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Willemsberg reports progress being made in talks with Govt on arrears

PHILIPSBURG--Social and Health Insurance SZV and Government are making progress on their talks to hammer out an agreement on the outstanding arrears owed to the insurance service provider by the deadline set by the Committee for Financial Supervision CFT.

The deadline is this month, which ends next Friday. The progress of talks with APS could not be ascertained. Government and SZV have been engaged in talks and have had several meetings to reach an agreement.

In an invited comment on Thursday on the progress of the talks, SZV official Reginald Willemsberg told The Daily Herald that parties had come to “some concrete proposals” during meetings held so far. “SZV has sent a proposal and we are now waiting on government to confirm or agree, but I think we are almost there,” he said. “We will reach the deadline. We will reach an agreement before the deadline.”

One of the issues of contention between parties is the exact amount government owes SZV in arrears. Government has one figure and SZV has another. CFT has given government until this month to substantiate that it can bring in the necessary income to cover the NAf. 445 million income set for the 2015 budget and settle the long-standing payment arrears of NAf. 200 million owed to SZV and General Pension Fund APS.

CFT had earlier described the situation with government's arrears to SZV and APS as "disconcerting." The arrears have been long pending and are causing persons to get "scared." It will "undermine confidence" in authorities and will cause people to question what will become of their pensions. CFT hopes that a lid can be placed on these issues when it returns to St. Maarten in June.

Revenge attacks feared after deadly Texas biker gang shootout

rWACO, Texas--Police worried about retaliation attacks after 170 people were charged on Monday in connection with Sunday's shootout between motorcycle gangs that left nine dead and 18 wounded at a Waco, Texas, restaurant turned into a blood-soaked shambles.
  Bikers from at least five rival gangs attacked each other with guns, knives, brass knuckles, clubs and motorcycle chains at a Twin Peaks Sports Bar and Grill in the central Texas city. No bystanders or police were injured, police said.
  When the bikers began shooting, officers moved in, some of them also firing their weapons. When the shooting ended, bodies were scattered in the restaurant and across two parking lots.
  "I will tell you that we have had threats against law enforcement officers throughout the night," Waco Police Sergeant Patrick Swanton told a news briefing, adding that hospital staff have also been threatened and bikers were reported to be traveling to the city following the shooting.
  "Yesterday's events was bad guys on bad guys. When our officers arrived, those bad guys turned their guns on our officers," he added.
  About 100 weapons were recovered from the crime scene strewn with shell casings, police said. They originally said 192 people had been arrested.
  Police would not immediately release information about how they were holding the massive group, out of security concerns. Those taken into custody were charged with engaging in organized crime for capital murder and likely will face charges related to the bloodshed after an investigation of the sprawling crime scene that is expected to be lengthy, police said.
  "Some of those may have been witnesses, many of those are going to be individuals involved in the shooting, and criminal charges may be applicable for that," Swanton said.
  The Texas Alcoholic Beverage Commission closed Twin Peaks, located at a shopping mall by a busy highway, for at least seven days "due to the ongoing danger it presents to our community," police said.
  Twin Peaks is a chain restaurant known for scantily clad waitresses serving bar food and large mugs of beer. The Waco restaurant had been used as a meeting place for motorcycle gangs for the past few months, police said. They had asked the restaurant's managers to put a halt to the meetings but said they did not heed the requests.
  Twin Peaks on Monday revoked the franchise rights to the Dallas-based company that ran the Waco restaurant for not doing enough to ensure security. "Unfortunately the management team of the franchised restaurant in Waco chose to ignore the warnings and advice from both the police and our company, and did not uphold the high security standards we have in place to ensure everyone is safe at our restaurants," the company said in a statement.
  Among the gangs involved in the shooting were the Bandidos Motorcycle Club, which the U.S. Justice Department says has between 2,000 to 2,500 members in the United States and 13 other countries. It is the one of the biggest motorcycle gangs and a rival to the better-known Hells Angels.
  "The Bandidos are involved in transporting and distributing cocaine and marijuana and are involved in the production, transportation and distribution of methamphetamine," according to a Justice Department fact sheet.
  The gangs try to keep under the radar as much as possible to avoid attention for their criminal activities, law enforcement officials said. But the tension between the Bandidos and at least four rival groups in Texas, including the Cossacks, came to a head at the gang meeting in Waco, where about 200 people were present.
  The fight appeared to have started with a shove or two in a restroom that moved into the restaurant and then spilled out into parking lots, where police had positioned themselves in anticipation of trouble.
  "(It) quickly escalated into a fist fight, which turned into a knife fight,
which immediately turned into a gun fight," Swanton said.


