Deer Run Community Development District ANNUAL FINANCIAL REPORT September 30, 2025 Deer RunCommunityDevelopmentDistrictANNUAL FINANCIAL REPORTSeptember 30, 2025TABLE OF CONTENTS PageNumber REPORT OF INDEPENDENT AUDITORS1-3MANAGEMENT’S DISCUSSION AND ANALYSIS4-9BASIC FINANCIAL STATEMENTS: Government-wide Financial StatementsStatement ofNet PositionStatement of ActivitiesFund Financial Statements: Balance Sheet–Governmental FundsReconciliation of Total Governmental Fund BalancesPositionof Governmental ActivitiesStatement of Revenues, Expenditures and Changes iBalances–Governmental FundsReconciliation of the Statement of Revenues,ExpendituChangesin Fund Balances ofGovernmentalFunds Statement of ActivitiesStatement of Revenues, Expenditures and Changes iBalances–Budgetand Actual –General Fundto Netn Fundres andto the n Fund10111213141516Notes to Financial Statements17-30 INDEPENDENT AUDITORS’REPORT ON INTERNALCONTROL OVER FINANCIALREPORTING ANDON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS31-32 MANAGEMENT LETTER33-35 INDEPENDENT ACCOUNTANTS’REPORT/COMPLIANCE WITH SECTION218.415, FLORIDA STATUTES REPORT OF INDEPENDENT AUDITORS To the Board of Supervisors Deer Run Community Development District Bunnell, Florida Report on Audit of the Financial Statements Opinion We have audited the financial statements of the governmental activities and each major fund of Deer Run 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. To the Board of Supervisors Deer Run 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 Responsibility 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 theaudit. •Identify and assess the risks of material misstatement of the financial statements, whetherdue 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, anddisclosures in the financial statements. •Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose ofexpressing 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 ofsignificant accounting estimates made by management, as well as evaluate the overallpresentation of the financial statements. •Conclude whether, in our judgment, there are conditions or events, considered in theaggregate, that raise substantial doubt about the District’s ability to continue as a goingconcern 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. To the Board of Supervisors Deer Run 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 June 30, 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 June 30, 2026 Management’s discussion and analysis of Deer Run Community Development District’s (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities for the fiscal year ended September 30, 2025. 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. This report also contains other supplementary information in addition to the basic financial statements. 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, culture/recreation and debt service. Fund financial statements present financial information for governmental funds. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources. Deer Run Community Development DistrictMANAGEMENT’SDISCUSSION AND ANALYSISFor the YearEndedSeptember 30, 2025 OVERVIEWOFTHE FINANCIAL STATEMENTS (CONTINUED) Fund financial statementsinclude a balance sheetand astatement of revenues, expendituresandchanges infundbalancesfor allgovernmentalfunds.Astatement ofrevenues,expenditures,and changesinfundbalances –budgetandactualisprovided forthe District’s General Fund.Fund financial statementsprovide more detailed information aboutthe District’sactivities.Individualfundsare established bythe Districtto trackrevenuesthatarerestricted to certain usesor tocomply with legalrequirements. The government-wide financialstatementsand the fund financialstatementsprovide differentpictures ofthe District.The government-wide financial statementsprovide an overall picture ofthe District’s financial standing. These statements are comparable to private-sector companiesand give a good understanding ofthe District’s overall financial health and how the District paidforthe variousactivities,orfunctions,provided bythe District.Allassetsofthe District, includingcapital assets,are reportedin thestatement of netposition.All liabilities, includingprincipaloutstanding on bonds,areincluded.The statementofactivitiesincludesdepreciation on alllong-livedassetsoftheDistrict,buttransactionsbetween thedifferentfunctions of the Districthave been eliminated inorder to avoid “doubling up”the revenues andexpenses. The fund financialstatementsprovide a picture of the majorfunds of the District.Inthe caseofgovernmentalactivities,outlaysforlong lived assetsare reported asexpendituresand long-term liabilities, such asspecial assessmentbonds, are not included in the fundfinancialstatements.To provide a linkfromthe fund financialstatementstothegovernment- wide financial statements, areconciliation is provided from thefund financialstatementsto the government-wide financialstatements. Notesto financialstatementsprovide additionaldetailconcerning the financialactivitiesand financialbalancesoftheDistrict.Additionalinformation aboutthe accounting practicesoftheDistrict,investments ofthe District,capital assets and long-term debtare some of the itemsincluded