TRADITION COMMUNITY DEVELOPMENT DISTRICT 1
FINANCIAL STATEMENTS
September 30, 2019

CONTENTS
PAGE
Independent Auditor’s Report	1-2
Management’s Discussion and Analysis	3-6
Government-wide Financial Statements:
Statement of Net Position	7
Statement of Activities	8
Fund Financial Statements:
Balance Sheet – Governmental Funds	9
Reconciliation of Total Governmental Fund Balances
To Net Position of Governmental Activities	10
Statement of Revenues, Expenditures and Changes in
Fund Balance – Governmental Funds	11
Reconciliation of the Statement of Revenues, Expenditures And Changes in Fund Balances of Governmental Funds
To the Statement of Activities	12
Statement of Net Position – Proprietary Fund	13
Statement of Revenues, Expenditures and Changes in
Fund Balance – Proprietary Fund	14
Statement of Cash Flows – Proprietary Fund	15
Notes to the Financial Statements	16-26
Required Supplemental Information:
Statement of Revenues and Expenditures – Budget and Actual – General Fund	27
Notes to Required Supplementary Information	28
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	29-30
Independent Auditor’s Report on Compliance with the Requirements of Section 218.415, Florida Statutes, Required by Rule 10.556 (10) of the Auditor General
of the State of Florida	31
Auditor’s Management Letter Required by Chapter 10.550, Florida Statutes	32-33

DMHB

DIBARTOLOMEO, MCBEE, HARTLEY & BARNES, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR’S REPORT

Board of Directors
Tradition Community Development District 1 Port St. Lucie, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, business-type activities, and each major fund of Tradition Community Development District 1 (the “District”) as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 opinions.

2222 Colonial Road, Suite 200 Fort Pierce, Florida 34950772-461-8833  Fax: 772-461-8872 591 S.E. Port St. Lucie Blvd., Port St. Lucie, Florida 34984772-878-1952Fax: 772-878-1709
Member AICPA	Member AICPA Division for CPA Firms	Member FICPA Private Company Practice Section
WWW.DMHBCPA.NET

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, and each major fund of the District as of September 30, 2019, and the respective changes in financial position, and, when applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 3 through 6 and page 27 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, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2020, on our consideration of Tradition Community Development District 1’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Tradition Community Development District 1’s internal control over financial reporting and compliance.

Report on Other Legal and Regulatory Requirements

We have also issued our report dated May 25, 2020 on our consideration of the District’s compliance with requirements of Section 218.415, Florida Statutes, as required by Rule 10.556(10) of the Auditor General of the State of Florida. The purpose of that report is to provide an opinion based on our examination conducted in accordance with attestation Standards established by the American Institute of Certified Public Accountants.

DiBartolomeo, McBee, Hartley & Barnes, P.A. Fort Pierce, Florida
May 25, 2020

TRADITION COMMUNITY DEVELOPMENT DISTRICT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS
The Tradition Community Development District 1 (the “District”) discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the District’s financial activity and financial statements, (c) identify changes in the District’s financial position, (d) identify any material deviations from the District’s budget, and (e) identify individual fund issues or concerns.
Since the Management’s Discussion and Analysis (MD&A) is designed to focus on the current year’s activities, resulting changes and currently known facts, please read it in conjunction with the Auditor’s Report (beginning on page 1) and the District’s financial statements (beginning on page 8.)
FINANCIAL HIGHLIGHTS
Revenues exceeded expenses by $387,151 in the governmental funds, general fund increased
$138,986.
Net position increased $734,896, included in the increase is the recording of depreciation in the amount of $1,570,471.
Total costs of all programs were $4,587,028 in 2019 compared to $4,434,662 in 2018.
The District expended $3,819,881 towards debt service for governmental activities.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and Statement of Activities (pages 7 & 8) provide information about the activities of the District as a whole and present a longer-term view of the District’s finances. Fund Financial Statements begin on page 9. For governmental activities, these Statements tell how these services were financed in the short term as well as what remains for future spending. Fund Financial Statements also report the District’s operations in more detail by providing information about the District’s most significant funds.
REPORTING THE DISTRICT AS A WHOLE
Our analysis of the District as a whole begins on page 7. One of the most important questions asked about the District’s finances is, “Is the District as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the District as a whole and about its activities in a way that helps answer this question. These Statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used in most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.
These two Statements report the District’s net position and changes in them. You can think of the District’s net position – the difference between assets and liabilities – as one way to measure the District’s financial health, or financial position. Over time, increases or decreases in the District’s net assets, is one indicator of whether its financial health is improving or deteriorating.