SCDF seeking to break free from ‘vicious cycle of debt’

~ Structural change crucial, hard data now the focus ~

PHILIPSBURG--St. Maarten Carnival Development Foundation (SCDF) said on Thursday that the event threatens to become trapped in "a vicious cycle of debt" that must be broken with decisive business decisions and initiatives.

"After all the revelling and good times the general population had for what many have called the best Carnival ever, the festival is still a very expensive affair that continues to come up short financially," an SCDF press release read.

SCDF, a private foundation, had said for months that it planned on transitioning to a new business structure after Carnival 2015 to ensure the financial viability of St. Maarten's largest annual event, and it has begun moving to this new structure since the closing of Carnival 2015.

"The organisation of Carnival is not the issue. We believe everyone can attest to the fact that we have one of the best festivals in the Caribbean that is only getting bigger annually. But so are the expenses. And unless we change our approach business-wise, we will never get out of this cycle of constant debt."

The foundation said it was currently engaged in its "annual post-Carnival dance" of trying to raise additional funds to meet some financial obligations in the next month or so.

By the numbers

When talking about Carnival, SCDF said, people, from the highest levels in government to the everyday man on the street only look at the number of people who attend Carnival events and conclude that the foundation must be doing well.

"This however, presents an unrealistic image (financially) and does not take into consideration the expenses."

According to SCDF, Carnival 2015 carried an operating budget of approximately $700,000. In previous years, that number was well over $800,000.

To the dismay of Carnival stakeholders in certain areas of Carnival, SCDF managed to "cut some fat" from the 2015 budget, but still ensured that it could execute key activities.

"Judging from Carnival 2015 and its success you would never imagine that we were hurting, but we were and we are," the foundation explained.

Of that $700,000, government contributes just $195,000, entirely from the budget of the Ministry of Tourism, Economic Affairs, Transport and Telecommunication (TEATT), meant for marketing only.

"In other words, government subsidy is for one specific thing, nothing else. The SCDF has to raise the remaining $500,000 for its operations on its own through its private sponsors and gate revenue," SCDF continued. "And this is something we never manage to do.

"There is no way, unless we change our business approach drastically, that the foundation can raise half a million dollars every year with the type of expenses we have. No way. The consequence of this is we depend on the patience and cooperation of our major contractors and service providers to allow large outstanding debts to roll over year after year. This, of course, puts us in a disadvantageous position in terms of negotiating."

The expenses related to major service providers alone were, approximately: sound and light $70,000; security $50,000; garbage collection $40,000; cleaning services $30,000; coming up to almost $200,000.

"Then there are the other numerous expenses related to Carnival, including but not limited to prizes, contributions to musical bands, musical artists, pest control, rental of Festival village spaces, daily operations in the village ..., etc., that total some $250,000.

"There are so many other incidentals and other financial aspects mentioned here that we are obligated to fund. It is not an easy task," SCDF said.

On the income side, SCDF relies on corporate sponsors and gate revenue. For Carnival 2015, it had approximately $120,000 in corporate sponsorship. An additional $60,000 came from promoter fees, $50,000 from booth fees and about $40,000 from the gate revenue of its local shows.

Of the $500,000 the foundation would need to raise just to break even, it manages to raise approximately $300,000 on its own.

"Don't buy into for a minute some of these major companies on the island that proclaim they contribute thousands to Carnival on an annual basis. In some cases they contribute a mere $3,000 but expect you to sell your soul and give away Carnival so that they can exploit it for their bottom lines, totally under-valuing Carnival."

