City's Lending Program for Affordable Housing is $10 Million Mess

The loans, for first-time buyers or owners facing foreclosure, have in some cases helped city employees, their relatives or friends. (Part 2 of 2)

As federal and state investigators try to sort out what happened to millions of dollars that Hercules used to fund its affordable housing program – now suspended for the second time in a decade – one thing is clear: The city has paid out substantially more than it has taken in.

Since 2003, the program has loaned almost $10 million in taxpayer money to help at least 150 individuals and families buy and keep their homes. No one can say for sure how much of that money has been repaid, but reports submitted to the California Department of Housing and Community Development suggest repayments might amount to as little as $408,647.

Some of the loans enabled people to fix up their homes with no payments and deferred interest for 10 years. Others helped them climb out of a financial hole. A handful of the properties have been leveraged for more than they're worth, turning loans that seemed like a sure bet into losses for this cash-strapped city.

"It's a lot of money out there that could be a profit center for the city," said Frank Fox, a real estate developer hired to manage the city's troubled properties earlier this year.

And having laid off close to half of its city employees this year, Hercules is in desperate need of some "profit." The only problem: No one remaining at City Hall seems to know precisely how much is owed on these loans or whether it's even possible to go after the debts.

"I have to tell you that I don't have the answers to these detailed questions," new City Manager Steve Duran said in response to a recent email inquiry about the loan portfolio. "What I have done is to reach out to a consultant who can hopefully give me a few firms that can help us with this."

Duran is the first Hercules city manager to be hired through a competitive selection process over the last decade. His predecessors had been hired on the strength of personal connections planted in small towns where all three of the previous city managers had lived or worked.

With no friends to pave the way, Duran inherited a mess when he took on the city's top management post last month.

• • • See Patch's Crisis in Hercules • • •

Since 2004, the affordable housing program in this town had been run by Affordable Housing Solutions Group, a company later incorporated as NEO, which stands for "Nelson E. Oliva," who ran the firm and then became Hercules' city manager. The firm left the city with its loan files when its contract was canceled earlier this year, but when reporters for The Huffington Post and Hercules Patch reviewed those files, many were so incomplete that they did not even contain deeds or other records on file with the county recorder's office.

NEO's contract was canceled in February following a controversy that led to the , a commercial real estate developer who'd been hired to manage the city when Oliva was off on medical leave last year.

In the space of less than two months as interim manager, Long identified financial irregularities that he predicted would lead to a budget meltdown within a few months if left unaddressed. And he set out to solve the problem with a machete, proposing radical changes that included the cancellation of NEO, a company founded and managed until recent years by Oliva.

The same night he was to have canceled the affordable housing contract, Long was fired, and NEO's founder, Oliva, was welcomed back as city manager. All decisions on the city's impending financial crisis were tabled, and NEO was back in business managing the city's affordable housing, which included the $10 million loan portfolio.

But not for long.

In the space of two months, Hercules canceled its longstanding contract with NEO-Affordable Housing Solutions Group and . The city is now  for $3 million, alleging violations of state law and breach of fiduciary duty. Neither Oliva nor his colleagues agreed to be interviewed for this report.

"It was shocking to see how little they did with what they had," said Maria Benjamin, program manager at Community Housing Development Corporation, a Richmond-based nonprofit that offers education counseling and loan services to first-time homebuyers and those at risk of losing their homes to foreclosure.

Of the $10 million spent on affordable housing loans since 2004, about $2.6 million has gone to employees of the city and their friends or relatives. With more than 900 people on the wait list for housing assistance, the fact that $1 out of every $4 went to those with connections to City Hall drew criticism in a civil grand jury report titled "" which Contra Costa County issued last year.

"The processes for carrying out the affordable housing and business loan programs lack transparency in the City of Hercules," the grand jury concluded. "Available redevelopment loans are not publicized. Decisions, for the most part, are handled by subcommittees of the City Council which do not record meetings or maintain minutes. Loans were made to family members of staff and elected officials. These practices raise the specter of impropriety and diminish the public trust."

