Good afternoon, ladies and gentlemen. Thanks for coming today to review with me the state of the University of NorthDakota. I’m pleased to say that the state of the University has never been better.

We remain one of the largest, most heavily endowed, complete universities in the very large region of the Upper Midwest. We continue to be rated among America’s best colleges and universities, and one of the best values in higher education nationally. We are already among just a hundred or so of America’s best doctoral research universities. This past year we exceeded the threshold for the Carnegie classification of “Doctoral/Research University Extensive.” We have enjoyed extraordinary progress over a four-year period in virtually every dimension of our plan for lifting the University toward our strategic goals. We have considerable momentum.

We are on a roll.

I am proud to say that, again, because our progress has so many elements, I will be able to touch on only a few in this report, as I illustrate the general trends that characterize the University in this 120th year of its history.

Overall, we’ve had a great run extending almost four years across the entire spectrum of research program development, enrollment, and in just about every dimension of the University.

Graphs and charts illustrating our progress are available in the University of North Dakota Progress Report, August 2003, published by our Office of Institutional Research.

Enrollment. We continue to enjoy a surge in enrollment, and we have worked diligently to ensure that the new students we are bringing to the University are well served. Most notable in this regard is the purchase this past year of the Road King Inn, which is now a student residence called Dakota Hall. Most profound is the way in which we have adjusted to the abrupt increase in demand for additional class sections – particularly in the College of Arts and Sciences – and student support services.

We are becoming more of a national university because of aggressive recruiting throughout the United States – as well as North Dakota – and because of signature, nationally recognized programs. We continue to see the benefits of our program articulation effort, so ably organized by our Registrar’s Office and supported by all academic departments.

Salary Increases. The University of North Dakota has again provided significant salary increases for both faculty and staff. We have capped four straight years of increases by providing, this year, far and away the largest increases of any of the institutions in North Dakota, and indeed, exceeding those of most institutions in the United States. This was necessary because we were so far behind. Although we continue to be behind, we are making progress.

Research. We’ve enjoyed another great year of significant progress in expanding our sponsored program base, particularly our research base. There have been new and exciting developments across a broad spectrum. We are well on our way to achieving the ultimate objective of $100 million a year in sponsored programs by 2006. I’m pleased that Dr. Peter Alfonso is becoming established in his role as Vice President for Research. His work with the University Research Council promises to bring even greater progress and soundness to our research program in the future. I continue to believe that some of our greatest potential for future sponsored research will come at the interface between and among the units that have traditionally operated in the “silo” mode at UND. The Red River Valley Research Corridor idea continues to take hold. This past year, the North Dakota Department of Commerce provided funds for marketing the corridor concept.

Facilities. The base of outstanding facilities to which we have access continues to expand in unique and cooperative ways with other organizations and groups. This past year we added the Hilton Garden Inn to our campus, and this, coupled with the Engelstad Arena and the Alerus Center, has moved our assets over the six million square feet mark. Renovation projects are ongoing throughout the campus.

Other. Once again, re-accreditation was awarded to all of the programs that were up for review this year. Many had several areas of praise noted by the accreditation visitors.

There are many other dimensions to our progress, of course. Our athletic programs continue to thrive and serve as a source of pride for all of us.

Our student pass-rates on national exams illuminate the quality of our programs in a direct way. And there are anecdotal indications of the quality of the University and the fact that those we serve recognize and appreciate it.

This came as an e-mail by way of a Foundation Board member just a few weeks ago. It was sent by a father who registered a daughter here for fall classes:

“Guys, I just got off a series of 45 minutes of phone calls with various offices of UND with my daughter on the line fixing tuition and schedule, etc. issues, and without exception, each one of the persons we talked with was helpful, professional, friendly and courteous beyond belief!!!! What a great place.”

Another Board Member in reply said he heard from a family who were “blown away” by UND’s orientation program for new students. He said that UND’s presentations were far ahead of what he’s experienced elsewhere, and wished one of his other sons had come here because he would have gotten more direction. Kudos to Alice Hoffert, Doug Munski, Kenton Pauls, Sommer Herring, and all of the many other professional staff and faculty involved in this process!!

We continue to receive strong financial support from both alumni and non- alumni. We’ve achieved most of the funding that will be needed to essentially double our Center for Innovation, thanks to the generosity of Mr. Ray Rude of Stanley, North Dakota, and the continued amazing generosity of Mr. James Ray, who has emerged along with Ralph and Betty Engelstad as one of the University’s leading benefactors. The capital campaign for our College of Business and Public Administration was recently lifted over the $10 million mark by a bequest of more than $2 million by alumnus, Mr. Burt Aarestad.

