SCENIC TERRACE SOUTH COMMUNITY DEVELOPMENT DISTRICT

FINANCIAL STATEMENTS

September 30, 2025

SCENIC TERRACE SOUTH COMMUNITY DEVELOPMENT DISTRICT
FINANCIAL STATEMENTS
September 30, 2025
CONTENTS
PAGE
Independent Auditors’ Report	1-3
Management’s Discussion and Analysis	4-8
Government-wide Financial Statements:
Statement of Net Position	9
Statement of Activities	10
Fund Financial Statements:
Balance Sheet – Governmental Funds	11
Reconciliation of Total Governmental Fund Balances
to Net Position of Governmental Activities	12
Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds	13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities	14
Notes to the Financial Statements	15-27
Required Supplementary Information
Statement of Revenues and Expenditures – Budget and Actual – General Fund	28
Notes to Required Supplementary Information	29
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	30-31
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	32
Auditor’s Management Letter Required by Chapter 10.550, Florida Statutes	33-35

DMHB

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

To the Board of Supervisors
Scenic Terrace South Community Development District Town of Lake Hamilton, Florida
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of Scenic Terrace South Community Development District, Town of Lake Hamilton, Florida (“District”) as of and for the year ended September 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2025, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

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

Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 17, 2026, on our consideration of the Scenic Terrace South Community Development District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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.
Report on Other Legal and Regulatory Requirements
We have also issued our report dated June 17, 2026 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
June 17, 2026

Our discussion and analysis of Scenic Terrace South Community Development District, Town of Lake Hamilton, Florida (“District”) financial performance provides an overview of the District's financial activities for the fiscal year ended September 30, 2025. Please read it in conjunction with the District's Independent Auditor's Report, basic financial statements, accompanying notes and supplementary information to the basic financial statements.

FINANCIAL HIGHLIGHTS
	The assets of the District exceeded its liabilities at the close of the most recent fiscal year resulting in a net position balance of $16,465,842.
The change in the District's total net position in comparison with the prior fiscal year was
$681,853, an increase. The key components of the District's net position and change in net position are reflected in the table in the government-wide financial analysis section.
	At September 30, 2025, the District's governmental funds reported combined ending fund balances of $2,112,590. A portion of fund balance is restricted for debt service and future capital repairs and replacement, nonspendable prepaid items, and the remainder is unassigned fund balance which is available for spending at the District’s discretion.

OVERVIEW OF FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as the introduction to the District's financial statements. The District's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the District's finances, in a manner similar to a private-sector business.

The statement of net position presents information on all the District's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.

The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

The government-wide financial statements include all governmental activities that are principally supported by special assessment revenues. The District does not have any business-type activities. The governmental activities of the District include the general government (management) and maintenance and operations.
Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has one fund category: governmental funds.

Governmental Funds

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a District's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District's near-term financing decisions.
Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains three individual governmental funds for external reporting. Information is presented in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, debt service fund and capital projects fund. All funds are major funds. The District adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget.

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

GOVERNMENT WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of an entity's financial position. In the case of the District, assets exceeded liabilities at the close of the most recent fiscal year. A portion of the District's net position reflects its investment in capital assets (e.g. land, land improvements and infrastructure). These assets are used to provide services to residents; consequently, these assets are not available for future spending. The remaining balance of unrestricted net position may be used to meet the District's other obligations.
Key components of net position were as follows:

	Statement of Net Position		
		2025		2024	
Current assets		$ 2,181,058		$ 2,008,619	
Capital assets		33,953,353		33,776,562	
Total assets		36,134,411		35,785,181	
Current liabilities		815,515		772,780	
Long-term liabilities	18,853,054		19,228,412	
Total liabilities	19,668,569		20,001,192	
Net position	
Net invested in capital assets	14,729,799		14,275,963	
Restricted for debt service	1,031,462		846,121	
Restricted for capital projects	161,918		101,722	
Unrestricted	542,663		560,183	
Total net position	$ 16,465,842		$ 15,783,989	
The District's net position increased during the most recent fiscal year. The majority of the change represents the degree to which program revenues exceeded ongoing cost of operations.
Key elements of the District's change in net position are reflected in the following table:
Change in Net Position

	2025		2024	
Program revenues	$	2,166,644		$ 8,001,986	
General revenues		143,342 			137,369 	
Total revenues		2,309,986 			8,139,355 	
Expenses	
General government	105,199		104,326	
Maintenance and operations	441,453		83,706	
Culture and recreation	153,467		29,064	
Interest on long-term debt	928,014		968,286	
Cost of issuance	-		217,775	
Total expenses		1,628,133 			1,403,157 	
Change in net position	681,853		6,736,198	
Net position - beginning of period		15,783,989 			9,047,791 	
Net position - end of year	$ 16,465,842		$15,783,989	

As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2025 was $1,628,133, which consisted of interest on long-term debt and costs associated with constructed and maintaining certain capital improvements. The costs of the District’s activities were funded by developer contributions and assessments.
GENERAL BUDGETING HIGHLIGHTS

An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2025.