Lending Spree

Some of the loans legitimately fell within the approved guidelines for interest-deferred loans of up to $35,000 offered to city employees, schoolteachers and firefighters as an incentive to keep them living in the city.

Others raise questions that remain unanswered. Consider, for example, a loan package awarded to Donna Sophus and her daughter, Shirnise, a city employee.

It was more than 10 years ago that Donna Sophus first walked into City Hall looking for some type of assistance that could get her into a home of her own. A year later, she got a call inviting her to come in and fill out an application.

"I went to all the things that they had for us, got certificates, went to the seminars, and I waited," she told the City Council in December 2010. "I made calls back. Never heard nothing. Program ended."

In fact, the program had been suspended after a senior housing official was sent to prison on charges that he had pocketed money from the city's beautification loans by fabricating invoices.

"The next time I heard from the city is when the affordable housing program came back. In 2009, I got my key, and I am a homeowner," she told the City Council. "The program, the staff is people that you can trust. ... I take my hat off to you, Mr. Oliva, and I thank you."

Sophus was among the crowd of people at City Hall last December who surprisingly showed up to applaud  in the city manager's office after a nearly three-month medical leave. In the years before he'd been handed the reins to the city, , and the audience that night was packed with his supporters, many of whom, like Sophus, had received substantial loans from a city teetering on the brink of insolvency.

Sophus had good reason to be grateful.

The year before, documents show, she and her daughter had received $386,575 in loans from the Hercules Redevelopment Agency to buy a house in the city's Baywood district, a quaint neighborhood of brick alleyways and carefully designed row housing with picketed front porches facing paved sidewalks.

Their Baywood home was one of a dozen so-called "inclusionary" affordable houses intended to fulfill the state requirement that 15 percent of new homes in redevelopment areas be made available to low-income buyers, which is broadly defined as those with .

The affordable housing package awarded to Sophus and her daughter included a loan for $135,000 with deferred payments and interest for 20 years. It was granted under the Inclusionary Below Market Affordable Housing Homebuyer Mortgage Assistance Loan Program, one of several deferred-payment loans offered by the city.

The women will not be required to make payments on that loan until 2029, at which point their monthly payment will be $749, according to documents on file with the city.

The package also included a loan almost twice that size granted under the  a fund normally reserved for properties in default or so behind in payments that the owners are at risk of going into default.

The retention loan – a little more than a quarter-million dollars – was recorded with a deed of trust on Nov. 2, 2009, the same day the purchase was recorded, raising questions about why funds earmarked to save homeowners from default would be loaned to someone just buying their first house.

All told, the loans from the city added up to $386,575, according to recorded documents. That's almost 100 percent of the $387,000 purchase price recorded in the documentary transfer tax.

With the departure of the city's affordable housing manager, NEO Consulting Inc. – doing business as Affordable Housing Solutions Group – there is no one left at City Hall to explain why any of it made sense. Even Fox, the real property manager intimate with many of the city's bigger deals, was baffled.

"Why in the world would we do that?" he said.

Neither Sophus nor her daughter could be reached for comment.

Residential Dominoes

Since 2007, Hercules' affordable housing program has spent $3 million of taxpayer money on the loss mitigation and retention loans, and while it is difficult to say anything definitive given the scant information in the city's files, the trail of publicly recorded deeds on the eight loans the city reported indicates that the Sophus package was the only time a home buyer received a "retention" loan at the time of purchase.

It remains unclear what portion of that $3 million has been repaid.

The City Council approved the Loss Mitigation and Retention Loan Program on May 22, 2007, less than two weeks after Oliva was first appointed as Hercules' city manager, a job that had him signing off on contracts with NEO, his family firm. Oliva said he handed the company to his daughters when he became city manager, but a year later, he reported in a corporate filing that he was "president" of the company.

