Arborwood Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2025

Arborwood Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2025

TABLE OF CONTENTS

Page Number

REPORT OF INDEPENDENT AUDITORS

1-3

MANAGEMENT’S DISCUSSION AND ANALYSIS

4-9

BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements Statement of Net Position Statement of Activities
Fund Financial Statements
Balance Sheet – Governmental Funds Reconciliation of Total Governmental Fund Balance
to Net Position of Governmental Activities Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund

10
11

12

13

14

15

16

Notes to the Financial Statements

17-30

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

31-32

MANAGEMENT LETTER

33-36

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

37

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
Arborwood Community Development District Lee County, Florida

Report on Audit of the Financial Statements

Opinion

We have audited the financial statements of the governmental activities and each major fund of Arborwood Community Development District (the “District”), as of and for the year ended September 30, 2025, and the related notes to financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2025, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS), and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our

report.

We are required to be independent of the District and to meet our other ethical

responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

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

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To the Board of Supervisors
Arborwood Community Development District

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for one year beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore, is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:



Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts, and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.









We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis be presented to supplement the basic financial statements.

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To the Board of Supervisors
Arborwood Community Development District

Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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 obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Management is responsible for the other information included in the financial report. The other information comprises the information for compliance with Florida Statutes 218.39(3)(c) but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued a report dated July 28, 2026 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 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 the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

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

July 28, 2026

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Arborwood Community Development District MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2025

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

OVERVIEW OF THE FINANCIAL STATEMENTS

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

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

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

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

Fund financial statements present financial information for governmental funds. These statements provide financial information for the major governmental 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.

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Arborwood Community Development District MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2025

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

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

The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District’s financial standing. These statements are comparable to private-sector companies and give a good understanding of the District’s overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of the District, including capital assets, are reported in the statement of net position. All liabilities obligated but not paid by the District, are included. In the statement of activities transactions between the different functions of the District are 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 are not included in the fund financial statements. To provide a link from the fund financial statements to the government-wide financial statements, a reconciliation is provided from the fund financial statements to the government-wide financial statements.

Notes to financial statements provide additional detail concerning the financial activities and financial balances of the District. Additional information about the accounting practices of the District is also included in the notes to financial statements.

Financial Highlights

The following are the highlights of financial activity for the year ended September 30, 2025:



The District’s total assets and deferred outflows of resources exceeded total liabilities

and deferred inflows of resources by $73,611,390 (net position).

Unrestricted net

position for governmental activities was $192,135. Restricted net position was $714,535.

Net investment in capital assets for governmental activities was $72,704,720.



Governmental activities revenues totaled $3,771,560 while governmental activities expenses totaled $3,699,182.

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Arborwood Community Development District MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2025

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District

The following tables present condensed, government-wide current year and prior year data about net position and changes in net position. Comparative year data is shown based on the

Government financial reporting Statement No. 34.

model

under the Governmental Accounting Standards Board

Net Position

	Governmental Activities	

	2025	

	2024	

Current assets
Prepaid bond insurance Restricted assets Capital assets, net
Total Assets

$

556,144
407,170
2,496,223

$

486,425
445,342
2,350,978

	96,122,304 
	99,581,841 

	98,074,260 
	101,357,005 

Deferred outflows of resources

	456,492 

	499,288 

Current liabilities Non-current liabilities
Total Liabilities

2,412,680
	24,013,753 
	26,426,433 

2,372,147
	25,944,574 
	28,316,721 

Deferred inflows of resources

	510 

	560 

Net investment in capital assets Net position - restricted
Net position - unrestricted Total Net Position

72,704,720
714,535
	192,135 
 $ 73,611,390 

72,845,236
524,612
	169,164 
 $ 73,539,012 

The increase in current and restricted

assets is primarily related

to revenues exceeding

expenditures at the fund level in the current year.

The decrease in capital assets is related to current year depreciation.

The decrease in total liabilities is related to principal payments in the current year.