Our alumni continue to stand out as sources of pride in so many ways.

This partial listing of general accomplishments and indications of quality and those not listed, all come from the work of individual faculty, staff, and students. They derive from people working as teams in individual academic departments and colleges, research, and other units throughout UND, thanks to the support we receive from the Governor and the Legislature, the State Board of Higher Education, the Chancellor and the System Office staff, our Congressional Delegation, our Alumni Association and Foundation, individual donors, and many others.

What we’ve done has been accomplished against the odds. The demographics of the Upper Midwest continue to predict a decline in college-age students – a decline under way already, and yet we continue to increase our number of students from North Dakota, from Minnesota, and from around the world. Despite federal budget deficits and competition from many universities trying to improve their research funding, we have made extraordinary progress – thanks to the work of lots and lots of people here on campus and our lobbyist, Sara Garland, in Washington, our two Senators, Kent Conrad and Byron Dorgan, and our Representative, Earl Pomeroy. We have a lot to celebrate, a lot in which to be proud; we should savor the fact that this has been done by coordinated teamwork in a strategic way by all of us. It’s the result of some very deliberate hard work.

What we’ve been able to do here in North Dakota runs counter to the trend of what’s happening throughout the United States, and indeed, throughout the world. North Dakota, at one point last year, was one of only a few states that came even close to meeting its revenue projections.

Some examples: California suffers with a $38 billion budget deficit. The president of the Yuba Community College in northern California expects to have to cut her budget by 15 percent.

The Maryland state system announced after months and months of wrangling, that tuition will be going up 21 percent. This was after Maryland made news earlier this year by raising tuition in the middle of the year. Unless something changes, universities in England project a $14.9 billion shortfall over the next three years.

Cuts in higher education funding this past year range from those as low as what we’ve experienced here to as high as 7 percent in states like Indiana. In most states, the cuts have been in the 2-4 percent range. Tuition across the nation has increased considerably. The University of Wisconsin system, faced with a $100 million budget cut, has announced hiring freezes. The Washington State legislature effected a 5 percent cut for their four-year colleges, plus a $22.7 million cut for planned faculty raises. Missouri originally announced a 10 percent budget cut for higher education, coming after a cut the year before almost as large.

It is also noteworthy that we get it done with less. Our state appropriations and net tuition and fees per FTE student are at the bottom of our group of benchmark institutions.

However, these successes hardly mean that we can breathe easy. Even as we pause to savor this moment, we now have to build on the momentum to take the University forward to new and greater heights, against whatever forces may operate to thwart us.

CHALLENGES & OPPORTUNITIES IN THE YEAR AHEAD

We have just instituted one of the largest increases in tuition in a single year in the history of the University. We did this in response to a public policy of shifting an increasing amount of the cost of education to students and their families. Fortunately, up to this point we have managed to keep tuition very low. Even with the increases we have put in place, UND remains one of the best bargains in America.* Nonetheless, we owe students an increasing amount of attention to their needs and their ultimate success. Students are paying more; they will expect greater quality in this institution.

Most of the challenges we face will be common to all of higher education.

Big Issues in Higher Education

The Association of Governing Boards lists the principal issues currently affecting higher education as follows:

1. Homeland security
2. Affirmative action
3. Deteriorating economic and fiscal environment
4. Surging numbers of diverse students
5. Rapid tuition increases
6. Reauthorization of the Higher Education Act
7. Federal tax policy
8. Assessment of accountability
9. Scientific research
10. Intercollegiate athletics

The homeland security issue has to do with costs of implementing complex federal laws, many of them unfunded mandates passed along to states. This issue also bears dramatically on our interest in increasing internationalization of our programs and study-abroad opportunities, as well as hosting students here from other countries.

The issue of affirmative action now has some new dimensions as an issue following recent Supreme Court decisions.

The economy is a huge issue, with both positive and negative effects on higher education: positive in that many students seek additional education in times of economic distress, but negative in the impact on the states’ ability to support public higher education.

Diversity is increasing in America, but yet it really hasn’t reached North Dakota. This puts extra pressure on us to ensure our students are ready to work in a more diverse world than they have experienced.

The rapid increases in tuition, forced in part by less money coming from state treasuries, may require new public policies, perhaps voucher assistance, perhaps more need-based aid coming from states even as they reduce their general subsidy of public higher education. It’s noteworthy that the public continues to rate colleges and universities highly, but cites affordability as a big concern.

Because so many of our students depend on grants and loans, reauthorization of the Higher Education Act and student aid programs is of tremendous significance to us.