The variance between budgeted and actual general fund revenues is not considered significant. The actual general fund expenditures for the current fiscal year were lower than budgeted amounts due primarily to anticipated costs which were not incurred in the current fiscal year. The general fund reported a deficit for fiscal year ended September 30, 2025 which was funded with prior year surpluses.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets
At September 30, 2025, the District had $33,953,353 invested in capital assets and construction in process. Construction in process has not completed as of September 30, 2025 and therefore is not depreciated to date. Once projects are complete, items will transfer to depreciable assets. More detailed information about the District’s capital assets is presented in the notes of the financial statements.

Capital Debt

At September 30, 2025, the District had $19,223,554 in notes payable and Bonds outstanding for its governmental activities. More detailed information about the District’s capital debt is presented in the accompanying notes to the financial statements.

ECONOMIC FACTORS, NEXT YEAR'S BUDGET AND OTHER INFORMATION

For the fiscal year 2026, 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.

CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, land owners, customers, investors and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact Scenic Terrace South Community Development District's Finance Department at 219 E. Livingston Street, Orlando, Florida 32801.

STATEMENT OF NET POSITION
September 30, 2025

ASSETS

GOVERNMENTAL
	ACTIVITIES	

Cash and cash equivalents	$	246,084
Investments	496,181
Assessments receivable	5,260
Due from developer	11,253
Due from other	15
Prepaid items	17,645
Restricted assets:
Investments	1,404,620
Capital assets:
Non-depreciable	33,863,555
Depreciable	89,798

TOTAL ASSETS
LIABILITIES

$	36,134,411

Accounts payable	$	68,468	
Accrued interest payable	376,547	
Bonds and notes payable, due within one year	370,500	
Bonds and notes payable, due in more than one year	18,853,054	
TOTAL LIABILITIES	19,668,569	
NET POSITION	
Net investment in capital assets	14,729,799	
Restricted for:
Debt service	
1,031,462	
Capital projects	161,918	
Unrestricted	542,663	
TOTAL NET POSITION	$	16,465,842	

STATEMENT OF ACTIVITIES
Year Ended September 30, 2025

Functions/Programs	Expenses

Charges for Services

Program Revenues Operating Grants and Contributions

Capital Grants and Contributions

Net (Expense) Revenues and Changes in Net Position

Governmental Activities

Governmental activities		
General government		$	105,199		$	105,199		$	-		$	-		$	-	
Maintenance and operations		441,453		440,136			-			145,771		144,454	
Culture and recreation		153,467		153,467			-			-		-	
Interest on long-term debt		928,014		1,265,683			56,388			-		394,057	
Total governmental activities	$	1,628,133		$ 1,964,485		$	56,388		$	145,771		538,511	
General revenues:
Unrestriced investment earnings	11,180	
Miscellaneous income	73,837	
Interlocal revenue	58,325	
Total general revenues	143,342	
Change in net position	681,853	
Net position - October 1, 2024	15,783,989	
Net position - September 30, 2025	$ 16,465,842	

BALANCE SHEET – GOVERNMENTAL FUNDS
September 30, 2025

MAJOR FUNDS

CAPITAL

TOTAL GOVERNMENTAL

ASSETS

	GENERAL	  DEBT SERVICE

	PROJECTS	 	FUNDS	

Cash and cash equivalents	$	95,434		$	-		$	150,650		$	246,084	
Investments	496,181		1,404,620		-		1,900,801	
Assessments receivable	1,871		3,389		-		5,260	
Prepaid items	17,645		-		-		17,645	
Due from developer	-		-		11,253		11,253	
Due from other	-		-		15		15	
TOTAL ASSETS	$	611,131		$ 1,408,009		$	161,918		$	2,181,058	