Tradition Community Development District 1 Statement of Net Position
GOVERNMENTAL ACTIVITIES	BUSINESS-TYPE ACTIVITIES	TOTAL
	 	2019		 	2018			 	2019		 	2018			 	2019		 	2018		
Current assets	$ 7,887,448	$ 7,452,682		$ 1,241,624	$ 1,306,628		$ 9,129,072	$ 8,759,310	
Non-current assets	1,298,519	1,355,785		-	-		1,298,519	1,355,785	
Capital assets	    36,140,502 	 	37,571,674 		 	4,763,679 	 	4,910,193 		    40,904,181 	    42,481,867 	
Total Assets	    45,326,469 	 	46,380,141 		 	6,005,303 	 	6,216,821 		    51,331,772 	    52,596,962 	
Deferred outflows of resources	150,835	167,073		-	-		150,835	167,073	
Current liabilities	4,182,846	4,093,466		352,775	325,017		4,535,621	4,418,483	
Long-term liabilities	    42,041,876 	 	44,070,338 		 	5,885,000 	 	5,990,000 		    47,926,876 	    50,060,338 	
Total Liabilities	    46,224,722 	 	48,163,804 		 	6,237,775 	 	6,315,017 		    52,462,497 	    54,478,821 	
Net assets									
Net investment in capital assets Restricted for debt service/	(7,719,498)	(7,468,755)	(1,226,321)	(1,184,807)	(8,945,819)	(8,653,562)	
Capital projects	5,372,877	4,367,049	502,440	497,639	5,875,317	4,864,688	
Unrestricted	 	1,599,203 	 	1,485,116 	 	491,409 	 	588,972 	 	2,090,612 	 	2,074,088 	
Total Net Assets	  $ (747,418)	$ (1,616,590)	$ (232,472)	$	(98,196)	$ (979,890)	$ (1,714,786)	

The District assets are made up of primarily capital assets of $40,904,181 and liabilities are mainly long-term debt in the amount of $48,031,876.
Governmental Activities
As noted earlier, net position may serve over time as a useful indicator of an entity’s financial position. In the Statement of Net Position and the Statement of Activities, the District has one activity. The changes in net position of governmental activities and business-type activities were
$734,896, as reflected below.

Tradition Community Development District 1 Changes in Net Position
GOVERNMENTAL ACTIVITIES	BUSINESS-TYPE ACTIVITIES	TOTAL
 	2019		 	2018			 	2019		 	2018			 	2019		 	2018		
Program Revenues							
Charges for services	$ 4,210,994	$ 4,118,696	$ 1,059,390	$ 1,384,463	$ 5,270,384	$ 5,503,159	
General Revenues							
Investment earnings	39,231	12,112	12,309	5,267	51,540	17,379	
Total Revenues	 	4,250,225 	 	4,130,808 	 	1,071,699 	 	1,389,730 	 	5,321,924 	 	5,520,538 	
Expenses									
General government	108,235	100,421	942,050	669,888	1,050,285	770,309	
Physical environment	1,431,172	1,486,092	-	-	1,431,172	1,486,092	
Interest on long-term debt	 	1,841,646 	 	1,910,135 	 	263,925 	 	268,126 	 	2,105,571 	 	2,178,261 	
Total Expenses	 	3,381,053 	 	3,496,648 	 	1,205,975 	 	938,014 	 	4,587,028 	 	4,434,662 	
Change in Net Assets	869,172	634,160	(134,276)	451,716	734,896	1,085,876	
Net assets - beginning of year	     (1,616,590)	 	(2,250,750)	 	(98,196)	 	(549,912)	     (1,714,786)	     (2,800,662)	
Net assets - end of year	  $ (747,418)	$ (1,616,590)	$ (232,472)	$	(98,196)	$ (979,890)	$ (1,714,786)	

FUND FINANCIAL STATEMENTS

Governmental funds – all of the District’s services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the District’s general government operations and the basic services it provides. Governmental fund information helps one determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs.

Governmental Type Funds

As of year-end, the governmental funds (as presented on page 9) reported a combined fund balance of $6,464,734 compared to the beginning of the year $6,077,578. Several of the governmental fund expenditures are capital expenditure related and, therefore, may reflect capital expenditures (which are reflected in the current financial resource-based Fund Financial Statements) as a spending of a portion of available net assets or an increase in net assets from unspent net position. The General Fund experienced a net increase of $138,986.

Proprietary Fund

The District maintains one type of proprietary fund, an enterprise fund. An enterprise fund is used to report the same function presented as business-type activities in the government-wide financial statements. The District uses an enterprise fund to account for the operations of the irrigation system within the District.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

During the fiscal year 2018-2019 the District continues to maintain infrastructure projects to support the Tradition master planned community. As of September 30, 2019, the District had $36,140,502 invested in land and infrastructure. The District’s business-type activities reported net capital assets of $4,763,679.

Debt

At September 30, 2019, the District had $44,051,876 Bonds outstanding for its governmental activities and $5,990,000 Bonds outstanding for its business-type activities. The District’s debt represents bonds secured by a special revenue source. Additional information on the District’s long- term debt can be found in the notes to financial statements.

ECONOMIC FACTORS, NEXT YEAR'S BUDGET AND OTHER INFORMATION

For the fiscal year 2020, the District anticipates that the cost of general operations will remain fairly constant. In connection with the District's future infrastructure maintenance and replacement plan, the District Board has included in the budget, an estimate of those anticipated future costs and has assigned a portion of current available resources for that purpose. For the irrigation system, it is anticipated that any future growth would come from commercial and residential development.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens and members with a general overview of the District’s finances and to show the District’s accountability for the money it receives. If you have questions about this report or need additional information, contact the District Finance Department  at 2501A Burns Road, Palm Beach Gardens, Florida 33410.

