HERCULES (BCN) — Hercules Mayor Ed Balico announced Tuesday night his resignation as mayor effective immediately, Hercules spokeswoman Michelle Harrington said Wednesday.

Balico, who was first elected to the City Council in 2000, said he is stepping down to spend more time with his family.

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His decision came as efforts to recall him, along with Vice Mayor Joanne Ward and City Councilman Donald Kuehne, were becoming official.

Right after Balico’s announcement, Hercules resident Dan Romero served Balico, Ward and Kuehne with a notice stating that he and a group of Hercules residents were planning to circulate a petition to have them recalled, Romero said.

The group needs to gather at least 2,500 signatures, 10 percent of the city’s population, to get the recall measure on the June ballot.

The notices accuse Balico, Ward and Kuehne of “failed leadership” that has led to the “unprecedented financial crisis” the city is now facing.

“Now we have a city that’s on the verge of bankruptcy,” Romero said.

According to the notices, the mayor and council members voted to approve multi-million dollar no-bid contracts to a company owned by former City Manager Nelson Oliva’s family and supported “sweetheart development deals that have depleted the city’s redevelopment funds.”

The notice also alleges that the mayor and council members voted to fire Interim City Manager Charlie Long for “revealing the truth about city financial woes.”

In November 2009, the Contra Costa County civil grand jury began investigating the city after receiving complaints about nepotism, questionable decision-making and a lack of government transparency with regard to the city’s affordable housing program, according to the report.

In 2003, the city’s redevelopment agency had selected NEO/Affordable Housing Group to provide services to the city, according to the grand jury report.

Nelson Oliva was the owner of that company.

In 2007, the City Council hired Oliva to be the new city manager.

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According to the grand jury report, shortly before becoming city manager, Oliva transferred ownership of NEO to two family members.

Romero said those two family members were Oliva’s young daughters.

In addition to administering affordable housing programs for the city, NEO now administers the city’s business loan program, neighborhood cleanup program, secure mailbox program, weatherization program for seniors and gas valve shut-off program, according to the grand jury report.

The report said that the city has paid more than $2 million to NEO for its service agreements without using a competitive bid process or amending its contract with the company for the expanded services.

According to Romero, City Council members approved the agreements as part of the council’s consent calendar with no public discussion.

The grand jury also found that redevelopment loans were made to immediate family members of City Council members and that the city has mishandled sales of homes purchased by the city’s affordable housing program.

On Jan. 6, a group of Hercules residents held a recall meeting at a pizza restaurant in the city. Romero said more than 100 people showed up in support of the recall effort.

Romero said the group discussed recalling Balico, Ward and Kuehne and bringing Long back to the city as a consultant to help get it back on track.

“Even though Mr. Balico retired last night, our group is still going to be meeting,” Romero said. “And I think we’re going to go through with the recall process.”

Harrington said Ward will fill in as mayor until the City Council can appoint an interim mayor.

Last week, Balico also withdrew his petition to be considered by the Contra Costa Mayors’ Conference for a second two-year term on the board of the Contra Costa Transportation Authority, said Dan Blubaugh, executive director of the Mayors’ Conference.

Blubaugh said Balico cited family reasons and stress as his reasons for withdrawing his petition.

His current term on the board would have ended at the end of this month, Blubaugh said.

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