No-bid contract draws allegations of nepotism

Penn Hills Council has awarded a no-bid contract to the mayor's husband, and a candidate for council in the November election is crying nepotism.

According to the contract, the municipality will pay a monthly lease of $600 to use a portion of Don Kuhn Auto Body's garage to store vehicles impounded by the police. The owner of the shop is Mayor Sara Kuhn's husband.

John Petrucci, one of two candidates for two council seats in the fall, thinks the deal is a classic example of nepotism.

“People are thinking he (Don Kuhn) has preferential treatment, nepotism,” Petrucci said in an interview after the meeting.

Several people on social media have expressed concern over the contract. Comments on Penn Hills Informer, a public Facebook group, range from “the contract should be cancelled” to “Corrupt!!!!”

Under the Penn Hills Home-Rule Charter, “All contracts or purchases in excess of $2,500 … shall not be made except with and from the lowest responsible bidder after due publication.”

The municipality's solicitor, Craig Alexander, confirmed the contract did not go out for a competitive bid. He said his opinion is there was no need because state law takes precedence over the municipality's home-rule charter.

According to Act 90 of 2011, contracts that do not exceed $10,700 are not required to go up for a competitive bid and quotes are not required either. Any contract that costs between $10,700 and $19,700 requires three quotes. If a contract exceeds $19,700, it would require formal bidding. The law became effective for all contracts on or after Jan. 1, 2012.

The contract in question states that either the municipality or Don Kuhn Auto Body can terminate the deal within a 30-day window, but the contract is on a three-year term — meaning the grand total amounts to $21,600 before council votes to renew it in 2020.

Alexander said the contract is renewed on a yearly basis, therefore amounting to $7,200. However, this statement contradicts the contract language where it reads, “lease agreement may be extended for a one year term by mutual agreement of both parties.”

“Everybody knew it was going to be a hot topic so the manager (Mohammad Rayan) went out and got quotes,” Alexander said.

During the July council meeting, Kuhn read a statement she said her husband wrote before the vote on the controversial deal. Reading the statement, she said Rayan contacted real estate brokers and commercial vendors for quotes on a cost-per-square-foot basis.

Rayan found, according to the statement Kuhn's husband wrote, the cost for other commercial spaces for the space needed — 576 square feet — would have amounted to somewhere between $30,000 to $37,000 per year.

Rayan did not respond to several attempts seeking comment.

Kuhn focused on the fact that the contract can be terminated within a month, essentially making it monthly.

“The real meat of it is either party can dissolve the contract. So in reality it's a 30-day contract,” Kuhn said.

Kuhn said the need to store impounded vehicles came up when the municipality demolished the public works garage four or five years ago.

Police Chief Howard Burton confirmed that he and Rayan went to Don Kuhn seeking to secure the contract sometime after the garage was demolished.

When asked if the contract had been put out to bid at that point, Howard said no. There was no indication that council had written or passed a contract when Rayan and Burton approached Mr. Kuhn.

“We looked at the facility needed based on security needs. It needed to be a secure area, and the fact that they (Don Kuhn Auto Body) did all the towing made it much more convenient,” Howard said. “We found that to be the best place we could think of.”

Planning Director Chris Blackwell wrote in an email that Kuhn Auto Body has served as the municipality's auto impound and tow provider since the late 1970s. Also in council's minutes from June 12, Kuhn said the need for the contract with Don Kuhn Auto Body could end with the addition of a garage at the new Municipal Complex.

“Why would we do this if we were going to have a spot in July 2018?” Petrucci said in an interview after the meeting. “But they signed (the contract) for three years.” He added it might be cheaper to charge the municipality on a per-car basis.

When asked why the contract was signed under a three-year lease instead of just one, Kuhn said it was not her job to answer those questions and deferred to Rayan.

Petrucci said he wants what he perceives as nepotism to stop.

“I'm looking out for the community, that's what I'm trying to do,” Petrucci said. “The whole problem, nobody on that council does their due diligence. That's my problem with this whole thing.”

The resolution was passed unanimously, with Kuhn abstaining.

Dillon Carr is a Tribune-Review staff writer. Reach him at 412-871-2325, dcarr@tribweb.com or via Twitter @dillonswriting.