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Arborwood Community Development District MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2025

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Financial Analysis of the District (Continued)

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

Change in Net Position

Governmental Activities

	2025	

	2024	

Program Revenues Charges for services
General Revenues Investment earnings
Total Revenues

$

3,644,948

$

3,676,361

	126,612 
	3,771,560 

	161,617 
	3,837,978 

Expenses
General government Physical environment Interest and other charges
Total Expenses

138,727
2,260,251
	1,300,204 
	3,699,182 

119,241
2,421,999
	1,384,370 
	3,925,610 

Conveyances to other entities

	- 

	(1,885,681)

Change in Net Position

72,378

(1,973,313)

Net Position – Beginning of Year Net Position – End of Year

73,539,012

75,512,325

 $	73,611,390 

 $	73,539,012 

The increase in general government is primarily related to the increase in engineering fees in the current year.

The decrease in physical environment is related to the decrease in lake bank erosion and streetlighting maintenance in the current year.

The decrease in interest and other charges is related to the reduction in bonds outstanding.

The decrease in conveyances to other entities is due to the transfer of streetlights in the prior year.

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Arborwood Community Development District MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2025

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, 2025 and 2024.
	Governmental Activities	

		Description	 Land and improvements Infrastructure
Improvements
Less: accumulated depreciation Capital Assets, Net

	2025	

	2024	

$

84,410,571
39,039,107
562,032

$

84,410,571
39,039,107
562,032

	(27,889,406)
 $	96,122,304 

	(25,937,450)
 $	98,074,260 

The capital asset activity for the current year was depreciation of $1,951,956.

General Fund Budgetary Highlights

Final budgeted expenditures exceeded actual expenditures primarily because of less engineering, traffic monitoring, and legal fees than were anticipated.

The September 30, 2025 budget was amended to closely reflect actual expenditures.

Debt Management

Governmental Activities debt includes the following:



In December 2014, the District issued $4,939,888 Capital Improvement Revenue Refunding Bonds, Series 2014A-1, $1,041,652 Capital Improvement Revenue Refunding Bonds, Series 2014A-2 and $9,097,400 Capital Improvement Revenue Refunding Bonds, Series 2014B. The bonds included a provision for accreted interest through May 1, 2016, which

increased the outstanding balances to $5,430,000, $1,145,000 and $10,000,000.

The

bonds were issued to refund Series 2005A-1, Series 2005B-1, and Series 2006 A-1 bonds. The balance outstanding at September 30, 2025 was $3,785,000 for the A-1 bond,
$420,000 for the A-2 bond.



In February 2018, the District issued $24,465,000 Capital Improvement Revenue and Refunding Bonds, Series 2018A-1 and $8,740,000 Capital Improvement Revenue and

Refunding Bonds, Series 2018A-2.

The Bonds were issued to (i) finance the cost of

acquiring, constructing and equipping assessable improvements; (ii) currently refund and

redeem all of Series 2005A-2, Series 2006A-2, and Series 2006A-3 bonds; (iii) pay certain costs associated with the issuance of the Series 2018 Bonds; and (iv) purchase the Reserve Policy to be deposited to the Series 2018A-1 Reserve Account. The balance outstanding at September 30, 2025 was $16,360,000 for the A-1 bond, and $5,670,000 for the A-2 bond.

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Arborwood Community Development District MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2025

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Economic Factors and Next Year’s Budget

Arborwood Community Development District does not expect any economic factors to have any significant effect on the financial position or results of operations of the District in fiscal year 2026.

Request for Information

The financial report is designed to provide a general overview of Arborwood Community Development District’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Arborwood Community Development District, Special District Services, Inc., 2501A Burns Road, Palm Beach Gardens, Florida 33410.

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Arborwood Community Development District STATEMENT OF NET POSITION
September 30, 2025

Governmental Activities

ASSETS
Current Assets
Cash and cash equivalents Due from other governments
Total Current Assets Non-current Assets
Prepaid bond insurance, net Restricted assets
Investments
Capital assets, not being depreciated Land and improvements
Capital assets, being depreciated Infrastructure
Improvements
Less: accumulated depreciation Total Non-current Assets
Total Assets

$

547,211

	8,933 
	556,144 

407,170

2,496,223

84,410,571

39,039,107
562,032
	(27,889,406)
	99,025,697 
	99,581,841 

DEFERRED OUTFLOWS OF RESOURCES
Deferred amount on refunding, net

	456,492 

LIABILITIES
Current Liabilities
Accounts payable and accrued expenses Bonds payable
Accrued interest payable Other current liabilities
Total Current Liabilities Non-current Liabilities
Bonds payable, net
Total Liabilities

27,275
1,910,000
475,223
	182 
	2,412,680 

	24,013,753 
	26,426,433 

DEFERRED INFLOW OF RESOURCES
Deferred gain on refunding, net

	510 

NET POSITION
Net investment in capital assets Restricted for debt service Unrestricted
Total Net Position

72,704,720
714,535
	192,135 
 $  73,611,390 

See accompanying notes to financial statements.