in the notes to financial statements. Financial Highlights The following are the highlights of financial activity forthe year endedSeptember 30, 2025. .The District’s total assetswere exceeded by totalliabilitiesby$(1,891,627)(netposition). Unrestricted netpositionforgovernmentalactivities was$325,534.Net investment in capitalassetswas$(2,561,416).Restricted net position was$344,255. .Governmental activities revenuestotaled $1,845,016while governmental activitiesexpenses totaled$1,514,943. -5 - Deer Run Community Development DistrictMANAGEMENT’SDISCUSSION AND ANALYSISFor the YearEndedSeptember 30, 2025 OVERVIEWOFTHE FINANCIAL STATEMENTS (CONTINUED) FinancialAnalysis of the District The following schedule provides a summary ofthe assets, liabilities and netpositionof the District and is presented by category for comparison purposes. NetPosition Governmental Activities20252024 Current assets$558,136$375,318Restricted assets827,310772,217Capital assets4,406,3224,529,288 Total Assets5,791,7685,676,823 Current liabilities463,215440,217Non-current liabilities7,220,1807,458,306 Total Liabilities7,683,3957,898,523 Net PositionNet investment in capital assets(2,561,416)(2,311,044) Restricted344,255257,436Unrestricted325,534(168,092) Total Net Position$(1,891,627)$(2,221,700) The increase in current and restricted assetsis primarilydue to revenues in excess ofexpenditures at the fundlevel in the currentyear. The decrease in capitalassets isprimarilyrelated to depreciation in the current year. The decrease in totalliabilitiesisthe resultof principalpaymentsmadein the current year. -6 - Deer Run Community Development DistrictMANAGEMENT’SDISCUSSION AND ANALYSISFor the YearEndedSeptember 30, 2025 OVERVIEWOFTHE FINANCIAL STATEMENTS (CONTINUED) FinancialAnalysis of the District(Continued) The following schedule provides a summary ofthe changes in net positionofthe District and ispresentedby category for comparison purposes. It is not intended to be a completepresentation ofDistrict-wide financial activity. Change in NetPositionGovernmental Activities Program Revenues Charges for services Capital grants and contributionsGeneral Revenues Investment earnings Miscellaneous revenues Total Revenues$ 20251,695,84685,15156,2547,7651,845,016$ 20241,680,116- 42,8926,7901,729,798Expenses General government Physical environment Culture/recreation Interest and other charges Total Expenses126,965433,124538,599416,2551,514,943108,275407,855522,426429,2271,467,783Change in Net Position330,073262,015Net Position - Beginning ofYear(2,221,700)(2,483,715) Net Position - End of Year$ (1,891,627)$ (2,221,700) The increaseincharges for servicesisdue to theincrease inspecial assessments in the currentyear. The increasein generalgovernmentisrelatedto the increasein engineering fee expense in thecurrent year. The increasein physical environment ismainly related to theincrease inrepairs andmaintenancein the current year. The increase in capitalgrants and contributionsisrelated tothe District receiving pond tractsfromthe Developer in the current year. -7 - Deer Run Community Development DistrictMANAGEMENT’SDISCUSSION AND ANALYSISFor the YearEndedSeptember 30, 2025 OVERVIEWOFTHE FINANCIAL STATEMENTS (CONTINUED) Capital Assets Activity The following schedule provides a summary of the District’scapital assets as ofSeptember 30,2025and2024. Governmental ActivitiesDescription20252024 Land$ 85,151$ - Construction in progress-42,255Infrastructure3,669,2913,584,781Buildings and improvements3,213,2963,213,296Accumulated depreciation(2,561,416)(2,311,044) Total Capital Assets (Net)$ 4,406,322$ 4,529,288 Capital assetactivityfor the yearconsisted ofadditions to land, $85,151, additions toconstruction in progress, $42,255, the transferof construction in progress to infrastructure, $84,510,and depreciation,$250,372. General Fund Budgetary Highlights Actualexpenditureswerelessthanbudgeted expendituresprimarilybecauseelectricityandlandscape maintenanceexpenditureswere lessthan anticipated. The September 30, 2025budgetwasnot amended. Debt Management Governmentalactivities debtincludes the following: .In August2018,theDistrictissueddebtof$11,175,000 ofSpecialAssessmentRevenueand Refunding Bonds, Series 2018. These bonds were issued to refund a portion oftheSeries 2008 Special AssessmentRevenue Bonds andto provide funding for the Series2018 Project. The balance outstanding at September 30, 2025was$7,485,000. Economic Factors and Next Year’s Budget Deer Run Community Development Districtdoes not expect any economic factorsto have anysignificant effect on thefinancial position or results of operations ofthe District in fiscal year2026. -8 - Deer Run Community Development DistrictMANAGEMENT’SDISCUSSION AND ANALYSISFor the YearEndedSeptember 30, 2025 OVERVIEWOFTHE FINANCIAL STATEMENTS (CONTINUED) Requestfor Information The financial report isdesigned to provide ageneral overview ofDeer Run CommunityDevelopment District’sfinances for all those with an interest. Questionsconcerning any of theinformation provided in this report orrequests for additional information should be addressedto theDeerRunCommunityDevelopmentDistrict, Governmental ManagementServices,LLC, 475West Town Place,Suite 114, St. Augustine, Florida32092. -9 - Deer Run Community Development DistrictSTATEMENT OF NET POSITIONSeptember 30, 2025GovernmentalActivitiesASSETSCurrent AssetsCash $ 59,931Investments424,496Due from other governments4,778Due from others1,160Prepaid expenses42,771Deposits25,000Total Current Assets558,136Non-current AssetsRestricted assetsInvestments827,310Capital assets, not being depreciatedLand85,151Capital assets, being depreciatedBuildings and improvements3,213,296Infrastructure3,669,291Less: accumulated depreciation(2,561,416) Total Non-current Assets5,233,632Total Assets5,791,768LIABILITIESCurrent LiabilitiesAccounts payable and accrued expenses63,652Accrued interest169,563Bonds payable230,000Total Current Liabilities463,215Non-current LiabilitiesBonds payable, net7,220,180Total Liabilities7,683,395NET POSITIONNet investment in capital assets(2,561,416) Restricted-debt service319,080Restricted-capital projects25,175Unrestricted 325,534Total Net Position$ (1,891,627) See accompanying notes to financial statements. - 10 - STATEMENT OF ACTIVITIESFor the Year Ended September30, 2025Deer Run Community Development DistrictFunctions/ProgramsExpensesCharges forServicesCapital Grants and ContributionsProgram RevenuesNet (Expense) Revenues andChanges inNet PositionGovernmentalActivities Governmental ActivitiesGeneral governmentPhysical environmentCulture/recreationInterest and other charges Total Governmental Activities(126,965)$ (433,124) (538,599) (416,255) $ (1,514,943) 158,442$ -$ 381,94385,151471,630- 683,831- 1,695,846$ 85,151$ $ 31,47733,970(66,969) 267,576266,054General Revenues: Investment earningsMiscellaneous revenuesTotal General RevenuesChange in Net PositionNet Position - October 1,2024Net Position - September 30, 2025$ 56,2547,76564,019330,073(2,221,700) (1,891,627) See accompanying notes to financial statements. - 11 - DeerRunCommunityDevelopment DistrictBALANCESHEET– GOVERNMENTALFUNDSSeptember30,2025TotalDebtCapitalGovernmentalASSETSGeneralServiceProjectsFundsCash 56,832$ -$ 3,099$ 59,931$ Investments180,641-243,855424,496Due fromotherfunds-2,189-2,189Due fromothergovernments3,0411,737-4,778Due fromothers1,160--1,160Prepaid expenses42,771--42,771Deposits--25,00025,000Restricted assetsInvestments-802,13525,175827,310TotalAssets284,445$ 806,061$ 297,129$ 1,387,635$ LIABILITIES ANDFUNDBALANCESLIABILITIESAccountspayable and accrued expenses36,202$ -$ 27,450$ 63,652$ Due to otherfunds2,189--2,189TotalLiabilities38,391-27,45065,841FUND BALANCESNonspendablePrepaid expenses42,771--42,771Deposits--25,00025,000RestrictedDebtservice-806,061-806,061Capitalprojects--25,17525,175AssignedCapitalreserves--219,504219,504Unassigned203,283--203,283TotalFund Balances246,054806,061269,6791,321,794TotalLiabilitiesand Fund Balances284,445$ 806,061$ 297,129$ 1,387,635$ See accompanying notesto financialstatements. -12 - Deer Run Community Development DistrictRECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCESTO NET POSITION OF GOVERNMENTAL ACTIVITIESSeptember 30, 2025 Total Governmental Fund Balances$ 1,321,794Amounts reported for governmental activities in the Statement of Net Positionare 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.85,151Capital assets, being depreciated, infrastructure, $3,669,291, and buildings and improvements, $3,213,296, net of accumulated depreciation, $(2,561,416), used in governmental activities are not current financial resources and therefore,4,321,171are not reported at the fund level. Long-term liabilities, such as bonds payable, $(7,485,000), net of bond discounts, net, $34,820, are not due and payable in the current period and therefore, are notreported at the fund level.(7,450,180) Accrued interest expense for long-term debt is not a current financial useand therefore, is not reported at the fund level.(169,563) Net Position of Governmental Activities$ (1,891,627) See accompanying notes to financial statements. - 13 - Deer Run Community Development DistrictSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDSFor the Year Ended September 30, 2025 TotalDebtCapitalGovernmentalGeneralServiceProjectsFundsREVENUESSpecial assessments$ 1,012,015$ 683,831$ -$ 1,695,846Investment earnings14,29531,76810,19156,254Miscellaneous revenues7,765--7,765Total Revenues1,034,075715,59910,1911,759,865 EXPENDITURESCurrentGeneral government126,965--126,965Physical environment306,064-37,353343,417Culture/recreation377,934--377,934Capital outlay--42,25542,255Debt servicePrincipal-240,000-240,000Interest-419,785-419,785Total Expenditures810,963659,78579,6081,550,356 Excess of revenues over/(under) expenditures223,11255,814(69,417)209,509 Other Financing Sources/(Uses) Transfers in--148,845148,845Transfers out(148,845)--(148,845) Total Other Financing Sources/(Uses)(148,845)-148,845- Net change in fund balances74,26755,81479,428209,509 Fund Balances - October 1, 2024171,787750,247190,2511,112,285 Fund Balances - September 30, 2025$ 246,054$ 806,061$ 269,679$ 1,321,794 See accompanying notes to financial statements. - 14 - DeerRunCommunityDevelopment DistrictRECONCILIATIONOFTHE STATEMENTOFREVENUES, EXPENDITURES ANDCHANGESIN FUND BALANCESOFGOVERNMENTALFUNDSTOTHESTATEMENT OF ACTIVITIESForthe YearEndedSeptember30,2025 NetChange in Fund Balances-TotalGovernmentalFunds$ 209,509Amountsreported forgovernmentalactivitiesin the StatementofActivitiesaredifferentbecause: $85,151,in the currentperiod. estimated usefullivesasdepreciation.Thisisthe amountthatdepreciation, $(250,372),exceeded capitaloutlay,$42,255,and capitalcontributions, Governmentalfundsreportcapitaloutlaysasexpenditures;however, in the StatementofActivities,the costofthose assetsisallocated overtheir(122,966) Repaymentofbond principalisan expenditure atthe governmentalfund level, butthe repaymentreduceslong-termliabilitiesin the StatementofNetPosition.240,000Amortization expense ofbond discountsdoesnotrequire the use ofcurrentfinancialresourcesand therefore,isnotreported atthe fund level.Thisisthe amountofamortization in the currentperiod.