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Public Finance Authority seeks $26.11M for FY2026; details GAVI bond closing and matching‑fund risks
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Summary
The Virgin Islands Public Finance Authority asked for $26.11 million for fiscal 2026 and described recent bond activity, outstanding securitizations and a negative outlook on matching‑fund bonds, while warning that general fund support is needed for authority operations.
Nathan Simmons, director of finance and administration for the Virgin Islands Public Finance Authority, told the legislature on June 10 that the authority’s board approved a $26,110,000 administrative budget for FY2026 and outlined recent financing activity, subsidiary operations and debt profiles.
Simmons said the FY2026 operating budget is a 21 percent decrease from FY2025 primarily because of lower consultancy spending and fewer budgeted salaries within the Office of Disaster Recovery (ODR). He told the committee the FY2026 budget is funded with $5 million from gross receipts, $9 million in requested general fund appropriation, about $8.21 million in federal reimbursements and $3.8 million from the authority’s project fund; $100,000 is expected from mall rental revenue.
On capital markets, Simmons reported the authority closed a $150,155,000 Grant Anticipation Revenue Bond (GAVI) issuance on June 5 to finance ferry, Veterans Drive Phase 2 and other highway projects. He said the authority also issued a $3.5 million tax increment revenue and refunding loan to consolidate earlier tax‑increment financing notes.
Simmons reviewed large outstanding obligations including the matching‑fund special‑purpose securitization corporation (outstanding about $952,800,000 as of April 30) and said the Core Bond Rating Agency had affirmed the long‑term rating of BBB but revised the outlook to negative. He said the change in matching‑fund flows — and slower rum cover‑over receipts — are a central revenue risk for long‑term planning.
Simmons told senators the authority provides managerial support to several entities (West Indian Company Limited, Virgin Islands Next Generation Network) and manages property including Fredericksted Mall. He said the board approved the Virgin Islands Transportation and Infrastructure Corporation as a subsidiary to issue the GAVI bonds and finance infrastructure projects.
Asked by senators what would happen if the Legislature did not appropriate the general fund portion the authority seeks, Simmons said, “if you don't fund our budget, we can't operate.” He said investment earnings and bond‑related proceeds have restricted uses and cannot be repurposed to run administrative operations.
Simmons also briefed senators on the tobacco settlement bonds (about $69.8 million originally issued, $20.5 million outstanding on a series), unexpended capital project balances and proceeds invested under the authority’s portfolio (reported book value $167.7 million as of March 31). He said the authority is implementing Microsoft Business Central for financial management and pursuing telecom and facilities upgrades.
The authority requested that the Legislature consider its FY2026 administrative budget to maintain ongoing bond management, disclosure, and federal‑grant oversight functions.