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Arborwood Community Development District STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2025

Net (Expense) Revenues and Changes in Net Position

Program Revenues

Charges for Services

Governmental Activities

Functions/Programs

Expenses

Governmental Activities General government Physical environment Interest and other charges
Total Governmental Activities

$

(138,727)
(2,260,251)

$

157,702
350,465

$

18,975
(1,909,786)

	(1,300,204)
 $	(3,699,182)

	3,136,781 
 $	3,644,948 

	1,836,577 
(54,234)

General Revenues
Investment earnings

	126,612 

Change in Net Position

72,378

Net Position Net Position

October 1, 2024
September 30, 2025

	73,539,012 
 $	73,611,390 

See accompanying notes to financial statements.
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Arborwood Community Development District BALANCE SHEET – GOVERNMENTAL FUNDS
September 30, 2025

Total Governmental Funds

Debt Service 2014

Debt Service 2018

ASSETS

General

Cash and cash equivalents Due from other funds
Due from other governments Restricted assets
Investments

$

547,211
- 1,292

$

- 6,897
1,452

$

- 32,723
6,189

$

547,211
39,620
8,933

	- 

	889,912 

	1,606,311 

	2,496,223 

Total Assets

 $	548,503 

 $	898,261 

 $	1,645,223 

 $	3,091,987 

LIABILITIES AND FUND BALANCES

Liabilities
Accounts payable and accrued expenses Due to other funds
Total Liabilities

$

27,275

$

182

$

-

$

27,457

	39,620 
	66,895 

	- 
	182 

	- 
	- 

	39,620 
	67,077 

Fund Balances Restricted
Debt service Unassigned
Total Fund Balances

-
	481,608 
481,608

898,079
	- 
898,079

1,645,223
	- 
1,645,223

2,543,302
	481,608 
3,024,910

Total Liabilities and Fund Balances

 $	548,503 

 $	898,261 

 $	1,645,223 

 $	3,091,987 

See accompanying notes to financial statements.

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Arborwood Community Development District RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCE
TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2025

Total Governmental Fund Balances

$

3,024,910

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

Capital assets not being depreciated, land, used in governmental activities are not current financial resources and therefore, are not
reported at the fund level.

84,410,571

Capital assets being depreciated, infrastructure, $39,039,107, and improvements, $562,032, net of accumulated depreciation,
$(27,889,406), used in governmental activities are not current financial resources and therefore, are not reported at the fund level.

11,711,733

Long-term liabilities, including bonds payable, are not due and payable in the current period and are not reported in the fund level statements.

(26,235,000)

The bonds payable includes a discount on bonds, $532,521, net of accumulated amortization, $(221,274), which is reflected as a decrease to bonds payable.

311,247

Prepaid bond insurance is not related to the current period, and therefore, is not reported at the fund level.

407,170

The deferred amount on refunding is a deferred outflow of resources, not related to the current period and is not reported at the fund level.

456,492

The deferred gain on refunding is a deferred inflow of resources, not related to the current period and is not reported at the fund level.

(510)

Accrued interest expense for long-term debt is not a current financial use and is not reported in the fund level statements.

	(475,223)

Net Position of Governmental Activities

 $ 73,611,390 

See accompanying notes to financial statements.
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Arborwood Community Development District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – GOVERNMENTAL FUNDS
For the Year Ended September 30, 2025

Total Governmental
	Funds	

Debt Service
	2014	

Debt Service
	2018	

Capital Projects
	2018	

  General 

Revenues
Special assessments Investment earnings
Total Revenues

$ 508,167
	- 
	508,167 

$

596,201

$

2,540,580

$

-

$  3,644,948
	126,612 
	3,771,560 

	38,779 
	634,980 

	87,828 
	2,628,408 

	5 
	5 

Expenditures Current
General government Physical environment
Debt service Principal Interest Other
Total Expenditures