The affordable housing program's goals were laudable. At a time when the tumbling real estate market was creating clusters of foreclosed homes in many suburban neighborhoods, it aimed to help residents stave off foreclosure and remain in their homes.

While various other cities of the same size offer paint-and-patch loans and assistance to first-time homebuyers, the cash Hercules had invested in the retention loans may be unusual for a city of just 24,000 residents.

Neighboring Pinole, for example, a city of similar size, offers two large-dollar programs for first-time homebuyers and repairs as well as a basket of grants ranging from $2,000 to $8,000 for emergency repairs and seismic upgrade. But all its programs have been suspended due to a lack of funding. When Pinole was handing out money, its applicants were reviewed not in-house, but through a contract with the nonprofit housing corporation in Richmond.

Pleasant Hill, a slightly larger city within the county, offers connections to a host of programs through its website. Instead of lending directly to troubled homeowners, the city points them toward other pots of money, including programs that offer up to $3,000 a month in mortgage assistance for homeowners collecting unemployment.

In Hercules, however, the city or the redevelopment agency would step in as a lender, assuming the owner's first mortgage and establishing a new 30-year payment schedule at a fixed rate. In other cases, the city or the agency would buy the home outright, a strategy that resulted in net losses that are impossible to accurately tally because the affordable housing files do not contain enough information to do so.

That strategy left the city and its redevelopment agency actually owning a handful of houses, in some cases for more than two years.

"They're big losses for the city," Fox said of the homes the city snapped up. "We might almost have been better off letting them go."

The buying and selling of houses essentially had Hercules functioning as a real estate speculator and landlord in a declining market. The intent was to protect the city's initial investment of $35,000 or $50,000 in loans, but in some cases the city lost more than that on the transactions alone. In hindsight it didn't make good financial sense.

"We took these houses on how long ago and in some cases, we lost," Fox said.

In one case, the city lost at least $49,000 on a single house, a figure that does not include what might have been paid on taxes, maintenance, utilities or homeowners' dues over two years. It was a condo on scenic Refugio Valley Road that the Hercules Redevelopment Agency had purchased in 2009 for $168,000, recorded deeds reveal.

"This property is in default," read an unsigned note in the city's file. "We propose purchasing the property at a short sale price in an effort to recover the borrower's first-time homebuyer silent second loan of $50,000."

In May 2011, the agency sold it for $119,000. But what remains unclear is whether the city recovered its original $50,000 cash investment in the property.

Within a few months of being hired, Fox started selling off houses the city had bought through the loss mitigation program. By last summer, he had sold seven of the eight houses then owned by the city, most of which had been sitting in the city's inventory for two years or more.

The Insiders

Many of the troubled housing deals in Hercules have also involved insiders.

Hercules barely turned a profit on the sale of a home belonging to Jill Balico – the daughter of a former mayor, – that ended up in the city's lap.

It's unclear what role, if any, the former mayor played in deciding to have the city purchase his daughter's house. From 2007 to 2010, the decision-making subcommittee consisted of two members: Balico and former Councilman Kris Valstad, neither of whom could be reached for comment. Numbers that Hercules Patch had for Balico have been disconnected and another number, according to the person answering, is not Balico's. Messages left for Valstad have not been returned.

The grand jury report that highlighted an appearance of favoritism also pointed out a lack of checks and balances in the system. NEO-Affordable Housing Solutions was solely responsible for vetting applications and forwarding them to the city manager's office for approval, it noted.

For most of his tenure, that meant Oliva was approving applications and invoices submitted from a company reportedly managed by his daughters, but for which he served as president for some period of time. In corporate documents filed in 2008, well more than a year after he assumed the top management post in Hercules, , and its mailing address was 118 Nautical Cove, his home in Hercules.

Oliva and the city have denied that favoritism played any role in how the money was handed out. But a close review of loan files shows that the biggest borrower was a woman who had worked for NEO and later served as Oliva's personal assistant.