TRADITION COMMUNITY DEVELOPMENT DISTRICT 1
STATEMENT OF NET POSITION
September 30, 2019

GOVERNMENTAL ACTIVITIES

BUSINESS-TYPE
ACTIVITIES	TOTAL

ASSETS		
Cash	$	3,256,000		$	535,431		$	3,791,431	
Accounts receivable, net	4,700		71,695		76,395	
Assessments receivable	23,837		-		23,837	
Due from other funds	3,137		-		3,137	
Deposits	200		95		295	
Restricted						
Investments	4,844,788		634,403		5,479,191	
Prepaid bond insurance (net of amortization)	1,298,519		-		1,298,519	
Capital assets						
Depreciable	19,842,158		4,171,880		24,014,038	
Non-depreciable	 	16,298,344 		591,799		16,890,143	
TOTAL ASSETS	 	45,326,469 		6,005,303		51,331,772	
DEFERRED OUTFLOW OF RESOURCES						
Deferred charge on refunding (net of amortization)	 	150,835 		-		150,835	
TOTAL DEFERRED OUTFLOW OF RESOURCES	 	150,835 		-		150,835	

LIABILITIES
Accounts payable and accrued expenses	

$	309,436		

$	102,290		

$	411,726	
Accrued interest payable	750,132		131,963		882,095	
Due to other governments	532,161		2,132		534,293	
Deferred revenue	-		10,000		10,000	
Deposits	581,117		1,390		582,507	
Non-current liabilities						
Due with one year	2,010,000		105,000		2,115,000	
Due in more than one year	 	42,041,876 		5,885,000		47,926,876	
TOTAL LIABILITIES	 	46,224,722 		6,237,775		52,462,497	

NET POSITION
Net investment in capital assets	

(7,719,498)		

(1,226,321)		

(8,945,819)	
Restricted for debt service/capital projects	5,372,877		502,440		5,875,317	
Unrestricted	 	1,599,203 		491,409		2,090,612	
TOTAL NET POSITION	$	(747,418)		$	(232,472)		$	(979,890)	

The accompanying notes are an integral part of this financial statement

TRADITION COMMUNITY DEVELOPMENT DISTRICT 1
STATEMENT OF ACTIVITIES
Year Ended September 30, 2019

 	Program Revenues	

Net (Expense) Revenues and
 	Changes  in  Net Position	

 Functions/Programs	 Governmental Activities	
    Expenses		Charges for
 	Services		Operating
  Contributions 	Governmental
 	Activities		Business-
 Type Activities 	
 	Total		
General government	$	108,235	$	136,085	$	-	$	27,850	$	-	$	27,850	
Maintenance & operations	1,431,172	2,116,032	-	684,860	-	684,860	
Interest on long-term debt	 	1,841,646	1,958,877	-		 	117,231 	 	-		 	117,231 	
Total Governmental Activities	 	3,381,053	4,210,994	-		 	829,941 	 	-		 	829,941 	
Business-Type Activities					
Irrigation expenses	942,050	1,059,390	-	-	117,340	117,340	
Interest on long-term debt	 	263,925	-	-		 	-		 	(263,925)	 	(263,925)	
Total Business-Type Activities	 	1,205,975	1,059,390	-		 	-		 	(146,585)	 	(146,585)	
	General Revenues: Investment earnings	
 	39,231 	
 	12,309 	
 	51,540 	
	Total General Revenues	 	39,231 	 	12,309 	 	51,540 	
	Change in Net Position	869,172	(134,276)	734,896	

Net Position - October 1, 2018	
 	(1,616,590)	
 	(98,196)	
 	(1,714,786)	
Net Position - September 30, 2019	  $	(747,418)	  $	(232,472)	$	(979,890)	

The accompanying notes are an integral part of this financial statement

- 8 -

BALANCE SHEET – GOVERNMENTAL FUNDS
September 30, 2019

 	MAJOR FUNDS		TOTAL

ASSETS

GENERAL
 	FUND	

CAPITAL
    PROJECTS 

GOVERNMENTAL
 	ACTIVITIES	

Cash	$ 3,256,000		$	-		$	3,256,000	
Accounts receivable	4,700		-		4,700	
Assessments receivable	6,231		17,606		23,837	
Due from other funds	132,030		475,130		607,160	
Deposits Restricted
Investments	200

 	-			-

 	4,844,788 		200

 	4,844,788 	
TOTAL ASSETS	  $ 3,399,161 		$ 5,337,524		$	8,736,685	

LIABILITIES AND FUND EQUITY						
LIABILITIES
Accounts payable	
$	309,436	
$	-	
$	309,436	
Due to other governments	777,375	-	777,375	
Due to other funds	507,045	96,978	604,023	
Deposits	 	581,117 	 	-		 	581,117 	
TOTAL LIABILITIES	2,174,973	96,978	2,271,951	

FUND EQUITY				
Nonspendable
Deposits	
200	
-	
200	
Restricted
Debt service	
-	
3,221,462	
3,221,462	
Capital projects	-	1,534,119	1,534,119	
Unassigned	 	1,223,988 	 	484,965 	 	1,708,953 	
TOTAL FUND EQUITY	 	1,224,188 	 	5,240,546 	 	6,464,734 	
TOTAL LIABILITIES AND FUND EQUITY	  $ 3,399,161 	$ 5,337,524	$	8,736,685	

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2019

Total Governmental Fund Balances in the  Balance Sheet, Page 9	$	6,464,734

Amount reported for governmental activities in the Statement of Net Position are different because:
Capital asset used in governmental activities are  not  financial resources and therefore are not reported in the governmental funds:
Governmental capital assets	66,393,684
Less accumulated depreciation	(30,253,182)
Deferred charges on refunding of long-term debt  are  shown  as deferred outflows of resources in the government-wide financial statements: however, this amount is not reported in the governmental
financial statements.	150,835
Governmental funds record bond insurance costs as expenditures when these costs are first incurred. Prepaid bond insurance is amortized over the term
of the  refunding bonds  in  the  government-wide financial statements.	1,298,519
Certain liabilities are not due and payable in the current period and therefore are not reported in the funds:

