To some of us, the mid-60s San Francisco band featuring the legendary Janis Joplin (here singing Somebody to Love if you just want to skip the rest of this post).
To others, a description of the Regional Council’s proposed new body intended to hold certain of the Council’s tangible assets (for now, principally the Port of Napier) and oversee the business development of these assets. As time goes by, other assets are assumed to be developed by the Holding Company (HoCo), such as the water storage infrastructure envisioned for Central Hawke’s Bay and the Council’s growing forestry holdings.
HoCo is seen as the institutional vehicle complementing an already-adopted investment strategy of the Regional Council aimed at using a portion of its investments to achieve improved financial returns through income-producing infrastructure investments right here in the region.
That investment goal seems appealing enough. But the proposed structure – the HoCo – is frightening to heaps of people, judging from views expressed at recent public briefings and the HBRC’s submission hearings.
If there’s one word that describes the folks who have shown up at these sessions, it is wary.
At this point, few admit to opposing the proposal outright. Many say they can see a rationale – the economic value of and need for strategic infrastructure investments in the Bay, the potential for higher returns (which could translate into more subsidization of rates), ability to better tap business expertise, ability to facilitate private investment in joint partnerships, tax advantages that potentially free-up additional income.
But at the same time, many of the same people see a variety of risks.
And here, it might be useful to separate the investment strategy from the proposed structure (HoCo).
Those who are wary of the underlying investment strategy are concerned chiefly about two things: 1) the greater financial risk they see in the kind of active business investments the Council has in mind (versus the traditional “safer” term deposits, property leaseholds, etc); and 2) privatization – they fear the strategy, which welcomes private partners as investor/owners, will necessarily lead to assets that should be forever public (according to some) passing into private (even foreign) hands.
Arguably, these concerns could be addressed by the groundrules officially established in HoCo’s founding statement of corporate intent. But for some, the strategy itself is simply fatally wrong or inappropriate.
On the other hand, those who accept the strategy, however warily, then look at the proposed structure and operating rules of HoCo to determine whether it will mitigate the perceived risks and allay their concerns.
That moves the debate forward in two directions.
One group (call them the “Cautious Optimists”) moves in the direction of saying that various accountability measures, reporting requirements, and stipulated investment policies (or constraints, if you prefer) can be devised that will protect the public’s interest in its nest egg. Among them:
- Placing elected Councillors on HoCo’s Board of Directors (But if a majority are Councillors who effectively control all key decisions, why bother creating HoCo in the first place? Personally, I’d settle for one voting Councillor on the HoCo Board to keep a direct eye on things, perhaps with an alternate … assuming other measures were in place.)
- Explicit transparency rules aimed at maximizing public access to HoCo meetings and information (not every matter before HoCo should be routinely deemed commercially sensitive and hidden away from public scrutiny).
- Stipulated policies regarding permissible investments, investors and directors. For example: prescribed ratio of HoCo holdings to HBRC’s directly controlled financial assets; borrowing limits and ratios; percentage limits on private investment in individual projects; perhaps even limitations on investors or Directors from outside the region (on the theory that living in the Bay adds “skin” to the game).
- Regular performance and policy reviews by HBRC.
But a second group – and at the moment decidedly the loudest (call them the “Skeptical Scrutineers”) – complains that they simply don’t yet know enough to make a decision on the matter, one way or the other. They note that details about HoCo have only very recently emerged and cannot possibly have been scrutinized adequately … either by independent experts or average ratepayers.
And they see no reason at all to hurry the matter. Indeed, some would argue that upcoming local body elections provide precisely the forum in which this proposition should be debated and weighed.
Listening to their comments and questions over the last few weeks (since HoCo briefing papers were made publicly available), I suspect a majority of Regional Councillors themselves today are sitting in the Skeptical Scrutineers group.
And politically this is a huge matter. HoCo cannot be established by anything less than a two-to-one Council majority and expect to have any hope of winning public confidence.
Not surprisingly, some of the public resistance is led by the same people who feel rightly or wrongly — that they were shafted on previous major decisions like Nelson Park and the Napier Hospital. Long memories, compounded by unrelenting evidence of gross failure by “financial experts” on a global scale. Public wariness is hardly surprising … and has been under-estimated by HBRC.
If wary ratepayers are to be led into the brave new world of Regional Council strategic investment, they will need to be led there by a largely unified and wildly enthusiastic band of Councillors. Those Councillors need to belt out the HoCo anthem in the full-out style of Janis Joplin!
That group does not exist as I write on June 10 … and I don’t think it will form by Wednesday, June 16th, when the Regional Council takes up the matter for decision. [For now at least, like it or not, that’s how long you have to make your views known to your favourite Regional Councillors.]
And I say that as a Cautious Optimist.
P.S. Ready for some Janis Joplin now?