may be able to get some discounts. SIXTH ORDER OF BUSINESS Discussion of Construction Funding Agreement Ms. Buchanan stated as you will recall at the last board meeting we did authorize your request for proposal for the first part of the infrastructure work on Phase 5. That request for proposals did run in the newspaper and we are currently waiting for responses, the deadline is probably about three weeks off. The one thing we left as an open item is the schedule of funding relating to that infrastructure. Dream Finders has worked with the district and has proposed to issue $1 million in bonds and they expressed a very strong desire to use that $1 million on the infrastructure improvements in the first part of the project. The way I understand it from their vice president is that they have set up their funding plan, their joint investors, that the $1 million comes first. After the last meeting I went back and thought through things and I have come to the conclusion 6

14 May 3, 2016 South Village CDD that we are going to collect $1.99 million from assessments and that is from the 199 lots. The way the numbers break down is that means the second part will almost be completely funded via the special assessments. I have a concern that we collect the $1 million and only release $500,000 as it was discussed at the last board meeting we would be holding back too much. Plus with the way the bond laws work we can only spend that money on the project that is described and approved by the board to essentially have excess money and no where to spend it. Paired with that Dream Finders request and the overall concern with the way our assessments are done if we change that now and Dream Finders for some reason doesn t want to use the $1 million our assessments won t work. We would have to go back through the process and that would delay the closing. Think about whether you still want to hold back the $500,000 and if you don t let s come up with a better solution because I think everyone involved understands that you feel very concerned with making sure that we have sufficient money to fund this contract. I understand and there is someone from Dream Finders here tonight to talk about this specifically, that as long as that $1 million was used on Phase 1 whether it means they pay the first half of the project cost and we pay the second or whether they pay 75% of every pay application and we pay 25%, they are willing to work with us on that schedule and timing they just really want to reiterate their need to have that $1 million in the first phase. I just need direction on this one part and I will bring it back when we approve the actual bids. Mr. Smith stated the first phase would be proportion based on the bond proceeds compared to the construction costs. If the $1 million is 25% the overall cost of Phase 1 then when the pay apps come in the bond proceeds would pay 25% of the pay app and Dream Finders would pay 75% of that pay app. Mr. Krueger asked when are you looking to plat and start selling and so forth? Mr. Smith stated currently we are projecting eight months for development and the second phase won t start until about 11 months after we complete the first phase. Mr. Krueger stated you are looking at somewhere around June or July to plat the first 100 or so. Mr. Smith responded no, I don t know that we could plat that early. Mr. Cross stated or October. Mr. Smith stated October. Mr. Krueger stated I don t have a problem with that. 7

15 May 3, 2016 South Village CDD Ms. Buchanan stated we discussed originally proportionately with the understanding that we are going to hold back $200,000 so if for some reason there is a problem we have the ability to pay that last pay out that came in before we stopped work. Mr. Payton stated we asked about parks and in the end they can say we are not going to build them but we didn t have them in the first place. I expected all along that the CDD would build those parks if we have to. Counsel s opinion is that we go with the full $1 million minus the $200,000 for the first phase and then we build up money for Phase 2. Ms. Buchanan stated that is right, when they sell the first 100 lots we will have the $1 million and it will either be by the time they sell to a builder or by 2021 there is a date certain by which they have to pay the $10,000. By 2021 in theory we should have $1 million that should they not choose to continue with the project we would be able to put in the infrastructure. Mr. Poole asked is that a contractual requirement? Ms. Buchanan stated that is our assessment that we levied earlier this summer so should they not pay that $10,000 per lot by 2021 we would have the ability to foreclose on the property and use the proceeds from that foreclosure sale. It is not attached to any bonds it is directly related to the district s improvements. Mr. Cross stated basically we are secured all the way around. Ms. Buchanan stated we can t protect against everything assuming that we pay proportionately withhold money to cover our payouts that should cover us in the short term and assume we collect that $10,000 per unit for the first 100 lots that would go along way towards funding the infrastructure in the second part. I just need direction then I will prepare the agreement and bring it back for approval at the next board meeting. Mr. Cross stated I don t have a problem with the direction being exactly what you are saying, proportionately with a hold back of $200,000. It was the consensus of the board to fund the pay applications proportionately and hold back $200,000 as discussed. SEVENTH ORDER OF BUSINESS Update Regarding Issuance of Bonds Mr. Oliver stated we spoke earlier that we extended the due diligence process and we need to meet again this month and if it works with your calendars we propose at the end of this meeting to continue the meeting to May 17 th and at the meeting we will give you an update on 8

16 May 3, 2016 South Village CDD the due diligence process but also bring before the board what is known as a delegated award resolution, which puts into motion the marketing of the bonds so that the investment bankers can go out in the market and get the best rates for the district. We would meet again in early June and likely meet a second time in June hopefully for a closing sometime around June 17 th. Mr. Cross asked do we need to send a letter to the owner that we are going to meet June 17 th? Ms. Buchanan stated if everyone is comfortable and it is within Grant s authority we will take direction from him in what we previously delegated to him. EIGHTH ORDER OF BUSINESS Ratification of Agreement with Environmental Services, Inc. for Limited Phase II Environmental Site Assessment Mr. Oliver stated the next item is ratification of agreement with Environmental Services, Inc. for the limited Phase II environmental site assessment for a fixed fee of $4,700. This resulted from the Phase 1 environmental report they did and there was additional work they need to do. To keep the ball rolling we executed it and had them start the work. On MOTION by Mr. Krueger seconded by Mr. Poole with all in favor the agreement with Environmental Services, Inc. for limited Phase II environmental site assessment was ratified. NINTH ORDER OF BUSINESS Board Guidance Regarding Fiscal Year 2017 Budget Mr. Oliver stated at the June meeting we will start the fiscal year 2017 budget process. We will bring a proposed budget to the board and once you approve the proposed budget and set a public hearing date we will refine that budget over the next 60+ days. We can t hold a public hearing and adopt a budget until at least 60 days after you approve a proposed budget. I suspect you will probably want to set your budget hearing for the first week in September and that gives us a lot of time to work through some of the transitions issues associated with the golf course. Then you will have a public hearing, adopt the budget and we will provide that to the Clay County Tax Collector by the September 15 th deadline and those assessments will be posted to the tax bills that go out November 1 st. I m asking for your guidance tonight in preparation of that budget. What I have in mind early on is to prepare two budgets on the revenue side, one would be anticipating those 100 lots 9

17 May 3, 2016 South Village CDD be platted before the October deadline so they can be fully assessed for O&M but I will also have a contingent budget assuming the platting is not going to take place by October 1 st and that would impact the assessments the district would receive. Ms. Buchanan stated I think we have to have them platted by the time we adopt the budget so it is really more like September 7 th. Mr. Poole stated the social dues would be another income stream and we talked about what we were going to call them going forward so you would be making some assumptions. Mr. Oliver stated I will be in a few things. There will still be property tax paid on the golf club operation. There won t be social dues per se anymore these will now be called operation and maintenance assessment because the district will own the course, the landowners will own the course, and we will charge operation and maintenance assessments just as you do for your other recreational facilities. Mr. Krueger asked in preparation for doing that when do we need to start looking at the rates we are going to charge and how things are going to be, are we going to change anything in the pool or clubhouse area? How are we going to allocate the fees that people pay when they buy in to the properties here, the initiation fees? Mr. Oliver stated that is something that we are going to tackle and there are the initiation fees, the capital reserve fund that landowners pay the current owner of the golf course but we will need to dig into that. In terms of the revenue projections from the typical sources that the golf club has right now we are going to pretty much mirror those for this particular budget. A lot of that is based on not only the budget we worked up but some of the comments made at the last meeting in terms of the golf course management and how there could be some slight change in the rates for residents versus non-residents. He was saying he is concerned to make too many big changes because he still doesn t have a good handle on what percentage of revenues are received from residents versus non-residents. There is a lot of work we need to do there. I don t think you are going to see great changes on what our draft budget was but once you have the proposed budget at the next meeting we can tweak it as we approach the public hearing. Mr. Cross stated if we purchase it in June the social dues will still be collected until October the way they are being collected now and that money will be released to us. We have a problem with how we collect them and how it says on our deeds they will be collected. 10

18 May 3, 2016 South Village CDD Mr. Oliver stated I have been talking primarily with Jason Merritt and Katie also and it is our anticipation those will flow to the district for the remainder of this fiscal year because this district didn t budget for that for fiscal year 2016 because we don t own the course yet. Mr. Poole stated whatever we call it we want to communicate that to the residents so they understand the transition we are going through so that they can understand any changes. Mr. Oliver stated I agree and we will do that and it will be on the proposed budget document as well as the narrative we are preparing for that information. It will be a net/net basis what is now the social dues will pretty much be a match for the O&M to support the golf course operation. TENTH ORDER OF BUSINESS Other Business Mr. Cross stated I have a letter from Mr. Deal who wants to chair a golf advisory board and I think that is a great idea, the more people we have involved in this the more input we get and the fact that several board members don t play golf it is hard for us. I would like to see an advisory board that can report to the board and work with the golf course and he would be a liaison between the three of us to work with us and work with them to make sure that we know if there is a problem we are all aware of it. Mr. Krueger stated my only concern is the sunshine law how it would impact that. Mr. Cross stated he would report to the board. Ms. Buchanan stated if an advisory committee is part of the decision-making process they would have to meet in the sunshine. They can still do it but I suggest they line up their board meetings concurrent with these so we can notice them at the same time and say the golf advisory board meets at 5:00 p.m. and the CDD meets at 6:30 p.m. all meetings are at this address. Mr. Cross stated we will work out the logistics. Mr. Krueger asked is there a way we can get around that? Ms. Buchanan stated what you had before was a group of citizens that were telling you what they thought about things when we had the initial committee. If you are talking about having them become part of your decision-making process meaning they are communicating with the vendors and reporting back to you, when they are making recommendations then my initial take is that those meetings need to be in the sunshine. 11

19 May 3, 2016 South Village CDD Mr. Payton stated I have talked to a number of people in the last few weeks about different advisory committees and resident groups and holiday lighting committee so I want to understand. I wasn t concerned until a minute ago. Ms. Buchanan stated it is a nuance but if they are making a recommendation and have your attention and they are on the agenda where you consider the recommendation and that weighs into your decision-making process then that is an advisory committee, which would generally be required to be noticed in the sunshine. If it is a group of citizens that are submitting a request to the board saying I would like you do to this then that is just a group of citizens. It is the delegation of authority, you are giving them some authority to go do things on your behalf and report back to you. That is where it changes. Mr. Payton stated now that I think about it some of these things are more like the holiday lighting as an example, they want to help Matt to plan or arrange or build things and we are not involved at all. Ms. Buchanan stated that is delegated independent authority under his contract. Mr. Cross stated that is really what I m looking at with the golf advisory committee. Mr. Poole stated there are a number of things in the community that would benefit from something like that as well. I think there are a number of people in the community who would be willing to act as a citizens group because that would probably be preferable, which would give them the flexibility they would like to have versus being subject to the sunshine law. ELEVENTH ORDER OF BUSINESS Staff Reports A. Attorney Ms. Buchanan stated there is a document in front of you from Clay County, which is a letter of support and is signed by the county manager, Stephanie Kopelousos and she explains that Armstrong Ventures and Clay County have been negotiating the design and construction of the Tines Boulevard extension. Basically she reiterates that this agreement is in draft form and would require approval by the Clay County Board of County Commissioners as well as this board to be effective and there are still some ongoing items that are under discussion. Some of the things she points out in sub-paragraph 5f, which is the maintenance of cash flow to the project, section 7b, which is a description of the guarantee, and 5h. On a 2,000 foot level the county and the developer are trying to negotiate the construction and funding of this extension. 12

20 May 3, 2016 South Village CDD The county wants to dedicate $7 million of construction money to a CDD for the construction of that extension. As we discussed before it is anticipated that particular piece of property will be de-annexed from the district it will not continue to be a part of the district. However, the county has timing constraints on using their money and they would like the district to move forward with design solicitation and we have done this before. We publish a request for proposals and seek proposals from interested engineering firms that would then be evaluated by the board and approved to start working on the design of the project. The understanding and intent is that the county provides the funding for this work. Should the property be de-annexed from the district as planned we would then assign these contracts and any work product produced by these contracts to the new CDD. We discussed that before, I believe Roger came in and presented it to you. I think that in the past you have expressed a willingness to undertake the request for proposals for engineering provided it was developer funded but that is the extent of my recollection of your commitment. Mr. Payton stated basically the request is that we help them get started even though we anticipate not being involved. Ms. Buchanan stated correct. That is not how this agreement is drafted and is one of the concerns I highlighted, there is no ability for us to terminate the agreement if for some reason the new CDD didn t work out I don t think you want to be on the hook for this construction. You would undertake the beginning with the understanding that you could assign it to someone else. That is what you have always contemplated. Mr. Krueger stated I don t have an issue with this as long as we can get out of this. Mr. Cross stated I agree. Mr. Poole asked what is expected of us? Ms. Buchanan stated you do the request for proposals, you publish the notice then you have your time and my time to review the proposals to make sure they are appropriate, which they would reimburse us for. All of that would be covered by a developer funding agreement, which Roger has already suggested and committed to. Mr. Cross stated we are just doing him a favor it is not going to cost us anything but time at a meeting to approve it, it is paid for by him. At what point do we get out of this? 13

21 May 3, 2016 South Village CDD Ms. Buchanan stated I think this is a solicitation for your comments and concerns so I suggest that be one thing we respond back with that we are happy to begin this process but we are not seeing it through to the end. Mr. Payton asked how long after we de-annex will it take to create a CDD? Ms. Buchanan stated I expect we will have the petition to amend the boundaries of South Village and a petition for the new CDD to be on the second county commission meeting in June. Mr. Poole asked what do we need to respond to this? Ms. Buchanan stated given his desire to move forward I m sure he expects a response as soon as you are able. If you wanted to take some action tonight I suggest that you direct staff to work with one of you to make revisions to this agreement that you deem appropriate that we can bring back to the May 17 th meeting for further discussion. Another option is to go ahead and approve the request for qualifications process subject to a funding agreement executed by the developer so even if you are not comfortable with this form we could potentially help him by starting the process. Mr. Cross moved to authorize staff to start the process to subject to amendments being made to the agreement. Mr. Poole stated if time is not of the essence I propose we bring this back as an agenda item at our continued meeting to give us time to read and understand it. I don t think two weeks is going to kill it. Mr. Krueger stated I think the fact that he sent it to us to look at and evaluate that he would like to get started as soon as he can. Mr. Cross stated I understand your point Bobby but it is not going to cost us anything, there is no liability it is really helping him out. He is just going through the process at this point. Whether we approve it now or two weeks from now it is still going to be the same thing with a change in the agreement so we know when it is going to be cancelled. Mr. Poole stated it would people on the board time to read this document and understand it. This document is dated April 20, 2016 we could have had this document before this meeting to go over it and if we had any concerns or questions about it we could have asked them. I see the letter from the county is dated the 29 th and that is not that old but if you are going to drop 14

22 May 3, 2016 South Village CDD something on our desk tonight for us to make some decisions and it was generated almost two weeks ago I get a little bit concerned. Mr. Oliver stated staff hasn t been holding this. Mr. Payton stated I agree with Bobby on this. Mr. Krueger stated as long as we put the caveat in there that we can cancel it I don t see any issues with it. Ms. Buchanan asked can you repeat the motion? Mr. Cross stated I want to move forward with the request for proposals. Ms. Buchanan stated you want to authorize solicitation for request for qualifications subject to developer funding. Mr. Cross stated yes with the fact of the proposed amendments within the agreement to show us a termination. Ms. Buchanan stated two motions, one is to direct staff to work with yourself to negotiate the terms of this agreement to ensure that the district has the ability to terminate this agreement basically provide for a contingent liability so we don t have any obligations if things don t work out as planned. We have a source of funding for this we have no bonds, it is not in our improvement plan we are doing this solely to facilitate the developer and county moving forward. That is one motion. The second motion I heard, which is separate and apart from this is to authorize district staff to move forward with solicitation of a request for qualifications for an engineering firm for the Tines Boulevard extension subject to the execution of a developer funding agreement prior to that work. Mr. Payton stated the first is now negotiating, we are not approving this agreement today we are approving you to work up a new agreement that gives us an out or deadline of being transferred to a new CDD. Are we approving this today? Mr. Cross stated approving it today with the clarification that there will be an amendment to show an expiration or termination of it. Mr. Payton asked will we all see the new document or will it be you who sees it? Mr. Cross responded you will see the new document. Mr. Poole stated if I have clarification that nothing is going to happen until you bring it back to the board again. 15

23 May 3, 2016 South Village CDD Mr. Payton stated right, for the next couple of weeks they are going to work on the finance side and bring it back. Mr. Cross stated on the second motion then we could go ahead and start the proposals, right. Ms. Buchanan stated there are two things. Is everyone in agreement on the solicitation motion? Why don t we consider that first? That is a separate issue that is a little cleaner. That is just to authorize district staff to move forward with soliciting proposals in response to request for qualifications from engineers regarding the design for Tines Boulevard extension, all of that being subject to an executed developer funding agreement. Mr. Cross stated basically what we are saying is that they can go ahead and move forward with an engineering agreement and proposals for contracts based on the fact that they are going to agree to pay for it. On MOTION by Mr. Cross seconded by Mr. Krueger with all in favor district staff was authorized to move forward with solicitation of a request for qualifications for an engineering firm for the Tines Boulevard extension subject to the execution of a developer funding agreement. Ms. Buchanan stated one more point of clarification. Our typical criteria we use for request for qualifications are ability and adequacy of professional personnel, we usually rate that at 25 points. The second would be past performance and how well they performed for other CDDs, their experience, integrity and character and any conflicts of interest or relationships and that is usually 25 points as well. The one caveat there is that generally a CDD engineer will be deducted points. It is not that because Hadden Engineering has done such great work we would be able to give them more points. The purpose of the statute is to provide for multiple opportunities for different firms. That will be 25 points. Geographic location how close they are to this particular project we sometimes weigh at 5 points. Willingness to meet time and budget at 15 points. A certified minority business enterprise at 5 points. Projected workload at 5 points and volume of work previously awarded to the principle by the district 5 points. Would you like to modify that criteria is there anything that seems more important or less important? One thing to understand about this particular statute is that you cannot evaluate budget. You are supposed to pick an engineer based solely on qualifications and experience. 16

24 May 3, 2016 South Village CDD It was the consensus of the board to use the evaluation criteria outlined by Ms. Buchanan. Ms. Buchanan stated we will use our standard form of qualifications when we publish the advertisement. We will have some time on this. I cannot make the advertisement work for our May 17 th meeting so we will have to bring back proposals at the earliest to our June meeting. Is there anyone you would like to delegate authority to make any changes? I will run these by the county and if they suggest a change I would prefer to have someone be able to change them. Mr. Cross stated I will be working with you and I can do that. Ms. Buchanan stated we are authorized to do the RFQ and I would like a motion to approve that. On MOTION by Mr. Cross seconded by Mr. Krueger with all in favor the evaluation criteria was approved and the chairman was authorized to make any necessary changes suggested by the county. Ms. Buchanan stated we have done something that in theory will enable the project to move forward. I think from a practical standpoint you have taken an action that the developer should hopefully find helpful. Now the question is whether you want to approve this and delegate authority specifically to the chairman to change it or whether you want to direct staff to work with the chairman to come up with proposed revisions and bring them back for consideration at your May 17 th board meeting. We will circulate a draft prior to that meeting so if you have comments you can review them and try to work them in prior to the Mary 17 th meeting. On MOTION by Mr. Cross seconded by Mr. Townsend with all in favor staff was authorized to work with the chairman to prepare revisions to the interlocal agreement to include a termination provision and to bring it back to the May 17 th board meeting. Mr. Poole stated I looked at the environmental report, the management services agreement between East West and Arnold Palmer and I looked at one other and I believe all three go back in his hand within them by some survey components the golf course and the golf club and would you share with us what the insufficiency existed in those surveys that really required us to go with the other survey? These were surveys of the golf course and the 17

25 May 3, 2016 South Village CDD clubhouse. The one question we asked as we started to move forward was the need to conduct a survey of the golf course and clubhouse to specifically identify what the boundaries were. I think we came to the conclusion that we had no survey that met the level of detail that we needed to have in the procurement of the golf course and the clubhouse. I m asking in looking at those three documents what were the insufficiencies from a legal standpoint? Ms. Buchanan stated I am going to have to refer that to Jason Merritt. I m happy to get back to you with the answer. I will get with Jason and he will get with Keith on the surveys. Mr. Poole stated there were surveys with those three documents that dealt with the golf course and dealt with the clubhouse. Mr. Andersen stated there were not surveys there was a legal description, which is completely different. What you saw were legal descriptions. We asked those questions in the very beginning and said will those legal descriptions satisfy a survey, that is not a boundary survey that is an estimation that is not going out and putting stakes in the ground and actually putting in monuments throughout and that is what they ended up doing. That is why it cost so much and took so much time because they had to delineate between the wetlands, conservation area and the golf course so we could get an actual survey of the property that we are buying. You saw a legal description not a survey. The surveyor put in 1,000 different way points, it is just like on your property you have iron sitting in the back of your property. It is a protection for the district because now we know exactly what we are buying. Ms. Buchanan stated we needed a certified survey to then get title insurance. If there is ever an issue with the title we have an insurance policy that will pay to defend what we believe is our property. Clary prepared a draft that we sent to the title company and that is what they preparing the policy on. B. Engineer There being none, the next item followed. C. Manager 1. Report on the Number of Registered Voters (1,737) Mr. Oliver stated the district is required by Florida Statutes once a year to put the number of registered voters on the record and that is now 1,737 registered voters. 18

26 May 3, 2016 South Village CDD 2. General Election Mr. Oliver stated general elections are approaching and this year there will be two seats up for elections, seats no. 2 and no. 4 held by Mr. Payton and Mr. Townsend. The qualifying period for registered voters who live in the district is from noon June 20 to noon June 24 and that is at the supervisor of elections office in Green Cove Springs, Florida. For more information go to clayelections.com and the phone number for the supervisor of elections is and we put that information on the website also. D. Director of Aquatics & Recreation Mr. Biagetti stated I believe I have spoken to a couple of you with regard to the fitness equipment upstairs in the athletic center. I would like to move forward on something now. We talked about purchasing new cardio equipment. I have one estimate to repair the cardio equipment and some other things that for roughly $6,500. This is replacing all the link arms on the ellipticals, new decks on the treadmills, new belts, which are the biggest things on the treadmills. This will take care of everything that we currently have and starting down a new path on a new preventative maintenance plan more frequently we will be looking at two to three years of spending this $6,500 opposed to the cost of one elliptical which is about $6,500. I suggest if we can give me a not to exceed $7,000 on getting everything where we want it to be on the workout equipment. On MOTION by Mr. Cross seconded by Mr. Krueger with all in favor staff was authorized to have the cardio equipment repaired in an amount not to exceed $7,000. Mr. Payton asked how soon can we expect to see this happen? Mr. Biagetti stated it will be in the next three to four weeks if no sooner. Mr. Cross stated the tennis facilities, the tennis classic we had I brought this up before about letting the board know when things are going on and no one was aware of it maybe Chris was but the board wasn t aware of it. I don t know what it cost us to put that on or if there is any cost. Is that money being donated under the name of South Village CDD or is it being donated 19

27 May 3, 2016 South Village CDD under East West? If we are helping them raise money for charity by using our facilities then we should get some kind of credit for it. Mr. Oliver stated I did get an update from Mark Arrowsmith this afternoon. It says the only extra cost associated for the district for the tournament were for a few hours of overtime. The courts were also resurfaced, paid for from last year s tournament, which saves the CDD money. The prize money and money paid out to charity is all provided by the USTA and sponsors. Mr. Biagetti stated the overtime is not passed through. Mr. Cross stated I would like to be aware when we have it next time. Mr. Payton stated we talked about it at a prior meeting but I will talk to them about notifying everyone. Mr. Andersen stated we will find out how much is actually passed through because last year it generated income for the community. Mr. Cross stated those are things I would like to know. Mr. Krueger stated the 4 th of July I would like to go back to having something for the community, a pig roast or whatever it may be. I would like to suggest that the board members contribute $100 each to help with the fees and have a pig roast. Mr. Cross stated I don t have a problem with that. Mr. Biagetti stated we could charge a minimal fee for folks who participate and bring their family out and it will be a good event. Mr. Cross stated I would rather have more of a community event with no charge if you live here. Mr. Biagetti stated we can figure that out. E. Operations Manager - Report Mr. Andersen gave an overview of his report, copy of which was included as part of the agenda package. TWELFTH ORDER OF BUSINESS Supervisor s Requests and Audience Comments Mr. Payton stated I had a meeting with Matt and Mark regarding concerns about the athletic facility and tennis courts. The issue we are having is late evening, Friday night, Saturday 20