Of the hundred-some people to have received loans under the affordable housing program, the biggest single pot of money went to Oliva's administrative aide, Eguzki Olano.

By taking advantage of four separate programs over the course of three years, Olano was able to borrow more than half a million dollars from the affordable housing program that had employed her.

Olano was hired as an administrative assistant in the Hercules Police Department in 2004. A year later, she was earning $1,750 biweekly with NEO, according to pay records contained in court files. She and her husband owned a house in Hercules at the time that he would keep after their divorce, and in the fall of 2006, only a month after quit-claiming her interest in the family home, she obtained a $50,000 loan under the first-time homebuyer program.

The city's guidelines require that someone must not have owned a home for three years prior to the qualifying purchase. But Olano qualified under a state exclusion for single parents who, while married, owned or occupied a home with their former spouse.

In March 2007, she transferred from her job in the trailer offices of affordable housing to City Hall, where she served as Oliva's administrative assistant.

In the years to come, she would receive three more loans – $10,000 to fix up her house, $24,999 under the "Revitalization and Beautification" program and finally, in July 2009, a retention loan of $456,460 that called for her to begin making monthly payments of $1,900 that August.

Olano did not return a phone call and has not responded to a letter mailed to her Hercules address. A note left at her front door received no reply.

Good Money After Bad?

In 2004, when Oliva's newly formed company took over affordable housing in Hercules, the program consisted of a handful of packages aimed at providing loans for first-time homebuyers and low- to moderate-income people trying to fix up their houses. An employee plan offered deferred interest loans as an incentive to encourage city employees and school teachers to live locally.

But the loss mitigation and retention loans that started in 2007 marked a sea change for the affordable housing program, which began functioning like a bank and even acting as trustee on various loans.

Was the city throwing good money after bad in many of these loans programs?

With respect to the emergency loans, Fox said the intent was to hold on to the city's initial investment. But with the rapid decline in California real estate, the city soon found itself dabbling in deep water and playing landlord on properties that ultimately cost more to hold than they were worth.

In the succession of city managers – two of whom were fired and one of whom left to join the city's bond underwriter for a stint as a senior partner – hardly anyone left at City Hall can explain why a city poised for success now finds itself struggling to meet its bills for basic service. Over the past year, the city been forced to borrow from its long-term investment funds to pay its and has laid off close to half its employees, including cops.

Former Interim City Manager Long, the whistleblowing administrator who was  not long after being fired at that December meeting for "insubordinate failure to follow instructions," has his own theories.

"This is a lot like Bell, (California)" he said. "The difference being that the guys in Bell knew not to empty the trough from which they fed."

