The city has to pick up the pieces following Oliva’s negotiated exit.

Nelson Oliva, the soon-to-be former city manager, will escape town with something that resembles a golden parachute. The City Council approved the termination of Oliva’s contract in closed session Dec. 21. It was agreed between both parties that his departure was without “good cause” for which his contract required a full year’s salary as compensation.

Examples of good cause–as described in his contract–include insubordination, dishonesty, embezzlement, and appearance of a conflict of interest. In other words, the city presumably had good cause to terminate Oliva’s contract under any of a litany of controversial items but chose not to. In fact, when the City Council dismissed interim City Manager Charles Long on Dec. 7, and reinstated Oliva amidst an orchestrated evening full of praise, it wiped out two avenues to terminate his contract in one fell swoop.

The reinstatement essentially negated Oliva’s past poor performance–including a significant and persistent appearance of a conflict of interest with his former company NEO Consulting–and cut short, by nine days, the possibility to enact another clause in his contract which would have allowed the city to terminate, even without cause, had Oliva failed to perform his duties for more than 60 consecutive days.

It is difficult to argue causation when the old council had awarded Oliva with the maximum bonus in 2009–20 percent of his then $200,000 salary (Oliva’s salary rose to $225,000 in 2010)–in gratitude of his service. In hindsight, 2009 was a trendsetting year for the city, but not in a good way.

On June 9, 2009, Oliva presented a construction budget of $56 million for the Sycamore North project to the council for approval within a lengthy consent calendar, which unsurprisingly came without discussion. It has since been revealed that the budget was $14 million less than what was actually anticipated–which was either negligent or purposefully destructive–and that the city had underfunded the project by $42 million, a crisis that now threatens the well-being of the redevelopment agency and all city projects.

Oliva had also promised progress and success on the waterfront project and the Intermodal Transit Center, but both continue to flail aimlessly and approach failure under his leadership.

Oliva’s tenure was not all a disappointment. As his supporters readily proclaim, Oliva oversaw the construction of a dog park and a community garden, helped cover the expenses at the city’s schools when the district made harsh program cuts, and expanded the city’s affordable housing department–be it for the financial benefit of his family.

And that is what is so perplexing about Oliva’s self-inflicted demise. His story is not unlike those told in Hollywood true-crime stories that document the rise and fall of individuals who take advantage of the system. Oliva leveraged a complacent electorate and a disinterested and disengaged council to perpetrate an ingenious scam out of city hall–funneling redevelopment monies through the affordable housing agency run by his company.

Just as if it were scripted however, Oliva continued to push the envelope–capped by the Sycamore North project, where he had finagled to include an inordinately-high affordable housing component (74 of 96 units)–and his empire ultimately came crashing down.

In the end, Oliva should be just as relieved as residents. He was never just the city manager. That was mostly a front, a pretense for his real position–executive of the company he never actually left when he took the high-paying job as city manager. NEO has its founder back, although it is safe to assume the company will be renamed before it approaches another city desperate for creative accounting and affordable housing solutions.

Two new council members breathe new life into the city’s governing body.

The new City Council had its first full meeting Tuesday evening and it was clear from the outset that residents were going to witness a city conducting its business in an entirely different way, and it could not come at a more opportune time.

The city faces significant hurdles, and trouble surely looms. Jobs may be cut, projects may be lost, and scars will be permanent. An energized council must take sweeping and effective action–which must be immediate to avoid serious harm. The deceits were deep, and the deficits are real.

Emerging from closed session on Tuesday, Mayor Ed Balico announced that the council had voted to confirm its controversial termination of interim City Manager Charles Long in a 3-2 vote, a first in recent memory. The vote established an old and new bloc on the council that echoed throughout the evening, and although it meant a segmented council, it welcomed a renewed sense of healthy democratic debate.

Council members Don Kuehne and Joanne Ward voted with Balico to form the majority which simply did not want to admit past mistakes, even though they did anyway by voting for a third consecutive closed-session council decision–all were unanimous, including Tuesday’s–that upended the city manager’s position.

On Dec. 7, the council fired Long and reinstated Nelson Oliva. On Dec. 14, the council announced Oliva’s return was temporary and that a new city manager would be sought immediately. And on Tuesday, the council announced that Oliva’s contract would be terminated immediately and that Police Chief Fred Deltorchio would assume the position of interim city manager, starting Jan. 9.

The council may have been on its best behavior because four members of the Contra Costa Grand Jury were in attendance–whom had published the scathing report in June harshly criticizing the city’s handling of affordable housing through NEO (Nelson Oliva’s former company)–but questions were asked, answers were provided, and an actual dialogue took place before the public. The vote was unanimous to terminate the contract with NEO immediately, but residents were finally able to understand the opinions of the council members, which is what they’ve exhaustively been seeking.

Most, if not all, of city business had been routinely conducted in daytime subcommittee meetings, for which minutes were not recorded, and only until recently were not noticed or agendized. The items were then passed through the council on the consent calendar without discussion. That was the business as usual in Hercules. It may now have come to an end.