About 90 per cent of SCDF's major corporate sponsorship comes from TelEm, Princess Juliana International Airport SXM, International Liquors and Tobacco (ILTT), Motorworld and NAGICO. Everyone else contributes less than 10 per cent to the budget.

"Through some creative financial management, the foundation manages to end each Carnival with a debt of just under $100,000, but as time goes on and services become more expensive we cannot continue to allow this kind of debt to linger. Eventually, it will swallow us up and so will our creditors," SCDF said, adding that it sometimes almost had to beg its creditors not to stop their specific services while Carnival was going on, or to refrain from liens and the like.

"Also consider that in 2014, without explanation or notice, Government cut its subsidy from NAf. 500,000 to NAf. 350,000 two months before Carnival was scheduled to begin. What that did was leave us with a marketing hole that we had to fill with operational funds.

"Two months before Carnival, commitments were already made for the same marketing initiatives that Government was responsible for funding. By cutting the marketing subsidy, we had to compensate that year with funds meant for operational matters. That is a hole we are still fighting to get out of."

In addition, the Government foundation that runs Festival Village, signed an exclusive deal with TelEm, apparently with the blessings of Government, that effectively banned any and all of that company's competitors from any presence in the Village.

SCDF said, "Although TelEm has been a terrific main sponsor, that agreement which was signed, again without consultation of SCDF, cost the foundation approximately $70,000 in sponsorship because now no competitor of TelEm is allowed in the village. Without presence in the village, those companies saw no reason to contribute to Carnival, since the foundation could not assure some kind of return for their investment. We have yet to recoup those lost funds."

The plan

SCDF said it "can confidently talk about the under-valuing of Carnival, because it is finally armed with hard data. The observation that business as usual could not be tolerated anymore was made three years ago by current President Mike Granger, who understood that something had to be done, but did not have any statistical data to support any action."

SCDF said it had conducted market and economic analyses that now served as the premise for its new direction forward. "Now we have the economic data and subsequently a better way to value Carnival financially. Before it was simply guesswork and people used to laugh us into accepting pennies. Hard data wasn't the focus. It is the focus now."

SCDF has little faith in any sort of increase in Government subsidy after what has occurred over the past few years. Moreover, it doesn't view Government's contribution as dependable, as the country's constant budgetary constraints often put Carnival and a few other entities first on the chopping block. This, it was stressed, is not conducive to sound planning and budgeting.

Therefore, SCDF has embarked on an ambitious plan with its corporate partners that will generate the funds required to get Carnival out of the "vicious cycle of debt."

"We admit that before our corporate sponsors could have been approached with this ambitious plan we had to show them the strength and value of Carnival to their specific companies.

"Across the board, while we might not have been generating lots of income, some of our corporate sponsors were. The growth of Carnival even in the current financial state is evident to everyone. Look at what we manage to stage for the world. Imagine what we can do when we are not burdened financially.

"In our new approach there will be benefits to key Carnival stakeholders and financial self-reliance which we've strived for for years. There will also be changes to certain long-time business relationships that we've maintained amicably, but which are not structured in a beneficial way to the foundation.

"New revenue streams will be created which could be bolstered by the SCDF getting control of the Festival Village to host well-planned, year-round initiatives. But that is a whole other discussion."

SCDF said it was assuring Carnival-lovers that nothing would be done to hamper or harm the festival itself. "In fact, plenty will be done to enhance it, to instil more culture, bring back aspects that have been lost and further establish St. Maarten's Carnival as the best in the Northeastern Caribbean.

"To do that, however, financial changes are crucial. We believe it is past time that we stop talking about it, and simply do it."

Legislation to streamline administration of tax law

PHILIPSBURG--The contours of new legislation to streamline the administration of tax law in the Caribbean part of the Kingdom were presented Wednesday by President of the Joint Court of Justice Evert Jan van der Poel and quartermaster and project leader Jane Jansen.