138,727
308,295

-
-

-
-

-
-

138,727
308,295

-
-
	- 
	447,022 

280,000
309,120
	1,649 
	590,769 

1,610,000
901,952
	7,025 
	2,518,977 

-
-
	- 
	- 

1,890,000
1,211,072
	8,674 
	3,556,768 

Excess of revenues over/(under) expenditures

	61,145 

	44,211 

	109,431 

	5 

	214,792 

Other Financing Sources/(Uses) Transfers in
Transfers out
Total Other Financing Sources/(Uses)

-
	- 
	- 

-
	- 
	- 

188
	- 
	188 

-
	(188)
	(188)

188
	(188)
	- 

Net change in fund balances

61,145

44,211

109,619

(183)

214,792

Fund Balances - October 1, 2024

	420,463 

	853,868 

	1,535,604 

	183 

	2,810,118 

Fund Balances - September 30, 2025

 $ 481,608 

 $	898,079 

 $	1,645,223 

 $	- 

 $  3,024,910 

See accompanying notes to financial statements.

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Arborwood 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, 2025

Net Change in Fund Balances - Total Governmental Funds

$

214,792

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

Governmental funds report capital outlays as expenditures. At the government-wide level these expenditures are capitalized as capital assets and depreciated
over their estimated useful lives. This is the amount of depreciation,
$(1,951,956), in the current period.

(1,951,956)

Principal payments are reported as expenditures at the fund level since they use current financial resources. However, at the government-wide level, bond payments decrease long-term liabilities.

1,890,000

The deferred gain on refunding is recognized as a component of interest expense over the remaining life of the bond. This is the current year amortization expense associated with the deferred inflow of resources.

50

At the government wide level, interest is accrued on outstanding debt;
whereas at the fund level interest expenditures are reported when due. This is the difference between the prior year and current year accruals.

29,639

At the government-wide level bond discounts, bond insurance and deferred amount on refunding are amortized over the life of the bonds. This is the current year amortization expense.

(110,147)

Change in Net Position of Governmental Activities

 $	72,378 

See accompanying notes to financial statements.

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Arborwood Community Development District STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
For the Year Ended September 30, 2025

Variance with Final Budget Positive (Negative)

Original Budget

Final Budget

Actual

Revenues
Special assessments

$

506,263

$

506,248

$

508,167

$

1,919

Expenditures Current
General government Physical environment
Total Expenditures

202,313
318,950

153,911
319,980

138,727
308,295

15,184
11,685

521,263

473,891

447,022

26,869

Net Change in Fund Balances

(15,000)

32,357

61,145

28,788

Fund Balances - October 1, 2024

15,000

459,322

420,463

(38,859)

Fund Balances - September 30, 2025

$

-

$

491,679

$

481,608

$

(10,071)

See accompanying notes to financial statements.

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Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the District have been prepared in conformity with generally accepted accounting principles (GAAP). 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 established on June 14, 2004, pursuant to Rule 42RR-1, Florida Administrative Code and Chapter 190, Florida Statutes. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is authorized to issue bonds for the purpose, among others, of financing, funding, planning, establishing, acquiring, constructing or reconstructing, enlarging or extending, equipping, operating and maintaining water management, bridges or culverts, district roads, landscaping, streetlights and other basic infrastructure projects within or without the boundaries of the Arborwood Community Development District. The District is governed by a five-member Board of Supervisors who are elected for four-year terms. The District operates within the criteria established by Chapter 190, Florida Statutes.

As required by GAAP, these financial statements present the Arborwood 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 includes, but is 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 Financial Reporting Entity, the District has identified no component units.

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Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

a.

Government-wide Financial Statements

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Government-wide financial statements report all non-fiduciary information about the reporting government as a

whole.

These statements include all the governmental activities of the primary

government. The effect of interfund activity has been removed from these statements.

Governmental activities are primarily supported by special assessments.

Program

revenues include charges for services and payments made by parties outside of the

reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program.

Amounts paid to acquire capital assets are capitalized as assets, rather than reported as

an expenditure.

Proceeds of long-term debt are recorded as liabilities in the

government-wide financial statements, rather than as an other financing source.

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

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.

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Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.

Measurement Focus and Basis of Accounting (Continued)
b. Fund Financial Statements (Continued) Governmental Funds
The District classifies fund balance in accordance with Governmental Accounting Standards Board Statement 54 – Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
The District has various policies governing the fund balance classifications.
Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.
Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company.
Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.
Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances.