28 May 3, 2016 South Village CDD and Sunday when we don t have staff, people from all over just show up playing tennis and sneaking into the basketball court through the backdoor. We met and tried to figure out some solutions. Courts 7 and 8 are the ones in the grass and courts 5 and 6, which are the back courts by the golf shed are fully fenced and the latches are the ones that have a hole for locking. We are going to put padlocks on those with a little sign that says check in at the desk to use the courts, which they should be doing anyway. The tennis pros will have keys and if someone checks in and wants to use the courts and if they are residents they can use the courts. We don t have the ability to lock 1 and 2 or 3 and 4 as they are 3 foot fences around some of the areas but those things are easily visible from the desk. When the facility is finished we will have fencing all the way around you will have to go to the front desk to get to a tennis court. We don t have that today. A little more difficult is I saw two adult gentlemen park in the golf parking lot come to the backdoor of the basketball gym and someone from inside let them in. I went around and they left. We have doors in the back and two doors on the side that anybody from inside can open and let their friends in. We need to consider putting emergency only sirens so if you push that door open it activates an alarm, which will stop people from letting their friends in. The problem is spending the money to put alarms on the doors that we have today is kind of worthless. We discussed that once the doors are replaced we will put those alarms on them. In the meantime Matt is going to talk to staff about increasing their walks around, going in the gym and checking for a wristbands, checking to make sure there is nobody they haven t talked to playing tennis. Mr. Cross stated if any resident sees somebody in there that doesn t belong let staff know. Don t confront them but let staff know. Mr. Poole stated if people let their friends in or non-residents in the gym after hours there is no way to identify who is a resident or not a resident. Mr. Payton stated the gym isn t open. Mr. Biagetti stated the basketball court is, the workout facility upstairs is a different question because residents do have access after hours with a key card. I haven t heard of anything recently, there for a while we had a bunch of teenagers that were letting kids in. Mr. Poole stated after hours if someone is in the gym and they are a resident and they let their friends in then unless someone is there to confront them or talk to them there is no way of identifying who is a resident and who is not. 21

29 May 3, 2016 South Village CDD Mr. Andersen stated right, which is why when we get the cameras installed this will be great because when I come in and let four friends in and they are approached or someone notices all you have to do is go back to the camera system and see what happened and come to the board and say this is the second time he has done this, yank his privileges. It is a great system, it works in a lot of different place and we have seen it in action. When we put up signs that say video surveillance 14 hours it tends to keep the honest people stay honest. It is a board decision but that is going to be our recommendation. A resident asked the environmental services does that include the lake? Ms. Buchanan stated it is the lake that the environmental assessment consultant recommended we do additional testing for. A resident asked it will be cleared up before we take ownership, right? Ms. Buchanan stated I think it is premature to say anything about it until we find out exactly what is wrong with it if there is anything wrong with it. That is the point of the due diligence to be sure that we are fully informed. A resident stated we need to make sure we are clear on that and we are not absorbing something. The $70,000 deferred maintenance, do we go back and negotiate that? Are we taking this on? Mr. Cross stated that would be up to the board and that is what we are going to look at when we finish all the due diligence, the overall cost of everything. It would be a negotiating point at that time. We want to look at the overall cost of everything. A resident stated it says $70,000 of deferred maintenance and that is like maintenance not done. Ms. Buchanan stated that is my paraphrasing. A resident asked did NGF say that the tee boxes and those things needed to be redone? Mr. Cross responded they said to make it a better facility they would recommend to do that but there is nothing wrong with them. A resident asked what happens on the entrance? I think it is nice that you want to help the developer out but what happens if they go over $7 million are we on the hook for anything? Mr. Krueger responded no, anything over $7 million the developer is responsible for. Mr. Cross stated the county loaned him $7 million that he has to pay back so ultimately the county is not even paying for it and if he is over the $7 million he has to pay that too. 22

30 May 3, 2016 South Village CDD Mr. Andersen stated this is a county mandated road, this is a road that the county wants to build not the developer. A resident asked I have seen a lot of the sidewalks built by the new builders that they have not brought the concrete level up to the utility, the utilities stick up. Is that something that you can look into? Mr. Andersen stated I m going to try to help. That is a builder issue that needs to contact the Clay County Utility Authority so they could lower those valve boxes. Clay County does know about this. A resident asked has there been any thought around the potential for a stoplight at our entrance? When the toll road is active that is going to increase the traffic dramatically. Mr. Cross stated that would be up to the county and the state has done studies that show that there are more accidents at red lights than stop signs so they don t like to put up a red light until they have to. THIRTEENTH ORDER OF BUSINESS Financial Reports A. Balance Sheet as of March 31, 2016 and Statement of Revenues and Expenses for the Period Ending March 31, 2016 The balance sheet and income statement were included as part of the agenda package. B. Assessment Receipt Schedule The assessment receipt schedule was included as part of the agenda package. C. Approval of Check Register On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the check register was approved. FOURTEENTH ORDER OF BUSINESS Next Meeting Scheduled for June 7, 2016 at 6:30 p.m. at Eagle Landing Residents Club Mr. Oliver stated the next scheduled meeting is June 7, 2016 at 6:30 p.m. but earlier tonight we talked about continuing this meeting to May 17 th and the items on that continued agenda would be the agreement we discussed earlier with the interlocal agreement with Clay County, the due diligence items and under bond matters we will bring the delegated award 23

31 May 3, 2016 South Village CDD resolution and associated documents. I ask that we delay the start of that meeting until 7:30 p.m. rather than 6:30 p.m. I have another district meeting that night that starts at 6:00 p.m. On MOTION by Mr. Cross seconded by Mr. Krueger with all in favor the meeting was continued to May 17, 2016 at 7:30 p.m. in the same location. Secretary/Assistant Secretary Chairman/Vice Chairman 24

32

33 SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT The continued meeting of the Board of Supervisors of the South Village Community Development District of May 3, 2016 reconvened Tuesday, May 17, 2016 at 7:30 p.m. at the Eagle Landing Residents Club, 3975 Eagle Landing Parkway, Orange Park, Florida Present and constituting a quorum were: Gary Cross Grant Krueger Richard Townsend Chris Payton Bobby J. Poole Chairman Vice Chairman Supervisor Supervisor Supervisor Also present were: Jim Oliver Katie Buchanan Keith Hadden Sarah Warren Jason Merritt Matt Biagetti Steve Andersen Misty Taylor Danny Tyler Sete Zare Kevin Mulshine Several Residents District Manager District Counsel District Engineer Hopping Green & Sams Hopping Green & Sams (by telephone) Director of Aquatics & Recreation Operations Manager Disclosure Counsel Nabors Giblin MBS Capital Markets MBS Capital Markets The following is a summary of the actions taken at the May 17, 2016 meeting. A copy of the proceedings can be obtained by contacting the District Manager. FIRST ORDER OF BUSINESS Roll Call Mr. Oliver called the continued meeting to order at 7:30 p.m. SECOND ORDER OF BUSINESS There being none, the next item followed. Audience Comments

34 May 17, 2016 South Village CDD THIRD ORDER OF BUSINESS Consideration of Resolution Delegated Award Resolution Ms. Buchanan stated Mr. Tyler has prepared the resolution before you and he will go through the resolution and explain to you what it accomplishes then he and Misty are going to go through the exhibits to the resolution. Mr. Tyler stated this is a delegated bond award resolution. You are going to delegate to the chair the authority to sign the bond purchase agreement, the form of which is attached to this resolution in order to be able to close the bond issue. When you do that you are approving also the form of the disclosure document called the official statement in connection with these bonds and it contains all the details of the bond documents, the structure of the transaction, a description of the development, the status of development, the golf course and the connection with the Dream Finders piece. It describes Dream Finders and what they plan to do and a description of the developer. It describes the district and the supervisors who manage the district and that sort of thing. You will be approving that together with the bond documents. There is a supplemental indenture for each of two series of bonds, the golf course acquisition and refunding bonds and the bit of new money, which you are doing for your capital projects. All of that is done under one supplemental indenture. The Dream Finders piece is being done under another supplemental indenture and the reason for that is because it is a new development as opposed to the balance of the community, which is almost fully developed, the interest rate and risk would be different on the two. Rather than taking away some of the savings from the refunding by virtue of this development being as beautifully and developed like it is they are done in a separate series. Their assessments will be predicated on the different interest rate. The Dream Finders parcels are going to get a piece of the refunding, a piece of their new money, a piece of the golf course and also they are doing some construction funds for themselves. That is a separate series with separate interest rates. The whole idea behind this is that once we approve all these things tonight, Kevin, Sete and their firm will be able to go out and market the bonds and call and say we are going to price the bonds on Tuesday and we would like to sign a bond purchase agreement on Wednesday. It is not totally open ended this is a delegated award to the chairman within parameters and if the bond purchase contract is within those parameters the chair is authorized to sign the contract and we will have a deal and we will set a closing date based on the numbers and the closing date will be the date that we will sell the bonds to the bond purchasers. We will get the money to buy the 2

35 May 17, 2016 South Village CDD golf course, put the other money in the construction fund for the capital improvements and we will put money in the escrow account to redeem the prior bonds that we are refunding on a date 30 days away because we have to give 30 days notice. There are all these moving pieces and those are the documents you will be approving tonight. There is an escrow deposit agreement, when we get the bond proceeds that we are going to use for the refunding we give them to the trustee and they hold them in an escrow in cash and the prior bonds we are refunding go away legally when the money is put there to pay them off. We get a new clean lien with our new bonds. The form of that escrow deposit agreement is an exhibit to the resolution. In addition to the official statement Misty has prepared the bond purchase contract and continuing disclosure agreement. Federal securities law requires the underwriter to enter into an agreement with the district to get them to agree to provide certain disclosures on an annul basis and also a disclosure of certain events that may occur and the securities and exchange commission enforces it. Mr. Mulshine stated we are further constrained by the constraints in the resolution and also constrained by the notice you sent to residents for the public hearings so we can t come in with a bond issue that results in higher assessments than what you disclosed to your homeowners so the homeowners at least get that deal or a better deal. We are very confident that we will be within those parameters. When Danny was explaining the 1,152 homes in Phases 1 4 are a better credit than the Phase 5. We actually did it for the $17 million to $18 million of senior lien bonds we actually received a BBB rating from Standard & Poor s, which is very positive. We have the wind to our back going into this. Ms. Taylor stated the preliminary official statement is considered a sales brochure. This is what MBS will use, we will post this online when it is final and it will be final except for filling in pricing information and that gets posted and sent out to various investors. There are basically two series of bonds, the first series is the 2016 A1 and A2 and those are set up as senior lien/subordinate lien, the senior lien bonds are the ones that Kevin just referenced that got an investment grade rating from Standard & Poor s. Those bonds can be offered to pretty much any investor. The unrated bonds are limited to what we can an accredited investor. The same offering document is used for bond purposes so we basically put your new development, new money deal into the same offering document as we did your refunding with the small piece of your recreational improvements. This document has several sections as Danny pointed out but basically we tell the investors all about the district, about the credit, how the documents function, 3

36 May 17, 2016 South Village CDD all about what we call in this document Assessment Area 2, which is the Dream Finders piece Phase 5, we tell them all about that and Dream Finders. All of this is bottled into one offering document that Kevin can post and communicate to the investors. What we try to do when we draft these things is what we have to have in here is everything a reasonable investor would consider important when making an investment decision to buy the bonds. We try to anticipate investor s questions and have everything in the offering document they will want to see. This document has a lot of attachments and what will be attached are things that you have approved before. For example the assessment reports, supplemental engineer s report that tells about the improvements you are going to undertake with the bond proceeds. The form of the bond counsel opinion that is important because these bonds are tax exempt to investors and they need to know that bond counsel has prepared and is ready to deliver an unqualified tax exempt bond counsel opinion so we provide them with a copy of that. The continuing disclosure agreement, which is a separate attachment to the resolution we attach that as a form. We will include a copy of your annual audit. Mr. Mulshine stated we are hoping to average slightly under 4% for the BBB rated bonds and when we blend it in we will be in the low 4 s so we are taking the 5.7% down to the low 4 s. Some of those savings go back to funding the golf course and your other improvements. The Dream Finders piece could be as high as 6% that is why we split them out. Mr. Payton asked when this is brought to Gary s attention will he have the opportunity to say no and will there be an opportunity for another offer? Mr. Tyler stated he clearly has the authority to say no before he signs. In terms of will there be another opportunity if you go out in the market and market the bonds and have sold them and then you just say let s see if we can get a better rate the market probably would not willingly accept or be eager to come back and do it. If there were something in the market that radically changed the market and Kevin calls and says here is what is happening and Gary says I don t want to market them right now that is probably what would happen. He would pull the plug before the bonds are marketed as opposed to after they were marketed. Mr. Mulshine stated if you do a lot or premarketing you have a set day for the pricing then we will call your manager to see if Gary is available several times during the day and in the morning we will get the feel for where the market is and if the offers look like they should be and we will save you money if we go out with this scale of interest rates and we will show him 4

37 May 17, 2016 South Village CDD exactly what that means to every homeowner and we will say if we go up in the scale and come back a couple hours from now and we actually make a commitment to buy all the he will have the opportunity to know where we are pricing the bonds before he says yes but after he says yes and signs the BPA there is not only contracts between us and the district there are actually contracts between MBS and a lot of investors that have bought those bonds so that is the point of no return. He will be able to see the impact of those rates on every resident before he says yes or no. Mr. Cross asked what is the timeframe for this? Ms. Buchanan stated I know you have commitments and the resolution authorizes the chairman and the vice chairman. Mr. Mulshine stated things are moving very quickly and we anticipate a closing at your next meeting on June 17 th. Ms. Buchanan stated we have a regular meeting on June 7 th and we had talked about pricing on June 8 th and then doing a pre-closing in conjunction with our continued June 17 th meeting. Ms. Taylor stated the big push will be to get the offering statement posted in the next few days no later than the holiday, you want it out there so that it gives Kevin enough time to field questions. Mr. Mulshine stated I think you are out to bid for the construction of the first 100 lots in Phase 5 and we are hoping to have that information, which will be on the 5 th or 6 th before we make commitments so we know how to size the bonds just right. Ms. Buchanan stated we are still going to finalize these documents, they are all in substantial form so understand that we are still working to get the final documents put together, which is completely normal. Audience Comments A resident asked if we sell the new bonds on day X, pay off the existing bonds of day X +30 is the district obligated for double interest payments during that 30 day period or how does that work? Mr. Tyler stated it is part of the sizing of the new bond issue. 5

38 May 17, 2016 South Village CDD A resident asked about two months ago we received documentation that seemed to outline infrastructure for the new bonds and there were specific dollar amounts that were forecast for payments. What interest rates were used for the development of those dollars? Ms. Buchanan stated the notices we sent you established maximums. We used conservative interest rates based on working with Kevin and GMS and they won t be higher than that notice. Mr. Mulshine stated we cannot go above what you were noticed. On MOTION by Mr. Cross seconded by Mr. Krueger with all in favor Resolution was approved in substantial form. FOURTH ORDER OF BUSINESS Consideration of Construction Funding Agreement (Phase 5) Ms. Buchanan stated we discussed several times how we want to prorate the payment of Dream Finders capital money out of their pocket as opposed to their construction proceeds. Since our last meeting Kevin has determined that he felt more comfortable if Dram Finders was required to put the balance of the construction project cost in escrow. There is no need for us to further contemplate a construction agreement. The payouts will be paid proportionately from our bond proceeds and the prefunded escrow account. Mr. Poole asked is Dream Finders in agreement with that? Ms. Buchanan stated Kevin has worked that out with them. FIFTH ORDER OF BUSINESS Consideration of Developer Funding Agreement (Tines Boulevard Extension) Ms. Buchanan stated we are going to table this. This is something the developer has already committed to funding and this will just relate to the cost of the request for qualifications for district engineering services for the design work and construction administration related work. It is not that you won t sign it we just don t have it tonight. We have prepared a request for qualifications that will be published in Clay Today tomorrow. SIXTH ORDER OF BUSINESS Consideration of Interlocal Agreement with Clay County (Tines Boulevard Extension) 6

39 May 17, 2016 South Village CDD Ms. Buchanan stated we are tabling this item as well. As a district you have done more than what they expected meaning you were willing to work with them for the RFQ and they are very appreciative and understand that the interlocal is just not right for your consideration yet. SEVENTH ORDER OF BUSINESS Update Regarding Golf Course Purchase, Due Diligence Process and Transition Planning Ms. Buchanan stated Jason Merritt is on the phone and he can give you an update. You have a memo that outlines where the process was. The first thing he addressed was the title and survey and at this point the survey is substantially complete I think they are just waiting on some formalities with the execution. It doesn t identify any major legal issues and Jason will explain what there is. Mr. Merritt stated the survey at this point has been completed. One of the remaining items that needed to be finalized was final verification of the actual legal description of the golf course and one of the things that was identified during the course of the survey was that the original legal description had some relatively minor errors and omissions that you can have with a legal description as complicated as a golf course that has numerous jogs and as Clary & Associates were in the field they identified those and were able to correct them and the legal description we now have is a little different than the description, which was originally used when Eagle Landing Golf Corporation acquired the property but we are going to work through that and obtain a quit claim deed from Eagle Landing Limited Partnership, which will clear up any title issues pertaining to that. In terms of improvements that exist on the ground identified by the survey there are numerous minor encroachments between the golf course boundary and adjoining parcels. Fortunately many of those issues relate to lands and facilities owned by the district so at the time the district closes those will go away, all the adjoining property will be combined into common ownership. There are a handful or less of situations where there are lots and fences and whatnot that encroach slightly against the golf course but these seem to be very minor in our view and don t present significant other problems. Probably the most significant issues are instances where golf carts paths as constructed stray slightly from the descriptions of where those cart paths may have been planned and strayed slightly either into land owned by the CDD, which I don t view as a problem or a little more into conservation easement areas. While that is not ideal 7

40 May 17, 2016 South Village CDD I don t have enough information to say what the water management district s posture would be if that were to be discovered. On the other hand since the golf course has been in operation for as long as it has we think the likelihood of any issues arising from that are pretty low and not surprising. In short I think the survey confirms some things for us and ought to eliminate a lot of questions and also we were able to clear up and eliminate potential title matters as a result of it. I think we are in good shape from that point of view and as also discussed in the memorandum we are working through a couple of remaining issues from the commitment but there is nothing that we have identified at this point that amounts to a significant problem from a title or survey perspective for due diligence purposes. Mr. Cross stated in the first paragraph where it talks about the title description I m assuming where it says the golf course continue operating, maintaining first class manner is going to be taken out. Mr. Merritt responded there are two restrictions that exist and they were imposed at the time that Eagle Landing Limited Partnership acquired title to the property from the original developer of the DRI. These were matters that Eagle Landing assumed and at the time Eagle Landing conveyed title to the current owner those were matters, which were made subject to so in order to eliminate those you would have to go back up the chain of title two steps to the original developer of the master DRI and obtain their consent to the release of that. We have not made efforts to do so in light of the fact that this was a legally negotiated term as part of the original conveyance of the development well before the community existed. If that is the board s direction we certainly can do so but to our knowledge there have been no issues raised by the existence of these provisions. The one referring to the continuing operations of the golf course in a first class manner that restriction will expire in a little more than two years and at that point in time that restriction will burn off and will no longer be applicable. The other restriction requiring the property continue to be used as a golf course until December 2033 has a longer period of time but as we sit here today I think it is everyone s expectation that is the plan and it will continue to be used as a golf course. We do not view that restriction as being problematic. Ms. Buchanan asked who would be able to enforce that restriction? Mr. Merritt responded the only entity that would be able to enforce that would be the original entity that conveyed the property to Eagle Landing Limited Partnership. 8

41 May 17, 2016 South Village CDD Ms. Buchanan stated that language isn t particularly problematic. It is an odd standard but I certainly think that we intend to operate these golf course facilities in a first class manner. Mr. Cross stated I agree. Equipment Leases and Service Contracts Mr. Merritt stated the next section deals with equipment leases and services contracts and as you will recall at our last meeting we discussed the existence of a series of equipment leases and the board s direction was working with representatives of Arnold Palmer Golf Management to have those existing leases evaluated and to obtain any recommendations they may have. We have in fact discussed these with Josh Smith and he had representatives of his lease finance group take a look and they recommend that no changes be made to any of those leases at this time. They thought they were appropriate and necessary for the operation of the course. Based on his recommendation we suggest that we continue to accept and assume those leases as we move forward to closing. To that end I have been in contact with counsel for the seller and we are working to initiate the process to get formal approval of the various equipment leasing companies to the assignment of those leases. Earlier this week we received the necessary credit applications and I have been working with the district manager s office to complete those. Additionally as we continue this process we were notified of several service agreements that are in place particularly an extended warranty agreement pertaining to the irrigation control system that is set to expire at the end of this month as well as a copy lease. We have been advised that those are the only two service contracts that exist that have a significant period of time and couldn t be terminated with 30 days notice and upon review the copy lease can be terminated on a 30 day notice, it is on a month to month basis. The proposal for the extended warranty for the irrigation system would be a five-year term and I provided the details of that in the memorandum. In conferring with Josh Smith of Century Golf he also confirmed that it was their recommendation that this warranty be renewed that it provides for maintenance and repair of the irrigation system that is a critical component for the golf course. Based on that recommendation we suggest that the board assume that and specifically as an action item give us authorization to tell the seller to go ahead and renew that agreement because if we wait until the end of this month we have been advised that the renewal rate will be increased. 9

42 May 17, 2016 South Village CDD On MOTION by Mr. Cross seconded by Mr. Townsend with all in favor staff was authorized to extend the irrigation system lease for a period of five years at a rate of $ per month subject to confirmation with Josh Smith that it is a reasonable rate. Mr. Poole asked does this have a 30 day termination provision? Mr. Merritt stated it does not have the 30 day termination provision this is for a five year term with no earlier termination option. Mr. Cross stated Bobby will get with Josh before the end of the end of the month and they will determine whether this is something the board wants to continue or decide if it has to come back to the board for a second approval. You will know before the end of the month whether or not to renew it. Bobby will get with Jim and Jim will let you know. I know you need it sooner than the end of the month and we will get with you as quickly as we can. Mr. Merritt stated that should be fine. Draft Management Agreement Mr. Merritt stated the next item in the memo is the draft management agreement. I believe Katie circulated under separate cover a preliminary draft that we had prepared based upon the existing version of the agreement between the seller and Arnold Palmer Golf Management. We prepared a redline so you can see the changes we are proposing to make in this version of the agreement to the existing version that exists between the seller and Arnold Palmer Golf Management. We need to finalize this agreement before closing and I will take any comments you have tonight, circulate a draft to counsel for Arnold Palmer Golf and bring back a revised draft to you at your upcoming meeting on the 7 th. Mr. Cross stated I read it today and what I saw in the redline was changing the verbiage to put us into the contract and the fact that we were a government entity and public records, etc. Mr. Merritt stated that is an accurate summation of the changes. There are particular points in the agreement that I think the board may wish to weigh in on for instance threshold amounts of contracts or dollar thresholds that we are delegating authority to the manager to act on without bringing it before the board. On page 3, comment 2 there is a definition of a term called material agreement that requires the owner s written approval for any agreement involving more than $10,000 or 10

43 May 17, 2016 South Village CDD terminate with not more than 30 days notice. We think the 30 day notice aspect is fine but whether or not we wanted to delegate that much authority to the manager to make a commitment to a $10,000 line item without bringing it to the board or if you wanted to reduce that. This is for something not already approved in the budget process. It was the consensus of the board to say we would like it to be reduced to $5,000 and they need to explain why they need $10,000. Mr. Merritt stated comment no. 5 on page 9 in section 2.46 talks about the reallocation of budgeted funds between line items and the intent of this provision would be to authorize the manager to move funds within and between budgeted line items but there is a 5% variance that the manager can t exceed. This is another example of a threshold and it is more of a managerial accounting mechanism. If you have a line item more than 5% over budget and you have to move funds do you want the manager to do that without your authority or do you want to bring it back to have a discussion about that particular issue and have a little more oversight? It could be an example like the last one where we create the question and ask them to come back as to why they think that 5% number is appropriate or not. Mr. Cross stated let s do that. Mr. Merritt stated the final comment is on page 13 section 4.2 the existing agreement contemplates that there will be an operating account established by the owner and that the owner will deposit and make sure there is always $150,000 of cash in that account and the intent of that provision is to make sure there is enough working capital on hand to permit the manager to draw down and pay the expenses of the club as they are incurred. Our question is and probably another point of discussion with representatives of Arnold Palmer Golf is that amount appropriate or is it maybe a little too high. It is probably a function of what are your anticipated revenues and expenses in any particular month. Katie and I took a quick eyeball examination of the forecasted revenues and expenses taking the low month of revenue and high month of expenses. My personal opinion was that I didn t think that number was out of the ballpark but at the same time there is a cost of capital that comes with having cash parked. If you want to have the appropriate amount of cash on hand that doesn t make sense to have excessive amounts of cash on hand either. 11