(1,874) governmentalfund level,interestexpendituresare reported when due. In the StatementofActivities,interestisaccrued on outstanding bonds,whereasattheThisisthe change in accrued interestfromthe prioryear.5,404Change in NetPosition ofGovernmentalActivities$ 330,073 See accompanying notesto financialstatements. -15 - Deer Run Community Development DistrictSTATEMENTOFREVENUES, EXPENDITURES ANDCHANGESIN FUND BALANCES–BUDGETAND ACTUAL– GENERALFUNDForthe YearEndedSeptember30,2025 Variance WithFinalBudgetOriginalFinalPositiveBudgetBudgetActual(Negative) RevenuesSpecialassessments$1,006,746$ 1,006,7461,012,015$ 5,269$ Investmentearnings--14,29514,295Miscellaneousrevenues5,1425,1427,7652,623TotalRevenues1,011,8881,011,8881,034,07522,187ExpendituresCurrentGeneralgoernment119,472119,472126,965(7,493) Physicalenvironment391,373391,373306,06485,309Culture/recreation352,198352,198377,934(25,736) TotalExpenditures863,043863,043810,96352,080Excessofrevenuesover/(under) expenditures148,845148,845223,11274,267OtherFinancing Sources/(Uses) Transfersout(148,845)(148,845)(148,845)- Netchange in fund balances--74,26774,267Fund Balances-October1,2024--171,787171,787Fund Balances-September30,2025-$ -$ 246,054$ 246,054$ See accompanying notesto financialstatements. -16 - NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Deer Run Community Development District (the “District”) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The District's more significant accounting policies are described below. 1. Reporting Entity The District was established on May 15, 2007, by an ordinance of the Board of City Commissioners of the City Of Bunnell, Florida, under the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the "Act"), as a Community Development District. The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is governed by a five-member Board of Supervisors, who are elected by the property owners for terms of four and two years. The District operates within the criteria established by 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, and financing improvements. The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility. Oversight responsibility includes, but is not limited to, financial interdependency, designation of management, significant ability to influence operations and accountability for fiscal matters. As required by GAAP, these financial statements present the Deer Run Community Development District (the primary government) as a stand-alone government. Based upon the application of the above-mentioned criteria as set forth in Governmental Accounting Standards Board, the District has identified no component units. 2. Measurement Focus and Basis of Accounting The basic financial statements of the District are composed of the following: • Government-wide financial statements • Fund financial statements • Notes to financial statements NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Measurement Focus and Basis of Accounting (Continued) 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 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. 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 classified 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 the state constitution, external resource providers, or through enabling legislation. Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company. Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance is considered to be utilized first when expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances. Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE A–SUMMARY OF SIGNIFICANTACCOUNTING POLICIES(CONTINUED) 2.Measurement Focus and Basis ofAccounting(Continued) b.Fund Financial Statements (Continued) Governmental Funds(Continued) Governmental fund financial statements are reported using the current financialresourcesmeasurementfocus and the modified accrual basis of accounting. Revenuesare considered to be available when they are collected within the current period or soonthereafter,to pay liabilities of the current period. For this purpose,the District considersrevenues to be available ifthey are collected within 60 days ofthe end ofthe currentfiscalperiod. Expendituresgenerally are recorded when a liability is incurred, asunder accrualaccounting.Interestassociated with thecurrentfiscalperiod isconsidered to bean accrual item and so hasbeen recognized asrevenue of the current fiscalperiod. Underthe current financial resourcesmeasurement