At several points during the meeting, newcomers Myrna de Vera and John Delgado asserted themselves and the platforms they ran on in the November election, and Kuehne voiced his opinion as well on several issues. Although Ward was mostly silent and Balico was characteristically not, the meeting seemed to carry a different air.

Whether or not the two blocs manifest into a serious disadvantage for a community demanding substantive change remains to be determined. However, with a potentially serious recall attempt in the works, news organizations actively reporting the council’s decisions and their impacts, and an engaged community, it is difficult to see how this council could manage to not approve elements of change, if only incremental. The city’s financial condition requires it. The additions of de Vera and Delgado pretty much guarantee it.

The new mayor delivered a message to a wary public.

Councilman Ed Balico said in his inaugural remarks as mayor he did not want to hold the position for the coming year. Residents knew that was simply not true. Balico revels in the spotlight, and the mayor took advantage of his election–which did not come easy (newcomer Myrna de Vera dissented)–with a speech that lasted nearly twenty minutes.

The mayor missed the opportunity to change the tone of debate in the city. Instead, his speech was contentious and combative and, at times, a lecture. Balico did not mince words either, warning that not following his lead would result in the destruction of Hercules. That is quite a bold statement from a councilman whose recent actions has sparked a grass-roots recall effort targeting his removal.

Balico is a revisionist historian. He criticized Lisa Hammon–the assistant city manager that resigned earlier in the evening–for not delivering on the Intermodal Transit Center project, the centerpiece of the stalled waterfront development. In his December 2007 remarks–as then outgoing mayor, and six months prior to Hammon taking the job–Balico stated unequivocally that the station would begin construction the following August (2008, if you are following along), due to the hard work of the council. Balico said, in 2007, that the station “did not come overnight.” Well, he’s certainly right about that.

The mayor must realize that he is responsible for the failure, not staff. While Balico admits the city has gotten off track, he refuses to be held accountable. The Intermodal Transit Center project is now projected to be eight years behind schedule. Originally slated to open in 2005, the station is now scheduled to open in 2013, but that depends on construction commencing this April, which is improbably optimistic considering the city’s financial condition.

Although the city council emerged from closed session on Tuesday and announced that Nelson Oliva’s return as city manager was only temporary–and that a search for a replacement would begin immediately–the mayor had no issue with returning all power at City Hall to the embattled Oliva in the meantime. If Oliva’s management was not an issue and his return not a concern, then why hire an interim city manager to clean up his mess, and why search for a replacement? There is an incongruence of logic in Balico’s thinking on this matter.

The council had hired Charles Long in October and specifically tasked him with conducting a complete review of the affordable housing program, every consultant contract, and all proposed projects. Unfortunately for Long, he did too good of a job. The final straw appears to have been the New Town Center project. At the Dec. 7 meeting, a representative of Red Barn, the developer, informed the council that the project will be delayed another five years in the best-case scenario.

Long had concluded that the New Town Center project was unrealistic in this economy and a drain on the redevelopment agency’s ailing budget. Long placed the project on indefinite hold and focused on other higher priority projects, including the Intermodal Transit Center and Sycamore North. Red Barn had received a drop dead letter from Long which apparently set off a chain of events that resulted in his unceremonious firing.

In order to reverse Long’s actions, Balico unilaterally directed the city manager on Tuesday evening to reinstate all contracts that Long had terminated on the New Town Center project. It was another sign that Balico assumes the city’s residents–and voters–continue to support him, despite a steady beat of reports of impropriety and fiscal insolvency. The city has yet to refute Long’s findings and a thorough financial audit is clearly appropriate.

It seems the mayor fails to understand the magnitude of the problems facing the city, as well as his role in the debacle. While Balico believes his leadership–and his alone–is the cure, a growing number of residents have concluded otherwise, and the mayor’s constituency may dwindle to include just himself.

The City Council made a step backward with Tuesday’s decision.

In a stunning, provocative move clearly meant to send a stern message to dissident residents clamoring for change and transparency, the City Council abruptly fired the interim city manager tasked with cleaning up the apparent mess left by the previous city manager, Nelson Oliva. Oliva was on indefinite sick leave until Tuesday evening, when the council inexplicably reinstated him. It was a significant change made a mere week prior to the swearing-in of two new council members who won handily on a platform of change.

It appears this council does not enjoy criticism–of any sort, at any time, even if it comes from within and with good reason. Interim City Manager Charles Long’s weekly reports, which included details of nefarious bookkeeping and disorganized chaos, and the subsequent news reports covering the timely information, was more than this council could handle.

This council would rather remain in the dark about the serious financial condition the city faces than proactively deal with the problem and move forward in a constructive manner. The city didn’t take an action to help itself; it delayed the inevitable–the hard work ahead to rebuild the unsteady foundation.