44 May 17, 2016 South Village CDD Mr. Cross stated I think we have to go back to the same thing and have them justify it. We would like some justification for all of these. Let them know it is not that we are against it we just need to know why they need it at those numbers. Mr. Merritt stated I don t anticipate any issues these are certainly reasonable questions. Mr. Cross stated they can call a board member directly if they want to and make it more understandable instead of going through third parties. Mr. Poole asked have we had any discussions about the management fee about how that was generated and whether it is appropriate going forward? Mr. Oliver stated that was one of the terms of the purchase and sales agreement with the seller of the golf course that we would take on this contract at that fee of $100,000 for one year. Ms. Buchanan stated if you have additional comments or questions try to get them to us by the end of the week and we will turn it over to their counsel and let them review it and hopefully get their responses in time for our June 7 th meeting. Mr. Merritt stated the management fee has been renegotiated over time and frankly they are much simpler fees than was originally negotiated. There used to be various levels of incentives and benchmarks that were negotiated between the original developer and Arnold Palmer and those have fallen away. As you move forward this might be a discussion you have with NGF or other advisors whether or not a lump sum structure such as proposed or some other alternative mechanism is best on a moving forward basis. I have a limited discussion of governmental approvals and licenses in my memorandum. In short the existing approvals appear to be in order and in hand with no open violations or investigations. There are a couple of outstanding due diligence matters that we are still waiting on and trying to complete mainly as you are aware we have moved forward with a Phase 2 irrigation pond, we have yet to receive those results so we do not have anything to report on that front this evening although we have received limited results that have not revealed any issues to this point so we are optimistic that everything will come back all clear. Also the audit is in process and we received an update that we should have a preliminary report as to the audit findings this week as well. Having said those things under the terms of the contract our due diligence period is scheduled to expire tomorrow and in light of the open items we thought it was appropriate to have the due diligence period extended and we have reached out to the seller and made such a request and the seller has agreed to extend the due diligence until June 17 th and has 12

45 May 17, 2016 South Village CDD signed an amendment to the contract to that effect. We recommend to agree to extend the due diligence period until the 17 th to allow us an opportunity to wrap up these remaining items then we can come back to the board at your June 7 th meeting and give a final report as to the status of these outstanding items. On MOTION by Mr. Poole seconded by Mr. Cross with all in favor the extension of the due diligence period to June 17, 2016 was approved. Mr. Poole stated what are the advantages and disadvantages of the manager having the permits and licenses versus the district? Ms. Buchanan stated I will speak to the liquor license first because it is the one I m most familiar with. We are still trying to determine whether or not the type of liquor license we have here would apply to the golf course. The limited exception we have here, our general liquor license is this is a civic center and the definition of a civic center means a place that a public body meets. In theory we could have an entire complex fall under that umbrella but the truth is in the past DVPR has examined this property and determined that since a road divides the two pieces they have to have two different licenses. Given that the road is a divider I m not sure whether or not DVPR will qualify the golf course as a civic center meaning a place of meeting owned by a public entity. We will work on it if we need to. That is one factor that weighs into it. The other thing to consider is that over here it is not just the CDD on the license I believe the amenity company was a co-applicant because there is a rule per DVPR that whoever serves the drink has to be responsible for the license as well. In this sense the same entity doesn t own it so there was a CDD portion of responsibility and amenity group responsibility so we would have to do something similar. Mr. Merritt stated that is the golf course owner and management company are shown as co-applicants on the current licenses as well. It is a point we can discuss with the manager but among other things in light of the fact that they have to be listed on the license that they are serving also from an administrative convenience point of view those are probably the reasons why they are listed on the license instead of the owner itself. Mr. Poole stated you are saying the CDD is listed as co-owner on the license over here as well as the license at the golf course. 13

46 May 17, 2016 South Village CDD Ms. Buchanan stated no, not the license on the golf course. We potentially may need to be added once we acquire it but for now we are only a co-applicant on this one. Mr. Poole asked what are the advantages or disadvantages of us being in that position? Ms. Buchanan stated give me a little time to think about that and I will get back to you on that. I will look into it a little further if you like. EIGHTH ORDER OF BUSINESS Consideration of Resolution Setting Rates and Fees for the Golf Club Mr. Oliver stated you have before you a resolution as well as proposed rates, which is basically the current rates with a range below and above that, which gives us enough information to actually set a public hearing. Ms. Buchanan stated the golf course charges fees but they are a private entity. We, as the CDD have to go through a statutory process before we can charge the same fees. The process is that we establish what we think our proposed fees will be, publish a notice in the newspaper that will be 28 and 29 days in advance and then have a hearing, which is an opportunity for the public to present concerns or questions about the rates before you officially adopt them. We have been walking a tightrope to try to figure out when our closing date is. We didn t want to do this and incur the expense of publication without being confident that we had a closing date. I need to make sure we do this in advance of our closing date because we are essentially taking ownership of a facility funded by tax-exempt bonds immediately and to be fully public we have to be able to have rates in place that someone from the public can come in and purchase a round of golf. We expanded the existing rates as we understand them from Josh and Marilyn by 20% on both ends to give us a little flexibility in pinpointing the rates we want to adopt with the understanding that we can leave a range in there and have some flexibility in which rates we apply at any given time during the year. Mr. Poole asked do we have a process by which there is a period of notification given upon changes in fees? Ms. Buchanan stated we have given notice of our intent to use these rates. In the future so long as the rate we like to use is within the range we adopt there won t need to be anything other than a motion by the board. 14

47 May 17, 2016 South Village CDD Mr. Poole asked is there any obligation on our part to the public that says today even though the social dues is $500 and we are going to raise that to $550, there is no requirement or public notice of that increase? Ms. Buchanan stated no. Mr. Poole stated we have already set a range by the board so the change in price becomes effective immediately. Ms. Buchanan stated upon approval by the board by a motion of the board, no further notice is required. Mr. Oliver stated for good communications you would probably send an e-blast and educate your residents that this is coming, we would give advance notice. Mr. Payton stated the management company can change rates within these thresholds at any time. Ms. Buchanan stated that is up to you how you want to operate that. Mr. Cross stated we give the management of the amenity center a range and allow them to adjust it as they deem necessary without coming back to the board. Mr. Payton stated we give them a range and they stay within that range. Mr. Oliver stated it can t be dynamic pricing that as different clients come in they get different prices, people within the same category in a given time period will get the same rates. Mr. Payton asked what if we want to add categories such as residents fees would that need notice? Ms. Buchanan stated yes. We do have in place the ability to incorporate promotional rates so if they have a new package they want to put out there that is not specifically included we already have a promotional rate rule in place to allow us to try something in the short term to see if we like it then we can go back and adopt it and finalize it. On MOTION by Mr. Cross seconded by Mr. Krueger with all in favor Resolution setting a public hearing to set rates and fees for the golf course for Friday, June 17, 2016 at noon in the same location was approved. NINTH ORDER OF BUSINESS Other Business 15

48 May 17, 2016 South Village CDD Ms. Buchanan stated I want to go over some of the checks and balances that are in place for this bond deal that you haven t considered yet. I will send it to you and we will review and approve them at the June 7 th board meeting. We know that in Phase 5 they plan to construct 199 units and we levied assessments based on that number. Should they choose to build only 150 units we wouldn t have enough money to pay off the bonds. That problem is solved by what is called a true-up agreement that is an agreement that they agree in writing and put a lien on all their property to basically say that if we develop less than 199 units we will write you a check for the difference so you have sufficient funds to pay your bonds. The second thing we have in place is we know they have a neighborhood improvement project that you previously approved. We understand they are going to prefund the construction account, they are going to have $1 million in bond proceeds and we also have capital assessments all of which can be used to fund that project. If for some reason the sum of that money is not enough the completion obligation would require them to pay for the rest of it. They have an obligation to complete their project. The third thing we have in place is called a declaration of consent to assessments. They already came to the hearing and they didn t object but we go ahead and have them record an official document that says I consent to these assessments that are levied on my property, I acknowledge the district is a valid entity and I agree that everything they have done is correct. I agree I can t challenge these assessments. The fourth is if they were to default we would be able to foreclose on their property. That doesn t necessarily give us the ability to continue to develop the property. It is not worth much if you can t put houses on it so we put in place a collateral assignment and this means that should they default on their assessment payments we have the ability to instantly assume the development rights associated with that property. We won t keep them we are obligated to assign them to the trustee on behalf of the bondholders. I want you to understand that is another check and balance so we are able to use the property and hopefully sell it to repay the bonds and satisfy our obligation. Finally, there is an acquisition agreement and it is a document that deals with how either real estate, work product, or improvements are conveyed to the district. At this point the only real estate I expect will be turned over is the property underlying the roads and potentially utilities. That has to come to us or to the county and they agree to do that. They also agree to 16

49 May 17, 2016 South Village CDD donate the work product to us, that is what we are asking for and we will see if they come back and want us to pay for it. We do have paperwork that they are paying for it themselves because they are paying the bond back. Those are the documents we use in every deal to make sure we have a nice clean package. We are going to get our project completed we are going to collect enough assessments to pay our bonds if we don t we are going to get the property and the ability to develop it as a marketable piece of property. I will send you the actual documents, Dream Finders has them and they are going to provide comments hopefully by the end of the week and once I have what I think is the final form of the agreement I will send it to you for your review. We will look to adopt them at the June 7, 2016 board meeting. Mr. Poole asked will you send us an with the name of the document and the brief comments you gave us tonight? Ms. Buchanan stated yes, I will send that. We can talk about scheduling. As Jim and I mentioned we expect to have a meeting on the 17 th and we set the hearing for the 17 th as well so on June 7 th you can expect a final update on due diligence. We will need from the board at that point a decision on whether or not we want to change the purchase and sale agreement whether there is a change in price or change in term that you want to take back. Let s do that by the 7 th if there is one. We will approve all the developer agreements I just discussed. I believe at that point Jim is going to have a proposed budget that is fully unrelated but will incorporate the golf course. Finally, we will also approve the rankings of the Phase 5 infrastructure proposals. We expect to do all of that on June 7 th and we will come back on June 17 th at noon and adopt a resolution that incorporates the rates and amounts of the bonds called a supplemental assessment resolution, it is the final piece of information you will adopt related to the bond transaction. We will also have the rate hearing and at that point I also hope to approve the golf course management agreement so we can have that in place prior to actually taking ownership of the property as well as the assignment of any leases that we have. Mr. Cross stated I will not be here on the 7 th I will be here on the 17 th. Mr. Poole asked when will we have the audit? Mr. Oliver stated the annual audit that we have each year we will bring to the June meeting. The special audit being done right now we will have a preliminary report by the end of 17

50 May 17, 2016 South Village CDD the week and I will circulate that when we get it. Jason mentioned in his memo that he did not see any red flags. TENTH ORDER OF BUSINESS Supervisor s Requests and Audience Comments A resident stated I was at an HOA meeting two months ago and one of the main topics was this huge amount of cash sitting in the HOA account. Apparently there is no means to transfer HOA dollars into CDD property for improvements. Mr. Cross stated the sticking point is the HOA attorneys and what they say they can do with the money. We haven t forgotten about it and we know they are willing to work with us. We are trying to come up with a plan that is acceptable to the attorneys and the HOA. A resident asked as one of the member of the citizens advisory group for the golf course, is the board receptive to input from us relative to the Arnold Palmer Golf Management agreement and if so when would you need that input? Ms. Buchanan stated the summary is that they are able to provide their opinion. It is the equivalent of submitting a written comment. A resident asked in order to complete everything by your timeline when would you need our comments? up. Mr. Krueger stated I don t think we can change the document as it is now until a year is Ms. Buchanan stated we are revising it but you are right the strict language of the purchase and sale agreement indicated we would accept it as is. The management company agreed with Jason that it just didn t work in the form it was in and that is the redline that we sent out. A resident stated we talked about a playground for Phase 5. Did you put that in writing? Mr. Cross responded no, I haven t gotten in touch with them yet. A resident asked what was meant by Dream Finders is getting a piece of the golf course? Ms. Buchanan stated the debt, approximately $2.6 million of debt that is financing the purchase of the golf course is being split proportionately between the platted lots and the Dream Finder lots. A resident asked looking at the entry points of Phase 5 is there a provision to construct entrances in advance of the development in lieu of using our main thoroughfare? 18

51 May 17, 2016 South Village CDD Mr. Cross stated they do have a construction entrance but we can t require them to use it because it is public roads. We can request that they use them but we can t force them to use it. ELEVENTH ORDER OF BUSINESS Next Meeting Scheduled for June 7, 2016 at 6:30 p.m. at Eagle Landing Residents Club Mr. Oliver stated the next meeting is going to be June 7, 2016 at 6:30 p.m. in this location. On MOTION by Mr. Cross seconded by Mr. Poole with all in favor the meeting adjourned at 9:08 p.m. Secretary/Assistant Secretary Chairman/Vice Chairman 19

52 FIFTH ORDER OF BUSINESS

53 A.

54 1.

55 AGREEMENT BETWEEN THE SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT AND DFH MOF EAGLE LANDING, LLC REGARDING THE ACQUISITION OF CERTAIN WORK PRODUCT, IMPROVEMENTS AND REAL PROPERTY THIS AGREEMENT (the Agreement ) is made and entered into this day of, 2016, by and between: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT, a local unit of special-purpose government established pursuant to Chapter 190, Florida Statutes, being situated in Clay County, Florida, with a mailing address is 475 West Town Place, Suite 114, World Golf Village, St. Augustine, Florida (the District ); and DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company, the owner and developer of certain lands within the boundaries of the District, with a mailing address is 360 Corporate Way, Suite 100, Orange Park, Florida (the Developer, and together with the District, the Parties ). RECITALS WHEREAS, the District was established by ordinance of the Board of County Commissioners of Clay County, Florida, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the Act ), for the purposes of planning, financing, constructing, acquiring, operating and/or maintaining certain public infrastructure improvements; and WHEREAS, Developer is the owner of certain lands located within the boundaries of the District known as Phase 5, upon which the District has constructed or will construct certain infrastructure improvements (the Development ); and WHEREAS, the District has adopted an improvement plan for the planning, design, acquisition, construction, and installation of additional recreational and neighborhood improvements as described in that certain Addendum to Improvement Plan Regarding Golf Course, Additional Recreation Improvements and Neighborhood Improvements, dated March 21, 2016 (the Engineer s Report ), attached hereto as Exhibit A and incorporated herein by reference; and WHEREAS, the District intends to finance up to $1,000,000 of the planning, design, acquisition, construction, and installation of certain neighborhood infrastructure improvements, facilities, and services specifically benefiting the area known as Phase 5 (the Neighborhood Improvements ), through the anticipated issuance of its South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-3 in one or more series (the Series Bonds ); and Dream Finders Homes, LLC - Acquisition 1

56 WHEREAS, because the Series Bonds have not yet been issued, the District has not had sufficient monies on hand to allow the District to fund the cost of the preparation of the necessary surveys, reports, drawings, plans, permits, specifications, and related documents which would allow the timely commencement and completion of construction of the Neighborhood Improvements (the Work Product ); and WHEREAS, the District acknowledges the Developer s need to have the Neighborhood Improvements constructed in an expeditious and timely manner in order to develop the Development; and WHEREAS, the District agrees that it will not have sufficient monies to proceed with either the preparation of the Work Product or the commencement of construction of the Neighborhood Improvements described in Exhibit A until such time as the District has closed on the sale of the Series Bonds; and WHEREAS, in order to avoid a delay in the commencement of the construction of the Neighborhood Improvements, the Developer has advanced, funded, commenced, and completed and/or will complete certain work to enable the District to expeditiously provide the Neighborhood Improvements; and WHEREAS, the District desires to commence the acquisition of certain portions of the Work Product and the Neighborhood Improvements, and accept assignment of certain agreements regarding the same; and WHEREAS, in conjunction with the acquisition of the Work Product and/or Neighborhood Improvements, the Developer desires to convey to the District interests in real property sufficient to allow the District to own, operate, maintain, construct, or install the Neighborhood Improvements, if any such conveyances are appropriate, and such conveyances shall be in fee simple, perpetual easement, or other interest as may be in the best interests of the District (the Real Property ); and WHEREAS, the Developer and the District desire to enter into this Agreement to set forth the process by which the District may acquire the Work Product, Neighborhood Improvements, and/or Real Property. NOW, THEREFORE, based upon good and valuable consideration and the mutual covenants of the Parties, the receipt of which and sufficiency of which are hereby acknowledged, the District and the Developer agree as follows: SECTION 1. INCORPORATION OF RECITALS. The recitals stated above are true and correct and by this reference are incorporated as a material part of this Agreement. SECTION 2. WORK PRODUCT. The Developer agrees to dedicate or provide to the District a license for use of the Work Product at no cost to the District. The Parties acknowledge that the Work Product is being acquired for use by the District in connection with the construction of the Neighborhood Improvements. Dream Finders Homes, LLC - Acquisition 2

57 A. The Developer agrees to convey to the District the Work Product pursuant to and as set forth in this Agreement. B. In lieu of conveying the Work Product to the District, the Developer may grant to the District a license to use the Work Product to the extent reasonably required by the District in connection with the ownership, construction, development and management of the Neighborhood Improvements to which the Work Product pertains. To the extent determined necessary by the District, the Developer shall use commercially reasonable efforts to obtain all releases from any professional providing services in connection with the Work Product to enable the District to use and rely upon the Work Product. Such releases may include, but are not limited to, any architectural, engineering, or other professional services. C. Except as otherwise separately agreed by the Parties with respect to any particular acquisition of Work Product, and without intending to modify any of the other terms of this Agreement, any conveyance of Work Product shall be on an AS-IS basis, and without any representation or warranty from the Developer to the District in respect thereto. D. The Developer agrees to make reasonable good faith efforts, but without imposing any requirement on Developer to pay for additional warranty rights on behalf of the District, to provide or cause to be provided to the District, either by assignment or directly from such third parties as may be necessary and desirable to the mutual satisfaction of the Parties hereto, a warranty that the Work Product is fit for the purposes to which it will be put by the District, as contemplated by the Engineer s Report. SECTION 3. IMPROVEMENTS. It is anticipated that the District will construct the Neighborhood Improvements with up to $1,000,000 proceeds from the Series Bonds and contributions and/or assessments from the Developer. However, it is possible that the Developer may complete portions of the Neighborhood Improvements separately. When a portion of the Neighborhood Improvements is ready for conveyance by the Developer to the District, the Developer shall notify the District in writing, describing the nature of the improvement, its general location, and its estimated cost. Developer agrees to provide, at or prior to the Acquisition Date, the following: (i) documentation of actual costs paid; (ii) instruments of conveyance such as special warranty bills of sale or such other instruments as may be reasonably requested by the District; and (iii) any other releases, indemnifications, or documentation as may be reasonably requested by the District. Any real property interests necessary for the functioning of the Neighborhood Improvements to be acquired under this paragraph shall be reviewed and conveyed in accordance with the provisions of Section 5 herein. The District Engineer in consultation with District Counsel shall determine in writing whether the infrastructure to be conveyed is a part of the Neighborhood Improvements contemplated by the Engineer s Report, and if so, shall provide Developer with a list of items necessary to complete the acquisition. Each Dream Finders Homes, LLC - Acquisition 3

58 such acquisition shall also be subject to the engineering review and certification process described in Section 2 above. The District Manager shall determine, in writing, whether the District has, based on the Developer s estimate of cost, sufficient unencumbered funds to acquire the improvement. A. All documentation of any acquisition (e.g., bills of sale, receipts, maintenance bonds, as-builts, evidence of costs, deeds or easements, etc.) shall be to the reasonable satisfaction of the District. If any item acquired is to be conveyed to a third-party governmental entity, then the Developer agrees to cooperate and provide such certifications, warranties, representations or other items as may be required by that governmental entity, if any. B. The District Engineer shall certify as to the actual cost of any improvement built or constructed by or at the direction of the Developer, and the District shall pay no more than the actual cost incurred, or the reasonable cost of the improvement, whichever is less, as determined by the District Engineer. C. The Developer agrees to cooperate in the transfer of any permits to the District or another governmental entity with maintenance obligations for any Neighborhood Improvements conveyed pursuant to this Agreement. D. Nothing herein shall require the District to accept any Work Product and/or Neighborhood Improvements unless the District Engineer, in his or her professional opinion, is able to certify that, in addition to any other requirements of law: (i) the Work Product and/or Neighborhood Improvements are as set forth in the Engineer s Report; (ii) the price for such Work Product and/or Improvements is equal to or less than each of (a) the cost actually paid to develop and/or install the Work Product and/or Neighborhood Improvements by the Developer and (b) the reasonable fair market value of the Work Product and/or Neighborhood Improvements; (iii) as to Work Product, the Work Product is capable of being used for the purposes intended by the District, and, as to any Neighborhood Improvements, the Neighborhood Improvements were installed in accordance with their specifications, and are capable of performing the functions for which they were intended; and (iv) as to any Neighborhood Improvements, all known plans, permits and specifications necessary for the operation and maintenance of the Neighborhood Improvements are complete and on file with the District, and have been transferred, or are capable of being transferred, to the District for operations and maintenance responsibilities. SECTION 4. SECTION 5. INTENTIONALLY OMITTED. CONVEYANCE OF REAL PROPERTY. A. Conveyance. In the event that real property interests are to be conveyed by the Developer and acquired by the District in connection with the acquisition of the Neighborhood Improvements, and as mutually agreed upon by Dream Finders Homes, LLC - Acquisition 4

59 the District and the Developer, then in such event, the Developer agrees that it will convey to the District at or prior to the Acquisition Date by a special warranty deed, or non-exclusive easement, as reasonably acceptable to the District together with a metes and bounds or other legal description, the Real Property upon which the Neighborhood Improvements are constructed or which are necessary for the operation and maintenance of, and access to the Neighborhood Improvements. The Parties agree that in no event shall the purchase price for the Real Property exceed the lesser of the actual cost to the Developer or the value of an appraisal obtained by the District for this purpose. The Parties agree that the purchase price shall not include amounts attributable to the value of improvements on the Real Property and other improvements serving the Real Property that have been, or will be, funded by the District. The District may determine in its reasonable discretion that fee title is not necessary and in such cases shall accept such other interest in the lands upon which the Neighborhood Improvements are constructed as the District deems reasonably acceptable. Such special warranty deed or other instrument shall be subject to a reservation by Developer of its right and privilege to use the area conveyed to construct any Neighborhood Improvements and any future improvements to such area for any related purposes (including, but not limited to, construction traffic relating to the construction of the Development) not inconsistent with the District s use, occupation or enjoyment thereof. The Developer shall pay the cost for recording fees and documentary stamps required, if any, for the conveyance of the lands upon which the Neighborhood Improvements are constructed. The Developer shall be responsible for all taxes and assessments levied on the lands upon which the Neighborhood Improvements are constructed until such time as the Developer conveys said lands to the District. At the time of conveyance, the District may require, at Developer s expense, an owner s title insurance policy in a form satisfactory to the District. In the event the title search reveals exceptions to title which render title unmarketable or which, in the District s reasonable discretion, would materially interfere with the District s use of such lands, the District shall not be required to accept such conveyance of Real Property and/or any related Neighborhood Improvements or Work Product. B. Boundary or Other Adjustments. Developer and the District agree that reasonable future boundary adjustments may be made as deemed necessary and approved by both Parties in order to accurately describe lands conveyed to the District and lands which remain in Developer s ownership; provided, however, that such future boundary adjustments shall not affect the ability of the Developer to have the lots developed. The Parties agree that any land transfers made to accommodate such adjustments shall be accomplished by donation. However, the party requesting such adjustment shall pay any transaction costs resulting from the adjustment, including but not limited to taxes, title insurance, recording fees or other costs. SECTION 6. TAXES, ASSESSMENTS, AND COSTS. Dream Finders Homes, LLC - Acquisition 5

60 A. Taxes and assessments on property being acquired. The District is an exempt governmental unit acquiring property pursuant to this Agreement for use exclusively for public purposes. Accordingly, in accordance with Florida law, the Developer agrees to place in escrow with the Clay County Tax Collector an amount equal to the current ad valorem taxes and non-ad valorem assessments prorated to the date of transfer of title, based upon the expected assessment and millage rates giving effect to the greatest discount available for early payment. 1. If and only to the extent the property acquired by the District is subject to ad valorem taxes or non-ad valorem assessments, the Developer agrees to reimburse the District for payment, or pay on its behalf, any and all ad valorem taxes and non-ad valorem assessments imposed during the calendar year in which each parcel of property is conveyed. 2. Nothing in this Agreement shall prevent the District from asserting any rights to challenge any taxes or assessments imposed, if any, on any property of the District. B. Notice. The Parties agree to provide notice to the other within ten (10) calendar days of receipt of any notice of potential or actual taxes, assessments, or costs, as a result of any transaction pursuant to this Agreement, or notice of any other taxes assessments or costs imposed on the property acquired by the District as described in Subsection A above. The Developer covenants to make any payments due hereunder in a timely manner in accordance with Florida law. In the event that the Developer fails to make timely payment of any such taxes or costs, the Developer acknowledges the District s right to make such payment. If the District makes such payment, the Developer agrees to reimburse the District within thirty (30) calendar days of receiving notice of such payment, and to include in such reimbursement any fees, costs, penalties, or other expenses which accrued to the District as a result of making such a payment, including interest at the maximum rate allowed by law from the date of the payment made by the District. C. Tax liability not created. Nothing herein is intended to create or shall create any new or additional tax liability on behalf of the Developer or the District. Furthermore, the Parties reserve all respective rights to challenge, pay under protest, contest or litigate the imposition of any tax, assessment, or cost in good faith they believe is unlawfully or inequitably imposed and agree to cooperate in good faith in the challenge of any such imposition. SECTION 7. LIMITED OBLIGATION OF THE DISTRICT. The Parties agree that the District shall have no obligation to pay more for the Work Product, Improvements, or Real Property than the sum of the total amount collected from the Neighborhood Improvement Proceeds; (ii) Capital Assessments; and (iii) the Initial Developer Infrastructure Payment, all as defined in the Completion Agreement between the Parties executed concurrent with this Agreement. SECTION 8. DEFAULT. A default by either Party under this Agreement, which continues for a period of thirty (30) days after notice of such default, shall entitle the other to all Dream Finders Homes, LLC - Acquisition 6