Accrued interest payable	(750,132)	
Governmental bonds payable	(44,051,876)	
Net Position of Governmental Activities, Page 7	  $	(747,418)	

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
Year Ended September 30, 2019

MAJOR FUNDS	TOTAL

REVENUE	GENERAL
 	FUND		CAPITAL
     PROJECTS		GOVERNMENTAL
 	ACTIVITIES		
Stormwater fees	$	17,911	$	-	$	17,911	
Engineering revenue fees	87,200	-	87,200	
On-roll assessments	47,107	4,055,872	4,102,979	
Other income	2,904	-	2,904	
Interest income	 	27,057 	 	12,174 	 	39,231 	
TOTAL REVENUES	182,179	4,068,046	4,250,225	
EXPENDITURES				
General government	43,193	-	43,193	
Debt service:				
Principal	-	1,950,000	1,950,000	
Interest	 	-		 	1,869,881 	 	1,869,881 	
TOTAL EXPENDITURES	 	43,193 	 	3,819,881 	 	3,863,074 	
EXCESS (DEFICIENCY) OF REVENUES				
OVER EXPENDITURES	138,986	248,165	387,151	

FUND BALANCE				
Beginning of year (As Restated)	 	1,085,202 	 	4,992,381 	 	6,077,583 	
End of year	  $	1,224,188 	  $	5,240,546 	$	6,464,734	

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Year Ended September 30, 2019

Net Change  in  Fund Balances - Total Governmental Funds, Page 11	$	387,151

Amount reported for governmental activities in the Statement of Activities are different because:
Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the
statement of net assets.	1,950,000
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets are depreciated over their estimated useful lives:
Current year  provision for depreciation	(1,431,172)
Certain items reported in the Statement of Activities do not require
the use of current financial resources and therefore are not reported expenditures in the governmental funds:

Change in accrued interest payable	28,235	
Provision for amortization of bond premium	8,462	
Provision for amortization of deferred charges	(16,238)	
Provision for amortization of bond insurance	(57,266)	

Change  in  Net Position of  Governmental Activities, Page 8	 $	869,172 

STATEMENT OF NET POSITION – PROPRIETARY FUND
September 30, 2019

ASSETS CURRENT ASSETS
Cash

BUSINESS-TYPE
 	ACTIVITIES	 ENTERPRISE
 	FUND	

$	535,431

Accounts receivable, net	71,695
Deposits	95
Restricted
Investments	 	634,403 
TOTAL CURRENT ASSETS	 	1,241,624 
NONCURRENT ASSETS
Capital assets
Land	580,183	
Construction work in progress	11,616	
Equipment & furniture	544,458	
Infrastructure	2,220,365	
Plant	 	1,705,146 	
	5,061,768	
Less accumulated depreciation	 	298,089 	
Total capital assets (net of depreciation)	 	4,763,679 	
TOTAL NONCURRENT ASSETS	 	4,763,679 	
TOTAL ASSETS	  $	6,005,303 	

Accounts payable and accrued expenses	$	102,290	
Accrued interest payable	131,963	
Due to other funds	2,132	
Deposits	1,390	
Deferred revenue	 	10,000 	
TOTAL CURRENT LIABILITIES	 	247,775 	
ONCURRENT LIABILITIES
Long-term liabilities	 	5,990,000 	
TOTAL NONCURRENT LIABILITIES	 	5,990,000 	
TOTAL LIABILITIES	 	6,237,775 	

LIABILITIES CURRENT LIABILITIES

N

NET POSITION
Net investment in capital assets	(1,226,321)	
Restricted for debt service	502,440	
Unrestricted	 	491,409 	
TOTAL NET POSITION	  $	(232,472)	

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION – PROPRIETARY FUND
Year Ended September 30, 2019

	BUSINESS-TYPE
 	ACTIVITIES	
ENTERPRISE FUND	
OPERATING REVENUES
Irrigation services	
$	1,049,604	
Engineering revenue fees	8,558	
Miscellaneous revenue	 	1,228 	
TOTAL OPERATING REVENUES	 	1,059,390 	
OPERATING EXPENSES		
General & administrative	802,751	
Depreciation	 	139,299 	
TOTAL OPERATING EXPENSES	 	942,050 	
OPERATING INCOME	 	117,340 	
NONOPERATING REVENUES (EXPENSES)		
Interest income	12,309	
Interest expense	 	(263,925)	
TOTAL NONOPERATING REVENUES (EXPENSES)	 	(251,616)	
CHANGE IN NET POSITION	(134,276)	
NET POSITION		
Beginning of year	 	(98,196)	
End of year	  $	(232,472)	

STATEMENT OF CASH FLOWS – PROPRIETARY FUND
Year Ended September 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers & users

BUSINESS-TYPE
 	ACTIVITIES	 ENTERPRISE
FUND

$	1,177,444

Payments  for goods & services	 	(693,413) NET CASH PROVIDED BY OPERATING ACTIVITIES			484,031

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Principal paid on capital debt	(105,000)
Interest paid  on capital debt	 	(266,025) NET CASH USED IN CAPITAL AND RELATED
FINANCING ACTIVITIES	(371,025)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(2,703)	
Interest income	 	12,309 	
NET CASH PROVIDED BY INVESTING ACTIVITIES	 	9,606 	
NET INCREASE IN CASH	122,612	
CASH
Beginning of Year	 	412,819 