focus, only current assets andcurrent liabilities are generally included on the balance sheet. The reported fundbalance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases(revenues and otherfinancingsources) and decreases (expendituresand otherfinancing uses) in net currentassets.Accordingly,theyaresaid to presenta summaryofsourcesand usesof“available spendable resources”during a period. Because of their spending measurement focus, expenditurerecognition forgovernmentalfundtypesexcludesamountsrepresented bynon-currentliabilities.Sincethey do not affect net current assets, such long-term amounts are not recognized asgovernmental fund type expendituresorfundliabilities. Amounts expended to acquire capital assetsare recorded asexpenditures in the yearthat resourceswere expended,ratherthan as fund assets.Theproceeds of long-term debt are recorded as an other financing source rather than as a fund liability. Debt service expendituresare recorded only when payment is due. 3.Basis of Presentation a.Governmental MajorFunds General Fund–The General Fund is the District’sprimary operating fund.It accountsfor all financial resources ofthe general government, exceptthose required to beaccounted forin another fund. -20 - Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE A–SUMMARY OF SIGNIFICANTACCOUNTING POLICIES(CONTINUED) 3.Basis of Presentation(Continued) a.GovernmentalMajor Funds (Continued) Debt ServiceFund–The Debt Service Fund accountsfordebt servicerequirements toretire certainspecial assessmentrevenueand refundingbondswhich were used torefund existing debt andfinance certain additional improvements. Thebond series issecuredbyapledge ofdebtservicespecialassessmentrevenuesinanyfiscalyearrelated to the improvements. A lien is placed on all benefited land in relationship to thedebt outstanding. Capital ProjectsFund–The Capital Project Fund accountsfor construction ofcertain additionalimprovementswithin the boundaries oftheDistrict. b.Non-current GovernmentalAssets/Liabilities GASB Statement 34 requiresthat non-currentgovernmental assets, such ascapitalassets, and non-current governmentalliabilities, such as special assessmentbonds, bereported in the governmental activities column in the government-wide statement ofnetposition. 4.Assets, Liabilities and NetPositionor Equity a.Cash and Investments Florida Statutesrequire state and local governmental unitsto deposit monies withfinancialinstitutionsclassified as"QualifiedPublicDepositories,"amultiple financialinstitution pool wherebygroups of securities pledged by the various financial institutionsprovide common collateral from their deposits ofpublic funds. This pool is provided asadditional insurance to the federal depository insurance and allows for additionalassessments against the member institutions, providing fullinsurance for publicdeposits. -21 - NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Assets, Liabilities and Net Position or Equity (Continued) a. Cash and Investments (Continued) The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of: 1. Direct obligations of the United States Treasury; 2. The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969; 3. Interest-bearing time deposits or savings accounts in authorized qualified public depositories; 4. Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency. Cash equivalents include time deposits and certificates of deposit with original maturities of three months or less and held in a qualified public depository as defined by Florida Statute 280.02. b. Restricted Net Position Certain assets of the District and a corresponding liability or portion of net position is classified as restricted 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 net position, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position. c. Capital Assets Capital assets, which include land, buildings and improvements and infrastructure, are reported in the applicable governmental activities column. The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. The valuation basis for all assets is historical cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Assets, Liabilities and Net Position or Equity (Continued) c. Capital Assets (Continued) 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 20-40 years Buildings and improvements 30 years d. Unamortized Bond Discount Bond discounts are presented on the government-wide financial statements and amortized over the life of the bonds using the straight-line method. For financial reporting, the unamortized bond discount is netted against the applicable long-term debt. e. 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. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general and debt service funds. As a result, deficits in the budget variance columns of the accompanying financial statements may occur. f. 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. Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE B–RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIALSTATEMENTS 1.Explanation of Differences Between the Governmental Fund Balance Sheet and theGovernment-wide Statement of NetPosition “Total fundbalances”of the District’s governmental funds,$1,321,794,differs from “netposition” of governmental activities,$(1,891,627),reported in the statement of netposition. This difference primarilyresults from the long-term economic focus ofthe Statement ofNet Positionversusthe currentfinancial resources focus ofthe governmental fund balancesheet. The effect ofthe differences is illustratedas follows. Capital related items When capital assets that are to be used in governmental activitiesare purchased orconstructed,the cost ofthose assets isreported as expendituresat thegovernmental fundlevel.However,theStatementofNetPosition included those capitalassetsamong theassets of the District asa whole. Land$85,151Infrastructure3,669,291Buildings and improvements3,213,296Accumulated depreciation(2,561,416) Total$ 4,406,322 Long-termdebt transactions Long-termliabilitiesapplicable totheDistrict’sgovernmentalactivitiesare notdueandpayable in the currentperiod and accordingly are notreported as fund liabilities. Allliabilities (both current and long-term) are reported in theStatement ofNet Position. Bonds payable$ (7,485,000) Bond discount, net34,820Total$ (7,450,180) Accrued interest Accrued liabilities in the Statement of Net Positiondiffer from the amountreported at thegovernmental fundleveldue to accrued interest on bonds. Accrued interest on bonds payable$ (169,563) -24 - Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE B–RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIALSTATEMENTS (CONTINUED) 2.Explanation of Differences Between the Governmental Fund Operating Statementsand the Statement ofActivities The “netchange infund balances”forgovernmentfunds,$209,509,differsfrom the “changein net position”for governmental activities,$330,073,reported in the statement of activities. The differencesarise primarilyfromthelong-termeconomicfocusoftheStatementofActivitiesversusthecurrentfinancialresourcesfocusofthe governmentalfunds.The effectofthe differences is illustratedas follows. Capital relateditems When capital assets that are to be used in governmental activitiesare purchased orconstructed,theresourcesexpendedforthose assetsarereported asexpendituresatthegovernmental fundlevel. However,at the government-wide level, the costs ofthose assetsis allocated over their estimated useful lives and reported as depreciation. As a result,fundbalances decrease bythe amount offinancial resources expended, whereasnet position decrease by the amountof depreciationcharged for the year. DepreciationCapital contributionsCapital outlayTotal$ $ (250,372) 85,15142,255 (122,966) Long-termdebt transactions Repayments of bond principal are reported as an expenditure atthe governmental fundleveland, thus, have the effect of reducing fund balance because current financial resourceshave been used. Debt principal payments$ 240,000 Some expenses reported at the government-wide leveldo notrequire the use of currentfinancial resources,and therefore, are not reported as expendituresat thefund level. Change in accrued interest$5,404 Amortization of bond discount$ (1,874) -25 - Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE C –CASHAND INVESTMENTS Alldepositsare held in qualified publicdepositoriesand are included on the accompanyingbalance sheet ascash and investments. Custodial Credit Risk– Deposits Custodial creditrisk isthe riskthat in the event of a bank failure,the District's deposits may notbe returnedto it. TheDistrict does not have a formal deposit policy for custodial credit risk, however,theyfollowthe provisionsofChapter280,Florida Statutesregarding depositsandinvestments. As ofSeptember 30, 2025, theDistrict's bank balancewas $71,910andthe carrying value$59,931. Exposure to custodial credit risk was as follows.The Districtmaintainsall deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which meansthat all deposits are fully insured bythe Federal DepositInsuranceCorporationor collateralized underChapter 280, Florida Statutes. Investments As ofSeptember 30, 2025, the Districthad the following investmentsand maturities: InvestmentMaturitiesFair ValueFIMM Government Portfolio34 days*$ 827,310Florida PRIME47 days*424,496Total$ 1,251,806 *Maturity is a weighted average maturity. The Districtcategorizesitsfairvalue measurementwithin the fairvalue hierarchyestablished bygenerally accepted accounting principles. Thefair value is the price that would be received tosell an asset, or paid to transfer a liability, in an orderlytransaction between market participantsat the measurement date.Thehierarchyisbased on the valuation inputsused tomeasure thefair value oftheasset.The Districtuses a market approach in measuring fairvalue that usesprices andotherrelevantinformation generated bymarkettransactionsinvolving identicalorsimilar assets, liabilities, or groups of assets and liabilities. Assets or liabilities are classified into one ofthree levels. Level 1 is themost realizable and isbased on quoted price for identical assets, or liabilities, in an active market. Level 2 usessignificant other observable inputs when obtainingquoted prices for identical or similar assets, or liabilities, inmarketsthat are not active. Level 3 isthe least reliable and uses significantunobservable inputs that use the best information available under thecircumstances whichincludes