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.

- 19 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.

Measurement Focus and Basis of Accounting (Continued)

b.

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

assets.

Accordingly, they are said to present a summary of sources and uses of

“available spendable resources” during a period.

Because of their current financial resource measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that resources are expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability.
Debt service expenditures are recorded only when payment is due.
Basis of Presentation

3.

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.

2014 Debt Service Fund – The 2014 Debt Service Fund accounts for debt service requirements to retire the capital improvement bonds which were used to refund Series 2005 A-1, Series 2005 B-1, Series 2005-1 and Series 2006 A-1 bonds. The bond series is secured by a pledge (lien) of all debt service special assessment revenues on all acreage of benefited land.

2018 Debt Service Fund – The 2018 Debt Service Fund accounts for debt service requirements to retire the capital improvement and revenue refunding bonds which were used to fund a capital project and refund the outstanding Series 2005 and Series 2006

bonds.

The bond series is secured by a pledge (lien) of all debt service special

assessment revenues on all acreage of benefited land.

2018 Capital Projects Fund – The Capital Projects Fund accounts for construction of infrastructure improvements funded by the Series 2018 Bonds within the boundaries of the District. The 2018 Capital Projects Fund was closed in the current year.

- 20 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

3.

Basis of Presentation (Continued)
b. Non-current Governmental Assets/Liabilities
GASB Statement 34 requires that non-current governmental assets, such as capital assets, and non-current governmental liabilities, such as capital improvement bonds, be reported in the governmental activities column in the government-wide Statement of Net Position.
Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position

4.

a.

Cash and Investments
Chapter 280, Florida Statutes requires state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial

institutions provide common collateral from their deposits of public funds.

This pool is

provided as additional insurance to the federal depository insurance and allows for

additional assessments against the member institutions, providing full insurance for public deposits.
The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of:

1.
2.

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

3.

4.

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 280.02, Florida Statutes.

b.

Restricted Net Position
Certain net position of the District are classified as restricted net position 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.

- 21 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.

Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position (Continued)

c.

Capital Assets
Capital assets, which include land, infrastructure, and improvements, are reported in governmental activities.
The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. The valuation basis for all assets is historical cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.
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 Improvement
Unamortized Bond Discounts

20-40 years
10 years

d.

Bond discounts associated with the issuance of revenue bonds are amortized over the

life of the associated bond using the straight-line method.

For financial reporting,

unamortized bond discounts are netted against the applicable long-term debt.
Prepaid Bond Insurance

e.

Prepaid bond insurance associated with the issuance of debt is amortized over the life of the associated bonds using the straight-line method.
Deferred Outflows/Inflows of Resources
Deferred outflows of resources is the consumption of net position by the government that is applicable to a future reported period. Deferred amount on refunding is amortized and recognized as a component of interest expense over the life of the bond.

f.

Deferred inflows of resources represents an acquisition of net position by the government that is applicable to a future reporting period. Deferred gain on refunding is amortized and recognized as a reduction to interest expense over the life of the bond.

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Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position (Continued)

g.

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

h.

Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the financial statement date and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

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, $3,024,910, differs from “net position” of governmental activities, $73,611,390, reported in the Statement of Net Position. This difference primarily results from the long-term economic focus of the Statement of Net Position versus the current financial resources focus of the Governmental Fund Balance Sheet. The effect of the differences is illustrated below.

Capital related items

When capital assets are purchased or constructed, the cost of those assets is reported as expenditures at the governmental fund level. However, the Statement of Net Position included those capital assets among the assets of the District as a whole.

Land and improvements Infrastructure Improvements
Less: accumulated depreciation Total

$

84,410,571
39,039,107
562,032

	(27,889,406)
$	96,122,304 

- 23 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

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)

Prepaid bond insurance

Prepaid bond insurance is a non-current asset related to insurance purchased at the time debt was issued by the District.

Prepaid bond insurance, net

$	407,170 

Deferred outflows of resources

The deferred amount on refunding is reported at the fund level as an expenditure, at the government-wide level it is reported as a deferred outflow of resources.

Deferred amount on refunding, net

$	456,492 

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 at the fund level. All liabilities (both current and long-term) are reported in the Statement of Net Position.