End of Year
RECONCILIATION OF OPERATING LOSS TO NET

$	535,431

CASH PROVIDED BY OPERATING ACTIVITIES		
Operating income	$	117,340	
Adjustments to reconcile operating income to net		
cash provided by operating activities		
Depreciation	139,299	
Loss on disposal of capital assets/bad debt	56,355	
(Increase) Decrease in:		
Accounts receivable	118,054	
Prepaid items	23,123	
Increase (Decrease) in:		
Accounts payable and accrued expenses	29,684	
Deposits	 	176 	
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	484,031	

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Tradition Community Development District 1 (the “District”) conform to generally accepted accounting principles as applicable to governments. The District was formerly known as Westchester Community Development District 1 and lawfully changed its name to Tradition Community Development District 1 effective August 14, 2006. The following is a summary of the more significant policies:
Reporting Entity
The District is an independent unit of special-purpose local government of the State of Florida created by law and established in accordance with the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended by ordinance of St. Lucie County, Florida, effective on August 21, 2001 as amended. The Act provides for a five member Board of Supervisors to serve as the governing body of the District. The District has no component units. Its purpose is to manage and finance basic community development systems, facilities and services, including capital infrastructure.
Basis of Presentation
Government-wide Financial Statements - Government-wide financial statements, including the statement of net assets and statement of activities, present information about  the District as a whole. These statements include the non-fiduciary financial activity of the primary government and its component units.

Government-wide financial statements are prepared using the economic resources measurement focus. The statement of activities presents a comparison between direct expenses and program revenues for each function or program of the District’s governmental activities. Direct expenses are those that are specifically associated with a service, program, or department and are thereby clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues, with certain exceptions. The comparison of direct expenses with program revenues identifies the extent to which each governmental function or business segment is self-financing or draws from the general revenues of the District.
The effects of inter-fund activity have been eliminated from the government-wide financial statements.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation (continued)

Fund Financial Statements - Fund financial statements report detailed information about  the District in the governmental, proprietary, and fiduciary funds. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Non-major funds are aggregated and reported in a single column. Because the focus of governmental fund financial statements differs from the focus of government-wide financial statements, the reconciliation is presented with each of the governmental fund financial statements.

Major Governmental Fund Types

General Fund - The general fund is the general operating fund of the District. All general tax revenue and other receipts that are not allocated by law or contractual agreement to another fund are accounted for in this fund. The general operating expenditures, fixed charges and capital improvement costs that are not paid through other funds are paid from the general fund.

Capital Project Fund - Capital project funds are established to provide common infrastructure to support the master planned community.

Major Proprietary Fund Types

Irrigation Fund - The irrigation fund accounts for the irrigation operations of the District that are financed and supported primarily by user charges.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the District’s enterprise fund are charges to customers for sales and services. Operating expenses of the enterprise fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

Assessments

Assessments are non-ad valorem assessments on benefited lands within the District. Assessments are levied to pay for the operations and maintenance of the District. The fiscal year for which annual assessments are levied begins on October 1 with discounts available for payments through February 28 and become delinquent on April 1. The District's annual assessments for operations are billed and collected by the County Tax Collector. The amounts remitted to the District are net of applicable discounts or fees and include interest on monies held from the day of collection to the day of distribution.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Irrigation Fees

Irrigation fees received are available for the payment of debt service on the District’s bonds and for costs associated with the operation and maintenance of existing system. These fees are included in restricted investments on the Enterprise Fund Statement of Net Position until spent for the designated purpose.

Receivables and Payables

Accounts receivable and revenues for the enterprise fund are shown net of an allowance for uncollectible amounts. For irrigation system accounts receivable, an allowance in the amount of
$328 has been recorded as of September 30, 2019. Equity Classifications
In the fund financial statements, governmental funds report non spendable and restricted fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Assignments of fund balance represent tentative management plans that are subject to change. Under GASB 54, Fund Balance Reporting and Governmental Fund Type Definitions, fund balances are required to be reported according to the following classifications:

Non-Spendable Fund Balance – Amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. “Not in spendable form” includes items that are not expected to be converted to cash (such as inventories and prepaid amounts) and items such as long-term amount of loans and notes receivable, as well as property acquired for resale. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact.

Restricted Fund Balance – Amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.

Committed Fund Balance – Amounts that can be used only for the specific purposes determined by a formal action (resolution) of the Board of Supervisors. Commitments may be changed or lifted only by the Board of Supervisors taking the same formal action (resolution) that imposed the constraint originally. Resources accumulated pursuant to stabilization arrangements sometimes are reported in this category.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Equity Classifications (continued)

Assigned Fund Balance – Includes spendable fund balance amounts established by the Board of Supervisors that are intended to be used for specific purposes that are neither considered restricted nor committed.

Unassigned Fund Balance – Unassigned fund balance is the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes.

The District first uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.

Cash and Cash Equivalents

Florida Statutes require state and local governmental units to deposit monies with a financial institution classified as a “Qualified Public Depository,” which is a state insurance pool for banks and other financial institutions. The pool requires  each bank to render as collateral a percentage of all state and local monies on deposit. Upon default of a particular financial institution within the pool, the pooled collateral is used to reinstate the state and local government deposits. This pool is additional insurance above the federal depository insurance. The District has cash deposits only with qualifying institutions as of September 30, 2019.