Glenn Abraham November 18, 2011 at 09:26 PM
Excellent advice from someone who knows what she's talking about. Well done, Toni
Phil Simmons November 18, 2011 at 09:27 PM
Glenn, Do you mean, Over the ladder and up the bridge To grandmothers house we go ? You know the one she got through the Affordable Housing Program and transfered her 40 year old Prop 13 tax base to.
Glenn Abraham November 18, 2011 at 09:34 PM
Cool. Somebody read my question list yesterday. I remember that Pearl Harbor Day council meeting, where Ma Oliva packed (or claimed credit for having done so) the chambers with Oliva "supporters". Those weren't supporters, they were co-conspirators. I don't recall Donna Sophus as sounding particularly sophisticated, but no one is stupid enough to think that a deal like hers could possibly be proper. "It's unclear what role, if any, the former mayor played in deciding to have the city purchase his daughter's house." It seems pretty clear to me: "From 2007 to 2010, the decision-making subcommittee consisted of two members: Balico and former Councilman Kris Valstad, neither of whom could be reached for comment." Why is Balico not in prison, and why isn't Valstad being more closely examined? Valstad could not have been at the center of things during those years and NOT be complicit in the balicoliva schemes. "NEO-Affordable Housing Solutions was solely responsible for vetting applications and forwarding them to the city manager's office for approval, [the grand jury report] noted." Not much chance for wrongdoing in THAT set-up. Oliva's beloved President Waitress, as CEO, would have had ultimate authority over the applications; Oliva's beloved self got to approve his daughter's decision, a decision made by a company in which Oliva has absolutely no personal interest. Didn't even know what "NEO" stood for.
Glenn Abraham November 18, 2011 at 09:35 PM
FINALLY the press has lifted the rock under which Eguzki Olano had crawled. It had to be the press, because police investigators sure don't seem to be working very hard on this. Last December, we already knew about her, and knew that she had gotten loans through her boss, loans which were apparently approved by the company with which her boss had absolutely no connection. This article of Ginley and Porterfield is, to my knowledge, the first serious exploration under Olano's rock. We owe a lot to Dan and Myrna, but we sure have a helluva debt to the press. "In the succession of city managers – two of whom were fired and one of whom left to join the city's bond underwriter for a stint as a senior partner." That one, the one who switched sides to join the bond underwriter...that was Sakamoto, wasn't it? Rather like an Afghan warlord, wasn't he? A recurring theme in this article..."hardly anyone left at City Hall can explain"...highlights another reason why we should be suing as many of the vultures as we possibly can. Truth comes from inquisitive journalists, but it also comes from depositions in civil litigation. We should be suing and deposing EVERYONE who dined off the carcass. I have a feeling that Valstad knows something. I have a feeling that the Viking, who doesn't return messages from journalists, might be motivated to share if he were sworn in under penalty of perjury and FORCED to tell us the story.
Glenn Abraham November 18, 2011 at 09:35 PM
"This is a lot like Bell, (California)" he [Charlie Long] said. "The difference being that the guys in Bell knew not to empty the trough from which they fed." I miss Charlie Long.
Glenn Abraham November 18, 2011 at 10:03 PM
Phil: I'm gonna put sponges on the steps of the ladder. I love a good cliché as much as anyone (and heaven knows, clichés are GOOD!), but it's important that the water never climb the ladder and get over the bridge: nothing has passed over/under anything, and nothing should be forgotten. The investigation is just beginning.
Phil Simmons November 18, 2011 at 10:13 PM
Glenn, Absolutely. Investigations hopefully will continue. At the very least we all need to see a breakdown of were the Affordable Housing funds went. The city is showing small profits on some off their resent property sales. I believe that once the $ is followed it will become evident that all of the city property sales will show hugh losses via the RDA and Affordable Housing $ spent for nothing.
Glenn Abraham November 18, 2011 at 10:25 PM
Phil, as I said below, I adore mindless clichés, but there are two which are especially effective at setting off my alarm system: That's water under/over/through/around the bridge -and- Now is not the time for blame. Both are a good indication that someone is hiding something, and I react to both. For all the other mindless clichés, I just lean back and admire the profundity.
Julian W November 18, 2011 at 10:32 PM
I totally agree Phil; city needs to stay out. My comments are geared more towards the future development of the waterfront. YES--to parks, shops, cafes, transport. NO--to more residential housing.
