N.D. education board won't approve president's homes costs

GRAND FORKS, N.D. (AP) — North Dakota's two largest universities displayed poor management in going over budget on the construction of new presidents' homes and using school money for furniture and landscaping, the state Board of Higher Education said Thursday.

The board refused to approve where additional money will come from for the houses at North Dakota State University in Fargo and the University of North Dakota in Grand Forks. It instead referred the matter to its budget and finance committee. The Legislature's Budget Section also will review the projects at its December meeting.

``The fact there appeared to be a lack of any kind of control over what they were doing clearly sends a message to the Legislature,' Budget Section chairman Sen. Ray Holmberg, R-Grand Forks, said after Thursday's meeting at UND. ``That was the show stopper.'

The board had earlier authorized $900,000 each for the homes, which are being financed by private money. NDSU officials say the bill for its project has climbed to $1.47 million because of higher than expected construction costs. UND's construction costs were nearly $23,000 over budget, but board members also included in their discussion more than $500,000 in design and preparation costs for both the president's house and UND alumni center.

Richie Smith, the board president, scolded NDSU foundation director Joe Miller when Miller said the board set the $900,000 figure.

``We asked you how much money it would cost to build the house. I asked several times whether that was enough. And we were told it was enough,' Smith said.

Board members were irate when they found out school money was being used to help pay for nearly $370,000 for furnishings and landscaping for the NDSU house, and about $200,000 for the UND house.

``State money shouldn't be part of the equation at all,' Smith said.

Holmberg said after the meeting that he was ``really shocked that there was institutional money involved.'

``I think the board appeared skeptical about that,' he said. ``I know the budget section will be extremely skeptical of approving $375,000 of money that really would have gone into a parking lot for students or another project. It came because students were paying for it.'

Representatives from NDSU and UND said it wasn't made clear how they were supposed to pay for landscaping and furniture.

``This is only the second building project we have been involved with. We are reviewing as an organization policies moving forward,' Miller said.

``There really isn't a defined process that demands that or aligns it with how it's supposed to happen,' UND foundation president Tim O'Keefe said afterward.

Asked about the final price tag at NDSU, Miller told the board that weather delays led to overtime costs and said the cost of materials during construction were at an all-time high.

``Today, we could build that house for less money because costs went down,' Miller said.

In addition, Miller said a subcommittee decided to upgrade parts of the house during construction, such as an all-brick exterior instead of a combination of wood and brick, and hardwood floors instead of carpet. Most of the changes were meant to extend the life of the house, he said.

``Clearly we made some mistakes,' Miller said. ``I think it would be fair to say there were mistakes made throughout the course of this project.'

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