Bonds payable

$	(26,235,000)

Certain discounts are reflected net of amortization expense as a reduction of bonds payable in the Statement of Net Position.

Bonds discount, net

$	311,247 

Deferred inflows of resources

The deferred gain on refunding is a deferred inflow of resources over the remaining life of the bond and not related to the current period. Accordingly, deferred inflows of resources are not reported at the fund level.

Deferred gain on refunding, net

$	(510)

Accrued interest

Accrued liabilities in the Statement of Net Position differ from the amount reported at the fund level due to the accrued interest on bonds.

Accrued interest

$	(475,223)

- 24 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

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

2.

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

The “net change in fund balances” for governmental funds, $214,792, differs from the “change in net position” for governmental activities, $72,378, reported in the Statement of Activities. The differences arise primarily from the long-term economic focus of the Statement of Activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below.

Capital related items

When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures at the fund level. However, in the Statement of Activities, the cost of those assets is allocated over

their estimated useful lives and reported as depreciation.

As a result, fund balances

decrease by the amount of financial resources expended, whereas net position decreases

by the amount of depreciation charged for the year.

Depreciation

$	(1,951,956)

Long-term debt transactions
The issuance of long-term debt and bond discount is reported as an other financing source/(use) and the repayments of bond principal are reported as expenditures at the governmental fund level and, thus, affect fund balance because current financial resources have been added or used.

Principal payments

$	1,890,000 

In the Statement of Activities, the deferred gain on refunding is recognized as a reduction of interest expense and amortized over the remaining life of the bond.

Deferred gain on refunding amortization

$	50 

In the Statement of Activities, bond discounts, prepaid bond insurance and deferred amounts on refunding are amortized over the life of the bonds at the government-wide level. This is the amount of current year amortization.

Amortization

$	(110,147)

At the government-wide level interest is accrued on long term debt, whereas, at the fund level interest is recognized when paid. This is the current year change in accrued interest.

Accrued interest

$	29,639

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Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE C – CASH AND INVESTMENTS

All operating 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, 2025, the District's bank balance and carrying value were
$547,211. Exposure to custodial credit risk was as follows. The District maintains cash 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 the Federal Deposit Insurance Corporation or collateralized under Chapter 280, Florida Statutes.

Investments

As of September 30, 2025, the District had the following investments and maturities:

	Investment	
First American Government Obligations Fund
U.S. Bank Money Market
Total

 Maturities 
45 days* N/A

  Fair Value	

$

889,912

	1,606,311 
 $ 2,496,223 

*Weighted average maturity

The District categorizes its fair value

measurements

within the

fair value hierarchy recently value is the price that would

established by generally accepted accounting principles. The fair

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

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

- 26 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE C – CASH AND INVESTMENTS (CONTINUED)

Interest Rate Risk
The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Credit Risk

The District's investments 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, 2025, the District's investments in the First American Government Obligations Fund were rated AAAm by Standard & Poor's. The District’s investments in U.S. Bank Money Market were not rated.

Concentration of Credit Risk

The District places no limit on the amount it may invest in any one investment. The investments in First American Government Obligations Fund are 36% and the U.S. Bank Money Market represents 64% of the District’s total investments. The District considers any decline in fair value for certain investments to be temporary.

NOTE D – CAPITAL ASSETS

Capital asset activity for the year ended September 30, 2025 was as follows:

Balance October 1,
	2024	

Balance September 30,
	2025	

	Additions	

  Deletions	

Governmental Activities:
Capital assets, not being depreciated Land and improvements

 $  84,410,571 

 $	- 

 $	- 

 $  84,410,571 

Capital assets, being depreciated Infrastructure
Improvements
Total Capital Assets, Being Depreciated

39,039,107
	562,032 
	39,601,139 

-
	- 
	- 

-
	- 
	- 

39,039,107
	562,032 
	39,601,139 

Less accumulated depreciation for: Infrastructure
Improvements
Total Accumulated Depreciation
Total Capital Assets Depreciated, Net

(25,375,418)
	(562,032)
	(25,937,450)
	13,663,689 

(1,951,956)
	- 
	(1,951,956)
	(1,951,956)

-
	- 
	- 
	- 

(27,327,374)
	(562,032)
	(27,889,406)
	11,711,733 

Governmental Activities Capital Assets

 $  98,074,260 

 $ (1,951,956)

 $	- 

 $  96,122,304 

Depreciation of $1,951,956 was charged to physical environment.