Since October 2014, Jansen has been responsible for the preparation of the implementation of new legislation to introduce the possibility for appeal and cassation at the High Court in The Hague in tax cases.

One of these preparations concerns the establishment of tax administration with the Courts of Aruba, Curaçao and St. Maarten, as well as for Bonaire, St. Eustatius and Saba.

Up until now, Aruba is the only country in the Dutch Caribbean to have implemented legislation to make appeals in tax cases possible. Aruba adopted the law on January 1.

In case there is a legal dispute with the tax office, one can now submit this case, similar as in civil cases, to the Court of First Instance. Under the new law, the Joint Court of Justice serves as Court of Appeals for all fiscal matters, including fines. A judge who will be solely hearing tax cases will be installed in August.

Under current legislation, the Council of Appeal for Tax Cases (Raad van Beroep voor Belastingzaken) is the only legal entity to settle tax disputes in Curaçao, St. Maarten and the Caribbean Netherlands.

As of June 30, the Court of First Instance in Bonaire will serve as Court of Appeals in tax cases for Bonaire, Statia and Saba, with the Joint Court of Justice obtaining appellate authority.

St. Maarten and Curaçao are still working on implementation of the new laws. The Council of Advice of St. Maarten presented a report in December 2014. The Department of Legal Affairs is now preparing a new proposal to be submitted to the Ministers of Finance and Justice. After approval by the Council of Ministers, the changes to the law will be presented to Parliament.

Pressure

Van der Poel said he was hopeful of a speedy introduction of the new laws. He said some pressure needed to be put on Parliament and the Minister of Justice to achieve this. "These laws are not only of importance to residents and businesses, but also to investors who not only want to know if they are entitled to a tax holiday, but also want to know if their investments are protected by law. This is essential if you want to attract big players. It is very important for them to know that they will have forums for appeal, including the High Court of the Netherlands," said Van der Poel to his audience of lawyers, tax office workers and civil servants.

Under the new laws, the Courts on the various islands will be serving as front offices for their respective islands. These will serve as contact, information and reception points for their "own" cases. The St. Maarten Court will also serve as front office for tax cases from Statia and Statia. A back office for tax administration for all the islands has already been established in Aruba.

St. Maarten tax cases will be heard in St. Maarten, but tax cases concerning Statia and Saba will be heard on the respective islands.

The new legislation is intended to streamline the process and to make the administration of justice in tax cases more efficient. Under the current system it takes from approximately 18 months to two years before a case is heard.

This also has to do with the fact that tax cases are currently heard by a three-judge panel from the Netherlands, who are flying to the Caribbean two times a year to hear a large number of cases.

The new way of working is to make it possible to hear cases within one year and to present a decision within six weeks after the hearing. It is the intention to hold tax hearings in St. Maarten every two months.

Currently, some 125 tax cases from St. Maarten are pending with the Council of Appeal, approximately half of which are ready to be heard and handled, it was stated.

The second chance for appeal in tax cases was introduced in the Netherlands on January 1, 2005. The absence of appeal was considered in violation of the European Human Rights Treaty and the International Treaty on Civil and Political Rights. A draft law to also introduce appeals in the Dutch Caribbean, was presented to the Parliament of the Netherlands Antilles in July 2010.

At the end of the meeting, Van der Poel said he was hopeful to be able to evaluate the first phase of the changes by next year.

Sarah to lobby opposition for audit chamber investigation

PHILIPSBURG--Democratic Party (DP) leader Member of Parliament (MP) Sarah Wescot-Williams said she will be lobbying her fellow opposition members to bring about an investigation by the General Audit Chamber into the security contract between St. Maarten Harbour Group of Companies and Checkmate Security.

Wescot-Williams said that to get answers Parliament has the powerful instrument of a parliamentary enquiry as mandated by the Constitution, and outlined in a national ordinance. However, she will first lobby to get the audit chamber's investigation into Economic Affairs Minister Claret Connor's "handling" of the security contract.

Two weeks ago, Connor had presented what had appeared to be a copy of the security contract for MPs to peruse during a meeting of Parliament's Permanent Committee for Tourism, Economic Affairs, Transportation and Telecommunication. The copy showed a price crossed out and another written in with pen.

