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Richardson, RRR defend fishermen, vendors, taxis

MARIGOT--Opposition party Rally, Responsibility, Success (Rassemblement Responsabilité Réussite (RRR)), headed by Territorial Councilman Alain Richardson, has come out in defence of St. Martin's small businesspersons, fishermen, market vendors and bus and taxi drivers and against the UP/UMP government's move to replace the professional tax.

The Territorial Council deliberated on the tax change on Thursday. The new system proposed is based on a dual mechanism (a licence tax and a levy of fixed assets).

Richardson said in a press release that this mechanism "favours greatly large companies that have for their operations large buildings and lands [...] and penalises greatly small and very small businesses," that represent close to 90 per cent of businesses in the Collectivité.

RRR presented several amendments during Thursday's session that were "retained, validated and adopted" by the council.

These amendments will now permit market vendors to benefit from a general rebate of 50 per cent, thus preventing the penalisation of this profession. Vendors would have seen their tax more than double if government's initial text had been adopted, whereas their yearly tax for 2011 is now limited to 200 euros.

Taxi and bus drivers are to benefit from a total exemption (as with the Professional Tax), while under the government's proposed text they would have been seriously taxed.

A further amendment is that all new businesses are to benefit from a total exemption for the first year, an exemption of the levy on fixed assets for the second year and a 50-per-cent rebate in the third year. Under the government's proposed text they would have been fully taxed from the beginning, according to RRR.

The Collectivité will collect a minimum amount of tax resources from the larger companies that, under the original proposal, would have seen their contributions substantially slashed.

The mechanism proposed by RRR now sets a minimum yearly contribution scale based on business size (level of yearly sales); this reintroduces more fiscal justice.

Richardson also tabled for RRR a tax-incentive modification for fishermen to aid by reducing fuel cost. He presented an amendment to the Gas Tax Law that would grant a total exemption from the government's fuel tax of six euro cents per litre for all registered fishermen.

The five-seat RRR sees its achievements for small business and defence of the Collectivité's financial interests as clear indications and proof of its effectiveness and commitment to serve the people and in line with the slogan, "Together, let's make it happen in 2011."

RRR "vehemently denounced" the fact that, over the Collectivité's four years of existence, the Council had been called to create, modify and adjust taxes, yet no substantial data, no simulations and no evaluation of the various scenarios had been presented or offered.

"This blind way of governing after four years of UP/UMP government is irresponsible and unacceptable," RRR said via Richardson. "How can the population have confidence in such a government? How can the tax payers understand and adhere when government cannot even evaluate the impact and justify its choices?"

The group said the government of President Frantz Gumbs was again bowing to the dictate of the French Tax Services in that, after imposing the suppression of the "Inhabitancy Tax" in 2009, was now doing the same with the Professional Tax behind fallacious excuses (of non-operational software to prepare assessments for 2011).

The group made it clear that, with the critical financial situation of the Collectivité, this suppression of 10 million euros of assessed tax, for an average yearly collected amount of five million euros, would be a fatal blow for the finances and even the autonomy of the Collectivité. It denounced this as "another violation" of the constitutional autonomy of the Collectivité that President Gumbs had "not even protested against."

RRR said that any new tax structure or mechanism destined to replace the Professional Tax had to guarantee yearly at least the equivalent resources in tax collected as the Professional Tax as well as fiscal justice within the business community, and had to be an incentive for business creation, development and growth and not another hurdle to discourage anyone from getting involved in business.

SZV introduces new system to cut down on long queues

page3a235 Unveils new logo 

PHILIPSBURG--Persons visiting the Social and Health Insurance SZV facility (former Social Insurance Bank) no longer will have to wait hours in line for service.

The health insurance provider has introduced a new appointment system to cut down on the long queues. SZV also unveiled its new logo and, with the assistance of Prime Minister Sarah Wescot-Williams, hoisted a flag bearing this logo outside its office on Monday.

SZV Director Dennis Richardson said many persons usually visited the office from early in the morning and stood in queues to get numbers for service. With the help of Business Consultant Hans de Bruyne, this system has been improved. Persons who visit SZV no longer will be given numbers. They will be given appointments. They can then show up at the time of their appointments, Richardson explained. Those who miss their appointments will have to make new appointments.

The new system has been tested and "it has been successful." A total of 120 appointments will be handled daily, which will amount to more than 20,000 a year. Emergency cases will be handled at a special window.

Richardson said the idea was to shorten the time within which people could be helped. A total of 34,000 persons are currently insured at SZV. Some 6,000 pensioners are also registered.

Richardson explained that St. Maarten had taken over most of the services offered by SVB under the new SZV organisation. SVB Curaçao has agreed to continue providing certain services, such as processing pensions, until July. St. Maarten will take over these services gradually.

He said SZV had decided to take on its challenges and he was proud of the attitude of the staff, many of whom enthusiastically approached their jobs to do them "better than before." SZV's staff eventually will have to be increased by 10-12 persons as St. Maarten assumes additional tasks from SVB.

