Times: Hercules officials respond to critical grand jury report
— by Jeffrey Wisniewski — 16 July 2010 — 7 comments below »
Tom Lochner reports on the City’s response…
Hercules has fired back at last month’s scathing county grand jury report, calling baseless the jury’s findings that the conduct of city business, particularly the affordable housing program, lacks transparency and creates an “appearance of impropriety.”
“Just because something looks wrong does not mean something is wrong,” reads part of the 11-page response, signed by Mayor Kris Valstad and posted on the city’s website Thursday.
It acknowledges the appearance of impropriety when the city’s affordable housing contractor hired members of City Manager Nelson Oliva’s family. But it also notes that those family members agreed to resign from the board of directors and sell the company to general manager Walter McKinney.
I’m surprised the mayor signed the letter. Kris Valstad should have directed the City Attorney sign it — since it’s City Attorney Mick Cabral’s argument/defense — and then find a new attorney to represent the Council on this issue. Cabral is protecting himself at this point — he has been labeled as part of the problem — and he is quite clearly not providing appropriate counsel to the City on this matter.
I have lived in Hercules for 21yrs and have been involved in most of the City of Hercules Council meetings for the last two years. I, like a lot of residents, live by rules and ethics. But when speaking of the city government of Hercules, I have to question their ethics and code of values. The fact that the current City Manager thinking that he could turn his affordable housing company over to his minor children who were early in college or still in high school and think that he had divested himself from the company is atrocious. The thought that no one on the city council questioned whether this was acceptable is troubling. This occurred two years prior to NEO, the affordable housing company, being sold to now Walter McKinney, after several residents have pleaded with the city council to have this matter answered. The fact that the ex City Manager leaves his job under questionable circumstances and we now find out that he was working with the bond company that Hercules was buying project bonds from. The city of Hercules brings this ex city manager back and no one has him fill out state form 700, Statement of Economic Interest. The residents also find out that our sister city Pinole requires this form of all contractors and consultants, leaves the residents to question who has any values in the city of Hercules. Most, if not all of the city busy is discussed in sub committee meetings, but the city is never consistent with the schedule. Meetings have been postponed or held a day earlier than scheduled. Times of meetings have been altered and held later than scheduled. When asked, the city will state that the time was posted outside of city hall, although the city maintains a website calendar that most residents use. These sub meetings are so important to gather information about how the city runs their affairs but Hercules, will have these meetings in the middle of the day, makes scheduling difficult for residents who work. If these meetings were video recorded, residents would be able to find out the inner workings of the city. It so important for the citizens to know what is being said not what the city records in minutes, but what is actually said. Most recently at the July 13, 2010 city council meeting, the City Manager was given a gift by a resident. The same night that the city council was in closed session discussing their response to the Grand Jury report, the gift that the city manager received was over the gift threshold mandated by the Fair Political Practices Commission. Did the City Attorney advise the City Manager not to accept the gift because it could be construed as a bribe? No, no one said a word. This is the problem with the City of Hercules. No one thinks about the ethical duties of office and this latest piece of written garbage by Hercules is proof that this city is not going to change their practices. Residents of Hercules join me in making changes in Hercules. Do not vote for any of the incumbents. We need new council members with new values. Not a continuance of the old guard.
Dan Romero
Dear Editor,
The so-called “response” by the City of Hercules to the recent Grand Jury report which seriously criticized the manner in which government business is conducted in Hercules is not only a bad joke it is clear evidence of the astonishing arrogance of the people at the helm here in Hercules.
The response presents absolutely no substantive evidence which tends to overcome the suggestion that our City Manager is running the financial benefit of his family and friends and that the City Council simply could care less.
The Grand Jury has investigated, the DA is alleged to be investigation further and these guys thumb their nose.
I implore our county officials to help us by filing any and all criminal charges which might conceivably be appropriate. People of this ilk believe that are above the law; and continue to believe that until the cell door closes behind them.
Bill Kelly
Hercules
I think that the response of the City of Hercules to the grand jury was bland but appropriate. Of course, the grand jury investigation forced Nelson Oliva to sell his company. Although the grand jury did not find any criminal activity nor did an FBI investigation (as I heard), a lot that went on has not passed the ethics test.
I believe that for a number of years now, our city attorney has not given good advice to the council nor has he given an exemplary service towards the citizens of Hercules. He has given advice numerous times not to answer issues raised by Tom Lockner, whether there was any merit to it or not. Keeping quiet and not “debating with the media” is not the proper answer in most cases. When Nelson Oliva got promoted to city manager, the city attorney declared NEO Consulting continuing to have contracts with the city legal. Ethics seems not to have been a priority. The council at that time (with Raines, not Kuehne) did not ask Nelson to choose between a promotion with over $200K in salary or operate NEO Consulting. Instead he was allowed to have both.