LIABILITIES AND FUND BALANCES

LIABILITIES
Accounts payable	
$	68,468		
$	-		
$	-		
$	68,468	
TOTAL LIABILITIES	68,468		-		-		68,468	

FUND BALANCES
Nonspendable: Prepaid items	

17,645	

-	

-	

17,645	
Restricted for:					
Debt service		-		1,408,009			-			1,408,009	
Capital projects		-		-			161,918			161,918	
Unassigned		525,018		-			-			525,018	
TOTAL FUND BALANCES		542,663		1,408,009			161,918			2,112,590	
TOTAL LIABILITIES AND											
FUND BALANCES	$	611,131		$ 1,408,009		$	161,918		$	2,181,058	

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2025

Total Governmental Fund Balances in the Balance Sheet	$	2,112,590

Amount reported for governmental activities in the Statement of Net Assets 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	33,998,141
Less accumulated depreciation	(44,788)
Certain liabilities are not due and payable in the current period and therefore are not reported in the governmental funds:

Accrued interest payable	(376,547)	
Original issue discount	4,119	
Governmental bonds payable	(19,227,673)	
Net Position of Governmental Activities	$ 16,465,842

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
Year Ended September 30, 2025

	MAJOR FUNDS				TOTAL	
						CAPITAL	GOVERNMENTAL	
		GENERAL   DEBT SERVICE  	PROJECTS	 	FUNDS		
REVENUES
Developer contributions	
$	
-	
$	
-	
$	
143,668	
$	
143,668	
Assessments		698,802		1,265,683		-		1,964,485	
Investment earnings		11,180		56,388		2,103		69,671	
Miscellaneous revenue		73,837		-		-		73,837	
Interlocal revenue		58,325		-		-		58,325	
TOTAL REVENUES		842,144			1,322,071			145,771			2,309,986	
EXPENDITURES
General government		
104,082		
-		
1,117		
105,199	
Maintenance and operations		441,453		-		-		441,453	
Culture and recreation		126,550		-		-		126,550	
Capital outlay Debt
Principal		-

22,187		-

330,000		203,708

-		203,708

352,187	
Interest expense		15,392		917,809		-		933,201	
TOTAL EXPENDITURES		709,664			1,247,809			204,825			2,162,298	
EXCESS REVENUES OVER (UNDER) EXPENDITURES		
132,480		
74,262		
(59,054)		
147,688	
OTHER SOURCES (USES)
Transfers in (out)		
(150,000)		
-		
150,000		
-	
TOTAL OTHER SOURCES (USES)		(150,000)			-			150,000			-	
EXCESS REVENUES OVER (UNDER) EXPENDITURES AND OTHER USES		

(17,520)		

74,262		

90,946		

147,688	
FUND BALANCE
Beginning of year		
560,183		
1,333,747		
70,972		
1,964,902	
End of year	$	542,663	$	1,408,009	$	161,918	$	2,112,590	

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Year Ended September 30, 2025

Net Change in Fund Balances - Total Governmental Funds	$	147,688

Amount reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the costs of those assets are depreciated over their estimated useful lives:
Capital outlay	203,708
Repayment of long-term liabilities are reported as expenditures in the governmental fund financial statements, but such repayments reduce liabilities in the Statement of Net Position and are eliminated in the Statement of Activities:
Payments on long-term debt	352,187
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:
Curent year provision for depreciation	(26,917) Provision for amortization of bond discount		(142)
Change in accrued interest payable	5,329