Deposits and Investments

The District's cash and cash equivalents are considered to be cash on hand and demand deposits (interest and non-interest bearing).

The District has elected to proceed under the Alternative Investment Guidelines as set forth in Section 218.415 (17) Florida Statutes. The District may invest any surplus public funds in the following:

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

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deposits and Investments (continued)
Securities listed in paragraph c and d shall be invested to provide sufficient liquidity to pay obligations as they come due. In addition, surplus funds may be deposited into certificates of deposit which are insured.
The District records all interest revenue related to investment activities in the respective funds and reports investments at fair value.
Amortized
 	Costs	 Credit Risk 	Maturities	
Money Market Mutual Funds - First American	Weighted average of the

Government Obligation Fund CL Y

$	634,403

S&P AAAm	fund portfolio: 23 days
Weighted average of the

US Bank N/A Open Monthly Commercial Paper 	4,844,788	S&P A-1+	Open ended
  $  5,479,191 

Credit Risk:
Florida Statutes require the money market mutual funds held by the District to have the highest credit quality rating from a nationally recognized rating agency.
Interest Rate Risk:
Florida Statutes state that the investment portfolio be structured in such manner as to provide sufficient liquidity to pay obligations as they come due. All holdings are currently invested to meet current obligations.
Concentration of Credit Risk:
The District places no limit on the amount the District may invest in any one issuer. More than 5% of the District’s investments are with one issuer.
Custodial Credit Risk:
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2019, the District is exempt from this requirement.
Fair Value Measurement - When applicable, the District measures and records its investments using fair value measurement guidelines established in accordance with GASB Statements. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Custodial Credit Risk: (continued)
These guidelines recognize a three-tiered fair value hierarchy, in order of highest priority, as follows:
Level 1: Investments whose values are based on unadjusted quoted prices for identical investments in active markets that the District has the ability to access;
Level 2: Investments whose inputs - other than quoted market prices - are observable either directly or indirectly; and,
Level 3: Investments whose inputs are unobservable.
The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the entire fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs.
Capital Assets
Capital assets, which include land and land improvements, buildings and improvements, infrastructure, machinery and equipment, are reported in the governmental activities column.
The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. The valuation basis for all assets is historical cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.
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:

Buildings and improvements	7-39 years
Infrastructure	20-40 years
Machinery and equipment	5-10 years
Unearned Revenue

Governmental funds report unearned revenue in connection with resources that have been received, but not yet earned.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Management Company
The District has contracted with a management company to perform management advisory services, which include financial and accounting advisory services. Certain employees of the management company also serve as officers (Board appointed non-voting positions) of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, and other administrative costs.
Subsequent Events
Management has performed an analysis of the activities and transactions subsequent to September 30, 2019, to determine the need for any adjustments to and/or disclosures within the  audited financial statements for the year ended September 30, 2019. As a result of the spread of COVID-19, economic uncertainties have risen which are likely to negatively impact operating results, though such potential impact is unknown at this time. Management has performed their analysis through May 25, 2020.
NOTE B - BUDGETARY INFORMATION
The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund. All annual appropriations lapse at fiscal year end.
The District follows these procedures in establishing the budgetary data reflected in the financial statements.
Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1.
Public hearings are conducted to obtain public comments.
Prior to October 1, the budget is legally adopted by the District Board.
All budget changes must be approved by the District Board.
The budgets are adopted on a basis consistent with generally accepted accounting principles.
Unused appropriation for annually budgeted funds lapse at the end of the year.

NOTE C – ASSET PURCHASE
On August 10, 2017, the District entered into an asset purchase agreement with Tradition Irrigation Company, LLC. As a result the District created an enterprise fund to account for the transactions of the irrigation system. As part of the agreement the District services the developments known as Tradition and Southern Groves, supplying quality water service under a Franchise Agreement with the City of Port St. Lucie, Florida. The District issued $6,095,000 in Irrigation System Revenue Bonds in order to finance the purchase. The District received $5,051,151 in capital assets including
$580,183 in land.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE D – RESTRICTED ACCOUNTS

At September 30, 2019, the District reported the following restricted asset accounts:

	Enterprise
Funds	
Investments
Reserve account - bond compliance	
$	371,025	
Interest account - bond compliance	133,224	
Sinking fund - bond compliance	113,189	
Maintenance reserve - bond compliance	 	16,965 	
Total restricted investments	$	634,403	

NOTE E – PROPERTY AND EQUIPMENT
A summary of changes in general fixed assets follows:

September 30,			September 30,	
 	2018		    Increases		    Decreases		 	2019		
Governmental activities:
Capital assets, not being depreciated:
Land and improvements	$ 12,861,574	$	-	$	-	$ 12,861,574	
Construction in progress	 	3,436,770 	 	-	 	-		 	3,436,770 	
Total capital assets, not being depreciated	
 	16,298,344 	
 	-		
 	-		
 	16,298,344 	
Capital assets, being depreciated					
Infrastructure	25,692,842	-	-	25,692,842	
Improvements other					
than buildings	 	24,402,498 	 	-		 	-		 	24,402,498 	
Total capital assets, being					
depreciated	 	50,095,340 	 	-		 	-		 	50,095,340 	
Less accumulated depreciation for:					
Infrastructure	9,238,804	867,534	-	10,106,338	
Improvements other					
than buildings	 	19,583,206 	 	563,638 	 	-		 	20,146,844 	
Total accumulated depreciation	 	28,822,010 	 	1,431,172 	 	-		 	30,253,182 	
Total capital assets, being					
depreciated - net	 	21,273,330 	 	(1,431,172)	 	-		 	19,842,158 	
Governmental activities capital						
assets - net	  $ 37,571,674 	$ (1,431,172)	$	-	$ 36,140,502	

