James R. Novak, head of the Prince George's County Department of Public Works and Transportation, whose partnership in a building purchased by the county raised ethical questions, has resigned his $82,000-a-year post to spend more time with his family.

Novak, who ran an agency with a $17 million annual budget for county road projects and $42 million in mass transit funds, announced earlier this month that he would leave Jan. 11. Public Works Deputy Director P. Michael Errico, a 20-year county employee, was named the department's chief.

Novak's move came as his department struggled to absorb $2.6 million in budget cuts made after County Executive Parris N. Glendening warned that the county will face a $70.3 million revenue shortfall this year. Novak has eliminated 62 positions in his department in the last two months. Most of the cuts were made through attrition or by leaving vacant slots empty. Nineteen public works employees were laid off.

Errico said his primary challenge as the department's new head will be to keep services at the same level despite having fewer employees and less money.

"The job is hard as it is, but the cutbacks will make it more challenging and give me a chance to be innovative," Errico said. "We'll just have to be more selective in prioritizing things."

Glendening said Novak had been considering leaving the department for several months because he wanted to spend more time with his family. The third-term county executive said Novak, chief since 1984, has left the county's road and transportation system on sound footing.

"He oversaw the largest infrastructure investment in the history of Prince George's County," Glendening said. "He did a good job at a time when we were doing major things with our infrastructure."

Novak was instrumental in moving the county's police headquarters to a spacious location in Landover, building a much needed fire station in Laurel and keeping watch over work to complete Metrorail's Green Line, which will have stations in the northern and southern ends of the county.

Novak began working for the county in 1972 as a building inspector for the Department of Licenses and Permits, and four years later became the department's second in command.

Ethical questions regarding him arose last summer after it was disclosed that Glendening authorized the 1987 purchase of an Upper Marlboro office building from a partnership that included Novak and a longtime Glendening supporter, Irving Kidwell.

At Glendening's behest to complete the sale as quickly as possible, the county did not conduct appraisals of the Gabriel Duvall Building, a three-story brick structure near the County Administration Building. A county official later said that, if not for the sense of urgency, the building might have been purchased for as much as $150,000 less than the $3 million price tag.

Novak defended his part in the building sale, saying that his 10 percent interest in the Kidwell joint venture was approved by the county Board of Ethics three years before the sale.