Change in Net Position of Governmental Activities	$	681,853

NOTE A- NATURE OF ORGANIZATION AND REPORTING ENTITY
Scenic Terrace South Community Development District ("District”) was created on October 5, 2021 by the Town Council of Town of Lake Hamilton, Florida Ordinance No. O-21-19 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes. The boundaries of the District were amended on May 2, 2023 by the Town Council of Town of Lake Hamilton, Florida Ordinance No. O-23-05 pursuant to the Act. The Act provides among other things, the power to manage basic services for community development, power to borrow money and issue bonds, and to levy and assess non-ad valorem assessments for the financing and delivery of capital infrastructure.
The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of a portion of the infrastructure necessary for community development within the District.
The District is governed by the Board of Supervisors ("Board"), which is composed of five members. The majority of the Board members are affiliated with the Developer or landowner. The Supervisors are elected on an at large basis by the qualified electors of the property owners within the District. The Board of Supervisors of the District exercise all powers granted to the District pursuant to Chapter 190, Florida Statutes.
The Board has the responsibility for:
Assessing and levying assessments.
Approving budgets.
Exercising control over facilities and properties.
Controlling the use of funds generated by the District.
Approving the hiring and firing of key personnel.
Financing Improvements.
The financial statements were prepared in accordance with Governmental Accounting Standards Board ("GASB") Statements. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District Board of Supervisors is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Government-Wide and Fund Financial Statements
The basic financial statements include both government-wide and fund financial statements. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Government-Wide and Fund Financial Statements (continued)
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment. Operating-type special assessments for maintenance and debt service are treated as charges for services and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Other Items not included among program revenues are reported instead as general revenues.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and similar items are to be recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the economic financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures are recorded when a liability is incurred, as under accrual accounting. 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.
Assessments and interest associated with the current fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. The portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued)
The District reports the following major governmental funds:
General Fund
The general fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund.
When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first for qualifying expenditures, then unrestricted resources as they are needed.
Debt Service Fund
The debt service fund is used to account for the accumulation of resources for the annual payment of principal and interest of long-term debt.
Capital Projects Fund
The capital projects fund accounts for the financial resources to be used for the acquisition or construction of major infrastructure with the District.
Assets, Liabilities and Net Position or Equity
Restricted Assets
These assets represent cash and investments set aside pursuant to contractual restrictions. 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;

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Assets, Liabilities and Net Position or Equity (continued)

Deposits and Investments (continued)

Interest bearing time deposits or savings accounts in qualified public depositories;
Direct obligations of the U.S. Treasury.

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 State Board of Administration’s (“SBA”) Local Government Surplus Funds Trust Fund (“Florida PRIME”) is a“2a-7 like” pool. A “2a-7 like” pool is an external investment pool that is not registered with the Securities and Exchange Commission (“SEC”) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a-7 of the Investment Company Act of 1940, which comprises the rules governing money market funds. Thus, the pool operates essentially as a money market fund. The District has reported its investment in Florida PRIME at amortized cost for financial reporting purposes.

The District records all interest revenue related to investment activities in the respective funds and reports investments at fair value.

Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Capital Assets

Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, sidewalks and similar items) are reported in the government activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Assets, Liabilities and Net Position or Equity (continued)

Capital Assets (continued)

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

In the governmental fund financial statements, amounts incurred for the acquisition of capital assets are reported as fund expenditures. Depreciation expense is not reported in the governmental fund financial statements.

Capital assets of the District are depreciated using the straight-line method over the following useful lives:

Assets	Years
Equipment	5
Unearned Revenue
Governmental funds report unearned revenue in connection with resources that have been received, but not yet earned.
Long-Term Obligations
In the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the Bonds. Bonds payable are reported net of applicable premiums or discounts. Bond issuance costs are expensed when incurred.
In the fund financial statements, governmental fund types recognize premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets, Liabilities and Net Position or Equity (continued)
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
Fund Equity/Net Position
In the fund financial statements, governmental funds report non spendable and restricted fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Assignments of fund balance represent tentative management plans that are subject to change.
Committed fund balance - Amounts that can be used only for the specific purposes determined by a formal action (resolution) of the Board of Supervisors. Commitments may be changed or lifted only by the Board of Supervisors taking the same formal action (resolution) that imposed the constraint originally. Resources accumulated pursuant to stabilization arrangements sometimes are reported in this category.
Assigned fund balance - Includes spendable fund balance amounts that are intended to be used for specific purposes that are neither considered restricted nor committed. The Board can assign fund balance as it does when appropriating fund balance to cover differences in estimated revenue and appropriations in the subsequent year's appropriated budget. Assignments are generally temporary and normally the same formal action need not be taken to remove the assignment.
The District first uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.
Net position is the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources. Net position in the government-wide financial statements are categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents net position related to infrastructure and property, plant and equipment. Restricted net position represents the assets restricted by the District’s Bond covenants or other contractual restrictions. Unrestricted net position consists of the net position not meeting the definition of either of the other two components.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Other Disclosures
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.
NOTE C - 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 D – DEPOSITS AND INVESTMENTS
Deposits
The District's cash balances, including certificates of deposit, were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer. Florida Statutes Chapter 280, "Florida Security for Public Deposits Act", requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral equal to various percentages of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally, U.S. Governmental and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository's financial history and its compliance with Chapter 280. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses.

