The controversy over the REAC building on the University of North Dakota campus – a $17.1 million project from 2009 that now sits half empty and uncompleted – is one taxpayers ought to be paying attention to. Last year the legislature ordered the State Board of Higher Education to negotiate a deal to sell the building from it’s supposedly “private” owner, the UND Research Foundation, to the University of North Dakota property. The SBHE was ordered to negotiate the deal because the UND Research Foundation was controlled by UND officials.
That didn’t happen. The SBHE punted on its authority, Chancellor Larry Skogen rubber-stamped a contract that hadn’t even been negotiated yet, and the building got dumped on the taxpayers, proving that these spin-off foundations at the universities are only “private” until they need something from the taxpayers.
The lender in the equation, Bremer Bank, got a sweetheart deal: A $9.8 million taxpayer-backed loan that keeps them whole as the taxpayers take the hit. The supposedly private UND Research Foundation has now folded.
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Legislators, among them state Senator Ray Holmberg, have suggested that the loan Bremer issued for the building is illegal because its repayment plan counts on appropriated dollars that the legislature didn’t appropriate for any such purpose. Today, writing for the Grand Forks Herald, Tom Dennis suggests that Bremer and the University of North Dakota ought to renegotiate that loan before the legislature does it for them.
“The board should start talking with Bremer Bank about how to get out in front of and ultimately put to rest the issue of the REAC Building at UND,” writes Dennis. “The talks would be in the interest of both parties, which also means they’d be good for the state.”
What might be good for the state is if somebody, somewhere in higher education suffered some consequences for their actions. If you get caught robbing a bank, you don’t just get to put the money back and say “let’s put the issue to rest.”
The North Dakota University System has shown a pattern of deceit and incompetence. Whether we’re talking about NDUS officials sitting on the knowledge of a massive security breach, which exposed hundreds of thousands of student records, for more than a month before alerting the public, or the tens of thousands of NDSU emails going missing right around the time the legislature requests them for review, or Dickinson State University issuing hundreds of phony diplomas based on phony grades with just one person getting fired as a consequence, the university system has done very little to earn the trust of the public.
And that’s before we start talking about abysmal graduation rates and poor academic outcomes at the universities.
Dennis suggests that the REAC building boondoggle should be put in our collective rear view mirrors because later this year there is a ballot measure that would restructure the way the NDUS is governed. “If the current board wants to keep the higher-education status quo, then the board members need to convince North Dakota voters that the board knows how to solve problems, be proactive and lead,” he writes.
But why on earth would we want to keep the status quo? The status quo is run-away spending, incompetence, and fraud.
Unless we want to chart a course for more of the same, we need to change how the universities are governed, and who is governing them.