Font ResizeMillion-dollar items routinely breeze through the council on the consent calendar virtually without comment, let alone vigorous discussion. An example is a $55.98 million construction budget for the Sycamore Downtown Street Development that passed on consent June 9.
The council, meanwhile, devotes a lot of meeting time to commendations, proclamations and homilies boosting Hercules; reports from council members on their activities on other agency boards such as WestCAT, the League of California Cities and others; conferences and dinners they attended; and personal vignettes.
Financial matters mostly go through the Finance Subcommittee consisting of Mayor Joe Eddy McDonald and Councilman Kris Valstad before going to the council on the consent calendar; subcommittee agendas are not posted on the city Web site, and there are no minutes. The subcommittee has been meeting at 10 a.m. on alternate Wednesdays; dates and times are posted on a calendar on the city Web site, but only since October.
Hercules' City Council agenda packets do not include a list of disbursements or accounts payable, unlike neighboring Pinole and San Pablo, where the lists additionally are posted online; Richmond too, posts its list online; Hercules does not. A former Hercules finance director
Real estate-related items on the closed-session agenda generally identify properties only by Assessor Parcel Number, without an address or description.
Many of the residents' recent questions about their city government, reflected in calls to Bay Area News Group and letters to the editor, revolve around the contractor-run Hercules Affordable Housing Department, following reports that the redevelopment agency invested sums far in excess of market value in several residential properties; in one instance the city paid about three times market value to bail the affordable housing project manager out of the mortgage on her condo.
The handling of public funds by the contractor, NEO Consulting Inc./Affordable Housing Solutions Group, "raises some questions which I think need to be aired out publicly," said resident Bill Kelly, addressing the council Oct. 27. "The citizens of Hercules are entitled to have transparency -- to know what our government is doing is in their best interest."
Councilman Don Kuehne, the only one of the five council members to respond to a reporter's inquiries, said he is aware of the residents' concerns.
"One of my campaign goals (in the 2008 council election) was to 'promote open government, sound decision-making, and good communication,'" Kuehne said in an e-mail. "I feel that overall the Hercules city government scores high in these areas."
Kuehne said the city staff is preparing a report on the Affordable Housing Program that will be mailed to the community later this month.
NEO/AHSG's founder is Nelson E. Oliva, the city manager, who says he divested himself of his interest in the company shortly before he became city manager in April 2007. Today, three Oliva daughters are the company's CEO, secretary and chief financial officer, and Oliva's administrative assistant at City Hall is one of two company directors.
"It looks bad," said resident Dan Romero. "It bothers me that we have a city council that thinks it's OK to do business like that."
NEO/AHSG runs several other loan programs for the city, including the Homeownership Retention and Loss Mitigation, First-Time Homebuyers, Inclusionary Housing, Citywide Employee Incentive Homeownership, Revitalization, and Business Development loan programs. The latter program facilitated loans that exceeded guidelines to two businesses, including a waterfront pub that got almost five times the $75,000 loan limit and later got a $125,000 financial assistance grant to reduce its debt principal.
All loans vetted by the contractor go for final approval before a committee consisting of the city manager and three other city staff members; the Transportation and Housing committee, made up of Valstad and Councilman Ed Balico, gets briefed, but not the full council.
The Affordable Housing Program produced an Annual Report for fiscal 2005-2006 but none for 2006-2007, according to city spokeswoman Doreen Mathews. A 2007-2008 Annual Report went to the City Council for information Sept. 9, 2008. A 2008-2009 report went to the Transportation and Housing committee but not to the full council.
According to the report, 21 households got First-Time Homebuyer assistance totaling $1,322,660 in 2008-2009; four households got Citywide Incentive assistance totaling $121,590; three households got Revitalization assistance totaling $60,000.; and three businesses got a total of $175,600 in assistance.
The Loss Mitigation program spent $1,287,960 in 2008-2009, according to the report, including $456,460 to take over the primary mortgage on one property and $831,500 to buy four other properties, two of which the city sold back to the same owners; the report does not identify any of the owners or properties.
A Loss Mitigation list for the same fiscal year furnished by the city in September shows a different total, $1,068,074, made up of four loans -- $334,170, $301,606, $212,472 and $219,826.
Reach Tom Lochner at 510-262-2760.