the District's own data in measuring unobservable inputs. Based on the criteria in the preceding paragraph,the investments in FIMMGovernmentPortfolioareLevel 1 assets. -26 - Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE C –CASHAND INVESTMENTS(CONTINUED) Investments(Continued) The District’s investment policy allows management to invest funds in investments permittedunder Section 218.415, Florida Statutes. The investment in Florida PRIME ismeasured atamortized cost. FloridaPRIME has established policies and guidelines regarding participanttransactions and the authority to limit orrestrictwithdrawals or impose a penalty for an earlywithdrawal. As ofSeptember 30, 2025, there were no redemption fees,maximum transactionsamounts, or anyother requirementthatwould limitdaily access to 100percent ofthe accountvalue. Interest Rate Risk The District does not have a formal investment policy that limits investment maturities as ameans ofmanaging its exposure to fair value losses arising from increasing interestrates. Credit Risk The District's investments are limited bystatestatutoryrequirementsand bond compliance. The District has no investment policy that would further limit its investment choices. As ofSeptember30,2025, theDistrict'sinvestmentsin theFIMMGovernmentPortfolioand FloridaPRIME were bothrated AAAmby Standard & Poor's. Concentration of CreditRisk The Districtplacesno limiton the amountitmayinvestin anyonefund.The investmentsinFIMMGovernment Portfolio represent66%and Florida PRIMErepresent34% of District’stotalinvestments. The types of deposits and investments and their level of risk exposure as ofSeptember 30,2025weretypical ofthese items during thefiscal yearthen ended. TheDistrict considers anydecline in fairvalue for certain investments to be temporary. NOTE D –SPECIAL ASSESSMENTREVENUES Specialassessmentrevenuesrecognized forthe 2024-2025fiscalyearwere levied in August2024.All taxescertifiedto the County’sTaxCollectoraredueand payable on November1andcertified to theCounty'sTax Collector.PerSection 197.162, Florida Statutesdiscountsare allowed for early payment atthe rate of 4% in November, 3% in December, 2% in January, and1%in February.Assessmentspaid in March are without discount. -27 - Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE E–CAPITAL ASSETS Capital Asset activity forthe year ended September 30,2025was as follows: BalanceBalanceOctober 1,September 30, 2024AdditionsDeletions2025Governmental Activities: Capital assets, not being depreciated: Land$ -$ 85,151$ -$ 85,151 Construction in progress Total Capital Assets, Not Being DepreciatedCapital assets, being depreciated: Buildings and improvements Infrastructure Total Capital Assets, Being DepreciatedLess accumulated depreciation for: Buildings and improvements Infrastructure Total Accumulated DepreciationCapital Assets Being Depreciated, NetGovernmental Activities CapitalAssets$ 4,529,28842,25542,2553,213,2963,584,7816,798,077(803,325) (1,507,719) (2,311,044) 4,487,033$ 42,255127,406- 84,51084,510(160,665) (89,707) (250,372) (165,862) (38,456)$ (84,510) (84,510) --- - - - - (84,510)$ - 85,1513,213,2963,669,2916,882,587(963,990) (1,597,426) (2,561,416) 4,321,1714,406,322Depreciationof $250,372culture/recreation, $160,665. wascharged to physicalenvironment, $89,707,andNOTE F–LONG-TERM DEBT The following is a summary of activityfor long-term debt ofthe Districtfor the year endedSeptember 30, 2025: Long-term debt atOctober 1, 2024$7,725,000Principalpayments(240,000) Long-term debt at September 30, 20257,485,000Bond discount, net(34,820) Long-term Debt atSeptember 30, 2025, net$ 7,450,180Long-term debt is comprised of the following: Special Assessment Revenue and Refunding Bonds$11,175,000 Series 2018 Special Assessment Revenue andRefunding Bondsdue in annualprincipalinstallmentsbeginningMay2019,maturingin May2044. Interestatvariousratesbetween 5.4%and 5.5%due in Novemberand May,beginning November 2018. Current portion is $230,000.$7,485,000 -28 - Deer Run Community Development DistrictNOTES TOFINANCIAL STATEMENTSSeptember 30, 2025 NOTE F–LONG-TERM DEBT(CONTINUED) The annual requirements to amortize the principal and interest of bonded debt outstanding as ofSeptember 30, 2025are asfollows: Year EndingSeptember 30,PrincipalInterestTotal 2026$ 230,000$ 406,950$ 636,950 2027245,000394,530639,5302028260,000381,300641,3002029275,000367,260642,2602030290,000352,410642,4102031-20351,695,0001,510,1403,205,1402036-20402,225,000998,4903,223,4902041-20442,265,000320,1002,585,100 Totals$ 7,485,000$ 4,731,180$ 12,216,180 Summary of SignificantBond Resolution Termsand Covenants The Districtleviesspecialassessmentspursuantto Section 190.022,Florida Statutesand theassessmentrollsare approved byresolutionsofthe DistrictBoard.Thecollectionsare to bestrictly accountedfor and applied tothe debt service ofthe bond seriesfor which theywerelevied.The District covenantsto levyspecialassessments in annualamounts adequate toprovide for payment of principal and interest on the bonds.Payment of principal and interest isdependent on the money available in the debtservice fund and the District’s ability to collectspecial assessments levied. The bonds are subject to extraordinary mandatory redemption