Annie R. November 19, 2011 at 02:21 AM
None of the information presented in this article is new. Tom Lochner has been relentless in his pursuit of uncovering the City's history of malfeasance and lack of transparency. The Patch shouldn't act as though it has discovered the Holy Grail.
bobbyrenfro November 19, 2011 at 10:59 AM
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Giorgio C. November 19, 2011 at 02:07 PM
I forgive Mr. Batara for his comment which he publicly apologized for. Many folks, myself included, have said and done stupid things. Can we move on? Hercules is a small city, so conflict-of-interest is almost impossible to escape. Mr. Batara is a business man and a resident. In fact, his contract with the city means that he might have more interest and knowledge about these matters than the average citizen, yet this is exactly why we do not want him on the committee? He passed the interview, right? An interview that was so rigorous that one of our own city council members received zero votes in his quest for a spot on the same committee? With full transparency, including publishing of Finance Subcommittee meeting minutes (only agendas are published), the citizens and city council will have the information THEY (not the subcommittee) need to make their decisions. Am I correct that the subcommittee has no authority to make decisions? They serve as a vehicle for discussion and research, with the decisions ultimately being made by the City Council who act on behalf of the citizens. That's why I made a big deal out of the Finance Subcommittee's role with the school childcare program. I wanted to see evidence of parent input, such as surveys, which would have been used for drafting the language of the RFP document. Full transparency will provide an environment where EVERYONE can participate in the decision process.
Glenn Abraham November 19, 2011 at 03:38 PM
Shining a spotlight under Ezguki Olano's rock, and incidentally catching NEO and Oliva lurking in the shadows, apparently along with Valstad and/or Balico: In a posting yesterday, I implicitly credited Jackie Ginley and Bob Porterfield with (effectively) having been the first to write about loans approved by NEO and the city to Ezguki Olano, Oliva's erstwhile "Executive Assistant to the City Manager's Office". I was wrong. Tom Lochner was already busily writing about Ms. Ezguki's dubious transactions in October and November 2009. The fault for misplacing credit is mine. I am a fraud: after an earlier burst of enthusiastic interest in city affairs from the late 90s to about 2004, I lost interest, and stopped paying attention...until October 2010, when Charlie Long jumped in and started shouting, and Tom released his invaluable series of reports on the shouts. There are still gaps in my knowledge ca 2005-Oct.2010. A lot of you know how to email me. If you want to see Tom's earlier articles, please email me, and I'll forward them. These points, though, bear noting: -In 2009, Eguzki Olano was Executive Assistant to the City Manager's Office; i.e., she worked directly for Nelson Oliva.
Glenn Abraham November 19, 2011 at 03:38 PM
-Olano received loans from the city. Quoting Tom's 11/22/09 Times article: "The mortgage loan to Eguzki Olano is for $456,460 with a 40-year term at 4 percent-a-year interest on her three-bedroom, two-bathroom, 1,422-square-foot home on Bedford in the city's Foxboro section; the agency provided another $3,540 for closing costs. The new loan comes on top of two earlier Redevelopment Agency loans -- a $50,000 first-time homebuyer loan in 2006, when Olano bought the house, and a $24,999 beautification loan disbursed in January 2009." Also to be noted: "The new loan [for $456.460], recorded July 2, brings the city's investment in Olano 's property to more than $500,000." "A sale of a three-bedroom, 2 1/2 bathroom, 1,475-square-foot house on a slightly larger lot and on the same block was recorded three days earlier for $287,000."
Glenn Abraham November 19, 2011 at 03:38 PM
Shortly after the largest loan was approved, Olano BECAME A DIRECTOR OF NEO. This is not a new revelation, but belongs in caps anyhow. Again quoting from Tom's article, the following was the defensive response of Michelle Harrington, a Hercules city spokesperson of the period: "She [Oguzki] never had 'dual roles' as administrative assistant and as a director of NEO Consulting, Inc.," Harrington wrote. "Her Home Ownership Retention and Loss Mitigation Program loan was approved on June 2, 2009. She was not appointed to the NEO Consulting, Inc., board of directors until June 29, 2009." NEO, of course, was allegedly owned by Oliva's daughters at this time. Those who wish more details: email me, or ask me at today's charette.
John Loudermilk November 19, 2011 at 06:45 PM
Great comments Glenn!
David F November 19, 2011 at 07:57 PM