NOTE D – DEPOSITS AND INVESTMENTS (CONTINUED)

Deposits (continued)

The District’s investments were held as follows at September 30, 2025:
Investment	Fair Value	Credit Risk		Maturities Money Market Mutual Funds - First			Weighted average of the

American Treasury Obligation CL Y

$	1,404,620

S&P AAAm	fund portfolio: 48 days

Investment in Local Government Surplus			Weighted average maturity Funds Trust Fund (Florida PRIME)	496,181	S&P AAAm		47 days
Total Investments	$	1,900,801
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 the investments or collateral securities that are in the possession of an outside party. The District has no formal policy for custodial risk. The investments listed in the schedule above are not evidenced by securities that exist in physical or book entry form.
Credit risk - For investments, credit risk is generally the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Investment ratings by investment type are included in the preceding summary of investments.
Concentration risk - The District places no limit on the amount the District may invest in any one issuer.
Interest rate risk - The District does not have a formal policy that limits investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates.
Fair Value Measurement - When applicable, the District measures and records its investments using fair value measurement guidelines established in accordance with GASB Statements. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques.

These guidelines recognize a three-tiered fair value hierarchy, in order of highest priority, as follows:
Level 1: Investments whose values are based on unadjusted quoted prices for identical investments in active markets that the District has the ability to access;
Level 2: Investments whose inputs - other than quoted market prices - are observable either directly or indirectly; and,
Level 3: Investments whose inputs are unobservable.

NOTE D – DEPOSITS AND INVESTMENTS (CONTINUED)

Investments (continued)

The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the entire fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs.

Money market investments that have a maturity at the time of purchase of one year or less and are held by governments other than external investment pools should be measured at amortized cost. For external investment pools that qualify to be measured at amortized cost, the pool's participants should also measure their investments in that external investment pool at amortized cost for financial reporting purposes. Accordingly, the District's investments have been reported at amortized cost above.

The District participated in the following external investment pools:

The State Board of Administration for participation in the Local Government Investment Pool (Florida PrimeTM) created by Section 218.415, Florida Statutes is an investment pool that operates under investment guidelines established by Section 215.47, Florida Statutes. The District’s investments in Florida PrimeTM, a qualified external investment pool, meet the requirements of GASB Statement No. 79 and are reported at amortized cost.

NOTE E – INTERFUND TRANSFERS
Interfund transfers for the fiscal year ended September 30, 2025 were as follows:

 Fund		  Transfer In 	 Transfer Out 	
General	$	-	$	150,000	
Capital projects		150,000 		-		
Total	 $	150,000 	 $	150,000 	

Transfers are used to move revenues and other financing sources from the fund where collection occurs to the fund where funds have been reallocated for use. In the case of the District, transfers from the general fund to the capital projects fund were per the approved budget were made in order to accumulate funds for repairs and maintenance projects.

NOTE F - CAPITAL ASSETS

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

Balance
10/01/2024	Increases	Decreases

Balance 09/30/2025

Governmental activities:
Capital assets, not being depreciated:		
Construction in process	$ 33,659,847		$	203,708		$	-		$ 33,863,555	
Total capital assets, not being								
depreciated	33,659,847			203,708			-		33,863,555	
Capital assets, being depreciated Equipment - financed purchase	
134,586			
-			
-		
134,586	
Total capital assets, being
depreciated	
134,586			
-			
-		
134,586	
Less accumulated depreciation for: Equipment - financed purchase	
17,871			
26,917			
-		
44,788	
Total accumulated depreciation	17,871			26,917			-		44,788	
Total capital assets, being depreciated - net	
116,715			
(26,917)			
-		
89,798	
Governmental activities capital assets - net	
$33,776,562		
$	
176,791		
$	
-		
$33,953,353	
Depreciation expense was charged to culture and recreation.

The District Capital Improvement Project (“CIP”) is being built in phases. A portion of the project costs will be financed with the proceeds from the issuance of Bonds with the remainder to be funded by the Developer and conveyed to the District. The infrastructure will include roadways, potable water and wastewater systems, and land improvements. Upon completion, certain infrastructure is to be conveyed to others for ownership and maintenance.
Developer contributions to the capital projects fund for the current fiscal year were $143,667 which includes a receivable of $11,253.

