7/22/08

Privatization infects labor-state

Prevailing wage forces town to confront the proper role of government in a free society

The town's days of hosting weddings could be numbered. North Andover (MA) Selectmen are considering allowing a private company to take over the town-owned Stevens Estate — an 1886 mansion with a carriage house and lush gardens and trails — because the town has lost money running it in the last couple of years.

"We can't allow this to continue," Selectman Richard Nardella said at a recent meeting. "We need to find ways to make the estate pay for itself." The estate closed fiscal 2008, which ended June 30, $180,000 in the red, he said.

The town purchased the 150-acre estate on Lake Cochichewick in 2004 for $4.9 million after Boston University sold it to a developer who planned to put houses around the lake.

Since then, Nardella said, the town has done more than $1 million worth of repairs and maintenance at the estate.

Part of the problem is that the estate is trying to compete with privately owned function facilities, which aren't required to follow the same rules as a publicly owned building, according to Town Manager Mark Rees.

For instance, because the town owns the Stevens Estate, it must pay the prevailing wage for repairs. Prevailing wage is the minimum hourly wage set by union contracts for work on public construction projects, which raises the price.

Kevin Willoe, president of the Stevens Estate board of trustees, said the estate has also had employee, building and marketing issues. He credits the new director, Laura Gifford, with drawing more bookings to the estate. He said the board is now focused on getting out the word about the facility, including throwing an open house in the fall and inviting the community to tour the estate.

He said the board would consider privatization if that would be the best thing for the estate.

"Longer term, I think we can turn this around, and if that means outsourcing, we support it," he said.

The town received two proposals for privatization after one round of bids. One company proposed taking over the operations of the current facilities. Another wanted the town to sell nine acres, where the company would build a function hall. The company did not give details on how that hall would be related to the current buildings on the Stevens Estate.

Nardella said any major changes, such as a sale of land, would require a vote by Town Meeting. If approved, the town would have to solicit more bids before selling land.

The estate is run through an enterprise fund, meaning whatever the estate makes goes back into running it. The enterprise fund can carry a deficit for one year. If the deficit lasts beyond the next year, costs may have to be covered by the general budget.

Selectman Rosemary Smedile said the town has been making repairs and redecorating the property in hopes of attracting more events.

"Improvements up there have been overwhelming," she said. "Business is really up."

(eagletribune.com)

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