The big question is why did we need NEO at all? Emeryville used Homebricks to manage the affordable units. In most of the programs, the prospective owners get a major break on the home price and the city usually carries a loan that is forgiven if you stay in your unit a requisite amount of time. The loan accrues interest that would be paid if the person sells it early. The units usually have to be sold to low income people as well. There are so many successful models around us that we did not need NEO.
Glenn Abraham November 19, 2011 at 10:28 PM
Thanks, John. I'm finding that positive feedback (of which there normally is so little) actually does matter. The negative, not so much.
Giorgio C. November 20, 2011 at 12:00 AM
Glenn, I appreciate your comments and apologize for how I responded to your comments concerning the Batara item. This is really about me and my trying to forgive people, including our current councilman. I should not request or expect you or anyone to do the same. Thanks for your understanding.
Glenn Abraham November 20, 2011 at 01:13 AM
Hi, Giorgio. I'm not taking issue with forgiveness...though I'm certainly not motivated to forgive a corrupt bunch (balicolivamoto, but not necessarily Frank Batara) who refuse to provide information on what they did, let alone atone for it...but my point had nothing to do with forgiveness. Batara's comments, which were a defense of the Valstad/Balico council, shows which side he's on. Anyone who wishes to forgive him is welcome to do so, but no one should forget that he's on the dark side. His Hitler slander of Tom was also important because it showed that he's capable of dishonesty to push his cause: given his position, Batara should have known just how true Tom's revelations were, and the Adolf and Horse Manure comments were dishonest attempts to distort. No one should forget what this says about his honesty and integrity. Batara DID apologize, and perhaps he was sincerely sorry (instead of sincerely concerned about patching up his image); that's great; but he's still the person who tried to defend the people who hurt this city so much, and tried to harm the image of the person whose reporting, whose honest reporting, saved us. Just remember, that's all.
Giorgio C. November 20, 2011 at 01:37 AM
Glenn, If Susan is correct (which it sounds like she might be), then who do you hold responsible for this example of cronyism? This is post-recall election cronyism, Glenn. Cronyism of a new era. This occurred under the watch of our new, leaders after scouring and disinfecting City Hall with gallons of concentrated RECALLICIDE. How did this happen, Glenn?
Glenn Abraham November 20, 2011 at 01:53 AM
Giorgio, I'll have to get back to you on this, when I have more time. But, if you feel like doing it now, I'll need a few clarifications: "If Susan is correct": about what? "who do you hold responsible for this example of cronyism? This is post-recall election cronyism, Glenn. Cronyism of a new era." Sorry, Giorgio, I'm not trying to be obtuse, but I really don't know which cronyism you're referring to. Maybe something I missed cuz I'm kinda rushed at the moment and maybe glossed over it. But I don't know what you mean. "How did this happen, Glenn?": ibid. What "this"? If you're referring to something done by the balicolivamoto mafia, I have plenty of opinions: if you're referring to something involving the present council, I cannot imagine what it must be. I'm really pretty positive about the current council. "This occurred under the watch of our new, leaders": this what? I think your question is probably important, but I really need clarification.
Glenn Abraham November 20, 2011 at 02:46 AM
Yep, you're right. See my correction, below.
Giorgio C. November 20, 2011 at 02:12 PM
Glenn, Read Susan's comment about the Finance Subcommittee. This happened with our new city council council. Then Vice-Mayor Devera and Councilman Delgado were the council representatives for this subcommittee. Was this really BUSINESS AS USUAL CRONYISM or perhaps.....just a mere oversight? Hmmmm. As a scientist, I am currently working in my garage, building a super-duper government purification device. The neatest feature is the "Government Procedure bias eliminator". You can place a copy of any government procedure document into the machine, and it removes any verbiage that is conducive to subjectivity or bias, replacing it with clean, objective language. Cronyism is stopped at the door when this procedure is followed. This machine is close to being completed. For the next generation of machine that I hope to complete before I die, you will be able to place an entire human being, flawed with biases as we all are, into the machine, for a thorough cleansing of any trace of bias, resulting in a product that is fit to serve on our council or any other government agency. Until then, remain vigilant, as the human factor has not yet been eradicated!
Jeffrey Boore November 20, 2011 at 05:20 PM