Depreciation expense recorded in governmental activities was $1,431,172 for 2019.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE E – PROPERTY AND EQUIPMENT (CONTINUED)

A summary of changes on proprietary fixed assets follows:

Business-type activitie s
Capital assets, not being depreciated:

September 30,
 	2018	 Increases	 Decreases	

September 30,
 	2019	

Land	$	580,183	$	-	$	-	$	580,183	
Construction in progress	 	18,831 	 	-	 	(7,215)	 	11,616 	
Total capital assets, not being depreciated	
 	599,014 	
 	-		
 	(7,215)	
 	591,799 	
Capital assets, being depreciated					
Plant	1,705,146	-	-	1,705,146	
Equipment & furniture	544,457	-	-	544,457	
Infrastructure	 	2,220,365 	 	-	 	-		 	2,220,365 	
Total capital assets, being					
depreciated	 	4,469,968 	 	-		 	-		 	4,469,968 	
Less accumulated depreciation for:					
Plant	64,936	56,838	-	121,774	
Equipment & furniture	30,437	26,952	-	57,389	
Infrastructure	 	63,417 	 	55,509 	 	-		 	118,926 	
Total accumulated depreciation	 	158,790 	 	139,299 	 	-		 	298,089 	
Total capital assets, being					
depreciated - net	 	4,311,178 	 	(139,299)	 	-		 	4,171,879 	
Governmental activities capital						
assets - net	  $ 4,910,192 	$	(139,299)	$	(7,215)	$	4,763,678	

Depreciation expense recorded in business-type activities was $139,299 for 2019.

NOTE F – LONG-TERM LIABILITIES

Governmental Activities Debt

$53,170,000 Special Assessment Refunding Bonds, Series 2014 – On April 9, 2014, the District issued $53,170,000 Special Assessment Refunding Bonds, Series 2014. The Bonds are payable in annual principal installments through May 2035. The bond bears interest ranging from 2.0% to 4.5% payable semi-annually on the first day of each May and November. Principal is due serially each May 1, commencing May 2015. The bonds are collateralized through pledged liens on approximately 3,100 acres of residential and commercial land.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE F – LONG-TERM LIABILITIES (CONTINUED)

Refunded Bonds
The District refunded the Series 2003 Capital Improvement Revenue Bonds, which had an outstanding balance of $53,775,000 at the time of the refunding with the proceeds from the Series 2014 Bonds and available funds on hand. As a result of this transaction, the District decreased its aggregate debt service payments for Series 2014 Bonds by $16,576,475 over the next 20 years, which resulted in an economic gain of approximately $7,565,000. The series 2003 Bonds have been paid off.
The following is a summary of the changes in long-term obligations for the year ended September 30, 2019:

Special Assessment Refunding Bonds, Series 2014

Beginning	Ending	Due Within
 	Balance	 Additions         Reductions 	Balance	 One Year 

  $ 45,810,000       $	-	 $ 1,950,000 $43,860,000 $ 2,010,000 45,810,000	-		1,950,000	43,860,000	2,010,000

Unamortized bond premium 	200,338 	-	 	8,462 	191,876 	-	

  $ 46,010,338 $

-	$ 1,958,462

$44,051,876

$ 2,010,000

The debt service requirements for the long-term obligations is as follows:

   September 30, 	 	Principal			 	Interest			 	Total		
2020	$	2,010,000		$	1,804,232		$	3,814,232	
2021	2,080,000		1,733,882		3,813,882	
2022	2,155,000		1,661,080		3,816,080	
2023	2,245,000		1,574,882		3,819,882	
2024	2,345,000		1,485,082		3,830,082	
2025-2029	13,215,000		5,941,610		19,156,610	
2030-2034	16,240,000		3,003,366		19,243,366	
2035	 	3,615,000 		 	163,124 		 	3,778,124 	
	$	43,905,000		$ 17,367,258		$	61,272,258	
Business-Type Activities Debt						
$6,095,000 Irrigation System Revenue Bonds (Existing System), Series 2017 – On August 1, 2017, the District issued $6,095,000 Irrigation System Revenue Bonds (Existing System), Series 2017. The Bonds are payable in annual principal installments through October 2047. The bond bears interest ranging from 4.0% to 4.5% payable semi-annually on the first day of each April and October. Principal is due serially each October 1, commencing October 2018.

NOTES TO FINANCIAL STATEMENTS
September 30, 2019

NOTE F – LONG-TERM LIABILITIES (CONTINUED)

Business-Type Activities Debt (continued)

The following is a summary of transactions of long-term obligations in the enterprise fund for the year ended September 30, 2019:

Irrigation System Revenue Bonds (Existing System), Series 2017

Beginning	Ending	Due Within
 	Balance	 Additions	 Reductions 	Balance	 One Year 

  $ 6,095,000      $	-	 $	105,000       $ 5,990,000      $	105,000 

  $ 6,095,000 $

-	$	105,000

$ 5,990,000

$	105,000

The debt service requirements for the long-term obligations is as follows:

   September 30,	 	Principal			 	Interest			 	Total		
2020	$	105,000		$	261,825		$	366,825	
2021	110,000		257,524		367,524	
2022	115,000		253,025		368,025	
2023	120,000		248,325		368,325	
2024	125,000		243,425		368,425	
2025-2029	705,000		1,136,138		1,841,138	
2030-2034	880,000		964,126		1,844,126	
2035-2039	1,100,000		742,500		1,842,500	
2040-2044	1,380,000		464,624		1,844,624	
2045-2048	 	1,350,000 		 	124,875 		 	1,474,875 	
$	5,990,000		$	4,696,387		$	10,686,387	

NOTE G - RISK MANAGEMENT					

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; natural disasters; and environmental remediation. The District has obtained commercial insurance from independent third parties to mitigate the costs of these risks; coverage may not extend to all situations. Settled claims from these risks have not exceeded commercial insurance coverage over the past three years.