NOTE G – LONG-TERM LIABILITIES
$22,350,000 Special Assessment Bonds, Series 2022 (Series 2022 Project) - On April 6, 2022, the District issued $22,350,000 in Special Assessment Bonds, Series 2022 (Series 2022 Project). The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the property within the District. The Bonds are payable May 2053. The Bonds bear interest ranging from 3.750% to 4.625% payable semi-annually on the first day of each May and November. Principal is due serially each May 1, commencing May 2024.
$2,195,000 Special Assessment Bonds, Series 2023 (Series 2023 Project) - On October 20, 2023, the District issued $2,195,000 in Special Assessment Bonds, Series 2023 (Series 2023 Project). The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the property within the District. The Bonds are payable through November 2053. The Bonds bear interest ranging from 5.75% to 6.75% payable semi-annually on the first day of each May and November. Principal is due serially each November 1, commencing November 2024.
The Series 2022 and 2023 Bonds are subject to redemption at the option of the District prior to maturity. The Series 2022 and 2023 Bonds are subject to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture.
The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The requirements have been met for the fiscal year ended September 30, 2025.

Financed Purchase Agreement
In February 2024, the District entered into a capital lease agreement for the acquisition of pool furniture and playground equipment. The total acquisition cost of the equipment was $134,586 which was recognized as a capital lease obligation. The term of the lease is from February 1, 2024 through January 1, 2029 and is payable in monthly installments of $3,132.

NOTE G – LONG-TERM LIABILITIES (CONTINUED)

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

	Balance			Balance	Due Within	
	10/01/2024	Additions	Deletions	09/30/2025	One Year	
Special Assessments Bonds, Series 2022	
$ 17,265,000	
$	-	$	
310,000	
$16,955,000	
$ 315,000	
Special Assessments Bonds, Series 2023	
2,195,000	
-	
20,000	
2,175,000	
30,000	
Note payable - financed						
purchase	119,860	-	22,187	97,673	25,500	
	19,579,860	-	352,187	19,227,673	370,500	
Unamortized bond discount	(4,261)	-	(142)	(4,119)	-	
	$ 19,575,599	$	-	$	352,045	$19,223,554	$ 370,500	
The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2025 are as follows:

  September 30, 		Principal			Interest			Total		
2026	$	345,000	$	904,819	$	1,249,819	
2027	360,000	891,281	1,251,281	
2028	375,000	877,181	1,252,181	
2029	390,000	861,081	1,251,081	
2030	405,000	844,425	1,249,425	
2031-2035	2,315,000	3,939,031	6,254,031	
2036-2040	2,925,000	3,344,469	6,269,469	
2041-2045	3,710,000	2,580,131	6,290,131	
2046-2040	4,720,000	1,584,775	6,304,775	
2051-2054		3,585,000 		364,031 		3,949,031 	
	 $ 19,130,000 	 $ 16,191,224 	 $	35,321,224 	

NOTE G – LONG-TERM LIABILITIES (CONTINUED)

The scheduled payments for years September 30, 2025 are as follows:

  September 30, 		Principal			Interest			Total		
2026	$	25,500	$	12,079	$	37,579	
2027	29,308	8,271	37,579	
2028	33,685	3,894	37,579	
2029	9,180	215	9,395	
2030		-			-			-		
	 $	97,673 	 $	24,459 	$	122,132	

NOTE H – DEVELOPER TRANSACTIONS
The Developer has agreed to fund the general operations of the District. See Note E for other Developer transactions.
The Developer owns a portion of land within the District; therefore, assessment revenues in the debt service funds include the assessments levied on those lots owned by the Developer.

NOTE I - MANAGEMENT COMPANY
The District has contracted with a management company to perform services which include financial and accounting advisory services. Certain employees of the management company also serve as officers of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, computer and other administrative costs.
NOTE J - 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 K – CONCENTRATION

The Districts activity is dependent upon the continued involvement of the Developer, the loss of which could have a material adverse effect on the District operations.

STATEMENT OF REVENUES AND EXPENDITURES BUDGET AND ACTUAL – GENERAL FUND
Year Ended September 30, 2025

	VARIANCE	
	WITH FINAL	
	BUDGET	
	ORIGINAL		FINAL				POSITIVE	
		BUDGET			  BUDGET				ACTUAL			  (NEGATIVE)		
REVENUES								
Assessments	$	691,023		$ 696,844		$	698,802		$	1,958	
Investment earnings	-		10,960		11,180		220	
Miscellaneous revenue	-		73,837		73,837		-	
Interlocal revenue	58,325		58,325		58,325		-	
TOTAL REVENUES	749,348		839,966		842,144		2,178	