Prime Minister Sarah Wescot-Williams said the change at SZV was another step and another block in building country St. Maarten, and was pivotal that the changes were recognised and appreciated, because they represented a very important service.

"For many years the country Netherlands Antilles has had legislation, some of it very old, as well as updated legislation regarding social security that governed us as part of the Netherlands Antilles. Much of that can be taken over and has been taken over by the new SZV of St. Maarten. However, we also now have the opportunity to make changes to this legislation and these policies that will benefit St. Maarten as a country," she said.

The Prime Minister said she and Richardson had been looking at where that need existed. "I think that the more steps we make towards this institution and the services it provides, the more the people will get to understand the importance of the service to St. Maarten, also going towards the future of country St. Maarten."

Health Ministry Acting Secretary General Jorien Wuite described the changes as an important milestone. Wuite said she had been expecting disruption of service with the changes, but she was happy to see that the transition had gone smoothly.

Former Windward Islands SVB Head Reginald Willemsberg is the Chief Operating Officer (COO) of SZV and is responsible for the facility's day-to-day operations. SZV's office on A.Th. Illidge Road – the former Medical Cost Provisions BZV department office – will remain open and is being run by Robert Budike.

Three Parliament meetings this week

PHILIPSBURG--Three Parliament meetings are planned for this week, starting with a caucus for "faction leaders" in the General Assembly Chamber of Parliament in the former Caribbean Palm building scheduled to begin at 2:00pm today.

Three agenda points will be discussed during today's session: recommendations from the four "faction leaders" about staffing for the four factions, the United Telecommunications Service (UTS) cellular phone service package, and an update regarding the state of the Parliament Building.

Expected to participate in today's caucus are Independent Member of Parliament (MP) Patrick Illidge, United People's (UP) party MP Romain Laville, Democratic Party (DP) MP Roy Marlin, and National Alliance (NA) MP William Marlin.

A meeting of the Central Committee of Parliament in the General Assembly Chamber of Parliament is scheduled for Tuesday, February 22, starting at 9:00am. Julio Romney will make a presentation to parliamentarians on "Understanding your Constitutional Parliamentary Government." The Central Committee meeting is open to the public and will be broadcast live via St. Maarten Cable TV Channel 20 from 9:00am.

The Ad Hoc Committee for Revision of the Rules of Order will meet in the General Assembly Chamber of Parliament, also on Tuesday, at 2:00pm to discuss the Rules of Order of the House of Parliament. The Committee members are MPs Lloyd Richardson, Roy Marlin and Sylvia Olivacce-Meyers.

IMA raises concerns on ToT during meeting with Sarah

PHILIPSBURG--The Indian Merchants Association (IMA) raised concerns about the turnover tax (ToT) increase during a recent meeting with Prime Minister Sarah Wescot-Williams.

"They questioned whether prior consultation had taken place. The prime minister explained to the IMA board that this was the only revenue-generating measure that could be implemented within a relatively short period of time, looking at the timeline of mid-December for the country to present a balanced budget," it was stated in a press release from the Department of Communications on Sunday.

"Crime was another area that was discussed and the Prime Minister explained a number of initiatives that are being taken to add manpower to the Police Force, the plan to improve the overall Justice organisation, and that crime fighting remains high on the agenda of Government."

Wescot-Williams was introduced to the new IMA board by spokesperson and Vice President Damu Rawtani. During the meeting she explained the new government structure with respect to ministerial responsibilities, the position of the Governor and the separation of powers.

"The Prime Minister expressed her willingness to involve [the IMA] as a stakeholder in the nation's development and thanked the IMA for requesting the meeting with her to discuss issues of general concern and those of the IMA in particular," the government press release said. The Prime Minister also explained the functioning of the Social Economic Council (SER) and the organic law that governs that body.

According to the government press release, "The IMA expressed [its] willingness to be a part of any tripartite committee regarding labour matters, an offer the Prime Minister welcomed as she again reiterated her position that dialogue amongst stakeholders and social partners is a necessary component of national development."

According to the release, the IMA representatives explained that the IMA remained committed to the socio-economic development of the country and would continue to do its part, and reiterated its call to be part of the solution in various matters with respect to national development.

Also raised was the policy of granting foreign work permits. The Prime Minister pointed out that some immediate changes were necessary with respect to the present policy as well as an improvement of the process.

Former TAPRC chairpersons contend new Pelican owners’ actions criminal

PHILIPSBURG--Gene Albrecht and Christine Schlunz, two former chairpersons of the Tenants Association Pelican Resort Club (TAPRC), over the weekend said the new owner of Simpson Bay Resort and Marina (formerly Pelican) and its affiliated group of companies are responsible for a series of actions that many affected parties consider criminal.

"Their recent attempt to assign blame to the very parties that are the victims of their alleged crimes is unconscionable. The press release issued by the new owner of Simpson Bay Resort and Marina (SBRM) is not only an unmitigated example of 'spin,' but is breathtaking in its complete disregard of full and honest disclosure concerning the history leading up to the recent events at Pelican Resort," they said.

They said while the labour problems and financial difficulties at the resort are real, assigning blame to the TAPRC board for failing to control the labour and budget situation misrepresents the facts.