61 remedies available at law or in equity, which may include, but not be limited to, the right of damages and/or specific performance, but excluding special, consequential or punitive damages. SECTION 9. INDEMNIFICATION. For all actions or activities which occur prior to the date of the acquisition of the relevant Real Property, Improvement or Work Product hereunder, the Developer agrees to indemnify and hold harmless the District and its officers, staff, agents and employees from any and all liability, claims, actions, suits or demands by any person, corporation or other entity for injuries, death, property damage or claims of any nature arising out of, or in connection with, the use by the Developer, its officers, agents, employees, invitees or affiliates, of the Real Property, Improvement, or Work Product, including litigation or any appellate proceedings with respect thereto, irrespective of the date of the initiation or notice of the claim, suit, etc.; provided, however, that the Developer shall not indemnify the District for a default by the District under this Agreement or the use of such Real Property, Improvement or Work Product by the District, its engineers, employees, contractors, or such persons or entities negligence. SECTION 10. ENFORCEMENT OF AGREEMENT. In the event that either Party is required to enforce this Agreement by court proceedings or otherwise, then the Parties agree that the prevailing party shall be entitled to recover from the other all fees and costs incurred, including reasonable attorneys fees and costs for trial, alternative dispute resolution, or appellate proceedings. SECTION 11. ENTIRE AGREEMENT. This instrument shall constitute the final and complete expression of the agreement between the District and the Developer relating to the subject matter of this Agreement. SECTION 12. AMENDMENTS. Amendments to and waivers of the provisions contained in this Agreement may be made only by an instrument in writing which is executed by all Parties hereto. This Agreement may not be amended without the prior written consent of the Trustee and the Bondholders owning a majority of the aggregate principal amount of the Series Bonds then outstanding. SECTION 13. AUTHORIZATION. The execution of this Agreement has been duly authorized by the appropriate body or official of the District and the Developer. The District and the Developer have complied with all the requirements of law. The District and the Developer have full power and authority to comply with the terms and provisions of this Agreement. SECTION 14. NOTICES. All notices, requests, consents and other communications under this Agreement ( Notices ) shall be in writing and shall be delivered, mailed by First Class Mail, postage prepaid, or overnight delivery service, to the Parties, as follows: A. If to the District: South Village Community Development District 475 West Town Place, Suite 114 St. Augustine, Florida Attn: District Manager Dream Finders Homes, LLC - Acquisition 7

62 With a copy to: Hopping Green & Sams, P.A. 119 South Monroe Street, Suite 300 Tallahassee, Florida Attn: Katie S. Buchanan B. If to Developer: DFH MOF Eagle Landing, LLC 360 Corporate Way, Suite 100 Orange Park, Florida Attn: Patrick Zalupski With a copy to: Holland & Knight LLP 50 North Laura Street, Suite 3900 Jacksonville, Florida Attn: Missy Turra Except as otherwise provided in this Agreement, any Notice shall be deemed received only upon actual delivery at the address set forth above. Notices delivered after 5:00 p.m. (at the place of delivery) or on a non-business day, shall be deemed received on the next business day. If any time for giving Notice contained in this Agreement would otherwise expire on a nonbusiness day, the Notice period shall be extended to the next succeeding business day. Saturdays, Sundays, and legal holidays recognized by the United States government shall not be regarded as business days. Counsel for the District and counsel for the Developer may deliver Notice on behalf of the District and the Developer. Any party or other person to whom Notices are to be sent or copied may notify the other Parties and addressees of any change in name or address to which Notices shall be sent by providing the same on five (5) days written notice to the Parties and addressees set forth in this Agreement. SECTION 15. ARM S LENGTH TRANSACTION. This Agreement has been negotiated fully between the District and the Developer as an arm s length transaction. All Parties participated fully in the preparation of this Agreement and received the advice of counsel. In the case of a dispute concerning the interpretation of any provision of this Agreement, all Parties are deemed to have drafted, chosen, and selected the language, and the doubtful language will not be interpreted or construed against any party hereto. SECTION 16. THIRD PARTY BENEFICIARIES. This Agreement is solely for the benefit of the District and the Developer and no right or cause of action shall accrue upon or by reason, to or for the benefit of any third party not a formal party to this Agreement. Nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person or entity other than the District and the Developer any right, remedy, or claim under or by reason of this Agreement or any of the provisions or conditions of this Agreement; and all of the provisions, representations, covenants, and conditions contained in this Agreement shall inure to the sole benefit of and shall be binding upon the District and the Developer and their respective representatives, successors, and assigns. Notwithstanding the foregoing, nothing in this paragraph shall be construed as impairing or modifying the rights of any holders of Series Dream Finders Homes, LLC - Acquisition 8

63 3 Bonds issued by the District for the purpose of acquiring any Work Product, Neighborhood Improvements and/or Real Property. Also notwithstanding anything herein to the contrary, the Trustee for the Series Bonds, on behalf of the owners of the Series Bonds, shall be a direct third party beneficiary of the terms and conditions of this Agreement and shall, acting at the direction of the holders of a majority of the aggregate principal amount of the Series Bonds then outstanding, be entitled to cause the District to enforce the Developer s obligations hereunder. SECTION 17. ASSIGNMENT. This Agreement may be assigned, in whole or in part, by either party only upon the written consent of the other, which consent shall not be unreasonably withheld, and the Trustee and Bondholders owning a majority of the aggregate principal amount of the Series Bonds then outstanding. Such consent shall not be required in the event of a sale of the majority of the Development then-owned by the Developer pursuant to which the unaffiliated purchaser agrees to assume any remaining obligations of the Developer under this Agreement. Upon the merger, amendment, or name change of the District, the Agreement will be assumed by operation of law by the District s successor in interest and no consent to such assumption shall be required. SECTION 18. APPLICABLE LAW AND VENUE. This Agreement and the provisions contained herein shall be construed, interpreted and controlled according to the laws of the State of Florida. Venue shall be in Clay County, Florida. SECTION 19. EFFECTIVE DATE. This Agreement shall be effective upon its execution by the District and the Developer. SECTION 20. TERMINATION. This Agreement may be terminated by the District without penalty in the event that the District does not issue its proposed Series Bonds within five (5) years from the date of this Agreement. SECTION 21. PUBLIC RECORDS. The Developer understands and agrees that all documents of any kind provided to the District in connection with this Agreement may be public records and will be treated as such in accordance with Florida law. SECTION 22. SEVERABILITY. The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of the remaining portions of this Agreement, or any part of this Agreement not held to be invalid or unenforceable. SECTION 23. LIMITATIONS ON GOVERNMENTAL LIABILITY. Nothing in this Agreement shall be deemed as a waiver of immunity or limits of liability of the District beyond any statutory limited waiver of immunity or limits of liability which may have been adopted by the Florida Legislature in Section , Florida Statutes, or other statute, and nothing in this Agreement shall inure to the benefit of any third party for the purpose of allowing any claim which would otherwise be barred under the Doctrine of Sovereign Immunity or by operation of law. Dream Finders Homes, LLC - Acquisition 9

64 SECTION 24. HEADINGS FOR CONVENIENCE ONLY. The descriptive headings in this Agreement are for convenience only and shall not control nor affect the meaning or construction of any of the provisions of this Agreement. SECTION 25. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be an original; however, all such counterparts together shall constitute but one and the same instrument. Signature and acknowledgment pages, if any, may be detached from the counterparts and attached to a single copy of this document to physically form one document. IN WITNESS WHEREOF, the Parties execute this Agreement the day and year first written above. Attest: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT (Print Name) Chairperson, Board of Supervisors Witness: DFH MOF EAGLE LANDING, a Delaware limited liability company (Print Name) By: Name Printed: Patrick Zalupski Title: Manager EXHIBIT A: Addendum to Improvement Plan Regarding Golf Course, Additional Recreation Improvements and Neighborhood Improvements, dated March 21, 2016 Dream Finders Homes, LLC - Acquisition 10

65 Exhibit A Addendum to Improvement Plan Regarding Golf Course, Additional Recreation Improvements and Neighborhood Improvements, dated March 21, 2016 Dream Finders Homes, LLC - Acquisition 11

66 2.

67 This instrument was prepared by and upon recording should be returned to: (This space reserved for Clerk) Katie S. Buchanan, Esq. HOPPING GREEN & SAMS, P.A. 119 South Monroe Street, Suite 300 Tallahassee, Florida COLLATERAL ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT RIGHTS This Collateral Assignment and Assumption of Development Rights (the Assignment ) is made and entered into this 16 th day of June, 2016, by and between: DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company, the owner and developer of certain lands within the boundaries of the District, whose address is 360 Corporate Way, Suite 100, Orange Park, Florida (the Developer ); and SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT, a local unit of specialpurpose government established pursuant to Chapter 190, Florida Statutes, being situated in Clay County, Florida, whose mailing address is 475 West Town Place, Suite 114, St. Augustine, Florida (the District ). WHEREAS, the District has adopted a supplemental improvement plan to finance the planning, design, acquisition, construction, and installation of certain infrastructure improvements, facilities, and services within the District (the Recreation and Neighborhood Improvements and together with the Original Improvements, the Improvements ) as described in that certain Addendum to Improvement Plan Regarding Golf Course, Additional Recreation 1 Dream Finders Homes, LLC: Collateral Assignment RECITALS WHEREAS, the District was established by an ordinance adopted by the Board of County Commissioners of Clay County, Florida, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the Act ) for the purpose of planning, financing, constructing, acquiring, operating and/or maintaining certain public infrastructure improvements within or without the boundary of the District; and WHEREAS, the Developer is the owner and developer of certain lands within the boundaries of the District known as Phase 5 (the Lands ), as more particularly described on Exhibit A attached hereto and incorporated herein by this reference; and WHEREAS, the District has previously issued the South Village Community Development District Capital Improvement Revenue Bonds, Series 2005A and applied the proceeds towards the acquisition and construction of the improvements (the Original Improvements ) identified in the South Village Community Development District Improvement Plan, dated January 5, 2005 the ( Original Improvement Plan ); and

68 Improvements and Neighborhood Improvements, dated March 21, 2016 (the Engineer s Report ); and WHEREAS, the District intends to finance a portion of the Improvements through the anticipated issuance of South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-3, (the Series 2016A-3 Bonds ); and WHEREAS, pursuant to Resolutions , , , , , , duly adopted by the Board on February 2, 2016, Resolution Nos , , and , duly adopted by the Board on March 21, 2016, (collectively, the Assessment Resolutions ) the District has imposed special assessments (the Series 2016A-3 Assessments ) on the Lands to secure the repayment of the Series 2016A-3 Bonds; and WHEREAS, the Developer has acquired, or hereafter may acquire, certain rights (the Development and Contract Rights ) in, to, under, or by virtue of certain contracts, agreements, and other documents, which now or hereafter affect the Lands and the Neighborhood Improvements Project (collectively the Contract Documents ); and WHEREAS, the District and the Developer anticipate developing the Lands consistent with the Engineer s Report and that certain Special Assessment Methodology Report for the Capital Improvement Revenue Refunding Bonds, Series 2016A-3, and Capital Improvement Revenue Bonds (Recreation and Neighborhood), Series 2016A-3 (Assessment Area 2), dated March 21, 2016 (the Assessment Report ), until such time as the approval of a plat, declaration of condominium and/or site plan of all Lands and the payment of any true-up amounts due and securing the Series 2016A-3 Bonds (hereinafter referred to as Development Completion ); and WHEREAS, in the event of default in the payment of the Series 2016A-3 Assessments securing the Series 2016A-3 Bonds, the District has certain remedies with respect to the lien of the Series 2016A-3 Assessments as more particularly set forth herein, including certain foreclosure rights provided by Florida law (the Remedied Rights ); and WHEREAS, as an inducement to the District to issue its Series 2016A-3 Bonds, it is necessary to require the assignment of the Development and Contract Rights to complete the development of the Lands as anticipated by and at substantially the densities and intensities envisioned in the Engineer s Report and the Assessment Report; and WHEREAS, this Assignment is not intended to impair or interfere with the development of the Lands as anticipated by and at substantially the densities and intensities envisioned in the Engineer s Report and the Assessment Report and shall only be inchoate and shall become an effective and absolute assignment and assumption of the Development and Contract Rights upon failure of the Developer to pay the Series 2016A-3 Assessments levied against the Lands owned by the Developer; and WHEREAS, in the event of a transfer, conveyance or sale of any portion of the Lands, any and all affiliated entities or successors-in-interest to the Lands shall be subject to this Assignment, which shall be recorded in the Official Records of Clay County, Florida; and Dream Finders Homes, LLC: Collateral Assignment 2

69 WHEREAS, the rights assigned to the District hereunder shall be exercised in a manner which will not materially affect the intended development of the Lands; and NOW, THEREFORE, in consideration of the above recitals which the parties hereby agree are true and correct and are hereby incorporated by reference and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the District and the Developer agree as follows: SECTION 1. INCORPORATION OF RECITALS. The recitals stated above are true and correct and by this reference are incorporated by reference as a material part of this Assignment. SECTION 2. COLLATERAL ASSIGNMENT. (a) In the event of Developer s default in the payment of the Series 2016A-3 Assessments securing the Series 2016A-3 Bonds, the District shall be entitled to exercise its Remedied Rights to secure control and/or title to the Lands. Such exercise of Remedied Rights by the District may include foreclosure proceedings, acceptance of a deed in lieu of foreclosure and the establishment of a special-purpose entity ( SPE ) to hold title to the Lands, as designee of the District. The Developer hereby agrees to unconditionally collaterally assign to the District or its designee, and to the extent assignable, and to the extent that they are owned or controlled by Developer, all of its Development and Contract Rights as security for Developer s payment and performance and discharge of its obligation to pay the Series 2016A-3 Assessments levied against the Lands. Notwithstanding any contrary terms in this Assignment, the Development and Contract Rights exclude: (i) any portion of the Development and Contract Rights which relate solely to lots which have been conveyed to homebuilders or end-users effective as of such conveyance, and (ii) any portion of the Development and Contract Rights which relate solely to any portion of the Lands which has been transferred, dedicated and/or conveyed, or is in the future conveyed, to Clay County, the District, any homebuilder, any utility provider, governmental or quasi-governmental entity, any applicable homeowner s or property owner s association or other governing entity or association as may be required by the Development and Contract Rights, in each case effective as of such transfer, conveyance and/or dedication, as applicable. Subject to the foregoing, the Development and Contract Rights shall include, but not be limited to, the following: (a) Any declaration of covenants of a homeowner s association governing the Lands, as recorded in the Official Records of Clay County, Florida, and as the same may be supplemented, amended and restated from time to time, including, without limitation, all of the right, title, interest, powers, privileges, benefits and options of the Developer or Declarant thereunder. (b) Engineering and construction plans and specifications for grading, traffic capacity analyses, roadways, site drainage, storm water drainage, signage, water distribution, waste water collection, and other improvements to or affecting the Lands. (c) Preliminary and final plats and/or site plans for the Lands. Dream Finders Homes, LLC: Collateral Assignment 3

70 (d) To the extent that they are owned or controlled by Developer, architectural plans and specifications for buildings and other improvements to the Lands. (e) Permits, approvals, agreements, resolutions, variances, licenses, and franchises and applications therefor whether approved or in process pending before or granted by governmental authorities, or any of their respective agencies, for or affecting the development of the Lands and construction of improvements thereon. (f) Contracts with engineers, architects, land planners, landscape architects, consultants, contractors, and suppliers for or relating to the development of the Lands or the construction of improvements thereon, together with all warranties, guaranties and indemnities of any kind or nature associated therewith. (g) Franchise or other agreements for the provision of water and waste water service to the Lands, and all hookup fees and utility deposits paid by Developer in connection therewith. (h) Permit fees, impact fees, deposits and other assessments and impositions paid by Developer to any governmental authority or utility and capacity reservations, impact fee credits and other credits due to Developer from any governmental authority or utility provider, including credit for any dedication or contribution of Lands by Developer in connection with the development of the Lands or the construction of improvements thereon. (i) All future creations, changes, extensions, revisions, modifications, substitutions, and replacements of any of the foregoing and any guarantees of performance of obligations to Developer arising thereunder by any means, including, but not limited to, pursuant to governmental requirements, administrative or formal action by third parties, or written agreement with governmental authorities or third parties. (b) This Assignment is not intended to and shall not impair or interfere with the development of the Lands, including, without limitation, any purchase and sale agreements for lots subject to a plat, declaration of condominium and/or site plan (the Builder Contracts ), and shall only be inchoate and shall become an effective and absolute assignment and assumption of the Development and Contract Rights upon failure of the Developer to pay the Series 2016A-3 Assessments levied against the Lands owned by the Developer, if such failure remains uncured after passage of any applicable cure period; provided, however, that such assignment shall only be effective and absolute to the extent that this Assignment has not been terminated earlier pursuant to the terms hereof. (c) If this Assignment has not become absolute, it shall automatically terminate upon the earliest to occur of the following events: (i) payment of the Series 2016A-3 Bonds in full; (ii) Development Completion; (iii) transfer of any Development and Contract Rights to Clay County, the State, the District, any utility provider, any other governmental or quasi-governmental entity, or any homeowners or property owner s association but only to the extent of such transfer; or (iv) transfer of any portion of the Lands that are subject to a plat, declaration of condominium and/or site plan to a homebuilder or end-user but only as to such portion transferred, from time to time (herein, the Term ). At Landowner s request from time Dream Finders Homes, LLC: Collateral Assignment 4

71 to time, District and Landowner will record a notice or other appropriate instrument in the Public Records of Clay County, Florida, confirming the end of the Term or the release of any property encumbered by this Assignment (and any other instrument encumbering the property of Landowner), subject to the reasonable approval of the District and subject to conformance with the Neighborhood Improvements Project and documents applicable thereto. SECTION 3. DEVELOPER WARRANTIES. The Developer represents and warrants to the District that, subject to the Builder Contracts now or hereafter executed by the Developer pursuant to the terms of the Builder Contracts: (a) Other than in connection with the sale of lots to end users located within the Lands and in the ordinary course of business, the Developer has made no assignment of the Development and Contract Rights to any person other than the District. (b) To the actual knowledge of the Developer, the Developer has not done any act or omitted to do any act which will prevent the District from, or limit the District in, acting under any of the provisions hereof. (c) To the actual knowledge of the Developer, there is no material default under the terms of the existing Contract Documents, subject to any notice and cure periods, and all such Contract Documents remain in full force and effect. (d) The Developer is not prohibited under agreement with any other person or under any judgment or decree from the execution, delivery and performance of this Assignment. (e) No action has been brought or threatened which would in any way interfere with the right of the Developer to execute this Assignment and perform all of its obligations herein contained. (f) Any transfer, conveyance or sale of the Lands, shall subject any and all affiliated entities or successors-in-interest of the Developer to this Assignment. SECTION 4. DEVELOPER COVENANTS. The Developer covenants with the District that during the Term (as defined above): A. The Developer will use reasonable, good faith efforts to: (i) fulfill, perform, and observe each and every material condition and covenant of the Developer relating to the Development and Contract Rights, including, but not limited to, any material changes in the Development and Contract Rights; and (ii) give notice to the District of any claim of material default relating to the Development and Contract Rights given to or by the Developer, together with a complete copy of any such claim. B. In the event of the institution of any involuntary bankruptcy, reorganization or insolvency proceedings against the Developer or the appointment of a receiver or a similar official with respect to all or a substantial part of the properties of the Developer, the Developer shall endeavor in good faith to have such proceedings dismissed or such appointment vacated within a period of one-hundred and twenty (120) days. Dream Finders Homes, LLC: Collateral Assignment 5

72 SECTION 5. DISTRICT OBLIGATIONS. Nothing herein shall be construed as an obligation on the part of the District to accept any liability for all or any portion of the Development and Contract Rights unless it chooses to do so in its sole discretion. Nor shall any provision hereunder be construed to place any liability or obligation on the District for compliance with the terms and provisions of all or any portion of the Development and Contract Rights. SECTION 6. EVENT(S) OF DEFAULT. Any breach of the Developer s warranties contained in Section 3 hereof or breach of covenants contained in Section 4 hereof, or the failure to timely pay the Series 2016A-3 Assessments levied and imposed upon Lands owned by the Developer, shall, after the giving of notice and an opportunity to cure (which cure period shall not be less than sixty (60) days, and shall not be construed to extend any other cure periods provided hereunder, unless the District, in its sole discretion, agrees to a longer cure period) constitute an Event of Default (hereinafter referred to as an Event of Default ) under this Assignment. SECTION 7. REMEDIES UPON EVENT(S) OF DEFAULT. Upon an Event of Default, the District or the District s designee may, as the District s sole and exclusive remedies under this Assignment (and separate and apart from any Remedied Rights or other rights provided by law), take any or all of the following actions, at the District s option: A. Perform any and all obligations of the Developer relating to the Development and Contract Rights and exercise any and all rights of the Developer therein as fully as Developer could; B. Initiate, appear in, or defend any action arising out of or affecting the Development and Contract Rights; C. Sue for, or otherwise collect and receive, monies due under the Contract Documents, including those past due and unpaid, and apply the same against all costs and expenses of collection and then against all costs and expenses of operation of the Lands or the performance of the Developer s obligations under the Contract Documents. Neither entry upon and taking possession of the Lands nor the collection of monies due under the Contract Documents shall in any way operate to cure or waive any default under any instrument given by the Developer to the District, or prohibit the taking of any other action by District under any such instrument, or at law or in equity, to enforce payment of the obligations secured hereby or to realize on any other security; and D. To be effective upon the occurrence of an Event of Default, and after the Developer s receipt of a demand notice from the District following an Event of Default, the Developer will use reasonable, good faith efforts: (i) at the sole cost and expense of the Developer, to enforce the performance and observance of each and every material covenant and condition of the Contract Documents to be performed or observed; and (ii) appear in and defend any action involving the Contract Documents or the obligations or liabilities of the Developer or any guarantor thereunder. Also to be effective upon the occurrence of an Event of Default, and after Developer s receipt of a demand notice from the District following an Event of Default, the Developer will neither modify the terms of the Contract Documents in any material respect Dream Finders Homes, LLC: Collateral Assignment 6

73 (unless required so to do by the terms thereof or to comply with documents executed in connection with the issuance of the Series 2016A-3 Bonds) nor waive or release any person from the performance of any obligation to be performed under the terms of the Contract Documents or from liability on account of any warranty given by such person, without the prior consent of the District, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, the Developer will not at any time take any action (or omit to take any action) with respect to the Development and Contract Rights that materially and adversely affect the rights of the District and the holders of the Series 2016A-3 Bonds. SECTION 8. AUTHORIZATION. Upon the occurrence of and during the continuation of an Event of Default, the Developer does hereby authorize and shall direct any party to any agreement relating to the Development and Contract Rights to tender performance thereunder to the District upon written notice and request from the District. Any such performance in favor of the District shall constitute a full release and discharge to the extent of such performance as fully as though made directly to the Developer. SECTION 9. SECURITY AGREEMENT. Subject to the terms of this Assignment, this Assignment shall be a security agreement between the Developer, as the debtor, and the District, as the secured party, covering the Development and Contract Rights and Contract Documents that constitute personal property governed by the Florida Uniform Commercial Code (the Code ), and the Developer grants to the District a security interest in such Development and Contract Rights and Contract Documents. Notwithstanding the foregoing, the District shall not be entitled to exercise any right as a secured party, including, without limitation, the filing of any and all financing statements, until the occurrence of an Event of Default hereunder, subject to any applicable notice and cure period. SECTION 10. AMENDMENTS. This Agreement shall constitute the entire agreement between the parties regarding the subject matter hereof and may be modified in writing only by the mutual agreement of all parties. SECTION 11. SUCCESSORS; THIRD PARTY BENEFICIARIES. This Assignment is solely for the benefit of the District and the Developer and no right or cause of action shall accrue upon or by reason, to or for the benefit of any third party not a formal party to this Assignment. Nothing in this Assignment expressed or implied is intended or shall be construed to confer upon any person or corporation other than the District and the Developer any right, remedy, or claim under or by reason of this Assignment or any of the provisions or conditions of this Assignment; and all of the provisions, representations, covenants, and conditions contained in this Assignment shall inure to the sole benefit of and shall be binding upon the District and the Developer and their respective representatives, successors, and assigns. SECTION 12. ENFORCEMENT. In the event that either party is required to enforce this Assignment by court proceedings or otherwise, then the parties agree that the substantially prevailing party shall be entitled to recover from the other all fees and costs incurred, including reasonable attorneys fees and costs for trial, alternative dispute resolution, or appellate proceedings. Dream Finders Homes, LLC: Collateral Assignment 7