I don't see how building residential units or not on the waterfront is something that the city should or could regulate. That is private property and the development is bound only by the building standards specified in the Waterfront Initiative. It is up to the landowner as to when (not how) the development will occur and the risk and liability is solely on the landowner for whether he can sell whatever he builds.
Glenn Abraham November 20, 2011 at 07:00 PM
Giorgio: is this what you're referring to?: Susan D.Keeffe 7:23am on Friday, November 18, 2011 "He [Batara] was later rewarded by being appointed by the Council to the Financial Ad Hoc committee. When it was learned he also has the City's street sweeping contract that he did not disclose on his application, he was not dismissed for conflict of interest. The culture of collusion and cronyism is strong in Hercules." At the time, I asked Myrna why she had chosen, of all people, Adolf Batara, to the Financial Ad Hoc committee. She said it was because Batara was in on the early decisions which led us to the corrupt mess, and that he could potentially contribute information on how the mess happened. It sounded more or less okay to me, though personally, I would have sued Batara, and then extracted his helpful information through sworn depositions. Personally, I see no corruption in Myrna's appointment of Batara to the ad hoc committee...what harm could he do? As for his failure to disclose the street sweeping contract in his application, I personally would have tossed him off the committee and then applied against him whatever punishments were available for the fraud, petty though it might be. But this is the first I've heard of this, and I see nothing in it which might impeach the earlier decision of Myrna and John to appoint Batara to the committee. If a conscious decision was made to RETAIN him AFTER the information was made available----->
Glenn Abraham November 20, 2011 at 07:07 PM
--->, my opinion would be different. I've no idea whether that happened, but if it did, I wouldn't defend it. Fwiw: I personally am fairly confident that John and Myrna will break from the earlier patterns of cronyism, especially Myrna who, when obliged on her first day on the council to vote for a new mayor, refused to vote for Balico, saying she must vote her conscience. I do trust her, but based on what's happened before, it has to be a conditional trust, awaiting the results of several years of performance. Valstad and Balico and their bent city managers built up a complicated web of favoritism. I don't know if the new council can eradicate it, but I hope they can.
Aazoba Yuzuki November 20, 2011 at 08:36 PM
few years ago, i meet a city employee that stated they got free money from Hercules .. now I know what they meant LOL messy city thanks to a few people that bought loyalty of others by giving away taxpayers money
Donna W. November 24, 2011 at 02:43 AM
Michelle Harrington was the Accounts Payable Clerk in the Finance Dept. before becoming the City's "spokesperson." I think that says it all. I am amazed at how Equzki has managed to stay out of the limelight for so long. She was working for Nelson at N.E.O when she was handed the job of being his Assistant. Although she was not a City employee at the time, somehow she didn't have to go through the competitve hiring process to get that great City job. Sounds fishy to me...
Glenn Abraham November 24, 2011 at 04:03 AM
That's why I try to keep dragging these people back out under the spotlight. Nobody should forget about Eguzki Olano. Nor Gloria Leon. Taylor Oliva. Tom Weigel. None of these stories should be dropped until we have ALL the facts, and until just punishments are assigned to all who've earned them. And we all keep learning. I did not know, until Donna mentioned it, that Olano worked for NEO before being hired by Oliva to work for him in his new role of city manager. That's one more conflict of interest: Olano's loan applications were approved by the dummy officers of the Oliva-controlled company OF WHICH SHE HAD BEEN AN EMPLOYEE, before those applications were passed on to Olano's former boss NEO-Oliva and current boss CityManager-Oliva for, of course, final approval. And all this happening shortly before Olano became a director of the company in which her current boss, citymanager Oliva, denied having any interest, and which approved her loan applications. Around and around and around. Just thinking about it causes dizziness. The most important reason for suing the maximum number of vultures is that it is only through the under-oath depositions that we can learn the truth of what happened. None of the vultures will be answering emails or phone calls; we need conversation induced under a penalty of perjury. There's a nonfiction bestseller in all this. And a 10-part Fox mini-series. And a National Geographic special on the Olivas.


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