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The Chairman
explained that submitters would be allowed 10 minutes speaking time, and a
further 5 minutes to respond to questions from Councillors.
1.10pm Submission
#8. Mr Ross Bramwell.
Mr Bramwell
reiterated his support for the concept of an investment company to manage and
maximise Council’s assets. Being that Directors will be responsible for
assets of such a magnitude, a rigorous selection process for those Directors
was required to ensure the required skills were available. Supports a Board
comprised of 3 independent directors (to be compensated) and 3 appointed
councillors (from different constituencies and paid meeting fees at the very
least).
Safeguards are
in place such as 100% HBRC ownership of company, plus Council investment
policy and statement of intent, which provided assurance of Council’s ongoing
control of investment decisions. Costs of setup should be justified by efficiencies
and results achieved.
Mr Bramwell
saw Council’s powers to ‘veto’ being exercised through its governance and
funding role.
1.25pm Submission
#18. Mrs June Graham.
Mrs Graham
spoke to her submission and tabled a written record of her presentation,
which covered matters relating to the selection of councillors and Board
members and concerns surrounding the resulting workload for councillors and
staff, the costs of setting up and maintaining the company, being in
competition with private sector companies, the effects that changes of
council make-up and CEO might have, and risk taking in difficult economic
times.
If a company Board
of Directors was formed, Mrs Graham preferred that it was made up of suitably
qualified, independent people with the necessary skills and experience.
1.35pm Submission
#1. Mr Robert Burnside.
Mr Burnside
expressed his belief that Council assets should not be under the control of
unelected representatives who may act without a public mandate, and that if
the company went ahead the Board should be made up of ‘local’ expert business
people. Further, he was seeking certainty around Council’s income and
delivery requirements of the company.
Mr Burnside
supported a board made up of both councillors and independent members. With
respect to leasehold land, Mr Burnside expressed his belief that commercial
investment in leasehold properties was not profitable.
Mr Burnside
supported the brief for making investment decisions being based on
consideration of social and economic factors in addition to commercial ones,
and that if an investment was above a set threshold that there would be a
requirement to seek council approval.
1.44pm Submission #7. Mr Philip Ward.
Mr Ward spoke
to his submission, which covered his view that ownership of a limited
liability company does not require that the Board should have any HBRC councillors
as directors, and similarly the HBRC CE position. Mr Ward also sought clarity
in relation to the ‘gearing’ of the company’s portfolio and reassurance that
the taxation benefits met legal requirements. Further, he sought that
Council’s Port shares be retained at a guaranteed level of at least 51% in
perpetuity. Mr Ward saw the ‘balance’ of the Board could be served by the
Council CE being a Director, but not filling both his current and Investment
Co CE roles.
Ms Aspinall was excused from the
meeting at 2pm.
2.04pm Submission
#12. Mr Murray Douglas on behalf of the Hawke’s Bay Chamber of Commerce.
Mr Douglas
spoke to the Chamber’s submission, and made comment that he had personal
experience of how this proposal worked successfully. The submission supported
the proposal because the performance of an investment portfolio can be
improved by use of and investment company structure if managed correctly.
Reserve the power of the ultimate shareholder, the power to appoint all
members to all boards, all decisions of remuneration of directors, all
purchases of shares and all investments in excess of a specified sum.
High
performance will require high level of business investment skill and
expertise through commercial directors on the Board and therefore not
satisfactory to appoint Councillors without the required skills and expertise
to the Board. Agree with objectives of the proposal.
View that CE
of HBRC could not serve as CE of investment company without conflict.
Recommends that directors of the Investment Company also serve on subsidiary
boards.
2.20pm Submission #17. Mr Barrie Crabbe.
Mr Crabb
objects to the proposal to create an Investment Company on the basis that the
ratepayers’ money should be left where it is and allow for public input into
how it is spent, and that the way Council currently manages its investments is
already able to meet the objectives for the proposed company. Concerns around
costs involved – set up as well as ongoing operational. Could there be any certainty
that higher returns would be achieved?
2.34pm Submission
#4. Dr Bill Sutton.
Dr Sutton’s
submission did not support establishment of the Investment company until
clear information about current investments was available. He sought more discussion
of the alternatives to the company proposed – i.e. status quo or other
options such as selling down of PoNL. Further, Dr Sutton was not convinced of
the claimed advantages and disadvantages.
Benefit of the
revenues needed to be kept in perspective, especially in relation to the
region’s GDP. Believes further consideration of and clear understanding of
the company’s purpose is required prior to Council making its decision.
Dr Sutton
stated his belief that there were clear differences between the
responsibilities of a public body and those of a private company that may not
eliminate the risks covered by ‘ring fencing’ investments. If 9 councillors
served as directors, the company would not be able to do the work required.
Simpler to make board of directors purely commercial and accountable to
Council.
2.55pm Submission
#6. Mr Tom Belford.
Mr Belford subscribes to the belief that exploring more
creative ways to fund different infrastructure projects is a good thing, and
supports putting Council’s assets to work in the Bay in a constructive way.
Prefers that the approach be to start at the smaller, subsidiary level first
before establishing a ‘holding company’ and to further develop those
subsidiaries as individual entities. Only after the individual companies
proved successful, should Council consider establishing the larger holding
company, and then only if it provided specific advantages that would not be
available to the subsidiaries otherwise.
Although
scheduled to do so, Tricia & Denys Caves (#2), Wairoa District Council
(#23) and David Renouf (#5) were not in attendance
at the meeting to present their submissions in person.
To enable Council to consider and make decisions on the
submissions received on the proposed Investment Company, staff were asked to
prepare a Summary paper of the issues raised by submitters, including staff
recommendations, which will then be used by Council to assist with their
deliberations at the Annual Plan Hearings scheduled 8, 9 and 10 June 2011.
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