74 SECTION 13. AUTHORIZATION. The execution of this Assignment has been duly authorized by the appropriate body or official of the District and the Developer; both the District and the Developer have complied with all the requirements of law with respect to the executories of this Assignment; and both the District and the Developer have full power and authority to comply with the terms and provisions of this instrument. SECTION 14. NOTICES. All notices, requests, consents and other communications under this Assignment ( Notices ) shall be in writing and shall be delivered, mailed by First Class Mail, postage prepaid, or overnight courier delivery service, to the parties, as follows: A. If to the District: South Village Community Development District 475 West Town Place, Suite 114 St. Augustine, Florida Attn: District Manager With a copy to: Hopping Green & Sams, P.A. 119 South Monroe Street, Suite 300 Tallahassee, Florida Attn: Katie S. Buchanan B. If to Landowner: DFH MOF Eagle Landing, LLC 360 Corporate Way, Suite 100 Orange Park, Florida Attn: Patrick Zalupski With a copy to: Holland & Knight LLP 50 North Laura Street, Suite 3900 Jacksonville, Florida Attn: Missy Turra Except as otherwise provided in this Assignment, any Notice shall be deemed received only upon actual delivery at the address set forth above. Notices delivered after 5:00 p.m. (at the place of delivery) or on a non-business day, shall be deemed received on the next business day. If any time for giving Notice contained in this Assignment would otherwise expire on a nonbusiness day, the Notice period shall be extended to the next succeeding business day. Saturdays, Sundays, and legal holidays recognized by the United States government shall not be regarded as business days. Counsel for the District and counsel for the Developer may deliver Notice on behalf of the District and the Developer. Any party or other person to whom Notices are to be sent or copied may notify the other parties and addressees of any change in name or address to which Notices shall be sent by providing the same on five (5) days written notice to the parties and addressees set forth herein. SECTION 15. ARMS LENGTH TRANSACTION. This Assignment has been negotiated fully between the District and the Developer as an arm s length transaction. Both parties participated fully in the preparation of this Assignment and received the advice of counsel. In the case of a dispute concerning the interpretation of any provision of this 8 Dream Finders Homes, LLC: Collateral Assignment

75 Assignment, both parties are deemed to have drafted, chosen, and selected the language, and the doubtful language will not be interpreted or construed against either the District or the Developer. SECTION 16. APPLICABLE LAW AND VENUE. This Assignment and the provisions contained herein shall be construed, interpreted and controlled according to the laws of the State of Florida. Venue shall be in Clay County, Florida. SECTION 17. PUBLIC RECORDS. The Landowner understands and agrees that all documents of any kind provided to the District in connection with this Assignment may be public records and treated as such in accordance with Florida law. SECTION 18. SEVERABILITY. The invalidity or unenforceability of any one or more provisions of this Assignment shall not affect the validity or enforceability of the remaining portions of this Assignment, or any part of this Assignment not held to be invalid or unenforceable. SECTION 19. LIMITATIONS ON GOVERNMENTAL LIABILITY. Nothing in this Assignment shall be deemed as a waiver of immunity or limits of liability of the District beyond any statutory limited waiver of immunity or limits of liability which may have been adopted by the Florida Legislature in Section , Florida Statutes, or other statute, and nothing in this Assignment shall inure to the benefit of any third party for the purpose of allowing any claim which would otherwise be barred by sovereign immunity or by other operation of law. SECTION 20. CONSTRUCTION. The descriptive headings in this Assignment are for convenience only and shall not control nor affect the meaning or construction of any of the provisions of this Assignment. SECTION 21. COUNTERPARTS. This Assignment may be executed in any number of counterparts, each of which when executed and delivered shall be an original; however, all such counterparts together shall constitute, but one and the same instrument. Signature and acknowledgment pages, if any, may be detached from the counterparts and attached to a single copy of this document to physically form one document. SECTION 22. EFFECTIVE DATE. This Assignment shall be effective after the last date of execution by the parties hereto on the date reflected above. Dream Finders Homes, LLC: Collateral Assignment 9

76 IN WITNESS WHEREOF, the Developer and the District have caused this Assignment to be executed and delivered on the day and year first written above. Signed, sealed and delivered in the presence of: DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company (Print Name) By: Name Printed: Patrick Zalupski Title: Manager (Print Name) STATE OF FLORIDA ) COUNTY OF ) The foregoing instrument was acknowledged before me this day of, 2016, by Patrick Zalupski, as Manager of DFH MOF Eagle Landing, LLC, for and on behalf of said entity. She/He [ ] is personally known to me or [ ] produced as identification. NOTARY STAMP: Signature of Notary Public Printed Name of Notary Public Dream Finders Homes, LLC: Collateral Assignment 10

77 Signed, sealed and delivered in the presence of: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT (Print Name) By: Chairperson, Board of Supervisors (Print Name) STATE OF FLORIDA ) COUNTY OF ) The foregoing instrument was acknowledged before me this day of, 2016, by, as Chairperson of the Board of Supervisors of South Village Community Development District, for and on behalf of the District. She/He [ ] is personally known to me or [ ] produced as identification. NOTARY STAMP: Signature of Notary Public Printed Name of Notary Public Dream Finders Homes, LLC: Collateral Assignment 11

78 EXHIBIT A LEGAL DESCRIPTION OF LANDS Dream Finders Homes, LLC: Collateral Assignment 1

79 Dream Finders Homes, LLC: Collateral Assignment 2

80 Dream Finders Homes, LLC: Collateral Assignment 3

81 Dream Finders Homes, LLC: Collateral Assignment 4

82 3.

83 AGREEMENT BETWEEN THE SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT AND DFH MOF EAGLE LANDING, LLC REGARDING THE COMPLETION OF CERTAIN IMPROVEMENTS THIS AGREEMENT (the Agreement ) is made and entered into this 16 th day of June, 2016, by and between: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT, a local unit of special-purpose government established pursuant to Chapter 190, Florida Statutes, being situated in Clay County, Florida, whose mailing address is 475 West Town Place, Suite 114, St. Augustine, Florida 32092, (the District ); and DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company, the owner and developer of certain lands within the boundaries of the District, whose address is 360 Corporate Way, Suite 100, Orange Park, Florida (the Developer and, together with the District, the Parties ). RECITALS WHEREAS, the District was established by an ordinance adopted by the Board of County Commissioners of Clay County, Florida, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the Act ), and is validly existing under the Constitution and laws of the State of Florida; and WHEREAS, the Act authorizes the District to issue bonds for the purpose, among others, of planning, financing, constructing, operating and/or maintaining certain infrastructure improvements within or without the boundaries of the District; and WHEREAS, the Developer is the owner of a portion of the lands located within the boundaries of the District known as Phase 5 (the Lands ), which will be made subject to the District s South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-3 (the Series 2016A-3 Bonds ); and WHEREAS, the District has previously issued the South Village Community Development District Capital Improvement Revenue Bonds, Series 2005A and applied the proceeds towards the acquisition and construction of the improvements (the Original Improvements ) identified in the South Village Community Development District Improvement Plan, dated January 5, 2005 the ( Original Improvement Plan ); and WHEREAS, the District has adopted a supplemental improvement plan to finance the planning, design, acquisition, construction, and installation of certain infrastructure improvements, facilities, and services within the District (the Recreation and Neighborhood Improvements and together with the Original Improvements, the Improvements ) as described in that certain Addendum to Improvement Plan Regarding Golf Course, Additional Recreation Improvements and Neighborhood Improvements, dated March 21, 2016 (the Engineer s Report ), attached hereto as Exhibit A and incorporated herein; and Dream Finders Homes, LLC: Completion 1

84 WHEREAS, the District intends to finance a portion of the Improvements through the anticipated issuance of South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-3, (the Series 2016A-3 Bonds ); and WHEREAS, as detailed in the Engineer s Report, the Recreation and Neighborhood Improvements are anticipated to cost Eight Million Three Hundred Eighty Nine Thousand Six Hundred Eighty Dollars ($8,389,680), with the Recreation Improvements to cost Four Million ($4,000,000) and the Neighborhood Improvements to cost Four Million Three Hundred Eighty Nine Thousand Six Hundred Eighty Dollars ($4,389,680); and WHEREAS, the District intends to finance only One Million Dollars ($1,000,000) of the Neighborhood Improvements identified in the Engineer s Report through the use of proceeds Series 2016A-3 Bonds (the Neighborhood Improvement Proceeds ); and WHEREAS, the District has imposed capital assessments on the Lands (the Capital Assessments ), to finance the construction and/or acquisition of an additional One Million Nine Hundred Ninety Thousand Dollars ($1,990,000) of the Neighborhood Improvements; and WHEREAS, in order to ensure that the remaining Neighborhood Improvements are completed and funding is available in a timely manner to provide for their completion, the Developer and the District hereby agree that the Developer will make provision for any additional funds that may be needed in the future for the completion of the Neighborhood Improvements over and above that amount including, but not limited to, all administrative, legal, warranty, engineering, permitting or other related soft costs. NOW, THEREFORE, based upon good and valuable consideration and the mutual covenants of the Parties, the receipt of which and sufficiency of which is hereby acknowledged, the Parties agree as follows: SECTION 1. INCORPORATION OF RECITALS. The recitals stated above are true and correct and by this reference are incorporated by reference as a material part of this Agreement. SECTION 2. COMPLETION OF IMPROVEMENTS. The Developer and the District agree and acknowledge that the District s proposed Series 2016A-3 Bonds, the Advanced Completion Payment (hereinafter defined) and Capital Assessments may provide only a portion of the funds necessary to complete the Neighborhood Improvements. In the event that the cost of the Neighborhood Improvements is such that the construction funds available from the Series 2016A- 3 Bonds proceeds and Capital Assessments are insufficient to complete the Neighborhood Improvements, the Developer hereby agrees to complete, cause to be completed, or provide funds to the District in an amount sufficient to allow the District to complete or cause to be completed, those portions of the Neighborhood Improvements which remain unfunded including, but not limited to, all administrative, legal, warranty, engineering, permitting or other related soft costs (the Remaining Improvements ) whether pursuant to existing contracts, including change orders thereto, contracts assigned by the Developer to the District, or future contracts. Nothing herein shall cause or be construed to require the District to issue additional bonds or indebtedness to provide funds for any portion of the Remaining Improvements. The Parties hereby acknowledge and agree that the District s execution of this Agreement constitutes the manner and means by Dream Finders Homes, LLC: Completion 2

85 which any and all portions of the Remaining Improvements are to be funded and completed. A. When all or any portion of the Remaining Improvements are the subject of a District contract, the Developer shall provide funds or cause funds to be provided directly to the District in an amount sufficient to complete the Remaining Improvements pursuant to such contract, including change orders thereto, upon written notice from the District. Such amounts shall be provided in a manner determined by the District and the Developer, but shall always be provided in such a way to allow the District to comply with Florida s Prompt Payment Act. B. When any portion of the Remaining Improvements is not the subject of a District contract, the Developer may choose to: (1) complete, cause to be completed, provide funds or cause funds to be provided to the District in an amount sufficient to allow the District to complete or cause to be completed, those Remaining Improvements; or (2) have the District enter into a contract and proceed under Section 2(a) above, subject, in each case, to a formal determination by the District s Board of Supervisors that the option selected by the Developer will not adversely impact the District, and is in the District s best interests. C. Prior to the District s issuance of the Series 2016A-3 Bonds, the Developer shall deposit with the District sufficient funds to pay (when combined with the Neighborhood Improvement Proceeds) the Agreement between the District and for the Construction of Phase 5 Infrastructure Improvements, dated. This deposit shall be known as the Initial Developer Infrastructure Payment. SECTION 3. OTHER CONDITIONS AND ACKNOWLEDGMENTS A. The District and the Developer agree and acknowledge that the exact location, size, configuration and composition of the Neighborhood Improvements may change from that described in the Engineer s Report, depending upon final design of the development, permitting or other regulatory requirements over time, or other factors. Material changes to the Neighborhood Improvements shall be made by a written amendment to the Engineer s Report, which shall include an estimate of the cost of the changes. B. The District and Developer agree and acknowledge that for any and all portions of the Remaining Improvements which are constructed, or caused to be constructed, by the Developer for the benefit of the District shall be conveyed to the District or such other appropriate unit of local government as is designated in the Engineer s Report or required by governmental regulation or development approval. All conveyances to another governmental entity shall be in accordance with and in the same manner as provided in any agreement between the District and the appropriate unit of local government. C. Notwithstanding anything to the contrary contained in this Agreement, the payment or performance by Developer of its completion obligations hereunder is expressly subject to, dependent and conditioned upon the following: (1) the issuance of Dream Finders Homes, LLC: Completion 3

86 the Series 2016A-3 Bonds and use of the proceeds thereof to fund the Neighborhood Improvements; and (2) the scope, configuration, size and/or composition of the Neighborhood Improvements not materially changing without the consent of the Developer. Such consent is not necessary and the Developer must meet its completion obligations when the scope, configuration, size and/or composition of the Neighborhood Improvements are materially changed in response to a requirement imposed by a regulatory agency. D. The District and the Developer agree and acknowledge that should the total funds collected from the Capital Assessments, the Neighborhood Improvement Proceeds, and the Initial Developer Infrastructure Payment exceed the total cost of the Remaining Improvements upon Completion of the Neighborhood Improvements, such excess funds shall be paid to the Developer as a partial refund of the Initial Developer Infrastructure Payment. SECTION 4. DEFAULT AND PROTECTION AGAINST THIRD PARTY INTERFERENCE. A default by either party under this Agreement shall entitle the other to all remedies available at law or in equity, which may include, but not be limited to, the right of damages and/or specific performance. The District shall be solely responsible for enforcing its rights under this Agreement against any interfering third party. Nothing contained in this Agreement shall limit or impair the District s right to protect its rights under this Agreement from interference by a third party. SECTION 5. RECOVERY OF COSTS AND FEES. In the event any party is required to enforce this Agreement by court proceedings or otherwise, then the substantially prevailing party, as determined by the applicable court or other dispute resolution provider, shall be entitled to recover from the non-prevailing party all fees and costs incurred, including reasonable attorneys fees and costs incurred prior to or during any litigation or other dispute resolution and including all fees and costs incurred in appellate proceedings. SECTION 6. AMENDMENTS. This Agreement shall constitute the entire agreement between the Parties regarding the subject matter hereof and may be modified in writing only by the mutual agreement of all Parties. SECTION 7. AUTHORIZATION. The execution of this Agreement has been duly authorized by the appropriate body or official of the District and the Developer, both the District and the Developer have complied with all the requirements of law, and both the District and the Developer have full power and authority to comply with the terms and provisions of this instrument. SECTION 8. NOTICES. All notices, requests, consents and other communications under this Agreement ( Notices ) shall be in writing and shall be delivered, mailed by First Class Mail, postage prepaid, or overnight delivery service, to the parties, as follows: A. If to Developer: DFH MOF Eagle Landing, LLC 360 Corporate Way, Suite 100 Dream Finders Homes, LLC: Completion 4

87 Orange Park, Florida Attn: Patrick Zalupski With a copy to: Holland & Knight LLP 50 North Laura Street, Suite 3900 Jacksonville, Florida Attn: Missy Turra B. If to District: South Village Community Development District 475 West Town Place, Suite 114 St. Augustine, Florida Attn: District Manager With a copy to: Hopping Green & Sams, P.A. 119 South Monroe Street, Suite 300 Tallahassee, Florida Attn: Katie S. Buchanan Except as otherwise provided in this Agreement, any Notice shall be deemed received only upon actual delivery at the address set forth above. Notices delivered after 5:00 p.m. (at the place of delivery) or on a non-business day, shall be deemed received on the next business day. If any time for giving Notice contained in this Agreement would otherwise expire on a non-business day, the Notice period shall be extended to the next succeeding business day. Saturdays, Sundays, and legal holidays recognized by the United States government shall not be regarded as business days. Counsel for the District and counsel for the Developer may deliver Notice on behalf of the District and the Developer. Any party or other person to whom Notices are to be sent or copied may notify the other Parties and addressees of any change in name or address to which Notices shall be sent by providing the same on five (5) days written notice to the Parties and addressees set forth herein. SECTION 9. ARM S LENGTH TRANSACTION. This Agreement has been negotiated fully between the District and the Developer as an arm s length transaction. Both Parties participated fully in the preparation of this Agreement and received the advice of counsel. In the case of a dispute concerning the interpretation of any provision of this Agreement, both parties are deemed to have drafted, chosen, and selected the language, and the doubtful language will not be interpreted or construed against either the District or the Developer. SECTION 10. THIRD PARTY BENEFICIARIES. This Agreement is solely for the benefit of the District and the Developer and no right or cause of action shall accrue upon or by reason, to or for the benefit of any third party not a formal party to this Agreement. Nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person or entity other than the Parties hereto any right, remedy, or claim under or by reason of this Agreement or any of the provisions or conditions of this Agreement; and all of the provisions, representations, covenants, and conditions contained in this Agreement shall inure to the sole benefit of and shall be binding upon the District and the Developer and their respective representatives, successors, and assigns. Dream Finders Homes, LLC: Completion 5

88 SECTION 11. ASSIGNMENT. This Agreement may be assigned, in whole or in part, by either party only upon the written consent of the other. SECTION 12. CONTROLLING LAW; VENUE. This Agreement and the provisions contained in this Agreement shall be construed, interpreted, and controlled according to the laws of the State of Florida. Venue shall be in Clay County, Florida. SECTION 13. EFFECTIVE DATE. This Agreement shall be effective after execution by both the District and the Developer. SECTION 14. PUBLIC RECORDS. The Developer understands and agrees that all documents of any kind provided to the District in connection with this Agreement may be public records and may be treated as such in accordance with Florida law. SECTION 15. SEVERABILITY. The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of the remaining portions of this Agreement, or any part of this Agreement not held to be invalid or unenforceable. SECTION 16. SOVEREIGN IMMUNITY. Nothing in this Agreement shall be deemed as a waiver of immunity or limits of liability of the District beyond any statutory limited waiver of immunity or limits of liability which may have been adopted by the Florida Legislature in Section , Florida Statutes, or other statute, and nothing in this Agreement shall inure to the benefit of any third party for the purpose of allowing any claim which would otherwise be barred under the Doctrine of Sovereign Immunity or by operation of law. SECTION 17. HEADINGS FOR CONVENIENCE ONLY. The descriptive headings in this Agreement are for convenience only and shall not control nor affect the meaning or construction of any of the provisions of this Agreement. SECTION 18. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be an original; however, all such counterparts together shall constitute, but one and the same instrument. Signature and acknowledgment pages, if any, may be detached from the counterparts and attached to a single copy of this document to physically form one document. (SIGNATURES SET FORTH ON THE FOLLOWING PAGE) IN WITNESS WHEREOF, the Parties execute this Agreement the day and year first written above. Attest: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT Dream Finders Homes, LLC: Completion 6

89 (Print Name) Chairperson, Board of Supervisors Witness: DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company (Print Name) By: Name Printed: Patrick Zalupski Title: Manager Exhibit A: Addendum to Improvement Plan Regarding Golf Course, Additional Recreation Improvements and Neighborhood Improvements, dated March 21, 2016 Exhibit A Addendum to Improvement Plan Regarding Golf Course, Additional Recreation Improvements and Neighborhood Improvements, dated March 21, 2016 Dream Finders Homes, LLC: Completion 7

90 4.

91 This instrument was prepared by and upon recording should be returned to: (This space reserved for Clerk) Katie S. Buchanan, Esq. HOPPING GREEN & SAMS, P.A. 119 South Monroe Street, Suite 300 Tallahassee, Florida DECLARATION OF CONSENT TO JURISDICTION OF SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT AND TO IMPOSITION OF SPECIAL ASSESSMENTS ( DECLARATION ) The undersigned, being a duly authorized representative of DFH MOF Eagle Landing, LLC, a Delaware limited liability company (the Landowner ), as the owner of those lands described in Exhibit A attached hereto (the Property ) located within the boundaries of South Village Community Development District (the District ), intends that it and its respective successors in interest and assigns shall be legally bound by this Declaration, hereby declares, acknowledges and agrees as follows: 1. The District is, and has been at all times, on and after April 28, 2003, a legally created, duly organized, and validly existing community development district under the provisions of Chapter 190, Florida Statutes, as amended (the Act ) and the members of the Board of Supervisors of the District (the Board ) are duly and properly designated pursuant to the Act to serve in their respective capacities and have the authority and right to authorize, approve and undertake all actions the District has approved and undertaken from April 28, 2003, to and including the date of this Declaration. 2. The Landowner, itself and its heirs, successors and assigns, hereby confirms and agrees, that the Special Assessments imposed by Resolution Nos , , , , , , , , duly adopted by the Board on February 2, 2016, Resolution Nos , , , and , duly adopted by the Board on March 21, 2016, (collectively, the Assessment Resolutions ), and all proceedings undertaken by the District with respect thereto have been in accordance with applicable Florida law, that the District has taken all action necessary to levy and impose the Special Assessments, and the Special Assessments are legal, valid and binding first liens upon the Property co-equal with the lien of all state, county, district and municipal taxes, superior in dignity to all other liens, titles and claims, until paid. The Landowner, itself and its heirs, successors and assigns, further confirms and agrees, that the Special Assessments imposed by the Assessment Resolutions, and all proceedings undertaken by the District with respect thereto have been in accordance with applicable Florida law, that the District has taken all action necessary to levy and impose the Special Assessments, and the Special Assessments are legal, valid and binding. Dream Finders Homes, LLC: Declaration of Consent 1

92 3. The Landowner, for itself and its respective heirs, successors and assigns, hereby waives the right granted in Chapter , Florida Statutes, to prepay the Special Assessments without interest within thirty (30) days after the improvements are completed, in consideration of the rights granted by the District to prepay the Special Assessments in full or in part at any time, but with interest, under the circumstances set forth in the Assessment Resolutions of the District levying the Special Assessments. 4. The Landowner hereby expressly acknowledges, represents and agrees that (i) the Special Assessments, the Assessment Resolutions, and the terms of the financing documents related to the District s issuance of the South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-1, (Senior Lien), South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-2 (Subordinate Lien), and South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-3 (collectively, the Series 2016 Bonds ) or securing payment thereof and all other documents and certifications relating to the issuance of the Series 2016 Bonds (the Financing Documents ) are valid and binding obligations enforceable in accordance with their terms; (ii) there are presently no claims or offsets whatsoever against, or defenses or counterclaims whatsoever to, payments of the Special Assessments or claims of invalidity, deficiency or unenforceability of the Special Assessments and Financing Documents (and the Landowner hereby expressly waives any such existing claims, offsets, defenses or counterclaims); (iii) the Landowner expressly waives and relinquishes any argument, claim or defense that foreclosure proceedings cannot be commenced until one (1) year after the date of the Landowner s default and agrees that, immediate use of remedies in Chapter 170, Florida Statutes, is an appropriate and available remedy, notwithstanding the provisions of Section , Florida Statutes; and (iv) to the extent Landowner fails to timely pay any Special Assessments collected by mailed notice of the District, such unpaid Special Assessments and future Special Assessments may be placed on the tax roll by the District for collection by the Tax Collector pursuant to Section , Florida Statutes, in any subsequent year. 5. This Declaration shall represent a lien of record for purposes of Chapter 197, Florida Statutes, including, without limitation, Section , Florida Statutes. This Declaration shall remain effective upon the merger, amendment, or name change of the District. Other information regarding the Special Assessments is available from the District Manager, Governmental Management Services (the District Manager ), 475 West Town Place, Suite 114, World Golf Village, St. Augustine, Florida THE DECLARATIONS, ACKNOWLEDGEMENTS AND AGREEMENTS CONTAINED HEREIN SHALL BE BINDING ON THE LANDOWNER AND ON ALL PERSONS (INCLUDING CORPORATIONS, ASSOCIATIONS, TRUSTS AND OTHER LEGAL ENTITIES) TAKING TITLE TO ALL OR ANY PART OF THE PROPERTY, AND THEIR SUCCESSORS IN INTEREST, WHETHER OR NOT THE PROPERTY IS PLATTED AT SUCH TIME. BY TAKING SUCH TITLE, SUCH PERSONS SHALL BE DEEMED TO HAVE CONSENTED AND AGREED TO THE PROVISIONS OF THIS DECLARATION TO THE SAME EXTENT AS IF THEY HAD EXECUTED IT AND BY TAKING SUCH TITLE, SUCH PERSONS SHALL BE ESTOPPED FROM CONTESTING, IN COURT OR Dream Finders Homes, LLC: Declaration of Consent 2

93 OTHERWISE, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THIS DECLARATION. Effective the 16 th day of June, WITNESSES: Witness Signature Printed Name: DFH MOF EAGLE LANDING, a Delaware limited liability company By: Patrick Zalupski Its: Manager Witness Signature Printed Name: STATE OF ) ) SS: COUNTY OF ) I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument was acknowledged before me by Patrick Zalupski, as Manager of DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company, for and on behalf of the company. WITNESS my hand and official seal in the County and State last aforesaid this day of, NOTARY PUBLIC, STATE OF (Name of Notary Public, Print, Stamp or Type as Commissioned) Personally known to me, or Produced identification: (Type of Identification Produced) Dream Finders Homes, LLC: Declaration of Consent 3

94 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Dream Finders Homes, LLC: Declaration of Consent 4