EXPENDITURES
Current
General government	136,726	134,466	104,082	30,384	
Maintenance and operations	255,302	476,591	441,453	35,138	
Culture and recreation	207,320	185,429	126,550	58,879	
Debt	
Principal	-		-		22,187		(22,187)	
Interest	-		-		15,392		(15,392)	
TOTAL EXPENDITURES	599,348		796,486		709,664		86,822	
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES	

150,000		

43,480		

132,480		

89,000	

OTHER FINANCING SOURCES (USES)
Transfer in (out) - capital reserves	

(150,000)		

(150,000)		

(150,000)		

-	
Carryforward balance	-		106,520		-		(106,520)	
TOTAL OTHER FINANCING	(150,000)		(43,480)		(150,000)		(106,520)	
SOURCES (USES)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES		
AND OTHER SOURCES	$	-	$	-		(17,520)		$	89,000	
FUND BALANCES
Beginning of year			
560,183			
End of year			$	542,663			

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 did not exceed appropriations for the fiscal year ended September 30, 2025.

The variance between budgeted and actual general fund revenues is not considered significant. The actual general fund expenditures for the current fiscal year were lower than budgeted amounts due primarily to anticipated costs which were not incurred in the current fiscal year. The general fund reported a deficit for fiscal year ended September 30, 2025 which was funded with prior year surpluses.

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

To the Board of Supervisors
Scenic Terrace South Community Development District Town of Lake Hamilton, 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 Scenic Terrace South Community Development District, as of September 30, 2025 and for the year ended September 30, 2025, which collectively comprise Scenic Terrace South Community Development District’s basic financial statements and have issued our report thereon dated June 17, 2026.

Report on 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 201 • 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

Report on 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
June 17, 2026

- 31 -

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

To the Board of Supervisors
Scenic Terrace South Community Development District Town of Lake Hamilton, Florida

We have examined Scenic Terrace South Community Development District, Town of Lake Hamilton, Florida’s (“District”) compliance with the requirements of Section 218.415, Florida Statutes, in accordance with Rule 10.556(10) of the Auditor General of the State of Florida during the fiscal year ended September 30, 2025. Management is responsible for District’s compliance with those requirements. Our responsibility is to express an opinion on District’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced in Section 218.415, Florida Statutes. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the District’s compliance with specified requirements.
We are required to be independent and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the examination engagement.
In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2025.
This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, management, and the Board of Supervisors of Scenic Terrace South Community Development District, Town of Lake Hamilton, Florida 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
June 17, 2026

Management Letter

To the Board of Supervisors
Scenic Terrace South Community Development District Town of Lake Hamilton, Florida

Report on the Financial Statements
We have audited the financial statements of the Scenic Terrace South Community Development District (“District”) as of and for the fiscal year ended September 30, 2025, and have issued our report thereon dated June 17, 2026.
Auditors’ 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 Reporting Requirements
We have issued our Independent Auditors' 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 Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated June 17, 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 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 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. The information required is disclosed in the notes to the financial statements.

Financial Condition and Management
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not the District has 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 the 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 the District. It is management’s responsibility to monitor the District’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.
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.
Property Assessed Clean Energy (PACE) Programs
As required by Section 10.554(1)(i)6.a., Rules of the Auditor General, the District did not authorize a PACE program pursuant to Section 163.081 or Section 163.082, Florida Statutes, did not operate within the District’s geographical boundaries during the fiscal year under audit.
Specific Information
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the Auditor General, the Scenic Terrace South Community Development District reported:
The total number of district employees compensated in the last pay period of the District’s fiscal year as 3.
The total number of independent contractors to whom nonemployee compensation was paid in the last month of the District’s fiscal year as 8.
All compensation earned by or awarded to employees, whether paid or accrued, regardless of contingency as $2,200.
All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of contingency as $706,789.
. 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 of the fiscal year being reported, together with the total expenditures for such project as $597,794.
The District amended its final adopted budget under Section 189.016(6), Florida Statutes, as included on page 28.

As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)7, Rules of the Auditor General, the Scenic Terrace South Community Development District reported:
The rate or rates of non-ad valorem special assessments imposed by the District range from $881 to $1,878 per residential unit.
The total amount of special assessments collected by or on behalf of the District as
$1,964,485.
The total amount of outstanding bonds issued by the District as $19,130,000.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but 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 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.

DiBartolomeo, McBee, Hartley & Barnes, P.A. Fort Pierce, Florida
June 17, 2026