The V.I. Public Finance Authority’s board unanimously approved a 50 percent increase in its annual administrative fee Thursday, raising the amount from $5 million to $7.5 million as officials cited mounting legal expenses and the demands of a larger disaster recovery operation.
The October 1 decision increases that source of operating support by $2.5 million for fiscal year 2027. The fee is funded through the territory’s gross receipts tax revenue and provides an annual contribution toward running the authority. Staff presented the change as an amendment to Resolution No. 18-027, intended to adequately fund operations under the board-approved budget.
In explaining the request, PFA staff pointed to continuing increases in expenses, particularly legal costs associated with projects, and the pressure those costs have placed on the administrative budget. The fee increase would expand an existing source of funding available to meet those obligations.
Board Secretary Keith O’Neale Jr. supported the proposal, saying the authority’s responsibilities had grown substantially since he began serving during the de Jongh administration. He linked that expansion to the territory’s recovery work, telling fellow directors that, with the Office of Disaster Recovery’s projects and other recovery activities, “our staff has mushroomed, our expenses have quadrupled.”
Mr. O’Neale said the larger scope of the PFA’s work justified additional financial support. “It’s more than reasonable to think that if our scope and if our mandate and if our goal to do the public good has expanded to such a degree that our budget should expand commensurately,” he said, adding that he had no issue with the motion.
The decision follows warnings about rising expenses during the authority’s FY2027 budget hearing earlier this year. As the Consortium reported in June, the PFA presented a $27.88 million budget request, a 7 percent increase over the previous fiscal year. Nathan Simmonds, the authority’s director of finance and administration, attributed the $1.77 million increase primarily to legal fees arising from tax refund litigation for the government.
That proposal included $5 million in gross receipts tax funding, alongside General Fund support, federal reimbursements, the PFA’s Project Fund and rental income. The administration category alone was projected at $6.22 million, up 10 percent, with higher insurance expenses and rent and overhead for the authority’s new St. Thomas office at WICO among the costs identified.
The June hearing also illustrated the scale of the recovery workload cited by Mr. O’Neale. Office of Disaster Recovery Director Adrienne Williams-Octalien said more than $734 million in recovery expenditures were planned for FY2027. Thursday’s discussion identified rising legal costs and expanded responsibilities as reasons for the fee increase, but did not include a line-item allocation of the additional $2.5 million.
Mr. O’Neale moved to approve the resolution, with board member Dorothy Isaacs seconding. Governor Albert Bryan Jr., who chairs the board, asked whether there were objections and announced that the motion carried unanimously.