95 Eagle Landing at Oakleaf Plantation Phase Five EXHIBIT "A" A PARCEL OF LAND SITUATED I N SECrION 13, TOWNSHIP 4 SOUTH, RANGc 24 cast, CLAY COUNTY, FLORIDA; SAlO PARCEL BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCE ATTHE SOUTHEAST CORNER OF SAID SECTION 13; THENCE ON THE SOUTH LINE THEREOF RUN SOUTH 88 DEGREES 14 M[ NUTES 22 SECONDS WEST FEET; THENCE NORTH 0 1 DEGREE 4 5 MINUTES 55 SECO NDS WEST FEET; THENCE NORTH 32 DEGREES 27 MINUTES 13 SECONDS EAST FEET; THENCE NORTH 12 DEGREES 25 MINUTES 55 SECONDS EAST FEET; THENCE NORTH 45 DEGREES 34 MINUTES 35 SECONDS EAST FEET; THENCE NORTH 29 DEGREES 34 MINlJTES 51 SECONDS EAST FEET; TH ENCE NORTH 48 DEGREES 47 MINUTES 10 SECONDS EAST FEET; THENCE NORTH 64 DEGREES 26 MINUTES 46 S ECONDS EAST FEET; THENCE NORTH 36 DEGREES 53 MINUTES 08 SECONDS WEST FEET; THENCE NORTH 36 DEGREES 53 MINUTES 08 SECONDS WEST FEET TO THE SOUTHEASTERLY BOUNDARY OF TORREY PINES AT OAKLEAF PLANTATION, ACCORDING TO PLAT BOOK 55 PAGES 69 THROUGH 79, OF THE PUBLIC RECORDS OF SAID COUNTY; THENCE ON LAST SAI D BOUNDARY RUN THE FOLLOWING 3 COURSES : 1) NORTH 76 DEGREES 34 MINUTES 41 SECONDS EAST FEET; 2) NORTH 53 DEGREES 06 MINUTES 52 SECONDS EAST FEET; 3) NORTH 36 DEGREES 53 MINUTES 08 SIECONDS WEST FEET TO TH E SOUTHEASTERLY BOUNDARY OF SPANISH BAY AT OAKLEAF PLANTATION, ACCORDING TO THE PLAT THEREOF RECORDED IN PLAT BOOK 55, PAGES 61 THROUGH 68, SAID PUBLIC RECORDS; THENCE ON SAID SOUTHEASTERLY BOUNDARY, NORTH 38 DEGREES 35 MINUTES 21 SECONDS EAST FEET; THENCE SOUTH 36 DEGREES 53 MINUTES 08 SECONDS EAST FEET; THENCE SOUTH 36 DEGREES 53 MINUTES 08 SECONDS EAST FEET; THENCE NORTHEASTERLY ON THE AR.C OF A CURVE CONCAVE TO THE SOUTHEASTERLY AND HAVING A RADIUS OF FEET, RUN A CHORD DISTANCE OF FEET, THE BEARING OF SAID CHORD BEI NG NORTH 35 DEGREES 36 MINUTES l 7 SECONDS EAST; THENCE NORTH 52 DEGREES 54 MINUTES 47 SECONDS WEST FEE"I'; THENCE NORTH 37 DEGREES 0 5 MINUTES 13 SECONDS EAST FEET; THENCE SOUTH 52 DEGREES 54 MINl!TES 47 SECONDS EAST FEET; THENCE NORTHEASTERLY ON Tl-I E ARC OF A CUR.VE CONCAVE TO THE SOUTHEASTERLY AND HAVING A RADIUS OF FEET, RUN A CHORD DISTANCE OF FEET, THE BEARING OF SAID CHORD BEING NORTH 44 DEGREES 49 MINUTES 52 SECONDS EAST; THENCE NORTH 51 DE'GREES 34 MINUTES 45.SECONDS EAST FEET; TH ENCE NOR.TI1EASTERLY ON THE ARC OF A CURVE CONCAVE TO THE NORTHWESTERLY AND l IAVING A RADIUS OF FEET RUN A CHORD DISTANCE OF FEET, T11E BEARING OF SAID CHORD BEING NORTH 50 DEGREES 14 MINUTES 56 SECONDS EAST; TMENCE NORTH 35 DEGREES 59 MINUTES 56 SECONDS EAST FEET; THENCE NORTH 51 DEGREES 21 MINlJTES48 SECONDS EAST FEET; THENCE NORTHEASTERLY ON THE ARC OF A CURVE CONCAV6 TO TH~ NORTHWESTERLY AND HAVING A RADIUS OF FEET, RUN A CHORD DI STANCE OF 16B.63 FEET, THE.BEARING OF SAID CHORD BEING NORTH 34 DEGREES 04 MINUTES 16 SECONDS EAST; THENCE NORTH 06 DEGREES 24 MINUTES 09 S ECONDS WEST FEET; THENCE NOR.TH 08 DEGREES 47 MINUTES 51 SECONDS EAST FEET; THENCE NORTH OB DEGREES 47 MINUTES 02 SECONDS EAST FEET; THENCE NORTI-! 75 DEGREES 4 0 MINUl'ES 57 SECONDS EAST FEET; THENCE NORTHERLY ON THE ARC OF A CURVE CONCAVE TO THE WESTERLY AND HAVING A RADIUS OF FEET, RUN A CHORD DI STANCE OF FEET, THE BEARING OF SAID CHORD BEING NORTH 09 DEGREES 11 MINUTES 07 SECONDS EAST; THENCE NORTH 73 DEGREES 34 MINUTES 30 SECONDS WEST FEET; THENCE NORTH 12 DEGREES 50 MINUTES 39 SECONDS WEST FEET; THENCE NORTH 48 DEGREES 57 MINUT.ES 48 SECONDS EAST FEET; THENCE NORTHERLY ON THE ARC OF A CURVE CONCAVE TO THE WESTERLY AND MAVING A RADIUS OF FEET, RUN A CHORD DISTANCE OF FEET, THE BEARING O F SAlD CHORD BEING NORTH 06 DEGREES 40 MINUTES 39 SECONDS WEST; THENCE NORTHERLY ON THE: ARC OF A CURVE CONCAVE TO THE EASTERLY AND HAVING A RADIUS OF FEET, RUN A CHORD DISTANCE OF FEET, Dream Finders Homes, LLC: Declaration of Consent 5

96 Dream Finders Homes, LLC: Declaration of Consent 6

97 Dream Finders Homes, LLC: Declaration of Consent 7

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99 This instrument was prepared by and upon recording should be returned to: (This space reserved for Clerk) Katie S. Buchanan, Esq. HOPPING GREEN & SAMS, P.A. 119 South Monroe Street, Suite 300 Tallahassee, Florida AGREEMENT BETWEEN THE SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT AND DFH MOF EAGLE LANDING, LLC, REGARDING THE TRUE-UP AND PAYMENT OF SERIES 2016A-3 ASSESSMENTS THIS AGREEMENT (the Agreement ) is made and entered into this 16 th day of June, 2016, by and between: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT, a local unit of special-purpose government established pursuant to Chapter 190, Florida Statutes, being situated in Clay County, Florida, with a mailing address is 475 West Town Place, Suite 114, World Golf Village, St. Augustine, Florida (the District ); and DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company, the owner and developer of certain lands within the boundaries of the District, with a mailing address of 360 Corporate Way, Suite 100, Orange Park, Florida (the Landowner ). RECITALS WHEREAS, the District was established by an ordinance adopted by the Board of County Commissioners of Clay County, Florida, pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the Act ), and is validly existing under the Constitution and laws of the State of Florida; and WHEREAS, the District, pursuant to Chapter 190, Florida Statutes, is authorized to levy such taxes, special assessments, fees and other charges as may be necessary in furtherance of the District s activities and services; and WHEREAS, Landowner is the owner and developer of certain lands within the boundaries of the District specifically relating to a portion of the area known as Phase 5 as more particularly described on the attached Exhibit A (the Property ); and WHEREAS, the District has previously issued the South Village Community Development District Capital Improvement Revenue Bonds, Series 2005A and applied the proceeds towards the acquisition and construction of the improvements (the Original Improvements ) identified Dream Finders Homes, LLC: True Up 1

100 in the South Village Community Development District Improvement Plan, dated January 5, 2005 the ( Original Improvement Plan ); and WHEREAS, the District has adopted a supplemental improvement plan to finance the planning, design, acquisition, construction, and installation of certain infrastructure improvements, facilities, and services within the District (the Recreation and Neighborhood Improvements and together with the Original Improvements, the Improvements ) as described in that certain Addendum to Improvement Plan Regarding Golf Course, Additional Recreation Improvements and Neighborhood Improvements, dated March 21, 2016 (the Engineer s Report ); and WHEREAS, the District intends to finance a portion of the Improvements through the anticipated issuance of its South Village Community Development District Capital Improvement Revenue and Refunding Bonds, Series 2016A-3, (the Series 2016A-3 Bonds ); and WHEREAS, pursuant to Resolution Nos , , , , , , duly adopted by the Board on February 2, 2016, Resolution Nos , , and , duly adopted by the Board on March 21, 2016, (collectively, the Assessment Resolutions ), the District imposed special assessments (the Special Assessments ); and WHEREAS, certain assessments levied on the Property secure the repayment of the Series 2016A-3 Bonds (the Series 2016A-3 Assessments ); and WHEREAS, Landowner agrees that the Property benefits from the timely design, construction, and/or acquisition of the Improvements; and WHEREAS, Landowner agrees that the Series 2016A-3 Assessments have been validly imposed and constitute valid, legal and binding liens upon the Property within the District upon which the Series 2016A-3 Assessments are imposed; and WHEREAS, to the extent permitted by law, Landowner waives any defect in notice or publication or in the proceedings to levy, impose and collect the Special Assessments on the Property; and WHEREAS, the District s Special Assessment Methodology Report for the Capital Improvement Revenue Refunding Bonds, Series 2016A-3, and Capital Improvement Revenue Bonds (Recreation and Neighborhood), Series 2016A-3 (Assessment Area 2), dated March 21, 2016, attached hereto and incorporated herein as Exhibit B (collectively, the Assessment Report ), provides that as the Property is developed, the allocation of the amounts assessed to and constituting a lien upon the Property would be calculated based upon certain density assumptions relating to the number of each type of residential units to be constructed on the developable acres within the Property, which assumptions were provided by Landowner; and WHEREAS, Landowner intends that the Property will be developed based on thenexisting market conditions, and the actual densities developed may be greater or lesser than the densities assumed in the District s Assessment Report; and Dream Finders Homes, LLC: True Up 2

101 WHEREAS, the Assessment Report anticipates a mechanism by which Landowner shall, if required, make certain payments to the District in order to satisfy, in whole or in part, the assessments allocated and the liens imposed pursuant to the Assessment Resolutions, the amount of such payments being determined generally by a calculation of the remaining unallocated debt prior to the recording of certain plats, declarations of condominium or site plans for a parcel or tract, as described in the District s Assessment Report (which payments shall collectively be referred to as the True-Up Payment ); and WHEREAS, Landowner and the District desire to enter into an agreement to confirm Landowner s intention and obligation to make the True-Up Payment, if required, relative to the Special Assessments, subject to the terms and conditions contained herein. NOW, THEREFORE, based upon good and valuable consideration and the mutual covenants of the parties, the receipt of which and sufficiency of which is hereby acknowledged, the parties agree as follows: SECTION 1. RECITALS. The recitals so stated are true and correct and by this reference are incorporated into and form a material part of this Agreement. SECTION 2. VALIDITY OF ASSESSMENTS. The Assessment Resolutions have been duly adopted by the District. The Special Assessments imposed as a lien by the District are legal, valid and binding liens on the land against which assessed until paid, coequal with the lien of all state, county, city district, and municipal taxes, and superior in dignity to all other liens, titles, and claims. Landowner hereby waives and relinquishes any rights it may have to challenge, object to or otherwise fail to pay such Special Assessments. SECTION 3. COVENANT TO PAY. Landowner agrees and covenants to timely pay all such Special Assessments levied and imposed by the District pursuant to the Assessment Resolutions on assessable property owned by Landowner, whether the Special Assessments are collected by the Tax Collector pursuant to Section , Florida Statutes, by the District, or by any other method allowable by law. Landowner further agrees that to the extent Landowner fails to timely pay all Special Assessments collected directly by the District, said unpaid Special Assessments (including True-Up Payments) may be placed on the tax roll by the District for collection by the Tax Collector pursuant to Section , Florida Statutes, in any subsequent year. SECTION 4. SPECIAL ASSESSMENT REALLOCATION. A. Assumptions as to Series 2016A-3 Assessments. As of the date of the execution of this Agreement, Landowner has informed the District that it plans to construct or provide for the construction of a total of 199 residential lots (the Units ) within the boundaries of approximately developable acres comprising the Property. B. Process for Reallocation of Assessments. The Series 2016A-3 Assessments will initially be imposed on unplatted developable acreage and will be reallocated as these lands become subject to a plat, declaration of condominium or site plan. In connection with the development of such acreage, the Series 2016A-3 Assessments imposed on the acreage subject to Dream Finders Homes, LLC: True Up 3

102 the plat, declaration of condominium or site plan will be allocated based upon an equal Equivalent Residential Units ( ERUs ) basis within the area subject to such plat, declaration of condominium or site plan. In furtherance thereof, at such time as additional developable acreage is to be subject to a plat, declaration of condominium or site plan, the Landowner covenants that such document(s) shall be presented to the District and the District shall allocate the Series 2016A-3 Assessments to those Units that are to be subject to the plat, declaration of condominium or site plan and the remaining developable acreage in accordance with the District s Assessment Report and shall cause such reallocation to be recorded in the District s Improvement Lien Book. i. It is an express condition of the lien established by the Assessment Resolutions that at the time of recording of any and all plats, declarations of condominium or site plans containing any portion of the lands within the Property, as the District s boundaries may be amended from time to time, that such document(s) shall be presented to the District for review and allocation of the Series 2016A-3 Assessments to the Units to be subject to the plat, declaration of condominium or site plan, and the remaining property in accordance with the District s Assessment Report (hereinafter referred to as the Reallocation ). Landowner covenants to comply, or cause others to comply, with this requirement for the Reallocation. The parties agree that no further action by the Board of Supervisors shall be required. The District s review of the plats, declarations of condominium or site plans shall be limited solely to the Reallocation of the Series 2016A-3 Assessments and enforcement of the District s assessment lien. Nothing herein shall in any way operate to or be construed as providing any other plat, declaration of condominium or site plan approval or disapproval powers to the District. ii. At such time as a plat, declaration of condominium or site plan is presented to the District that involves the cumulative platting of either (i) 100 lots or (ii) 33 acres contained within the Property, the following provisions shall apply. Commencing on that date (each such date being a True-Up Date ), the District shall determine if the debt per acre remaining on the unplatted land is greater than the debt per acre at the time of imposition of the Series 2016A-3 Assessments, and if it is, a True-Up Payment in the amount of such excess shall become due and payable by Landowner that tax year, in addition to the regular Series 2016A-3 Assessments installment payable for lands owned by the Landowner. The District will ensure collection of such amounts in a timely manner in order to meet its debt service obligations, and in all cases, Landowner agrees that such payments shall be made in order to ensure the District s timely payments of the debt service obligations on the Series 2016A-3 Bonds. If such True-Up Payment is made at least forty-five (45) days prior to an interest payment date on the Series 2016A-3 Bonds, the Landowner shall include accrued interest as part of the True-Up Payment to such interest payment date. If such True-Up Payment becomes due within forty-five (45) days of the next interest payment date, accrued interest shall be calculated to the next succeeding interest payment date. iii. The foregoing is based on the District s understanding with Landowner that Landowner will develop 199 Units within the Series 2016A-3 Assessment Property as identified in the Assessment Report. However, the District agrees that nothing herein prohibits more or less than the currently planned ERUs from being developed. In no event shall the District collect Series 2016A-3 Assessments pursuant to the Assessment Resolutions in excess of the total debt service related to the Improvements, including all costs of financing and interest; provided, Dream Finders Homes, LLC: True Up 4

103 however, that the District may collect Series 2016A-3 Assessments in excess of the annual debt service related to the Improvements, including all costs of financing and interest, which shall be applied to prepay the Series 2016A-3 Bonds. If the strict application of the True-Up methodology to any reallocation pursuant to this paragraph would result in Series 2016A-3 Assessments collected in excess of the District s total debt service obligation for the Improvements, the District agrees to take appropriate action by resolution to equitably reallocate the Series 2016A-3 Assessments. iv. Notwithstanding anything to the contrary, the Landowner shall not be required to make True-Up Payments for any portion of the Property that have been conveyed to the District by the Landowner by any foreclosure or deed in lieu thereof. SECTION 5. ENFORCEMENT. This Agreement is intended to be an additional method of enforcement of Landowner s obligation to pay and to abide by the requirements of the Series 2016A-3 Assessments, including the making of the True-Up Payment, as set forth in the Assessment Resolutions. A default by any party under this Agreement shall entitle any other party to all remedies available at law or in equity, excluding special, consequential and punitive damages. SECTION 6. RECOVERY OF COSTS AND FEES. In the event any party is required to enforce this Agreement by court proceedings or otherwise, then the substantially prevailing party, as determined by the applicable court or other dispute resolution provider, shall be entitled to recover from the non-prevailing party all fees and costs incurred, including reasonable attorneys fees and costs incurred prior to or during any litigation or other dispute resolution and including all fees and costs incurred in appellate proceedings. SECTION 7. NOTICE. All notices, requests, consents and other communications hereunder ( Notices ) shall be in writing and shall be mailed by First Class Mail, postage prepaid, delivered by overnight delivery service, or telecopied or hand delivered to the parties, as follows: A. If to the District: South Village Community Development District 475 West Town Place, Suite 114 St. Augustine, Florida Attn: District Manager With a copy to: Hopping Green & Sams, P.A. 119 South Monroe Street, Suite 300 Tallahassee, Florida Attn: Katie S. Buchanan B. If to Landowner: DFH MOF Eagle Landing, LLC 360 Corporate Way, Suite 100 Orange Park, Florida Attn: Patrick Zalupski Dream Finders Homes, LLC: True Up 5

104 With a copy to: Holland & Knight LLP 50 North Laura Street, Suite 3900 Jacksonville, Florida Attn: Missy Turra Except as otherwise provided herein, any Notice shall be deemed received only upon actual delivery at the address or telecopy number set forth herein. If mailed as provided above, Notices shall be deemed delivered on the third business day unless actually received earlier. Notices hand delivered after 5:00 p.m. (at the place of delivery) or on a non-business day, shall be deemed received on the next business day. If any time for giving Notice contained in this Agreement would otherwise expire on a non-business day, the Notice period shall be extended to the next succeeding business day. Saturdays, Sundays and legal holidays recognized by the United States government shall not be regarded as business days. Counsel for the parties may deliver Notice on behalf of the parties. Any party or other person to whom Notices are to be sent or copied may notify the other parties and addressees of any change in name, address or telecopy number to which Notices shall be sent by providing the same on five (5) days written notice to the parties and addressees set forth herein. Notwithstanding the foregoing, to the extent Florida law requires notice to enforce the collection of assessments placed on property by the District, then the provision of such notice shall be in lieu of any additional notice required by this Agreement. SECTION 8. ASSIGNMENT. This Agreement may be assigned, in whole or in part, by either party only upon the written consent of the other. SECTION 9. AMENDMENT. This Agreement shall constitute the entire agreement between the parties regarding the subject matter hereof and may be modified in writing only by the mutual agreement of all parties. SECTION 10. TERMINATION. This Agreement shall continue in effect until the earlier of: (1) the entirety of the Property being subject to a plat, declaration of condominium or site plan and payment of any associated True-Up Payments; or (2) the payment in full of all outstanding Series 2016A-3 Bonds. SECTION 11. NEGOTIATION AT ARM S LENGTH. This Agreement has been negotiated fully between the parties as an arms length transaction. All parties participated fully in the preparation of this Agreement and received the advice of counsel. In the case of a dispute concerning the interpretation of any provision of this Agreement, all parties are deemed to have drafted, chosen and selected the language, and the doubtful language will not be interpreted or construed against either party. SECTION 12. BENEFICIARIES. This Agreement is solely for the benefit of the formal parties herein and no right or cause of action shall accrue upon or by reason hereof, to or for the benefit of any third party not a formal party hereto. Nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person or corporation other than the parties hereto any right, remedy or claim under or by reason of this Agreement or any provisions or conditions hereof; and all of the provisions, representations, covenants and conditions herein Dream Finders Homes, LLC: True Up 6

105 contained shall inure to the sole benefit of and shall be binding upon the parties hereto and their respective representatives, successors and assigns. SECTION 13. LIMITATIONS ON GOVERNMENTAL LIABILITY. Nothing in this Agreement shall be deemed as a waiver of immunity or limits of liability of the District beyond any statutory limited waiver of immunity or limits of liability which may have been adopted by the Florida Legislature in Section , Florida Statutes, or other statute, and nothing in this Agreement shall inure to the benefit of any third party for the purpose of allowing any claim which would otherwise be barred under the Doctrine of Sovereign Immunity or by operation of law. SECTION 14. APPLICABLE LAW; VENUE. This Agreement shall be governed by the laws of the State of Florida. Venue shall be in Clay County, Florida. SECTION 15. PUBLIC RECORDS. The Landowner understands and agrees that all documents of any kind provided to the District in connection with this Agreement may be public records and may require treatment as such in accordance with Florida law. SECTION 16. EXECUTION IN COUNTERPARTS. This instrument may be executed in any number of counterparts, each of which, when executed and delivered, shall constitute an original, and such counterparts together shall constitute one and the same instrument. Signature and acknowledgment pages, if any, may be detached from the counterparts and attached to a single copy of this document to physically form one document. SECTION 17. EFFECTIVE DATE. This Agreement shall become effective after execution by the parties hereto on the date reflected above. [Signatures on Next Page] Dream Finders Homes, LLC: True Up 7

106 IN WITNESS WHEREOF, the parties execute this Agreement the day and year first written above. Attest: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT (Print Name) Chairperson, Board of Supervisors Witness: DFH MOF EAGLE LANDING, LLC, a Delaware limited liability company (Print Name) By: Name Printed: Patrick Zalupski Title: Manager Exhibit A: Exhibit B: Legal Description of the Property Special Assessment Methodology Report for the Capital Improvement Revenue Refunding Bonds, Series 2016A-3, and Capital Improvement Revenue Bonds (Recreation and Neighborhood), Series 2016A-3 (Assessment Area 2), dated March 21, 2016 Dream Finders Homes, LLC: True Up 8

107 Exhibit A Legal Description of Series 2016A-3 Assessment Property Dream Finders Homes, LLC: True-Up 9

108 Dream Finders Homes, LLC: True Up 10

109 Dream Finders Homes, LLC: True Up 11

110 Dream Finders Homes, LLC: True Up 12

111 Dream Finders Homes, LLC: True Up 13

112 Exhibit "A" continued ACCORDlNG TO PIJ\T BOOK 4 6 PAGES 71 THROUGH 93, 0 1' SAID PUBLIC RECORDS; THENCE ON LAST SAID BOUNDARY RUN NORTH 49 DEGREES 14 MINUTES 25 SECONDS EAST FEET; THENCE SOlITH 40 DEGREES 45 MINUTES 3 5 SECONDS EAST FEET; TH ENCE NORTH 49 DEGREES 14 MINUTES 2 5 SECONDS EAST FEET; THENCE NORTH 3 4 DEGREES 12 MINUTES 15 SECONDS EAST FEET; THENCE NORTH 43 DEGREES 36 MINUTES 40 SECONDS EAST FEET; THENCE SOUTH 89 DEGREES 13 MINUTES 01 SECOND EAST FEET; THENCE NORTH 24 DEGREES 42 MINUTES 18 SECONDS EAST FEET; THENCE NORTH 31 DEGREES 52 MINUTES 44 SECONDS EAST FEET; THENCE SOUTH 88 DEGREES 16 MINUTES 57 SECONDS EAST FEET; THENCE NORTH 02 DEGREES 26 MINUTES 09 SECONDS WEST FEET; THENCE NORTH 36 DEGREES 52 MINUTES 31 SECONDS EAST FEET; THENCE NORTH 35 DEGREES 05 MINUTES 2.7 SECONDS WEST FEET; THENCE NORTH 08 DEGREES 16 MI NUTES 16 SECONDS EAST FEET; THENCE NORTH 32 DEGREES 21 MINUTES 46 SECONDS EAST FEET; THENCE SOUTH 47 DEGREES 22 MINUTES 15 SECONDS EAST SS.76 FEEl '; THENCE NORTH 71 DEGREES 56 MINUTES 12 SECONDS EAST FEET; THENCE NORTH 79 DEGREES 46 MINUTES 48 SECONDS EAST FEET; THENCE NORTH 61 DEGREES 41 MI NUTES 58 SECONDS EAST FEET; TH ENCE SOUTH 49 DEGREES 45 MINUTES 44 SECONDS EAST FEET; IBENCE SOUTH 12 DEGREES 11 MINUTES 57 SECONDS EAST FEET ; THENCE NORTH 04 DEGREES 11 MINUTES 4 7 SECONDS WEST FEET; THENCE NORTH 26 DEGREES 56 MI NUTES 12 SECONDS EAST FEET; THENCE NORTH 87 DEGREES 26 MINUTES 55 SECONDS EAST FEET TO TME EASTERLY LINE OF SAID SECTION 13; THENCE ON I.AST SAID LINE RUN THE FOLLOWING 2 COURSES : 1) SOUTH 00 DEGREES 12 MINUTES 04 SECONDS EAST FEET TO THE EAST QUARTER-CORNER THEREOF; 2) SOUTH 00 DEGREES 08 MINUTES 15 SECONDS EAST FEET TO THE POINT OF BEGINNING, BEI NG ACRES MORE OR LESS IN AREA. Dream Finders Homes, LLC: True Up 14

113 Exhibit B Special Assessment Methodology Report for the Capital Improvement Revenue Refunding Bonds, Series 2016A-3, and Capital Improvement Revenue Bonds (Recreation and Neighborhood), Series 2016A-3 (Assessment Area 2), dated March 21, 2016 Dream Finders Homes, LLC: True-Up 15

114 SIXTH ORDER OF BUSINESS

115 A.

116 South Village Community Development District Request for Proposal Phase V Infrastructure Improvements Score Sheet Personnel (5 Points) Experience (20 Points) Understanding Scope of Work (20 Points) Schedule (25 Points) Price* (30 Points) Totals A.J. Johns Vallencourt *30 Points maximum total allocated as follows: 30 Points will be awarded to the Proposer submitting the lowest cost proposal, (i.e., the summation of the unit price extensions using quantity estimates provided, the allowances shown, plus the proposal contractor s fee) for completing the work. All other proposals will receive a percentage of this amount based upon the difference between the Proposer s bid and the low bid.

