HERCULES -- A former Hercules city manager, by his conduct, has forsaken any claim to the balance of his exit pay, the city declared in a court filing.

And even if Hercules owed Nelson Oliva the second half of the extra year's salary of $225,000 that it promised to pay him under a December 2010 separation agreement, the unpaid balance, or $112,500, would be more than offset by the $3 million-plus that Oliva must refund to the city, according to arguments filed in Alameda County Superior Court in Oakland on Friday.

The city sued Oliva, daughters Taylor, Gabrielle and Adrianna Oliva, and the Oliva family company, NEO Consulting Inc./Affordable Housing Solutions Group, in 2011 seeking at least $3.2 million. The amount comprises the consulting contracts between the defunct Hercules Redevelopment Agency and NEO/AHSG during Oliva's tenure as city manager from April 2007 to January 2011.

The suit, originally filed in Contra Costa Superior Court, was moved to Alameda County after Oliva asked for a change of venue.

In a cross-complaint, Oliva demands the $112,500 balance of his separation pay, plus interest.

Hercules' filings cite California Government Code Section 1090, which bars public officials from having a financial interest in contracts they make in their official capacity. Oliva, as city manager, prepared more than a dozen contracts and contract amendments with NEO/AHSG that a pliable City Council approved largely without discussion from 2007 through June 2010. Voters eventually replaced all five of the 2010 councilmembers.


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Oliva had said he divested himself of the company shortly before he became city manager; later, he said two of his daughters each owned half of the company. But the city had no documentation of Oliva's supposed divestiture, and as late as 2009 and 2010, Oliva pitched the services of NEO/AHSG to the Soledad and Lompoc city councils, referring to the company as "we" and "us." The FBI began investigating Hercules in late 2010.

On Friday, Hercules submitted more than a dozen defenses to Oliva's Dec. 3 cross-complaint; most of them mirror the basic argument that Oliva cannot obtain the relief he seeks, "by reason of his own wrongful conduct and breaches of fiduciary duty, repeated violations of Government Code (Section) 1090, and liability to Cross-Defendant in excess of $3.2 million."

In November, Alameda County Superior Court Judge Robert Freedman denied Oliva's demurrer, which had contended that the suit was too vague and did not state facts sufficient to support a cause of action. Freedman also declined to dismiss the daughters from the suit, rejecting Oliva's argument that the daughters had no contractual relationship with the city and accepting Hercules' argument that the daughters were "alter egos" of NEO/AHSG.

The city is represented by David Trotter and Lawrence Goldberg of Bowles & Verna LLP of Walnut Creek. Oliva is represented by the law firm of Richard Ewaniszyk of Victorville.

A case management conference is scheduled for February.

Contact Tom Lochner at 510-262-2760 and tlochner@bayareanewsgroup.com. Follow him at twitter.com/tomlochner.