"Since 1997, Royal Resorts has had primary responsibility for formulating realistic annual budgets, up to and including, complete control and responsibility for the labour management and collective labour agreement (CLA). If the new owner believes the resort can now run with almost 100 fewer employees than when the TAPRC owned the resort, then shouldn't Royal Resorts be held responsible for the overstaffing at the resort for the last 13 years and the deficits thereby created?" they asked.

"But it was much more advantageous for them to raise the annual maintenance fees on which Royal Resorts was being paid a 10 per cent commission than to manage the resort efficiently and in a manner that financially benefited the TAPRC," they added.

Albrecht and Schlunz said unlike the TAPRC owners, who were lured into investing in a capital improvement programme initiated by Royal Resorts, the new owner received complete repayment of all his operational loans together with 12 per cent interest. "The same loans also served to secure the continuation of the management fees being paid to his affiliated management company, Royal Resorts," they said.

"It is true that early TAPRC Boards wanted to build Pelican Marina Residences (PMR) to establish reserves for the resort, because they had been assured it would be a joint venture with Royal Resorts, which consistently represented themselves as a financially strong and trustworthy partner. The TAPRC Board even received a signed letter of intent stating, that the building of PMR would be a joint venture. What the new owner fails to tell you is critical: When it appeared that the TAPRC Board would not approve the project, the new owner acquired enough votes to personally vote himself and a number of his friends on the TAPRC Board," the former chair persons said.

They added that with this new power, contracts were signed that included among other things:

1. Giving exclusive sales rights on the new building to Alpha Marketing (another company affiliated with the new owner). Alpha was to receive 46 per cent of any sales proceeds;

2. Making Royal Resorts the construction manager, whereby they awarded a sole source contract to a contractor without so much as a single competing bid and failed to phase the project as planned, despite an obviously slowing economy;

3. Eliminating the joint venture and making Pelican Resort solely responsible for the debt.

4. Agreeing to construction financing that did not even provide enough funds to pay for the building construction, while pledging the entire resort as collateral for the loan. (A minimum of US $68 million in collateral for a US $25 million loan) The loans went so far as to contain clauses requiring Royal Resorts to remain the Resort manager during the complete term of the financing;

5. Giving Royal Resorts 50 per cent of any profits, calculated on an annual basis, with no responsibility for any losses, for completely unspecified services;

6. Backdating a number of contracts, including one to give the new owner more favourable loan terms, on the accounts receivable portion of the financing;

7. Extending the management contract for Royal Resorts by 10 years with absolutely no performance measurements and adding PMR to their management contract.

"In short, the new owner and its affiliated companies controlled the construction, the sales, the financing, the management, the receivable collections, and even the loan re-payments on the project," Albrecht and Schlunz said.

"It is perfectly clear why no commercial bank would provide financing for this project. A timeshare association, with absolutely no financial wherewithal or reserves, was being thrust into a position in which it was responsible for massive debt," they continued.

"All the significant benefits of the project had been transferred to companies affiliated with the new owner. Under the best case scenario, as indicated in projections provided by Royal Resorts, Pelican only stood to make US $8 million. After deducting the US$4 million land value contributed by the TAPRC, the net profit on which the TAPRC would risk the entire Resort and bankruptcy was only $4 million, while the new owner and his affiliated companies stood to make millions of dollars risk free. If the project encountered any difficulties or delays, such as the current economic downturn, foreclosure was a foregone conclusion.

The conflicts of interest enumerated above are even more egregious given the fiduciary responsibilities of the board members involved and Royal Resorts, which served as co-managing director for Pelican Resort." They said.

Albrecht and Schlunz said notably absent from the facts presented by the new owner is that Royal Resorts had gone so far as to open numerous bank accounts (in direct violation of its Management Agreement) in other countries, such as Belize. Opening these bank accounts, they said, was analogous to identity theft; numerous accounts opened in the name of the Resort, with no one on the TAPRC Board with signature authority over any of the accounts.

"Engaging attorneys and consultants was the only responsible action the TAPRC Board could take when the intent of the new owner to assume ownership of Pelican Resort became obvious. Becoming "indignant" when access to funds was blocked and contract terms were grossly skewed in favour of Royal Resorts was a situation manufactured by the new owner, not the TAPRC," they said.

They stressed that the he current claim by the new owner that he cannot afford to keep the resort open and will close the resort effective February 20 after collecting an undisclosed amount of 2011 maintenance fees from the timeshare owners, must be viewed in the full context of the circumstances surrounding his carefully premeditated acquisition of the resort.

"The St. Maarten government must respond and respond forcefully. As an island dependent on tourism, St. Maarten's ongoing economic well-being is heavily dependent on the steps the government takes to protect the timeshare owners who have made substantial investments on the island. Timeshare owners, the citizens of St. Maarten who rely upon income from timeshare owners and tourists, the businesses in St. Maarten and the displaced employees of Pelican Resort are all relying upon the government of St. Maarten to right these wrongs," Albrecht and Schlunz concluded.

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