117 SEVENTH ORDER OF BUSINESS

118 RESOLUTION A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT APPROVING PROPOSED BUDGETS FOR FISCAL YEAR 2016/2017 AND SETTING A PUBLIC HEARING THEREON PURSUANT TO FLORIDA LAW AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the District Manager has heretofore prepared and submitted to the Board of Supervisors of the South Village Community Development District (the Board ) prior to June 15, 2016, proposed budgets for Fiscal Year 2016/2017; and WHEREAS, the Board has considered the proposed budgets and desires to set the required public hearing thereon. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT: 1. The budgets proposed by the District Manager for Fiscal Year 2016/2017 attached hereto as Exhibit A are hereby approved as the basis for conducting a public hearing to adopt said budgets. 2. A public hearing on said approved budgets is hereby declared and set for the following date, hour and location: DATE: HOUR: LOCATION: 3. The District Manager is hereby directed to submit a copy of the proposed budgets to Clay County at least 60 days prior to the hearing set above. 4. In accordance with Section , Florida Statutes, the District's Secretary is further directed to post the approved budgets on the District's website at least two days before the budget hearing date as set forth in Section Notice of this public hearing shall be published in the manner prescribed in Florida law. 6. This Resolution shall take effect immediately upon adoption.

119 PASSED AND ADOPTED THIS 7TH DAY OF JUNE, ATTEST: SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT Secretary By: Its:

120 Proposed Budget Fiscal Year 2017 South Village Community Development District June 7, 2016

121 South Village Community Development District General Fund Revenues Adopted Actual Projected Total Proposed Budget thru Next Projected at Budget Description FY2016 4/30/ Months 9/30/2016 FY2017 Maintenance Assessments - Tax Collector $487,387 $416,786 $41,452 $458,238 $513,631 M?intenance Assessments - Direct (Administrative) $56,329 $27,925 $28,404 $56,329 $56,188 Developer Contributions $61,095 $0 $61,095 $61,095 $34,640 Total Revenues $604,811 $444,711 $130,951 $575,662 $604,460 Expenditures Administrative Supervisors Fees $12,000 $8,800 $1,600 $10,400 $12,000 FICA Taxes $918 $673 $122 $796 $918 Engineering $10,000 $25,748 $5,000 $30,748 $10,000 Arbitrage $1,200 $1,200 $0 $1,200 $1,200 Dissemination Agent $5,000 $5,000 $0 $5,000 $5,000 Assessment Roll $5,260 $5,000 $0 $5,000 $5,260 Attorney $30,000 $23,208 $32,491 $55,699 $30,000 Annual Audit $4,500 $0 $3,700 $3,700 $4,000 Trustee $8,860 $8,860 $0 $8,860 $8,860 Management Fees $45,000 $26,250 $18,750 $45,000 $45,000 Computer Time $1,000 $583 $417 $1,000 $1,000 Telephone $300 $533 $100 $633 $300 Postage $1,500 $1,802 $900 $2,702 $1,700 Insurance $7,243 $6,538 $0 $6,538 $7, 192 Printing & Binding $2,500 $1,523 $1,088 $2,611 $2,500 Legal Advertising $3,000 $895 $1,250 $2, 145 $3,000 Other Current Charges $1,250 $4, 180 $500 $4,680 $1,250 Office Supplies $250 $33 $24 $57 $250 Dues, Licenses, Subscriptions $175 $175 $0 $175 $175 Contingency $500 $0 $500 $500 $500 Sub-Total - Administrative Expenses $140,456 $121,001 $66,442 $187,442 $140,105 Community Appearance lnterlocal Agreement - MVCDD $36,000 $35,886 $0 $35,886 $36,000 Landscape - Contract $165,000 $87,500 $62,500 $150,000 $165,000 Landscape - Management Fee (Labor) $19,208 $11,205 $8,003 $19,208 $19,208 Lake - Contract $28,882 $16,795 $9,350 $26, 145 $28,882 Operations Management $42,920 $25,037 $17,883 $42,920 $42,920 Utilities $75,000 $41,018 $29,299 $70,317 $75,000 Miscellaneous - Direct Cost $20,000 $5, 120 $17,000 $22, 120 $20,000 Security $24,000 $12,840 $9, 171 $22,011 $24,000 Capital Outlay $0 $0 $2,500 $2,500 $0 Sub-Total - Community Appearance $411,010 $235,400 $155,706 $391,106 $411,010 Other Sources/(Uses): TOTAL EXPENDITURES $551,466 $356,401 $222,148 $578,549 $551,115 lnterfund Transfer In $0 $89,551 $0 $89,551 $0 lnterfund Transfer Out ($53,345) ($53,345) $0 ($53,345) ($53,345) (1) TOTAL OTHER ($53,345) $36,206 $0 $36,206 ($53,345) EXCESS REVENUESl{EXPENDITURES) $0 $124,516 ($91, 197) $33,319 $0 (1) Represents a transfer to the Capital Reserve Fund

122 South Village Community Development District General Fund I Platted Lots General Fund: Assessments - Platted Lots Net-Assessment Rate Total Net Assessments - Tax Collector Gross Assessment (6 /o Discount)!Gross Assessment - Per Unit Capital Reserve: Assessable Units - Platted Lots Net Assessment - Per Lot Net Assessments - Platted Lots Gross Assessment - Platted Lots 6 /o Collection Costs) Gross Assessment - Per Lot FY $ $1,082,904 $1,152,025 $1, FY $1, $1,146,918 $1,220,125 $1,075.oo I 1,135 $47 $53,345 (1) $56, I Undeveloped Property: Administrative Budget Total Assessable Acres Undeveloped Property - Assessable Acres Administrative Assessment - Per Acre Administrative Assessme'nt - Total FY2016 $140, $ $56, FY2017 $140, $ $56, Allocation of Assessments: Total GF Exp (less Cap Res) Total RF Exp $551,115 $ $1,373,238 40% General Fund 60o/o Recreational Fund Total Net: 40% $460, % $ $1,146,918 2

123 South Village Community Development District GENERAL FUND BUDGET REVENUES: Assessments - Platted Lots The District will assess the platted lots within the District to fund a portion of the District's operating budget for the fiscal year. Assessments - Administrative The District will assess the undeveloped property for the administrative portion of the budget allocated to all property owners within the District. Developer Contributions The District will enter into a Funding Agreement with the Developer to Fund a portion of the expenditures for the Fiscal Year. EXPENDITURES: Administrative: Engineering Fees The District's engineer will be providing general engineering services to the District, i.e. attendance and preparation for monthly board meetings, review invoices, and various projects assigned as directed by the board of supervisors. Arbitrage The District is required to have an annual arbitrage rebate calculation prepared for the Series 2005A, Special Assessment Bonds. The District will contract with an independent CPA firm to perform this calculation. Dissemination Agent The District has contracted with Prager, & Co. to act as Dissemination Agent for the District to prepare the Annual Disclosure Report required by the Security and Exchange Commission in order to comply with Rule 15(c)(2)-12(b)(5), which relates to additional reporting requirements for un'rated bond issues. Attorney The District's legal counsel will be providing general legal services to the District, i.e. attendance and preparation for monthly meetings, review operating & maintenance contracts, agreements, etc. Annual Audit The District is required.by Florida Statute to arrange for an annual audit of its financial records by an independent certified public accounting firm. Trustee The District's Series 2005A, Special Assessment Bonds are held by a Trustee with US Bank, N.A. The amount represents the fee for the administration of the District's bond issue. Page 3

124 South Village Community Development District GENERAL FUND BUDGET Assessment Roll Assessment Roll administrative services are provided by Governmental Management Services, LLC for updating the districts' tax roll, certifying the annual assessments and collection of prepaid assessments. Management Fees The District receives Management, Accounting and Administrative services as part of a Management Agreement with Governmental Management Services, LLC. These services are further outlined in Exhibit "A" of the Management Agreement. Computer Time The District processes all of its financial activities, i.e. accounts payable, financial statements, etc. on a mainframe computer leased by Governmental Management Services, LLC Telephone This category includes all charges relating to telephone calls, conference calls, and faxes made to and on behalf of the District. Postage Mailing of agenda packages, overnight deliveries, correspondence, etc. Insurance The District's General Liability & Public Officials Liability Insurance policy is with Florida Insurance Alliance. FIA specializes in providing insurance coverage to governmental agencies. Printing & Binding This category includes expenses relating to the printing and binding of agenda packages for board meetings, accounts payable checks, stationary, envelopes, photocopies, etc. Legal Advertising The District is required to advertise various notices for board meetings, public hearings, etc. in a newspaper of general circulation. Other Current Charges Bank charges and any other miscellaneous expenses incurred during the year. Office Supplies Miscellaneous office supplies. Page4

125 South Village Community Development District GENERAL FUND BUDGET Dues, Licenses & Subscriptions The District is required to pay an annual fee to the Department of Economic Opportunity for $175. This is the only expense under this category for the District. Community Appearance lnterlocal Agreement - Middle Village CDD The District has entered into an agreement with Middle Village CDD for the maintenance and repair of certain landscape areas and associated irrigation systems which are located within the Right-of-Way of Oakleaf Plantation Boulevard. Landscape This represents landscape maintenance of all District property, to include mowing, weeding, trimming, pruning, fertilizing etc. The District is contracted with Down To Earth. The contract is $12, per month, or $160,000 annually. Amount budgeted includes a 10% contingency. Landscape Management Fee (Labor) Represents amount paid to Eagle Landing Limited Partnership for labor cost associated with managing landscape maintenance contract. Operations Management The estimated cost associated with the overall management of the Community Appearance operations of the District. Lake Maintenance The District has contracted with Lake Doctor's for monthly aquatic plant management in 29 ponds. Services provide labor, equipment, herbicides and technology to control cattails, pennywort, primrose and algae. The contract is $2,188 per month, or $26,256 annually. Amount budgeted includes a 10% contingency. Utilities The District currently has the following accounts with Clay Electric Cooperative for electric service: Account# Service Address Monthly Annually Eagle Landing/Water Fall $ 1, $ 20, Eagle Landing/St lights $ $ 3, Eagle Crossing Drive $ $ Page 5

126 South Village Community Development District GENERAL FUND BUDGET In addition, the District has the following accounts with Clay County Utility Authority for water, sewer and reuse service: Account# Service Address Monthly Annually Eagle Landing Pkwy $ $ 2, Eagle Landing Parkway $ $ 1, Eagle Landing Parkway $ $ 1, Eagle Landing Parkway $ $ 1, Eagle Landing Parkway $1, $ 22, Eagle Landing Parkway $ $ Eagle Landing Parkway $ $ Eagle Landing Parkway $ $ 4, Eagle Landing Parkway $ $ 2, Eagle Landing Parkway $ $ 2, Eagle Landing Parkway $ $ Club Lake Drive Reclaimed Irr $ $ Club Lake Drive Reclaimed Irr $ $ Misc - Direct Costs Contingency $ 11, Represents any expenses not included in the other categories. Security The District has contracted with the Clay County Sheriff's Office for security. $ 75, Page6

127 South Village COMMUNITY DEVELOPMENT DISTRICT CAPITAL RESERVE FY2017 REVENUES: ADOPTED FY2016 BUDGET PROPOSED FY2017 BUDGET Capital Reserve - Transfer In Carry Forward Surplus TOTAL REVENUES $53,345 $53,345 $53,345 $106,690 $106,690 $160,035 EXPENDITURES: Capital Outlay other Current Charges TOTAL EXPENDITURES $0 $0 $300 $300 $300 $300 ASSIGNED FUND BALANCE $106,390 $159,735 7

128 South Village Community Development District Recreational Fund Revenues Adopted Actual Projected Total Proposed Budget thru Next Projected at Budget Description FY2016 4/30/ Months 9/30/2016 FY2017 Maintenance Assessments - Tax Collector $687,144 $625, 179 $62,178 $687,357 $686,381 Swim & Tennis Revenue $211,750 $184,652 $8, 184 $192,836 $211,750 Total Revenues $898,894 $809,831 $70,361 $880,192 $898,131 Expenditures Swim & Tennis General & Administrative $56,790 $25,802 $36, 123 $61,925 $56,790 Accounting $40,000 $24,300 $16,667 $40,967 $40,000 Tennis $51,900 $41,448 $41,448 $82,896 $51,900 Pools $102,912 $46,825 $65,555 $112,380 $102,912 RC Snack Shop & Store $62,550 $19,602 $27,443 $47,045 $62,550 Kids Club $26,100 $10,654 $14,915 $25,568 $26,100 Lake House $1,700 $462 $646 $1, 108 $1,700 Management Fee $448,288 $218,331 $229,957 $448,288 $448,288 Property Insurance $34,162 $30,366 $0 $30,366 $31,884 TOTAL EXPENDITURES $824,402 $417,788 $432,753 $850,541 $822,124 EXCESS REVENUES/(EXPENDITURES) $74,492 $392,043 ($362,392) $29,651 $76,007 Platted Lots: FY2016 FY 2017 Assessments - Platted Lots Net-Assessment Rate $ $1, Total Net Assessments - Tax Collector $1,082,904 $1, 146,918 Gross Assessment (6% Discount) $1, 152,025 $1,220, 125 Gross Assessment - Per Unit $1, $1, Allocation of Assessment: General Fund $460,536 Recreational Fund $686,381!Total Net: $1,146,9181 Allocation of Assessments: Total GF Expenses (less Cap Res) $551,615 40%, General Fund $460,536 Total RF Expenses ~822,124 60% Recreational Fund $686,381 $1,373,738 Total Net: $1,146,918 8

129 South Village Community Development District RECREATIONAL FUND BUDGET REVENUES: Assessments The District will levy a maintenance assessment on all assessable property within the district. Swim & Tennis Revenues Represents funds collected from the operation of the Swim and Tennis facilities. EXPENSES: Management Fee The District will enter into a Management agreement with East/West Partners for the oversight and management of the District's recreational amenities. Swim and Tennis Represents estimated cost for maintaining and operating the Swim and Tennis facilities. Page 9

130 South Village Community Development District Debt Service Fund Series 2005A Adopted Actual Projected Budget thru Next Description FY2016 4/30/ Months Total Projected at 9/30/2016 Proposed Budget FY2017 Revenues Carry Forward Surplus $778,098 $881,329 $0 Special Assessment - Tax Collector $1,504,199 $1,362,093 $69,816 Special Assessment - Direct $309,460 $148,011 $161,449 Prepayments $0 $15,335 $0 Interest Income $0 $2,037 $0 TOTAL REVENUES $2,591,757 $2,408,805 $231,265 Expenditures $881,329 $1.431,909 $309,460 $15,335 $2,037 $2,640,070 $759,519 $1,504,199 $309,460 $0 $0 $2,573,179 (1 J Series 2005 Interest - 11/1 $603,773 $603,773 $0 Special Call - 11 /1 $65,000 $70,000 $0 Interest - 5/1 $603,773 $0 $601,778 Principal - 5/1 $585,000 $0 $585,000 Special Call - 5/1 $0 $0 $20,000 TOTAL EXPENDITURES $1,857,545 $673,773 $1,186,778 EXCESS REVENUES/(EXPENDITURES) $734,212 $1,735,032 ($955,513) $603,773 $70,000 $601,778 $585,000 $20,000 $1,880,551 $759,519 $584,535 $0 $615,000 $584,535 $0 $1,784,070 $789,109 (1) Subject to change with revised Amortization Schedule Interest $567,008 Product Type 60' Units ro 21a 80' ' ' 43 Cottages 30 TH & Condos o Commercial 0 Golf Course 0 Tola! Gross Assessment Less: Discounts and Co!!eclions Total Net Assessment Per Unit $1, $1, $1, $1, $1, $1, $1, $10, $66.01 $323,484 $738,967 $695,935 $63,806 $44,516 $0 $0 $0 $10,753 $1,877,461 $112,648 $1,764,814 On Roll Assessments: #Units Phase I-IV 1090 Less: Discounts, Collections & LOC Fees 70/o Gross Assessment $1,484 Total Gross: Total Net Total $1,617,418 $1,617,418 ($113,219) $1,504,

131 South Village Community Development District Revised Amortization Schedule Series 2005A, Capital Improvement Bonds DATE BALANCE RATE PRINCIPAL INTEREST TOTAL 5/1/2016 $ 5.70% $ $ 11/1/2016 $ 20,510, % $ $ 584, $ 584, /1/2017 $ 20,510, o/o $ 615,000 $ 584, /1/2017 $ 19,895, % $ $ 567, $ 1,766, /1/2018 $ 19,895, % $ 650,000 $ 567, /1/2018 $ 19,245, % $ $ 548, $ 1,765, /1/2019 $ 19,245, % $ 690,000 $ 548, /1/2019 $ 18,555, % $ $ 528, $ 1, 767, /1/2020 $ 18,555, o/o $ 730,000 $ 528, /1/2020 $ 17,825, o/o $ $ 508, $ 1,766, /1/2021 $ 17,825, % $ 775,000 $ 508, /1/2021 $ 17,050, /o $ $ 485, $ 1,768, /1/2022 $ 17,050, % $ 820,000 $ 485, /1/2022 $ 16,230, % $ $ 462, $ 1, 768, /1/2023 $ 16,230, % $ 865,000 $ 462, /1/2023 $ 15,365, % $ $ 437, $ 1,765, /1/2024 $ 15,365, o/o $ 920,000 $ 437, /1/2024 $ 14,445, % $ $ 411, $ 1,769, /1/2025 $ 14,445, ?0o/o $ 970,000 $ 411, /1/2025 $ 13,475, % $ $ 384, $ 1,765, /1/2026 $ 13,475, % $ 1,030,000 $ 384, /1/2026 $ 1'2,445, o/o $ $ 354, $ 1,768, /1/2027 $ 12,445, % $ 1,090,000 $ 354, /1/2027 $ 11,355, % $ $ 323, $ 1, 768, /1/2028 $ 11,355, % $ 1,155,000 $ 323, /1/2028 $ 10,200, o/o $ $ 290, $ 1,769, /1/2029 $ 10,200, % $ 1,220,000 $ 290, /1/2029 $ 8,980, % $ $ 255, $ 1,766, /1/2030 $ 8,980, % $ 1,290,000 $ 255, /1/2030 $ 7,690, % $ $ 219, $ 1, 765, /1/2031 $ 7,690, o/o $ 1,365,000 $ 219, /1/2031 $ 6,325, ?0o/o $ $ 180, $ 1,764, /1/2032 $ 6,325, % $ 1,450,000 $ 180, /1/2032 $ 4,875, % $ $ 138, $ 1,769, /1/2033 $ 4,875, % $ 1,535,000 $ 138, /1/2033 $ 3,340, % $ $ 95, $ 1,769, /1/2034 $ 3,340, o/o $ 1,620,000 $ 95, /1/2034 $ 1, 720, % $ $ 49, $ 1,764, /1/2035 $ 1,720, ?0o/o $ 1,720,000 $ 49, $ $ 1,769, Total $ 20,510, $ 13,652, $ 34, 162, **Revised as of 5/9/16 11

132 South Village COMMUNITY DEVELOPMENT DISTRICT Golf Course FY2017 REVENUES: PROPOSED FY2016 BUDGET ( 1 ) PROPOSED FY2017 BUDGET Guest Fees $403,268 $1,143,717 Acct. Cart Fees $13,097 $36,440 Tournament Revenue $29,288 $93,900 Dues Revenue $68,725 $200,919 Initiation Fees $1,000 $3,000 Food & Beverage Sales $130,944 $395,947 Liquor Sales $81,451 $225,534 Banquet Revenue $5,490 $46,691 Banquet Alcohol $269 $1,889 Tournament Food $10,772 $12,317 Merchandise Sales $46,570 $138,728 Driving Range Revenue $10,439 $37,824 Club Rentals $1,398 $3,862 Miscellaneous Income $3,312 $10,608 TOTAL REVENUES $806,024 $2,351,378 COST OF GOODS SOLD: Food $44, 162 $136,487 Liquor $27,785 $77,324 Merchandise $32,599 $97,110 TOTAL COGS $104,546 $310,921 TOTAL NET REVENUES $701,478 $2,040,457 EXPENDITURES: Personnel: $91,489 $264,300 Salaries $213,354 $610,766 Hourly $1,998 $6,089 Payroll Processing ($600) ($1,800) Labor Recovery $31,075 $95,028 Payroll Taxes $7,744 $22,863 Workers Compensation $15,113 $46,972 Benefits $10,000 $30,000 Other Personnel Cost TOTAL PERSONNEL $370, 173 $1,074,218 12

133 South Village COMMUNITY DEVELOPMENT DISTRICT Golf Course FY2017 PROPOSED FY2016 BUDGET ( 1 l PROPOSED FY2017 BUDGET Golf Course ExB_enditures: Advertising $17,308 $50,000 Bank Charges $1,989 $5,584 Beverage Cart Lease $1,845 $5,534 Cable/Dish TV $1,660 $4,980 Chemicals $14,550 $79,914 China, Glass and Silveiware $500 $1,500 Cleaning Supplies $2,662 $7,742 Course Accessories $2,000 $11,000 Credit Card Fees $13,807 $39,589 Electricity $17,298 $44, 127 Equipment Rental $551 $2,654 Fertilizer $27,803 $57, 120 Gas & Oil $12, 100 $29,400 Gas/Propane $6,134 $16,712 Golf Cart Lease $19,220 $57,659 Golf Cart Repairs $3,650 $10,700 Insurance - Property $14,311 $41,065 Janitorial & Pest Control $981 $2,978 Legal Fees $4,000 $12,000 Audit Fees $0 $5,000 License, Tax and Permit $2,655 $6, 155 Lien Rentals $2,815 $9,023 Member promotions $48,967 $139,025 Office Supplies $1,333 $4,000 Paper Supplies $9,037 $26,051 Personal Property Taxes $1,145 $8,597 Plant, Seed and Sod $0 $4, 100 Postage & Delivery $250 $700 Pump Electricity $7,381 $18,563 R&M - Building/Grounds $2,200 $7,600 R&M - Equipment $13,223 $34,669 R&M - Irrigation $3,700 $8,550 Range Supplies $2,000 $8,400 Reservation Systems $3,720 $11,160 Score Cards $1,200 $2,400 Security $152 $609 Software Support/Main!. $4,700 $13,050 Telephone $2,068 $6,204 Top Dressing/Bunker Sand $3,750 $13,850 Trash Removal $6,867 $20,600 Travel $1,968 $5,904 Uniforms $1,875 $4,050 13

134 South Village COMMUNITY DEVELOPMENT DISTRICT Golf Course FY2017 PROPOSED FY2016 BUDGET ( 1 ) PROPOSED FY2017 BUDGET Management Fee - GC $33,333 $100,000 Management Fee - CDD $8,333 $25,000 Real Estate Taxes $0 $38,043 Equipment Lease $21, 178 $63,533 Equipment Finance $665 $1,662 Water and Sewer $14,224 $26,258 Contingency $16,667 $50,000 TOTAL GOLF COURSE $377,773 $1, 143,014 TOTAL EXPENDITURES $747,946 $2,217,232 OPERATING INCOME/(LOSS) ($46,468) ($176,775) Non Operating Revenues/{Expenditures): Special Assessments $0 $300,000 Transfer In - Operating Capital/Deficit $200,000 $0 Capital Outlay/ Reserve $0 ($100,000) NON OPERATING REVENUES/(EXPENDITURES) $200,000 $200,000 NET INCOME $153,532 $23,225 Assessments - Net $ 300,000 Collection Cos!J?%) $ 19, 149 Assessments - Gross $ 319, 149 Assessable Units 1,352 Assessments Per Unit - Gross $ 236 ( 1 ) Represents July through Sept