NOTE H – DEPENDENCY ON SUPPORT

The District receives the majority of its funding from local tax revenue. A reduction in the level of advances would have a substantial effect on the District’s projects and activities.

STATEMENT OF REVENUES AND EXPENDITURES – BUDGET AND ACTUAL – GENERAL FUND
Year Ended September 30, 2019

REVENUE	
ORIGINAL
 	BUDGET		
FINAL
 	BUDGET		

 	ACTUAL		VARIANCE FAVORABLE
 (UNFAVORABLE) 	
Stormwater fees	$	8,296	$	17,171	$	17,911	$	740	
Engineering revenue fees	-	-	87,200	87,200	
On-roll assessments	28,225	34,558	47,107	12,549	
Other income	-	12,154	2,904	(9,250)	
Interest income	 	-		 	25,599 	 	27,057 	 	1,458 	
TOTAL REVENUES	36,521	89,482	182,179	92,697	
EXPENDITURES
Administrative	18,653	
12,917	
12,880	
37	
Maintenance	 	21,639 		 	20,406 		 	30,313 		 	(9,907)	
TOTAL EXPENDITURES	40,292		33,323		43,193		(9,870)	
Surplus/(Deficit) (Notes to RSI)	 	(3,771)		 	-			 	-			 	-		
EXCESS OF REVENUES OVER								
(UNDER) EXPENDITURES	  $	-			$	56,159		$	138,986		$	82,827	

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

The District is required to establish a budgetary system and an approved Annual Budget for the general fund. The District’s budgeting process is based on estimates of cash receipts and cash expenditures which are approved by the Board. The budget approximates a basis consistent with accounting principles generally accepted in the United States of America (generally accepted accounting principles).

An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures exceeded appropriations for the fiscal year ended September 30, 2019.

The variance between budgeted and actual general fund revenues is not considered significant. The actual general fund expenditures for the current fiscal year were higher than original budgeted amounts due primarily to costs being higher than anticipated.

DMHB

DIBARTOLOMEO, MCBEE, HARTLEY & BARNES, P.A.
CERTIFIED PUBLIC ACCOUNTANTS

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

Board of Directors
Tradition Community Development District 1 Port St. Lucie, Florida

We have audited in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to the financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Tradition Community Development District 1, as of September 30, 2019 and for the year ended, which collectively comprise the Tradition Community Development District 1’s basic financial statements and have issued our report thereon dated May 25, 2020.

Internal Control Over Financial Reporting
In planning and performing our audit, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control over financial reporting.

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 misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

2222 Colonial Road, Suite 200 Fort Pierce, Florida 34950772-461-8833  Fax: 772-461-8872 591 S.E. Port St. Lucie Blvd., Port St. Lucie, Florida 34984772-878-1952Fax: 772-878-1709
Member AICPA	Member AICPA Division for CPA Firms	Member FICPA Private Company Practice Section
WWW.DMHBCPA.NET

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

Purpose of this Report

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

DiBartolomeo, McBee, Hartley & Barnes, P.A. Fort Pierce, Florida
May 25, 2020

- 30 -

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10) OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA

Board of Directors
Tradition Community Development District 1 Port St. Lucie, Florida

We have examined the District's compliance with the requirements of Section 218.415, Florida Statutes with regards to the District's investments during the year ended September 30, 2019. Management is responsible for the District's compliance with those requirements. Our responsibility is to express an opinion on the District's compliance based on our examination.

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

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2019.

DiBartolomeo, McBee Hartley & Barnes, P.A. Fort Pierce, Florida
May 25, 2020

Management Letter

Board of Directors
Tradition Community Development District 1 Port St. Lucie, Florida

Report on the Financial Statements

We have audited the financial statements of the Tradition Community Development District 1 as of and for the fiscal year ended September 30, 2019, and have issued our report thereon dated May 25, 2020.

Auditor’s Responsibility

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

Other Reports

We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountant’s Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 25, 2020, should be considered in conjunction  with this management letter.

Prior Audit Findings

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

Official Title and Legal Authority

Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. Refer to Note A in the notes to the financial statements.

Financial Condition

Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report the results of our determination as to whether or not Tradition Community Development District 1 has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific conditions met. In connection with our audit, we determined that the Tradition Community Development District 1 did not meet any of the conditions described in Section 218.503(1), Florida Statutes.

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

Annual Financial Report

Section 10.554(1)(i)5.b., Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for the Tradition Community Development District 1 for the fiscal year ended September 30, 2019, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2019. In connection with our audit, we determined that these two reports were in agreement.

Other Matters

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

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

Purpose of this Letter

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

DiBartolomeo, McBee, Hartley & Barnes, P.A. Fort Pierce, Florida
May 25, 2020
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