President's houses

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President's houses

Postby ndfan » Sat Oct 17, 2009 9:08 am

Associated Press |

Summaries of cost overruns for new homes constructed for the presidents of North Dakota State University and the University of North Dakota. The information is drawn from reports submitted to the state Board of Higher Education's audit subcommittee.

North Dakota State University
COST CEILING: North Dakota's Board of Higher Education gave its permission for NDSU to seek legislative permission to build a new home for the school's president "at a total cost not to exceed $900,000." The Legislature's Budget Section approved the plan. The board's motion allowed NDSU the option to build a new house or add to the president's existing home. The existing home was razed and a new one built.
OVERRUN: The president's house cost $2.04 million to build and furnish, according to figures prepared for the Board of Higher Education. The sum includes site preparation, landscaping, exterior concrete work, parking, lighting, and $155,270 worth of furniture and appliances. It does not include $372,355 in donated materials and services.
DESIGN: Jim Miller, the foundation's director, said the project's architect, Terry Stroh, and a supervising committee that included Gale Chapman, the wife of NDSU President Joseph Chapman, went ahead with a house design that they knew would cost more than the $900,000 limit, according to reports prepared for the Board of Higher Education. The committee also added a "bonus" room, which expanded the house's planned size by almost 25 percent. The room added 1,210 square feet and $120,000 to the project's cost.
EXPECTATIONS: The project's developers hoped to get gifts that could be used to build and furnish the home, but the amount of "in-kind" contributions fell well short of expectations. They eventually received $372,355 in in-kind contributions; Stroh alone contributed work that he estimated was worth $300,000.
RUSHED BUILDING: Stroh had laid out an 18-month construction schedule, beginning in July 2008, but Miller said the Chapmans pushed to have the home completed by June 2009 - 11 months. The accelerated construction meant normal cost-control procedures went by the wayside, Miller said in a report to the Board of Higher Education. The Chapmans moved into the home last August.
MONEY: The NDSU Development Foundation was to finance the project, using a $1 million gift from William Marcil, chief executive officer of Forum Communications Co. of Fargo. Marcil's pledge was to be paid in $200,000 installments over five years, so the foundation sold $900,000 worth of bonds to finance the development costs up front.
NOT ALL DONATIONS: NDSU financial reserves, not donated money, were used to cover $516,159 of the cost of building the new president's home, or one-fourth of the total. The money came from university parking fees; profits from selling books, meals and housing; soft-drink commissions; and interest income.

University of North Dakota
COSTS: The Board of Higher Education also gave the University of North Dakota permission to seek legislative approval to raze the university president's existing home and build a new one, "at a total cost not to exceed $904,000." The University of North Dakota Foundation was to finance the project, using a separate $1 million pledge from Marcil.
OVERRUN: The completed home cost $1.26 million to build and furnish, including the late addition of some cabinetry and a security system and $47,682 worth of furniture and appliances. UND paid for the home's landscaping, parking, driveway and patio costs, which are not detailed in a summary of expenses presented to the Board of Higher Education. UND's new president, Robert Kelley, moved in when he started his job in July 2008.
NOT ALL DONATIONS: The University of North Dakota financed the home project's deficit of more than $260,000 with almost $112,000 in tuition revenues and about $152,000 in other funds, including interest income and profits from auxiliary services, such as food, book and housing sales, according to the expense summary.
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