Reacting to questions from MPs, Connor apologized for the confusion caused by the two prices on the contract, indicating that he penned in the second amount as a note and it should be disregarded.

Connor's apology and admission that the notation was made by him has "complicated the issue" and puts government "in the middle" of the security contract issue, said Wescot-Williams. This action is motivation enough for a call to the audit chamber to investigate Connor's handling of the issue.

Parliament has been asking questions about the contract for several months now, but has come up against a stone wall. MPs have not even been able to ascertain whether the proper procedures were followed in awarding the contract, or who the shareholders of the company are.

Government seems to have put off the submission of answers about the security contract between Harbour Group and Checkmate Security, Wescot-Williams said in a party press conference held in Parliament House on Thursday afternoon.

Connor had to submit answers to parliament's questions within two weeks. That period expired yesterday, Thursday, and nothing had been received by Wescot-Williams at the time of the press conference.

Parliament consultation

Wescot-Williams will travel to the Netherlands in the coming days as part of the delegation to the Inter-Parliamentary Kingdom Consultation IPKO. She called for government and parliament to refocus their efforts to be on the same line on issues to be more effective in the future.

Dutch Kingdom Affairs Minister Ronald Plasterk has recently stated that trade agreements will be discussed at the upcoming Kingdom Conference that will be attended by all governments in the Kingdom.

Trade is an area the IPKO is slated to discuss, she pointed out. The way the system is set up, the MPs will have to come back and ask government its trade stance, while it really should be that MPs and government are fully informed and have a collective stance for the betterment of the country, she said.

Similarly, government and Parliament have to look into the adoption of the competition regulation. The country, unlike Aruba and Curacao, is not ready with a competition regulation to standardize open and fair public bidding, among other areas.

Wescot-Williams called on government to update Parliament about the progress to establish competition regulations.

Many areas covered by IPKO's agenda and that of the Kingdom Conference are "overlapping," said Wescot-Williams. "It is a pity Parliament has not been able to sit with government and synchronize approaches."

Cohesion between government and Parliament is also very much needed on the push for the establishment of a dispute regulation for the kingdom, she said. It is clear that the Dutch Government and the Second Chamber of the Dutch Parliament are one line. "If St. Maarten wants to act strong ... government and Parliament need a clear agenda."

Integrity law

Wescot-Williams said she was still baffled by government dropping its hot pursuit to get Parliament to pass the national ordinance to establish an integrity chamber. She recalled that Prime Minister Marcel Gumbs and Justice Minister Dennis Richardson were "peeved" that Parliament appeared to be dragging its feet on the law. It has been almost a month since government was to be back in Parliament with the law and nothing has happened.

Quarterly reports

Finance Minister Martin Hassink has informed Wescot-Williams that he will not deliver monthly financial reports on government's revenues and expenditures, but stick to delivery of the legally required quarterly reports to Parliament. The first quarter report should be sent to Parliament this month.

The MP had asked the minister to present monthly reports in the debate on the budget earlier this year. The reports, whether monthly or quarterly, are "an important instrument" for parliamentary oversight.

Wescot-Williams intends to continue to press the chairman of the Parliament's Permanent Finance Committee to hold meetings on the 2013 annual reports of government-owned companies. She had been pursuing meetings for the longest while to no avail.

"I will continue to sit on this matter," she said, adding that past lawmakers did not put in the law that annual reports should come to Parliament "just to put them in a drawer."

Opt out

Wescot-Williams has once again opted out of attending a committee meeting of the Latin American Parliament Parlatino. The committee of which she is a member is slated to meet from June 5-7 in Cuba.

After reviewing the agenda, the MP said there was nothing on it that was "of significance to St. Maarten." Therefore, she has "politely declined" to attend.

DP fraction advisor Emil Lee said it was laudable that Wescot-Williams opted not to attend the meeting. She is being "fiscally responsible" with this, more so, as Parliament has not yet balanced its budget for 2015, he said.

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