As long as this city refuses to examine itself in the mirror, and implement policy changes that not only remedy the issues that exist but also prevent them from happening again, this city will continue to be on a self-inflicted path of destruction. And no end is in sight.

With the hiring of Long in October, the council admitted mistakes, and directly ordered Long to fix the situation. But by restoring Oliva, who was responsible for misleading the council and possibly placing the city on the ledge of financial ruin, the city has failed to accomplish anything in the past two critical months.

Sitting in the audience during Tuesday evening’s spectacle, it felt more like the scene of a low-budget political thriller than a small town public meeting. Speaker after speaker rendered endless praise for the previously embattled Oliva, followed by applause from a crowded room made up individuals not considered to be regulars, who had just miraculously showed up for the pomp.

The evening clearly must have been orchestrated–there were too many people prepared to speak, with note cards, speaking about something not on the agenda and which had transpired in closed session only minutes before–and it raises questions about potential Brown Act violations. If more than two council members had discussed the removal of Long and the reinstatement of Oliva prior to the meeting–even through a series of disaggregated emails or phone conversations–it would constitute an illegal meeting.

According to Councilman Ed Balico’s statement on Tuesday, I shouldn’t be writing these words, and you shouldn’t be reading them. He feels that any negative commentary made about the city, even if accurate and helpful in its purpose, is damaging to the city’s reputation. Apparently the next mayor of Hercules believes the First Amendment doesn’t cross the city’s border. That is a slippery slope, and a condition I am not willing to accept.

Balico must remember that this council has lost the public trust–as evidenced by the trouncing of incumbents in last month’s election–and in order to regain it, the city needs to improve communications with its residents. In fact, that was one of the tasks directed to Long. He took the task seriously however, and the council had only hoped for continued lip service.

The council delivered more than lip service on Tuesday. They informed residents they weren’t willing to be held accountable. The image in the mirror must have been too hideous to tolerate.

As the city reorganizes, reviews, hires and terminates staff, the controversial city attorney has been left untouched.

Interim City Manager Charles Long has either addressed or begun to address big issues facing the city in his first month on the job–reorganization at city hall, tearing up the NEO affordable housing contract, examining the funding woes for the Intermodal Transit Center and Sycamore North projects, and restarting negotiations with the waterfront developer. However, one item seems to have escaped his attention– the fate of the city attorney.

Long’s predecessor, Nelson Oliva, is still on the payroll and retains the official title of city manager, and it is now apparent that his ambitious activities as executive director of the redevelopment agency was a shell game, or a disorganized Ponzi scheme. It is surprising then that the attorney that provided the legal basis and protection for the actions taken–City Attorney Alfred “Mick” Cabral–has retained his position. And it is not as if Cabral has a reputable tenure.

The best-known case is the city’s battle with Walmart. Cabral led the city council into troubled waters when he advised the city to invoke eminent domain over Parcel C, where the big-box retailer had proposed to construct a 99,000 square foot supercenter. Although members of the city council had invited Walmart into the city in 2004 and assisted in the retailer’s purchase of the property, the retailer’s plans resulted in an uproar from residents who campaigned to halt the project, and the council was forced to reverse course and commence eminent domain proceedings in 2006, under legal guidance from Cabral. The city council’s decision made national news.

Unfortunately, the city didn’t have the right to invoke the power of eminent domain–the right had been long expired–and a county judge eventually ruled that the city’s ordinance was invalid. It was a costly oversight by Cabral that placed Hercules, again, in a difficult position. The city ultimately convinced Walmart to sell the property to the redevelopment agency, which purchased Parcel C in 2009. While the site remains vacant, the only winner in the entire four-year saga seems to be Cabral, who racked up unknown amounts of legal fees. That is only one example of Cabral’s history of encouraging the city council into unnecessary legal proceedings. More recently, Cabral has been a key player in the city’s threats of eminent domain of the waterfront property.

Cabral also is no stranger to a conflict of interest. The city has recently begun efforts to withdraw from the jointly-operated wastewater treatment facility in Pinole at a hefty cost. The plan is to send the city’s waste to the larger West County Wastewater District (WCWD) in Richmond with the city footing the bill for the installation of needed infrastructure (upwards of $70 million). The attorney representing the city in the Pinole-Hercules Joint Powers Authority is unsurprisingly Mick Cabral. The attorney for WCWD? None other than Cabral. It’s a conflict of interest made in heaven. No matter what the city ultimately decides–or how much it pays–Cabral will benefit.

It is a pattern of behavior not fit for civil service, although Cabral is a contract employee. The city attorney must provide legal guidance in the best interest for the municipality–which he has failed to do–and not for the personal benefit of a city manager. Cabral has provided inadequate counsel on issues of great magnitude, to substantial cost to the city, and has, on occasion, shown great disregard for open government meeting laws (conducting city business in closed session) and even contempt for the community for which he serves.

When the new council sits for its first meeting in January, its first order of business should be the dismissal or demand for resignation of its city attorney. It is long overdue.