- 27 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE E – INTERFUND ACTIVITY
Interfund balances at September 30, 2025, consisted of the following:

 Payable Fund 
General Fund

 Receivable Fund	 Debt Service Fund 2014 Debt Service Fund 2018
Total

$

6,897

	32,723 
 $	39,620 

Interfund balances relate to revenue collected by the General Fund for the Debt Service Funds that were not remitted as of year-end.

Interfund transfers for the year ended September 30, 2025, consisted of the following:

Transfers Out
Capital Projects

Fund 2018
188

Transfers In
Debt Service Fund 2018

$

Transfers were made in accordance with the Trust Indenture.

NOTE F – LONG-TERM DEBT

The following is a summary of activity in the long-term debt of September 30, 2025:

the District for the year ended

Long-term debt at October 1, 2024 Principal payments
Long-term debt at September 30, 2025 Less: bond discount, net
Long-term Debt, Net at September 30, 2025

$

28,125,000

		(1,890,000) 26,235,000
	(311,247)
$	25,923,753 

Capital Improvement Revenue Bonds

Series 2014 A-1 Capital Improvement Revenue Refunding Bonds,
$5,430,000, maturing in May 2036. Interest at a rate of 6.90% is due November 1, beginning November 2016. Current portion is
$240,000.

$

3,785,000

Series 2014 A-2 Capital Improvement Revenue Refunding Bonds,
$1,145,000, maturing in May 2036. Interest at a rate of 6.90% is due November 1, beginning November 2016. Current portion is
$20,000.

420,000

- 28 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE F – LONG-TERM DEBT (CONTINUED)

Capital Improvement Revenue Bonds (Continued)

Series 2018 A-1 Capital Improvement Revenue and Refunding Bonds, $24,465,000, due in annual principal installments beginning May 2019, maturing in May 2036. Interest rates ranging from 2.00% to 3.70% is due May 1 and November 1, beginning May 2018. Current portion is $1,250,000.

16,360,000

Series 2018 A-2 Capital Improvement Revenue and Refunding Bonds, $8,740,000, due in annual principal installments beginning May 2019, maturing in May 2036. Interest rates ranging from 4.125% to 5.000% is due May 1 and November 1, beginning May 2018. Current portion is $400,000.

	5,670,000

Bonds payable Bond discount, net

26,235,000
	(311,247)

Bond Payable, Net

$  25,923,753 

The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2025 are as follows:

Year Ending
  September 30,	

	Principal	

	Interest	

	Total	

2026
2027
2028
2029
2030
2031-2035
2036

$

1,910,000
1,985,000
2,070,000
2,175,000
2,280,000
12,885,000

$

1,140,535
1,066,595
987,694
903,305
808,910
2,457,845

$

3,050,535
3,051,595
3,057,694
3,078,305
3,088,910
15,342,845

	2,930,000 

	133,530 

	3,063,530 

Totals

 $	26,235,000 

 $	7,498,414 

 $	33,733,414 

- 29 -

Arborwood Community Development District NOTES TO THE FINANCIAL STATEMENTS
September 30, 2025

NOTE F – LONG-TERM DEBT (CONTINUED)

Summary of Significant Bonds Resolution Terms and Covenants

The Trust Indenture has certain restrictions and requirements relating to 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.

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

Reserve Fund – The Series 2014A1/A2, 2018A-1, and 2018A-2 Capital Improvement Revenue Bonds Reserve Accounts are funded from the proceeds of the Bonds in an amount equal to reserve accounts percentage times the deemed outstanding principal amount of the bonds, as of the time of any such calculation. Monies held in the reserve accounts will be used only for the purposes established in the Trust Indenture.

Reserve
	Balance	

Reserve
 Requirement 

Series 2014A-1 Capital Improvement Revenue Refunding Bond Series 2014A-2 Capital Improvement Revenue Refunding Bond Series 2018A-1 Capital Improvement Revenue Refunding Bond Series 2018A-2 Capital Improvement Revenue Refunding Bond

$
$
$
$

503,233
107,960
454,732
340,813

$
$
$
$

501,467
57,598
454,543
339,938

The District also holds a bond insurance policy in partial satisfaction Reserve Account Requirement.

of the Series 2018A-1

NOTE G – 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. Settled claims from these risks did not exceed commercial coverage over the past three years.