135 EIGHTH ORDER OF BUSINESS

136 South Village Community Development District Auditor Selection Evaluation Criteria Ability of Personnel (e.g., geographic locations of the firm's headquarters or permanent office in relation to the project; capabilities and experience of key personnel; present ability to manage this project; evaluation of existing workload; proposed staffing levels, etc.) Proposer's Experience (e.g., past record and experience of the Proposer in similar projects; volume of work previously performed by the firm; past performance for other Community Development Districts in other contracts; character; integrity; reputation of respondent, etc.) Understanding of Scope of Work Extent to which the proposal demonstrates an understanding of the District's needs for the services requested. Ability to Furnish the Required Services Extent to which the proposal demonstrates the adequacy of proposer's financial resources and stability as a business entity necessary to complete the services required (e.g., the existence of any natural disaster plan for business operations). Price Points will be awarded based upon the price bid for the rendering of the services and reasonableness of the price to services. Proposer Point Total Berger, Toombs, Elam, Gaines & Frank Carr Riggs & Ingram (CRI) Grau & Associates McDirmit Davis & Company, LLC

137 NINTH ORDER OF BUSINESS

138 South Village Community Development District ANNUAL FINANCIAL REPORT September 30, 2015

139 South Village Community Development District ANNUAL FINANCIAL REPORT September 30, 2015 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 Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Recreation Fund 16 Notes to Financial Statements 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 MANAGEMENT LETTER INDEPENDENT ACCOUNTANT S REPORT / COMPLIANCE WITH SECTION , FLORIDA STATUTES 35

140 ~~~l Berger, Toombs, Elam,... OJ Gaines & Frank Cenified Public Accountants 600 Citrus Avenue Suite 200 Fort Pierce, Florida Pl 772/ // FAX: 772/ Report of Independent Auditors To the Board of Supervisors South Village Community Development District Clay County, Florida Report on the Financial Statements We have audited the accompanying basic financial statements of South Village Community Development District as of and for the year ended September 30, 2015, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Member AICPA Fort Pierce I Stuart Member AICPA Division For CPA Firms Private Companies Practice Section Member FICPA

141 «ftl Berger, Toombs, Elam, (t)i Gaines & Frank To the Board of Supervisors South Village Community Development District Opinion In our opinion, the basic financial statements referred to above present fairty, in all material respects, the financial position of the governmental activities, General Fund, Special Revenue Fund, Debt Service Fund and the Capital Projects Fund of South Village Community Development District as of September 30, 2015, 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 Management's Discussion and Analysis 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 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, economical 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 principally 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 the 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 May 25, 2016 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 South Village Community Development District's internal control over financial reporting and co"t;:1..j~ a. ~PI:j~.. J.1a~ Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL Fort Pierce, Florida May 25,

142 South Village Community Development District MANAGEMENT S DISCUSSION AND ANALYSIS For the Year Ended September 30, 2015 Management s discussion and analysis of South Village Community Development District (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 assets 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 and debt service. Fund financial statements present financial information for governmental funds. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources

143 South Village Community Development District MANAGEMENT S DISCUSSION AND ANALYSIS For the Year Ended September 30, 2015 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances budget and actual is provided for the District s General Fund. Fund financial statements provide more detailed information about the District s activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements. The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District s financial standing. These statements are comparable to private-sector companies and give a good understanding of the District s overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of the District, including land and improvements 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, reconciliation is provided from the fund financial statements to the government-wide financial statements. Notes to financial statements provide additional detail concerning the financial activities and financial balances of the District. Additional information about the accounting practices of the District, investments of the District, capital assets and long-term debt are some of the items included in the notes to financial statements. Financial Highlights The following are the highlights of financial activity for the year ended September 30, 2015: The District s total liabilities exceeded total assets by ($(10,759,958)), net position. Unrestricted net position for Governmental Activities is ($(7,327,078)). Net investment in capital assets is ($3,744,298). Restricted net position is $311,418. Governmental activities revenues totaled $3,412,614, while governmental activities expenses totaled $3,126,

144 South Village Community Development District MANAGEMENT S DISCUSSION AND ANALYSIS For the Year Ended September 30, 2015 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 Current assets $ 412,895 $ 406,995 Restricted assets 882, ,183 Capital assets 9,811,008 10,256,142 Total Assets 11,106,665 11,601,320 Current liabilities 1,286,623 1,257,631 Non-current liabilities 20,580,000 21,390,000 Total Liabilities 21,866,623 22,647,631 Net Position Net investment in capital assets (3,744,298) (3,289,164) Restricted for debt service 256, ,025 Restricted for capital projects 54,645 - Unrestricted (7,327,078) (8,069,172) Total Net Position $ (10,759,958) $ (11,046,311) The decrease in restricted assets is related to the prepayment made on the bonds during the fiscal year. The decrease in capital assets is the result of current year depreciation. The decrease in non-current liabilities is primarily due to bond principal payments

145 South Village Community Development District MANAGEMENT S DISCUSSION AND ANALYSIS For the Year Ended September 30, 2015 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Financial Analysis of the District (Continued) The following schedule provides a summary of the changes in net postion of the District and is presented by category for comparison purposes. Governmental Activities Program Revenues Charges for services $ 3,347,640 $ 3,341,841 Operating grants and contributions 64,754 98,320 General Revenues Miscellaneous revenues - 1,752 Investment earnings Total Revenues 3,412,614 3,442,091 Expenses General government 197, ,159 Physical environment 524, ,180 Culture/Recreation 1,156,664 1,036,931 Interest on long-term debt 1,247,560 1,259,177 Total Expenses 3,126,261 3,038,447 Change in Net Position 286, ,644 Net Position - Beginning of Year (11,046,311) (11,449,955) Net Position - End of Year $ (10,759,958) $ (11,046,311) The increase in physical environment is related to increased water usage and other direct costs. The decrease in general government and increase in culture/recreation is the result of the reclassification of certain expenses

146 South Village Community Development District MANAGEMENT S DISCUSSION AND ANALYSIS For the Year Ended September 30, 2015 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Capital Assets Activity The following schedule provides a summary of the District s capital assets as of September 30, Governmental Activities Description: Infrastructure $ 3,255,773 $ 3,255,773 Recreation facilities 10,250,182 10,240,182 Equipment 49,351 49,351 Accumulated depreciation (3,744,298) (3,289,164) Total Capital Assets, Net $ 9,811,008 $ 10,256,142 During the year depreciation was $455,134 and additions to recreation facilities was $10,000. General Fund Budgetary Highlights During the year, the actual expenditures exceeded budgeted amounts because collection costs related to assessments commissions were not anticipated. The budget was amended for increased legal fees, utilities and direct costs. Debt Management Governmental Activities debt includes the following: In January 2005, the District issued $26,635,000 Series 2005A Capital Improvement Revenue Bonds, due on May 1, 2035 with a fixed interest rate of 5.7%. The bonds were issued to finance the acquisition ad 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 bond is payable annually on each May 1 commencing in The Bonds are subject to redemption at the option of the district prior to maturity. The Bonds are subject extraordinary mandatory redemption prior to 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 to the use of proceeds and the procedures to be followed by the district on the assessments to property owners. The balance outstanding at September 30, 2015 was $21,185,

147 South Village Community Development District MANAGEMENT S DISCUSSION AND ANALYSIS For the Year Ended September 30, 2015 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Economic Factors and Next Year s Budget The District expects to issue refunding and capital improvement bonds to purchase the privately held golf course located within the District boundaries, update recreational facilities and construct additional recreational facilities and neighborhood infrastructure. The effects on the financial position or results of operations of the District as of and for the year ended September 30, 2016 cannot be determined. Request for Information The financial report is designed to provide a general overview of South Village 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 South Village Community Development District, GMS-SF, LLC, 5385 N Nob Hill Road, Sunrise, Florida,

148 South Village Community Development District STATEMENT OF NET POSITION September 30, 2015 Governmental Activities ASSETS Current Assets: Cash and equivalents $ 332,134 Accounts receivable, net 9,647 Due from other government 1,167 Due from developer 25,902 Inventory 3,091 Prepaid expenses 40,954 Total Current Assets 412,895 Non-Current Assets: Restricted assets: Investments - debt service 881,329 Investments - capital projects 1,433 Capital assets being depreciated: Infrastructure 3,255,773 Recreation facilites 10,250,182 Equipment 49,351 Less: Accumulated depreciation (3,744,298) Total Non-Current Assets 10,693,770 Total Assets 11,106,665 LIABILITIES Current Liabilities: Accounts payable and accrued expenses 57,067 Due to developer 118,087 Accrued interest 506,469 Bonds payable 605,000 Total Current Liabilities 1,286,623 Non-Current Liabilities: Bonds payable 20,580,000 Total Liabilities 21,866,623 NET POSITION Net investment in capital assets (3,744,298) Restricted for: Debt service 256,773 Capital projects 54,645 Unrestricted (7,327,078) Total Net Position $ (10,759,958) See accompanying notes to financial statements

149 South Village Community Development District STATEMENT OF ACTIVITIES FOR THE YEAR ENDED September 30, 2015 Net (Expense) Revenues and Changes in Program Revenues Net Position Operating Charges for Grants and Governmental Functions/Programs Expenses Services Contributions Activities Governmental Activities General government $ (197,236) $ 134,191 $ 64,754 $ 1,709 Physical environment (524,801) 357,053 - (167,748) Recreation (1,156,664) 858,598 - (298,066) Interest on long-term debt (1,247,560) 1,997, ,238 Total Governmental Activities $ (3,126,261) $ 3,347,640 $ 64, ,133 General revenues: Investment earnings Change in Net Position 286,353 Net Position - October 1, 2014 (11,046,311) Net Position - September 30, 2015 $ (10,759,958) See accompanying notes to financial statements

150 2005 Total General Recreation Debt Capital Governmental ASSETS Fund Fund Service Projects Funds Cash $ 262,016 $ 16,906 $ - $ 53,212 $ 332,134 Due from other governments 1, ,167 Accounts receivable, net - 9, ,647 Due from other funds 23, ,087 Due from developer 25, ,902 Inventory - 3, ,091 Prepaid expenses 10,538 30, ,954 Restricted assets: Investments, at fair value ,329 1, ,762 Total Assets $ 322,710 $ 60,060 $ 881,329 $ 54,645 $ 1,318,744 LIABILITIES AND FUND BALANCES South Village Community Development District BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2015 LIABILITIES Accounts payable and accrued expenses $ 39,154 $ 17,913 $ - $ - $ 57,067 Due to developer , ,087 Due to other funds - 23, ,087 Total Liabilities 39,154 41, , ,241 FUND BALANCES Nonspendable - prepaid expenses and inventory 10,538 19, ,598 Restricted for debt service 763, ,242 Committed capital projects ,645 54,645 Unassigned 273, ,018 Total Fund Balance 283,556 19, ,242 54,645 1,120,503 Total Liabilities and Fund Balances $ 322,710 $ 60,060 $ 881,329 $ 54,645 $ 1,318,744 See accompanying notes to financial statements

151 South Village Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES September 30, 2015 Total Governmental Fund Balances $ 1,120,503 Amounts reported for governmental activities in the statement of net position are different because: Capital assets being depreciated, infrastructure ($3,255,773), recreation facilities ($10,250,182), and equipment ($49,351), net of accumulated depreciation (($3,744,298)) used in governmental activities are not financial resources and, therefore, are not reported in the funds. 9,811,008 Bonds payable are not due and payable in the current period and therefore, are not reported in the funds. (21,185,000) Accrued interest expense for long-term debt is not a financial use and; therefore, is not reported in the funds. (506,469) Net Position of Governmental Activities $ (10,759,958) See accompanying notes to financial statements

152 South Village Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended September 30, Totals Debt Capital Governmental General Recreation Service Projects Funds Revenues: Special assessments $ 452,633 $ 652,030 $ 1,544,482 $ - $ 2,649,145 Direct assessments 38, , ,927 Developer contributions 64, ,754 Swim and tennis revenues - 206, ,568 Investment earnings Total Revenues 555, ,598 1,998,018-3,412,614 Expenditures: Current General government 141,846 24,547 30, ,236 Physical environment 411, ,340 Cultural/Recreation - 814, ,991 Capital Outlay 10, ,000 Debt service Principal , ,000 Interest - - 1,262,641-1,262,641 Total Expenditures 563, ,538 2,068, ,471,208 Other Financing Sources/(Uses) Transfers in (53,345) (53,345) Transfers out 53, ,345 Total Other Financing Sources/(Uses) 53, (53,345) - Net Change in Fund Balances (60,533) 19,060 (70,333) 53,212 (58,594) Fund Balances - October 1, , ,575 1,433 1,179,097 Fund Balances - September 30, 2015 $ 283,556 $ 19,060 $ 763,242 $ 54,645 $ 1,120,503 See accompanying notes to financial statements

153 South Village 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, 2015 Net Change in Fund Balances - Total Governmental Funds $ (58,594) Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation. This is the amount that depreciation ($(455,134)) exceeded capital outlay ($10,000) in the current period. (445,134) Principal payments are reported as expenditures in the governmental funds, but are reported as reductions of liabilities in the Statement of Net Position. 775,000 In the Statement of Activities, interest is accrued on outstanding bonds; whereas in governmental funds, interest expenditures are reported when due. This is the change in accrued interest during the current period. 15,081 Change in Net Position of Governmental Activities $ 286,353 See accompanying notes to financial statements

154 South Village Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended September 30, 2015 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Revenues Special assessments $ 439,346 $ 452,633 $ 452,633 $ - Direct assessments 38,611 38,611 38,611 - Developer contributions 64,754 64,754 64,754 - Total Revenues 542, , ,998 - Expenditures Current General government 96, , ,846 1,322 Physical environment 393, , , Capital Outlay - 10,000 10,000 - Total Expenditures 489, , ,186 1,572 Transfers out 53,345 53,345 53,345 - Total Other Financing Sources (Uses) 53,345 53,345 53,345 - Net Change in Fund Balances - (62,105) (60,533) 1,572 Fund Balances - October 1, , , ,089 Fund Balances - September 30, 2015 $ - $ 4,895 $ 283,556 $ 278,661 See accompanying notes to financial statements

155 South Village Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - RECREATION FUND For the Year Ended September 30, 2015 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Revenues Special assessments $ 632,889 $ 651,854 $ 652,030 $ 176 Swim and tennis revenues 178, , ,568 (3,632) Total Revenues 811, , ,598 (3,456) Expenditures Current General government - 12,965 24,547 (11,582) Cultural/Recreation 802, , ,991 13,274 Total Expenditures 802, , ,538 1,692 Net Change in Fund Balances 8,824 20,824 19,060 (1,764) FUND BALANCES - October 1, FUND BALANCES - September 30, 2015 $ 8,824 $ 20,824 $ 19,060 $ (1,764) See accompanying notes to financial statements

156 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 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. 1. Reporting Entity The District was created on April 28, 2003, pursuant the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the Act ) by Ordinances Number as amended by ordinance number of the Clay County Board of County Commissioners, as a Community Development District. 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 South Village Community Development District. The District is governed by a five-member Board of Supervisors who are elected by qualified electors of the District for four year terms. The District operates within the criteria established by Chapter 190. As required by GAAP, these financial statements present the South Village 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. 2. 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

157 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Measurement Focus and Basis of Accounting (Continued) a. Government-wide Financial Statements Government-wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include all the governmental activities of the primary government. The effect of interfund activity has been removed from these statements. Governmental activities are supported by developer contributions and interest. Program revenues include charges for services and grants and contributions made by parties outside of the reporting government s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program. Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure. b. 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

158 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Measurement Focus and Basis of Accounting (Continued) b. Fund Financial Statements (Continued) Governmental Funds Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered to be available when they are collected within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period. Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of available spendable resources. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net position. 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 other financing source rather than as a fund liability. Debt service expenditures are recorded only when payment is due

159 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Measurement Focus and Basis of Accounting (Continued) b. Fund Financial Statements (Continued) Governmental Funds (Continued) The District classifies fund balance according to 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. Unassigned fund balance is considered to be utilized first when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. Fund Balance Spending Hierarchy - For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances

160 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3. Basis of Presentation a. Governmental Major Funds General Fund - The General Fund is the District s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Recreation Fund The Recreation Fund is a special revenue fund established to account for the financial resources of the District s recreation areas. 2005A Debt Service Fund - Accounts for debt service requirements to retire the capital improvement revenue bonds which were used to finance the acquisition and construction of certain improvements for the benefit of the District. The bond series is secured by a pledge of all available special assessment revenues in any fiscal year related to the improvements and a first lien on the special assessment revenues from the District lien on all acreage of benefited land. Capital Projects Fund The Capital Projects Fund accounts for the proceeds from Long-Term debt issued in 2005 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. b. 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. 4. Assets, Liabilities, and Net Position or Equity a. 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

161 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Assets, Liabilities, and Net Position or Equity (Continued) a. Cash and Investments (Continued) The District is authorized to invest in those financial instruments as established by Section , Florida Statutes. The authorized investments consist of: 1. Direct obligations of the United States Treasury; 2. The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969; 3. Interest-bearing time deposits or savings accounts in authorized qualified public depositories; 4. Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency. For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less and held in a qualified public depository as defined by Chapter , Florida Statutes. b. Restricted Assets Certain assets of the District and a corresponding liability or portion of net position is 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. c. Capital Assets Capital assets, which include infrastructure, recreation facilities, and equipment, are reported in governmental activities. The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of two years. The valuation basis for all assets is historical cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Depreciation of capital assets is computed and recorded by utilizing the straight-line method. Estimated useful lives of the various classes of depreciable capital assets are as follows: Infrastructure and recreation facilities 30 years Equipment 10 years

162 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Assets, Liabilities, and Net Assets or Equity (Continued) d. Budgets Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to Chapter 190 and Section , 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. As a result, deficits in the budget columns of the accompanying financial statements may occur. All budgeted appropriations lapse at year end. NOTE B RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS 1. 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 ($1,120,503) differs from net position of governmental activities ($(10,759,958)) 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 as follows: Capital related items When capital assets (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. Infrastructure $ 3,255,773 Recreation facilities 10,250,182 Equipment 49,351 Accumulated depreciation (3,744,298) Total $ 9,811,008 Long-term debt transactions Long-term liabilities applicable to the District s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position. Balances at September 30, 2015 were: Bonds payable $ (21,185,000)

163 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE B RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) 1. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position (Continued) Accrued interest Accrued liabilities in the Statement of Net Position differ from the amount reported in governmental funds due to the accrued interest on bonds. Accrued interest $ (506,469) 2. Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities The net change in fund balances for government funds ($(58,594)) differs from the change in net position for governmental activities ($286,353) 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 Outlays When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation. As a result, fund balances decrease by the amount of financial resources expended, whereas net position decreased by the amount of depreciation charged for the period. Depreciation $ (455,134) Capital outlay 10,000 Net Change $ (445,134) Long-term debt transactions Repayments of bond principal are reported as an expenditure in the governmental funds and, thus, have the effect of reducing fund balance because current financial resources have been used. Bond principal payments $ 775,000 Some expenses reported in the Statement of Activities do not require the use of current financial resources, therefore, are not reported as expenditures in governmental funds. Change in accrued interest $ 15,

164 NOTE C CASH AND INVESTMENTS South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash and investments. Custodial Credit Risk - Deposits Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not have a formal deposit policy for custodial credit risk, however, they follow the provisions of Chapter 280, Florida Statutes regarding deposits and investments. As of September 30, 2015, the District's bank balance was $339,367 carrying value was $332,134. Exposure to custodial credit risk was as follows. The District maintains all deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes. As of September 30, 2015, the District had the following investments and maturities: Investment Maturities Fair Value First American Government Obligation Fund Z N/A $ 882,762 Investments The District s investment policy allows management to invest funds in investments permitted under Section , Florida Statutes. 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 Government Obligation Mutual Funds 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, 2015, the District's investment in the First American Government Obligation Fund Class Z was rated AAAm by Standard & Poor's. Concentration of Credit Risk The types of deposits and investments and their level of risk exposure as of September 30, 2015 were typical of these items during the fiscal year then ended. The District considers any decline in fair value to be temporary

165 NOTE D CAPITAL ASSETS South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 Capital Asset activity for the year ended September 30, 2015 was as follows: Governmental Activities: October 1, September 30, 2014 Additions Deletions 2015 Capital assets, being depreciated: Infrastructure $ 3,255,773 $ - $ - $ 3,255,773 Recreation facilites 10,240,182 10,000-10,250,182 Equipment 49, ,351 Total Capital Assets, Being Depreciated 13,545,306 10,000-13,555,306 Less accumulated depreciation for: Infrastructure (779,810) (108,526) - (888,336) Recreation facilites (2,478,497) (341,673) - (2,820,170) Equipment (30,857) (4,935) - (35,792) Total Accumulated Depreciation (3,289,164) (455,134) - (3,744,298) Total Capital Assets Being Depreciated, Net 10,256,142 (445,134) - 9,811,008 Governmental Activities Capital Assets $ 10,256,142 $ (445,134) $ - $ 9,811,008 The infrastructure intended to serve the District has been estimated at a total cost of approximately $49 million. The infrastructure includes roadways, stormwater management system, water and sewer facilities, recreational facilities, and other related infrastructure. A portion of the project costs was financed with the proceeds from the Series 2005A Bonds while the remainder will be funded by additional bonds and the Developer. In a prior fiscal year, certain improvements were conveyed to other entities for ownership and maintenance responsibilities. Depreciation charged to physical environment was $113,461 and $341,673 was charged to culture/recreation

166 NOTE E LONG-TERM DEBT South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 The following is a summary of debt activity for the District for the year ended September 30, Long-term debt at October 1, 2014 $ 21,960,000 Principal payments (775,000) Long-term debt at September 30, 2015 $ 21,185,000 Capital Improvement Revenue Bonds $26,635,000 Series 2005A Bonds, interest at 5.700%, maturing through May 1, 2035, payable on May 1 and November 1; collateralized by the pledged revenues of special assessments levied against the benefited property owners $ 21,185,000 The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2015 are as follows: Year Ending September 30, Principal Interest Total 2016 $ 605,000 $ 1,207,545 $ 1,812, ,000 1,173,060 1,813, ,000 1,136,580 1,811, ,000 1,098,105 1,813, ,265,000 4,827,615 9,092, ,665,000 3,461,895 9,126, ,535,000 1,646,730 9,181, ,085,000 61,845 1,146,845 Totals $ 21,185,000 $ 14,613,375 $ 35,798,375 Summary of Significant Bonds Resolution Terms and Covenants The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds 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 is in compliance with those requirements of the Bond Indenture as of September 30, In lieu of a bond reserve the Developer has provided a letter of credit as collateral for the Bonds. The District collects a fee each year for the letter of credit. The balance due to the Developer is $118,087 at September 30,

167 South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 NOTE F SPECIAL ASSESSMENT REVENUES Assessments are non-ad valorem assessments on benefitted property within the District. Operating and Maintenance Assessments are based upon adopted budget and levied annually at a public hearing of the District. 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 , 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 due and payable on November 1 or as soon as the assessment roll is certified and delivered to the Tax Collector. Per Section , Florida Statutes, discounts are allowed for early payment at the rate of 4% in November, 3% in December, 2% in January, and 1% in February. Taxes paid in March are without discount. 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 G INTERLOCAL AGREEMENTS In January 2004, the District entered into a cost sharing agreement with Middle Village Community Development District ( Middle Village ) for the maintenance of certain landscape improvements for which both Districts benefit. In accordance with the interlocal agreement, Middle Village will perform the required maintenance and the District will provide 31% of the costs incurred to perform the maintenance. For the fiscal year ended September 30, 2015, the costs related to the maintenance incurred by Middle Village was approximately $115,706, of which $35,866 was reimbursed to Middle Village by the District in connection with the agreement. NOTE H DEVELOPER AGREEMENTS The Developer owns a portion of the land within the District; therefore, assessment revenues in the general, recreation, and debt service funds include assessments levied on the Developer owned property. Pursuant to the funding agreement dated September 4, 2012, the Developer has agreed to fund any deficit of the District s general government, physical environment, and recreation expenditures in excess of the special assessments collected up to the total amount expended by the District for the fiscal year, without any reimbursement to the Developer. In connection with this agreement, Developer contributions to the general fund was $64,

168 NOTE I MANAGEMENT AGREEMENTS South Village Community Development District NOTES TO FINANCIAL STATEMENTS September 30, 2015 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. The District has also contracted with two additional management companies, both who are affiliated with the Developer, to perform property management services, including managing, operating, maintaining, and supervising the recreation facilities of the District. Under these agreements, the District compensates the management companies for management, accounting, financial reporting, computer and other administrative costs. NOTE J ECONOMIC DEPENDENCY A significant portion of the District s activity is dependent upon the continued involvement of the Developer, the loss of which could have a material adverse effect on the District s operations. NOTE K RISK MANAGEMENT The government 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. NOTE L SUBSEQUENT EVENT In June 2016, the District expects to issue refunding and capital improvement bonds to purchase the privately held golf course located within the District boundaries, update existing recreational facilities and construct additional recreational facilities and neighborhood infrastructure

169 ~~ ( Berger, Toombs, Elam, to,, Gaines & Frank C"rtified Public Accouniants 600 Citrus Avenue Suite 200 Fort Pierce, Florida 349SO 772/ II SS FAX: 772/ Pl INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MA TIERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS South Village Community Development District Clay County, Florida We have audited, in accordance with auditing standards generally accepted in the United States of America the financial statements of South Village Community Development District (the udistrict") as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise South Village Community Development District's basic financial statements, and have issued our report thereon dated May 25, Internal Control over Financial Reporting In planning and performing our audit, we considered the District's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control over financial reporting. 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 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 over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Fort Pie!c~6S!uart Member AICPA Member AICPA Division For CPA firms Private Companies Practice Section Member FICPA