The angry partisan reactionists want blood. For the good of the whole Hercules, I believe it is time to let Mr. Cabral go.
The city claims that NEO was selected after a competitive bid process to provide affordable housing services “on the Sycamore North Project.”. But that is not the problem. The problem is that NEO was subsequently awarded a number of no bid contracts to provide other services wholly unrelated to affordable housing at the Sycamore North site.
The City’s reply stating that the grand jury “is simply wrong” because NEO was in fact retained via a competitive bid process for the Sycamore North project glosses over the fact that NEO has had its tentacles in all manner of projects unrelated to affordable housing, and that this expansion of NEO’s scope of services was apparently not undertaken via a competitive bid process.
The city’s report claims the council will in the future seek bids for any future affordable housing provider. I am glad to hear it. That is a first step in the right direction. But I think the council needs to do much more to restore lost credibility. Among other things, our elected officials should consider enacting stringent nepotism provisions as have a number of other California cities and public entities that would preclude hiring of, or contracting with, family members. Palm Springs, Riverside, Visalia, and UC are just a few of a number of entities that have done so.
I agree with the city that the title of the grand jury report is inappropriate and inflammatory. It is unfortunate that, in the very next paragraph, the city’s reply puts out its own inappropriate characterization, equating “transparency” to a “modern buzzword”. According to the American Heritage Dictionary, a “buzzword” is a “stylish or trendy word or phrase”. Is transparency in government (or a lack thereof) just a trendy concept du jour to be ignored?
The Ralph M. Brown Act that sets minimum standards for the conduct of public business in order to increase transparency in state and local government was passed in 1953. Hardly a newfangled notion. It is revealing, and disappointing, that the city council considers transparency a mere “buzzword”.
I support any and all efforts city officials take to address what many citizens and the grand jury believe are significant issues with how the public’s business is run here in Hercules. Council members, bite the bullet, take this seriously, and embrace the need for significant reforms. As it stands, the city’s response simply does not adequately answer many of the questions raised in the grand jury report.
I agree with all the above comments and look forward to the Nov. election to start house cleaning of the present council. This council has lost its way and there will never be the transparency the citizens expect and deserve. I would look to the time when we have a council willing to take the next step in replacing the City Manager and his legal counsel, Cabral.
Pure and simple, the present council must be replaced and the current city employees who have played the game must be fired. Perception is reality and my perception is that these people are crooks. Simply transferring ownership of the company has not solved the problem and has not removed the $$ that these people have recieved improperly. Additionly, this attorney is embedded in the scam at the root. All players must go and all contracts rescinded regardless of the cost to the city. Right is right and nothing about this scam is acceptable to anyone except the people who made $$ from their greed. I find it an incredible coincidence that Oliva, Sakamoto and McKinney were all co-workers in So-Cal and they somehow all show up in Hercules and reunite for the good of our city? Our city deserves honest hard working employees and elected officials.
The city claims it has addressed the issues and there are no more conflicts.
End of story.
Move along, nothing to see here.
Really?
There are numerous unanswered questions here. Ultimately, the city is STILL contracting with NEO for a number of services that are not related to affordable housing and that were awarded to NEO without competitive bidding. The city’s relationship with NEO should be terminated NOW.
Just a few of the loose ends that come to mind: If the address for NEO is a residence in southern California and that home is in the name of the city manager’s wife, as reported in the CC Times, then Oliva and/or his wife have probably been receiving rent under the terms of that lease. Are they continuing to collect rent from NEO for use of the home? Someone needs to follow the money here…. I seriously doubt Oliva has completely severed his ties, and that in exchange for turning NEO over to McKinney, there is some ongoing consideration. Grand Jury, are you listening? What “deal” was struck for Oliva and his clan to “retire” from NEO?
The CC Times reports that Oliva’s daughter is still on the NEO payroll for at least an additional 6 months to help with the “transition”. How can the city claim that the situation has been addressed, with Oliva’s daughter STILL on the payroll?
Apparently NEO has maintained an office on city owned property, and made liberal use of city personnel and resources to conduct their business. Do they still operate out of offices provided by the city? Are they paying for that via a lease? If they are essentially grafted into city staff, are they really contractors? The IRS has strict rules regarding the characterization of “contractors”. If they are functioning essentially as employees, the IRS will consider that they are employees. If the NEO gang are city employees per IRS rules, the conflicts with the city manager are even more apparent. What other contractor gets free use of city offices? Even if the mailbox security and other contracts were put out to bid, how could another entity submit a competitive bid when NEO has the ability to undercut any bid because they get free use of city resources?
At the minimum, these continuing ties amount to additional violations of the prohibition against even the “appearance of impropriety” standard for public officials. Put in basic terms, the arrangement stinks, and continues to stink. No, Mr. Mayor, the “appearance of impropriety” issues have NOT been fully addressed.