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County sacks 4 in rent dodge

Workers lived free in park homes; realty overseer also fired

Friday, July 02, 1999

By Kristen Ostendorf, Post-Gazette Staff Writer

The real estate company hired to oversee Allegheny County's troubled park home rental program has been fired, along with four county employees, after the county controller's office found "inadequate" controls that allowed two of the employees to live rent-free for several years.

A third employee was fired because he paid a discounted rental rate he wasn't entitled to; the fourth who was dismissed was responsible for overseeing the program.

An audit by the county controller found that the county is owed at least $39,000 in rental payments and late-payment penalities, a figure that could go higher, said county Manager Glenn Cannon.

The homes sit in county parks and are rented to both county employees and private citizens. There are 34 rental units in 32 buildings in the nine-park county system. Twelve of those are rented by county employees. The money from the rents goes back to the county to help fund the parks.

But under OTC Enterprises Inc., which the county hired a little less than two years ago to manage the program, county employees were allowed to go for years without paying rent and take discounts to which they weren't entitled.

Cannon said that one county laborer who didn't pay rent for 3 1/2 years owes the county almost $23,000. Another employee, who didn't pay rent for two years and 10 months, had owed about $11,700; he paid about $10,000 of that back when he realized the county auditors were on his trail.

Both of them were fired, along with a county operations manager who lives in Boyce Park. He used to receive a 30 percent reduction in his rent because he was the park's supervisor. But after being promoted to another position, he knowingly kept taking the discount, even thought he was no longer entitled to it.

The fourth fired employee was responsible for overseeing the contract but did not live in a park house.

"They were fired because they took advantage of their county position in a way a citizen could not," Cannon said. Some are still living in the homes, and eviction proceedings are in motion, he added.

"It happened because somebody wasn't looking at what was going on -- and that was the fellow who got fired today," Cannon said last night.

Cannon and Public Works Director Tom Donatelli declined to name the employees last night.

OTC Enterprises could not be reached for comment last night.

Jack Chielli, spokesman for County Controller Frank Lucchino, declined to comment on a draft report of the audit, saying it is his department's practice to wait until the final version is released. He said last night that he didn't expect the final version to be released for at least another week.

In April 1994, a Pittsburgh Post-Gazette investigation revealed that nearly two dozen county employees were living rent-free in houses in county parks. It was a practice that had lasted decades.

The employees included a truck driver, an equipment operator, a secretary, an accountant, seven laborers, eight park managers and a handful of administrators.

For 22 of 27 employees, rent had been free.

Eight of those 22 employees paid $200 a month to cover utility bills, but in some cases, those payments didn't offset utility costs, documents revealed.

Five other employees paid rent between $375 to $500 a month, while six houses were rented to members of the public and three were rented by retired county employees.

Also, county taxpayers picked up a $1 million tab over the past five years to renovate the houses, scattered among eight of the nine county parks.

In the furor over revelations that employees were living free, the commissioners ordered rents to be instituted, or raised, and the management of the houses was turned over to Howard Hanna Commercial Real Estate Services Inc. in July 1994.

Hanna administered the program between 1994 and 1997. It opted to not continue with the contract, and OTC bid to take over the program.

Under its contract, OTC gets about 8 percent of the $150,000 to $175,000 collected annually in rent payments.

Cannon has told the county to sever its month-to-month contract with OTC at the end of this month.

He also has placed the General Services Department in charge of the park house program, which oversees the leases on other county properties, and directed the county solicitor to see if the county can recoup any of its losses. County employees will no longer be able to take out new leases on any of the homes.

Donatelli said he agreed with the changes that Cannon has set in motion.

"I do think it's a good idea for general services to take over," he said, saying that was that department's area of expertise.

Despite the perennial problems with the program, Cannon said the county is reluctant to end it.

"The problem is that these houses do generate revenue that goes back into the improvements of the park," he said.

County Commissioner Bob Cranmer, in a statement yesterday, said, "It's unbelieveable that this gross mismanagement continued after being addressed several years ago."

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