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Sara Gray was living in Valley Ford with her husband and two children two years ago when she got an offer she couldn't refuse.

Her boss, former Santa Rosa Recreation & Parks Department director Marc Richardson, asked her whether she'd like to live in a 1,400-square-foot home on six acres on the outskirts of Santa Rosa for just $100 a month.

The place needed a little work, but the decision was an easy one for Gray, who at the time was the marketing director for Santa Rosa's ArtStart Program and today is its executive director.

"I couldn't really turn that down!" recalled Gray this week from outside the home on Burbank Avenue in Roseland where she and her family have lived since August 2011.

She enjoys living on the property, which has plenty of space for her young children to play, a rustic red barn and Roseland Creek running through it.

"I would love to stay," Gray said as a flock of wild turkeys meandered down her gravel driveway.

But the arrangements Richardson struck with Gray's family and another family renting a second city-owned home nearby for $200 per month raise further questions about the management of the department and the ongoing efforts to sort out issues left in the wake of Richardson's retirement.

As a department director, Richardson wasn't authorized to unilaterally authorize leases, City Manger Kathy Millison said. That's something only the City Council or city manager acting on council direction can decide, she said.

After learning about the leases following Richardson's decision to retire in December, Millison initiated an "internal personnel investigation" into the matter, the results of which are confidential, she said.

It's the second such investigation Millison has undertaken involving Richardson.

The first was in October after she learned he had been playing golf for free at the Bennett Valley Golf Course. The probe confirmed that Richardson and his second-in-command, Rich Hovden, had accepted thousands of dollars worth of free golf access and other undisclosed gifts from the golf course operator over several years.

Both longtime city officials repaid the operator for the gifts, retired quietly and amended years of disclosures with the state Fair Political Practices Commission to reflect the gifts. The commission fined both men a total of $9,500 for the failure to disclose the gifts, and, in Richardson's case, having a conflict of interest by accepting gifts from an operator while renegotiating his contract.

Millison explained that the city has a process for leasing out publicly owned properties and it would typically involve some type of public announcement or advertisement, she said.

She said she became aware the Burbank Avenue home had been leased to a city employee, but declined to discuss those details, citing the confidential investigation.

Gray was hired in February of 2010 by the city as a special activity instructor working for ArtStart, the publicly funded nonprofit that installs public art projects around the city, such as murals and painted benches. She is now its executive director making $25 an hour.

Not long after Gray was hired, the city acquired the six-acre parcel at 1400 Burbank Ave. from the developer Schellinger Brothers for $2.5 million with a grant from the Sonoma County Agricultural Preservation and Open Space District.

The parcel is the southernmost of four rural properties the city hopes to one day transform into a 20-acre park called Roseland Creek Community Park.

Read all of the PD's fire coverage here

Before the sale, there had been a renter living in the home, long-time Roseland activist Duane De Witt said. But after the city acquired the property, that tenant left and the property remained vacant for a period of months.

Neighbors hopeful to see the property preserved and restored to its natural state were dismayed to see it fall prey to squatters and vandalism, De Witt said.

At some point, Richardson, aware that Gray was commuting into the city from Valley Ford, told her of the city's need for a caretaker on the semi-rural property.

"He said, 'You shouldn't be living in Valley Ford. You should be living in Santa Rosa,'" Gray recalled.

In exchange for the low rent, Gray said the three-year agreement called for them to make upgrades to the home and to act as caretakers for the property.

Her husband, Nick Tucker, is a contractor and they have made a number of upgrades since moving in. These included installing a new toilet, flooring and carpeting to the home and stabilizing the dilapidated barn, Gray said.

All told, Gray estimates the family has spent about $10,000 on the property, including buying a riding mower to keep down the weeds.

The lease also requires them to walk to property daily, keep it in a neat condition, and notify the city promptly of any problems, such as vandalism. They also must allow city workers and community groups access to the property for such things as creek clean-ups, according to the lease.

While she knows the rent is cheap, Gray said it isn't like living on the property is a walk in the park.

People sometimes dump garbage including mattresses under the bridge where the creek crosses Burbank Avenue, she said. Two months after they moved in, sheriff's deputies arrested a "fugitive" on the property, the sheriff's helicopter buzzing overhead, she said.

And homeless people have been known to frequent the area, she said. "It's amazing how many bum encampments there are around here," Gray said.

The city struck a similar arrangement for a property on McMinn Avenue at what is supposed to be the northern end of the future park.

In 2011, as part of its effort to acquire additional properties for the park, the city and Open Space District purchased the two northernmost lots, 1027 McMinn Ave. and 1360 Burbank Ave., for $1.7 million from Exchange Bank, which acquired them from another developer, Cobblestone Homes, through foreclosure.

The fourth property, a 2.6-acre parcel in between the others, remains privately owned, with negotiations for its purchase stalled.

The McMinn property has an older 1,200-square foot home on it. Allen Danley, a carpet cleaner who lives in the home with his wife and young children, pays $200 to live on what is effectively an 11-acre parcel. They signed a month-to-month lease Aug. 1, 2012.

Danley declined to discuss the situation in detail, saying he was told not to speak to the media about the issue. He wouldn't say by whom, but referred questions to Assistant City Manager Jennifer Phillips and a representative at Eugene Berger, the firm that now manages both properties for the city.

Danley said he doesn't know Richardson but declined to say how he came to learn of the rental opportunity. Asked about his $200 rent Danley said "it's more complicated than that," but declined to elaborate.

He said he is "a family man" who would like to be able to remain in the home because his children are enrolled in local schools. Asked about the condition of the two homes before they were rented, Danley said "they were dumps."

It's unclear what duties Danley performed on the 11-acres or what upgrades he has made to the home. The lease requires Danley to return the home in the same condition in which it was received.

Both Danley and Gray's leases hold tenants responsible for utility bills.

Last week during the City Council budget hearings, De Witt questioned the low rents and suggested the city begin charging market rates to raise money for the future park.

"I'm just stunned that the city has allowed those people to live there for those rents for more than a year and a half," De Witt later said.

By his estimates, the city could have banked $30,000 toward future park improvements had the leases been fairly negotiated.

Phillips explained to the council that the homes were "uninhabitable" when the city acquired them and the rental agreements took into account their poor conditions.

"Significant renovations have been done in both of the homes to make them habitable at this point," Phillips said.

The homes have since been inspected and the tenants have been notified that the city is looking to increase the rents to market rates "now that they are in a more acceptable condition," Phillips said.

But the city may not increase the rates it all. It may just bulldoze the homes, Millison said.

It's not clear that the homes would be of value as part of the future park, and even if they were, it can be difficult and expensive to renovate older homes to preserve them for public use, she said.

"If we're going to stay in the property rental business, then we're probably going to have to do some additional work on these older homes," Millison said. "And I'm not particularly interested in doing that."

A decision about the future of the homes will likely come before the City Council in the near future, she said.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @citybeater.

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