TESTIMONY ON BR25-0936 COMMITTEE ON BUDGET, APPROPRIATIONS AND FINANCE 36th LEGISLATURE OF THE VIRGIN ISLANDS FRIDAY, FEBRUARY 27, 2026 EARLE B. OTTLEY LEGISLATIVE HALL ST. THOMAS, U.S.V.I. 10:00 AM BY: KEVIN MCCURDY EXECUTIVE DIRECTOR VIRGIN ISLANDS PUBLIC FINANCE AUTHORITY Virgin Islands Public Finance Authority Testimony on BR25-0936 Committee on Budget, Appropriations and Finance 36th Legislature of the US Virgin Islands February 27, 2026 2 Introduction Mr. Chair, thank you for the opportunity to appear before you today to present testimony on BR25-0936 (“the Bill”). This legislation seeks to appropriate $4,200,000 of the administrative fees collected by the Virgin Islands Public Finance Authority for its role in facilitating the $448.6 million Series 2025 bond issuance to finance the acquisition of the Westin Frenchman’s Reef and Morningstar Buoy Haus Hotels. Under this finance restructuring deal, the Territory would gain ownership of the resort property once the bond debt is retired. To facilitate this deal, the Virgin Islands Hotel Development Corporation was created as a special purpose, independent and autonomous, public corporation, and government instrumentality of the Virgin Islands Public Finance Authority (“VIPFA” and/or “Authority”). The Authority itself is a body corporate and politic, constituting an autonomous public corporation and governmental instrumentality. The Authority was created to assist and support the Government in fulfilling its fiscal responsibilities, including raising capital—whether public or private—for essential public projects and to foster economic growth through public-private partnerships. The Authority also oversees other business-type activities, grant management, and the administration of investment and debt service funds on behalf of the Government. Moreover, our ongoing federal advocacy and congressional engagement—conducted in close coordination with our Washington, D.C. consultants—has been instrumental in securing the permanency of the rum cover-over rate at $13.25. Additional ongoing priority initiatives include the reopening of the St. Croix refinery, advancing parity in Medicaid and Medicare treatment for the Territory’s residents, restoring Caneel Bay as a premier destination within the Caribbean, expanding energy-related incentives, resolving customs-duty matters, and addressing the EU Tax Haven Blacklist designation. Each of these efforts requires a sustained and strategic approach, supported by the necessary financial resources. We continue to work with our Washington legal and government relations partners to navigate and resolve complex issues affecting the Territory. In Virgin Islands Public Finance Authority Testimony on BR25-0936 Committee on Budget, Appropriations and Finance 36th Legislature of the US Virgin Islands February 27, 2026 3 furtherance of its overall mission, the Authority is mandated to design and administer financing programs that meet the needs of the people of the Virgin Islands, including facilitating access to working capital needed for ongoing operations, infrastructure development, and disaster recovery throughout the Territory. Towards this end, the Authority, as an organization, has grown its Office of Disaster Recovery to augment the Territory’s capacity in its disaster recovery effort. Consequently, as a result of all these endeavors over the past six years, the Authority has experienced exponential growth in its mission, scope, and operations. What began as a small office with a staff of two has expanded into an organization of more than 100 employees, driven largely by the Territory’s increasing financing demands and the Authority’s pivotal role in disaster recovery initiatives. As the Authority continues to take on broader responsibilities, it is essential that its operational and financial needs be thoughtfully considered and weighed — particularly against proposed legislative appropriations involving funds generated through Authority-related entities or transactions. Additionally, the Authority has expanded from three subsidiaries to over five, which now includes the following wholly owned and fully supported subsidiaries: 1. Matching Fund Special Purpose Securitization Corporation, 2. Virgin Islands Transportation and Infrastructure Corporation 3. Virgin Islands Hotel Development Financing Corporation, 4. Tobacco Settlement Financing Corporation, 5. Lonesome Dove Petroleum Company 6. King’s Alley Management, Inc. This expansion reflects the success and effectiveness of the Authority but also brings with it increased operational demands. Growth of this magnitude naturally requires additional resources, Virgin Islands Public Finance Authority Testimony on BR25-0936 Committee on Budget, Appropriations and Finance 36th Legislature of the US Virgin Islands February 27, 2026 4 along with a sustainable revenue structure to support ongoing responsibilities and continued assistance with the advancement of the Territory’s economic development. In today’s increasingly competitive municipal bond environment—and amid ongoing economic uncertainty—the Authority’s opportunities to issue bonds and generate administrative fees remain limited and occur intermittently. This makes the administrative fees that support the Authority’s core operations especially vital. These resources are not merely supplemental; they are essential for an entity that is consistently relied upon to provide critical financial and operational assistance to other governmental bodies across the Territory and to advance the Territory’s overall economic interest. While the Authority wholly supports the projects identified for funding under this Bill, we respectfully submit that the Authority’s own needs must also be taken into account. As our staff and portfolio continue to expand, so too does our obligation to ensure that the public financing mechanisms of the Virgin Islands remain stable, transparent, and capable of supporting long-term Government initiatives, as well as the PFA’s operations. It is imperative that the Authority maintain a strong and sustainable operational foundation, as its ability to effectively support the Territory depends first on ensuring its own institutional stability. By safeguarding the resources necessary to fulfill its core responsibilities, the Authority is better positioned to continue delivering the critical financial and operational assistance that other governmental entities routinely call upon. Mr. Chair, thank you again for the opportunity to provide comments on BR25-0936. The Authority remains committed to working collaboratively with the Legislature and assisting the Government in meeting is many critical financial initiatives. We are available to answer any questions you or your colleagues may have.