DCR still struggling as landlord

 THE STATE’S DEPARTMENT OF CONSERVATION AND RECREATION is improving as a landlord, but the agency still has a long way to go, with a new state audit reporting that $600,000 in user fees went uncollected over a two-year period and a number of  tenants were allowed to continue using state property with expired leases.

The audit, which checked for progress since an earlier scathing audit in 2013, found that the agency is beginning to put systems in place to manage leases of public lands, but progress has been slow in maximizing state revenues.

For example, the audit said just over $600,000 in user fees went uncollected between July 1, 2015, and June 30, 2017. The biggest chunk, nearly $182,000 owed by concessions operating on state land, was left over from earlier years. In a response accompanying the audit report, DCR offered a number of reasons for why its internal systems may have shown as unpaid user fees that were actually paid. The agency estimated the actual amount of uncollected user fees was probably less than $80,000, a contention largely dismissed by the state auditor’s office.

Late payments were another problem. Auditors checked 89 accounts with payments late by more than 120 days and found none of them had been referred to the state comptroller or a debt collector for collection, as state regulations require.

Another example of DCR’s inability to take advantage of its revenue opportunities was a 1993 agreement signed by Delaware North as part of deal to win state approval for the construction of TD Garden. The deal committed the company to host three fundraisers a year to support the agency’s operations. In 2017, a group of teenagers from Hyde Square discovered that Delaware North’s commitment had never been honored – or enforced.  Delaware North subsequently agreed to pay $1.65 million to the state – well below what the teenagers estimated the company owed – and to start hosting the fundraisers or provide some other form of financial support. The audit report said DCR still has no agreement with Delaware North on the fundraisers.

The audit also indicated DCR was continuing to have problems keeping its lease agreements current, a problem first highlighted in a CommonWealth report in 2012. The magazine’s story said the agency was doing a poor job of monitoring its leases because the records were in terrible shape, too few employees were assigned to the task, and oversight of the leases was shared with another state agency.

The audit sampled 64 lease agreements and found four that had expired but the tenant was still occupying the property. Four other lease agreements were never executed properly with the signature of the DCR commissioner.

A review of another 20 lease agreements spotlighted in the 2013 audit as not being executed properly uncovered many of the problems had not been fully resolved. The 20 lease agreements consisted of 16 with concession operators and four with ice skating rinks. The new audit found that five of the 16 concession operators still had contracts that had not been executed properly. Nine of the remaining 11 concession operators had obtained proper contracts since 2013, but they had subsequently lapsed. The four rink operators had all signed valid agreements since 2013, but all four had expired.

In a response accompanying the audit, DCR said it agreed that it was important to keep lease agreements up to date. “However, we note that these agreements are typically the product of a negotiation between the parties to arrive at mutually acceptable terms, and that process may take a substantial amount of time,” the response said. “DCR has been addressing this issue by improving our internal processes.”

DCR also failed to update lease agreements with utility companies that use DCR property for gas pipelines and transmission lines. The audit said many of the terms of the lease agreements had not been updated since 1923.

According to the audit, DCR received a $90.3 million state appropriation in fiscal 2017 and brought in $23.6 million in additional revenue, including $5.8 million from user fees. In 2012, DCR had only two temporary employees trying to oversee the agency’s lease operations, way below the 13 who were assigned the task in 2003 when DCR was formed from the merger of the Metropolitan District Commission and the Department of Environmental Management. Today, according to the audit, the agency has four employees overseeing permits and leases and six overseeing revenue collection. DCR said it is operating with 300 fewer employees today than in 2009.

Troy Wall, a spokesman for DCR, said the agency’s staff oversees 450,000 acres of parks and property and strives to make sure they are well maintained and accessible. “We will continue to review the auditor’s report as we evaluate certain permit and lease policies and procedures,” he said.