- 30 -

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

To the Board of Supervisors
Arborwood Community Development District Lee County, Florida

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements, as listed in the table of contents, of Arborwood Community Development District, as of and for the year ended September 30, 2025, and the related notes to the financial statements, which collectively comprise the basic financial statements and have issued our report thereon dated July 28, 2026.

Report on Internal Control Over Financial Reporting

In planning and performing our audit, we considered Arborwood Community Development District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Arborwood Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Arborwood Community Development District's internal control.

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

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

- 31 -

To the Board of Supervisors
Arborwood Community Development District

Report on Compliance and Other Matters

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

Purpose of this Report

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

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

July 28, 2026

- 32 -

MANAGEMENT LETTER

To the Board of Supervisors
Arborwood Community Development District Lee County, Florida

Report on the Financial Statements
We have audited the financial statements of Arborwood Community Development District as of and for the year ended September 30, 2025, and have issued our report thereon dated July 28, 2026.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Chapter 10.550, Rules of the Florida Auditor General.
Other Reports and Schedule
We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and our Independent Auditor’s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated July 28, 2026, 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 made to address findings and recommendations made in the preceding financial audit report. There were no findings or recommendations in the preceding financial audit report.

- 33 -

To the Board of Supervisors
Arborwood Community Development District

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

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

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

Specific Information

The information below was provided by management and has not been audited by us; therefore, we do not express an opinion or provide any assurance on the information.

As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)7, Rules of the Auditor General, Arborwood Community Development District reported:

1)

The total number of District employees compensated in the last pay period of the District’s fiscal year as: 0
The total number of independent contractors, to whom nonemployee compensation was paid in the last month of the District’s fiscal year as: 4
All compensation earned by or awarded to employees, whether paid or accrued, regardless of contingency as: $0
All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of contingency: $96,983
Each construction project with a total cost of at least $65,000 approved by the District that is scheduled to begin on or after October 1, 2024, together with the total expenditures for such project as: N/A
A budget variance based on the budget adopted under Section 189.016(4), Florida Statutes, before the beginning of the fiscal year being reported if the District amends a final adopted budget under Section 189.016(6), Florida Statutes: The Board amended the budget. See Original Budget vs. Actual below:

2)

3)

4)

5)

6)

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To the Board of Supervisors
Arborwood Community Development District

Variance with Original Budget Positive (Negative)

Original Budget

Actual

Revenues
Special assessments

$

506,263

$

508,167

$

1,904

Expenditures Current
General government
Physical environment Total Expenditures

202,313
318,950

138,727
308,295

63,586
10,655

521,263

447,022

74,241

Net changes in fund balance

(15,000)

61,145

76,145

Fund Balances - October 1, 2024

15,000

420,463

405,463

Fund Balances - September 30, 2025

$

-

$

481,608

$

481,608

As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)9, Rules of the Auditor General, Arborwood Community Development District reported:

1)

The rate or rates of non-ad valorem special assessments imposed by the District:
$57.52 – $237 for the General Fund and $297 – $1,782.82 for the Debt Service Fund The amount of special assessments collected by or on behalf of the District: $3,634,808 The total amount of outstanding bonds issued by the District and the terms of such bonds are as follows: $3,785,000 Series 2014A-1 Bonds due on May 1, 2036, $420,000 Series 2014A-2 Bonds due on May 1, 2036, $16,360,000 Series 2018A-1 Bonds due on May 1, 2036, $5,670,000 Series 2018A-2 Bonds due on May 1, 2036. See Note F of the report for additional details.

2)
3)

Additional Matters

Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or fraud, waste, or abuse, that has occurred or is likely to have occurred, that has 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 note any such findings.

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To the Board of Supervisors
Arborwood Community Development District

Purpose of this Letter

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

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

July 28, 2026

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

To the Board of Supervisors
Arborwood Community Development District Lee County, Florida

We have examined Arborwood Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2025. Management is responsible for Arborwood Community Development District's compliance with those requirements. Our responsibility is to express an opinion on Arborwood Community Development District's compliance based on our examination.

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

In our opinion, Arborwood Community Development District complied, in all material respects, with the aforementioned requirements during the year ended September 30, 2025.

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

July 28, 2026

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