Is The North Dakota University System Going To Give Sanford Health A Sweetheart Deal?
On tomorrow’s State Board of Higher Education agenda is a line item asking board members to approve a takeover by North Dakota State University of a nursing college in Bismarck currently run by Sanford Health (starts on page 25). Legislators I’ve spoken to are buzzing about the proposal, wondering if the SBHE has taken enough time to review the matter and questioning apparent conflicts of interest.
Not to mention the apparent sweetheart deal Sanford stands to get from the deal.
On the issue of conflicts, SBHE member Don Morton is on the board of trustees for Sanford Health, and University System Chancellor Larry Skogen sits on the Sanford Bismarck Board of Directors. Skogen is recommending approval of the sale, though he does disclose his relationship with Sanford.
That the matter was being discussed was announced by NDSU and communicated to the SBHE back in November, but since then the board hasn’t discussed the matter and per the documents included in the agenda for tomorrow NDSU President Dean Bresciani has already signed an asset transfer agreement with Sanford on March 7th.
That’s a big deal, because the college could represent significant costs for the taxpayers given that it doesn’t cash flow.
“During the first three years of the program, it is estimated that tuition revenues and payments from Sanford Health will cover expenditures,” reads the proposal before the SBHE. “However, beginning in year 4 and thereafter, with the added rent payment to Sanford and associated facility operating costs, state funds would be needed to support the program.”
It’s estimated that revenues from the college would cover about 79 percent of expenses, with taxpayers needing to make up the other 21 percent, in years four and five of the budget project (see page 70 of the SBHe agenda). Assuming that projection is right and no additional funds are needed in the first three years (and I don’t think we should assume any such thing), the cost to taxpayers will be about $5 million for years four and five.
That’s a lot of money, and to what end? According to estimates the college’s expenditures are around $2 million per year, while student revenues are only about $150,000 per year. Taxpayer appropriations are expected to make up the difference.
That’s a heck of a deal for Sanford Health given that 91 percent of the college’s students go on to work at…Sanford Health. Not only does Sanford get to dump a nursing college that doesn’t cash flow on the taxpayers, but they get to continue benefitting from the trained nurses that college produces thanks to a university system where they can count one board member, and one chancellor, on their payroll.
That’s a pretty good deal if you can get it.