prior tomaturity, in whole on anydate, or in part on an interest payment date, without premium,together with accrued interest tothe redemption date ifmonies are available to retire the debt in accordance with the provisionsof the indenture. The bondresolutionandthetrustindentureprovide fortheestablishmentofcertainaccounts. The accounts include a construction,revenue,redemption,reserve, interest and prepaymentaccount and are maintained by a trustee. The bond indenture provides for Debt Service Reserve Funds, whichshall be held bytheTrusteeseparatelyandapartfromallotherfunds.Thefollowing isaschedule ofreserverequirements and balances in the reserve accounts atSeptember30, 2025: ReserveReserveBalanceRequirement Series 2018 $ 317,719 $ 317,418 -29 - NOTE G – RISK MANAGEMENT The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. Settled claims from these risks have not exceeded commercial insurance coverage over the past three years. NOTE H – INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2025, consisted for the following: Transfers OutTransfers InGeneral FundCapital Projects Fund148,845$ Interfund transfer relates to budgeted capital reserve funding. NOTE I – SUBSEQUENT EVENT In November 2025 and May 2026, the District made prepayments on the Series 2018 Bonds in the amounts of $10,000 and $5,000, respectively. 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 Deer Run Community Development District Bunnell, 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 Deer Run 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 June 30, 2026. Report on Internal Control Over Financial Reporting In planning and performing our audit, we considered Deer Run 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 Deer Run Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Deer Run 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. To the Board of Supervisors Deer Run Community Development District Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether Deer Run 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 June 30, 2026 MANAGEMENT LETTER To the Board of Supervisors Deer Run Community Development District Bunnell, Florida Report on the Financial Statements We have audited the financial statements of Deer Run Community Development District as of and for the year ended September 30, 2025, and have issued our report thereon dated June 30, 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 June 30, 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. 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 Deer Run 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 Deer Run 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 Deer Run Community Development District. It is management’s responsibility to monitor Deer Run 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, Deer Run Community Development District reported: 1)The total number of District employees compensated in the last pay period of the District’sfiscal year as: 5 2)The total number of independent contractors, to whom nonemployee compensation waspaid in the last month of the District’s fiscal year as: 17 3)All compensation earned by or awarded to employees, whether paid or accrued, regardless of contingency as: $9,800 4)All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of contingency: $1,604,346.81 5)Each construction project with a total cost of at least $65,000 approved by the District thatis scheduled to begin on or after October 1, 2024, together with the total expenditures forsuch project as: N/A 6)A budget variance based on the budget adopted under Section 189.016(4), FloridaStatutes, before the beginning of the fiscal year being reported if the District amends afinal adopted budget under Section 189.016(6), Florida Statutes: See the Schedule ofRevenues, Expenditures and Changes in Fund Balance – Budgeted and Actual – GeneralFund. As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)9, Rules of the Auditor General, Deer Run Community Development District reported: 1)The rate or rates of non-ad valorem special assessments imposed by the District: $503.13 – $1,700.60 for the General Fund and $500 – $4,250 for the Debt Service Fund 2)The amount of special assessments collected by or on behalf of the District: $1,695,846 3)The total amount of outstanding bonds issued by the District and the terms of such bondsare as follows: $7,485,000 Series 2018 Bonds due on May 1, 2044 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. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL Fort Pierce, Florida June 30, 2026 INDEPENDENT ACCOUNTANTS’ REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES To the Board of Supervisors Deer Run Community Development District Bunnell, Florida We have examined Deer Run Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2025. Management is responsible for Deer Run Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on Deer Run 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 Deer Run 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 Deer Run Community Development District’s compliance with the specified requirements. In our opinion, Deer Run 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 June 30, 2026