Not only is federal tax policy an issue that has divided Congress and the nation as to its impact on rejuvenating the economy, it also affects our ability to raise private funds.

Assessment and accountability is a very large issue, particularly now that tuitions are going up so dramatically nationwide. We should expect to be asked to prove over and over that the students and the public are getting a result from the investment they make in higher education.

Scientific research is a core mission in which we seek to significantly increase our level of activity. We see increasing interest among economic developers and government leaders for commercializing discoveries coming out of our universities.

While we have to be cognizant of intercollegiate athletics as an issue that needs to be kept in perspective, we do this from a very good vantage point.

Perhaps an eleventh public policy issue could be labeled the “skills deficit.” It’s a matter of some urgency that we prepare larger numbers of high school graduates for the challenges of high-performing jobs and the innovations that are inevitably coming in the future. The continued evolution of universities from institutions that deliver four-year degrees to ones that support lifelong learning must continue. In this regard, I’m pleased that UND is a leader in this region in providing continuing education opportunities.

Patrick Callan and colleagues at the Center for Public Policy on Higher Education are recommending that all states forge public policies that provide at least two years of education and training beyond high school for all citizens, and that there should be multiple pathways by which students can achieve the level of competency needed for today’s modern workforce. They point out that the new global economy requires significantly more workers with higher levels of knowledge and skills. There are warnings from sources like Business Week that there will be wrenching manpower and skill shortages in the United States, especially of college-educated workers, as the labor force growth slows and baby boomers retire. The No-Child-Left-Behind legislation in 2002 perhaps should be expanded to encompass “no potential college student left behind.” The imperative is clearly to raise knowledge and skill levels of all American citizens. In other words, the need for and the demand for (as well as the accountability of) higher education are likely to increase.

Much of the above suggests that we will have to get more comfortable with having to find resources to fulfill our mission. There is more and more pressure on all of us to raise funds from various sources. While some of us might prefer how it was in the old days, those days are gone forever. All of the above will be issues for the University of North Dakota to some degree. I want to now turn, however, to some specific challenges that we will be facing this year.

There are a number of special areas in which we have work to do.

• We simply must give greater and greater attention to student learning as an outcome, and we must find ways to do this more effectively and more efficiently. We’ve had significant increases in enrollment since the beginning of this new century – and from the beginning of the last one for that matter. We now serve students from every state and from 50-60 foreign countries. We have the largest freshman class of Presidential Scholars ever – 40 more than last year. Because of the very positive value placed on education in this region, we welcome each year students who come with an extraordinary readiness to learn.

There is no reason to believe that public support for higher education will get any better in the years ahead. There are many causes of this, including an erosion of tax base and an explosion of health care costs. These and other elements have many subelements that we won’t have the time to discuss today. But it is generally accepted that this situation won’t be improving, and is likely to deteriorate even further. We’ve seen a marked increase in tuition across the United States – above and beyond the rate of inflation – over the past three decades. There is obviously a limit to how far this can go without having a disastrous impact on accessibility to higher education.

We simply have to find better ways of doing what we do to help students learn. We have to reduce the cost per student, and the only way I know to do this is by changing the delivery system. We need to be much smarter about the design and the delivery of curriculum. Every one of our curricula should be audited by the faculty and restructured to tighten up and focus more on learning. It isn’t about how much faculty teach, after all; it is about how much students learn. We haven’t paid nearly enough attention to the potential of experiential learning – using the community as a way to enhance learning, or to the use of technology to accomplish student learning. In short, we have to find ways of increasing student learning without increasing total instructional time. We should start by taking an especially hard look at the relatively small proportion of courses that account for the bulk of our credit hours and enrollment.

• We should strive to raise the average ACT scores of our incoming classes. Students who come here to achieve and succeed should expect that their peers will be just as ready to learn as they are. Our new enrollment/admission standards should help address this situation.

• We haven’t made enough progress in the area of experiential learning. Although we do have a fairly high participation rate, it’s not high enough and it’s not on the trajectory to reach 100 percent soon enough. We need to do better in helping our students find these experiences.

• Our “progress” report shows that 10 percent of our seniors rated advising as poor. This must improve. A special committee has been appointed by Vice Presidents Robert Boyd and John Ettling to review this issue and to make recommendations.

• 9-11 continues to reverberate and both thwarts and underscores our need to globalize our curriculum and our campus.

• We need to find a way to expand our distance education program, because we’re running up against some limits on the number of students we can serve here on our campus. To this end, we are adding personnel in Outreach Programs to develop an expanded set of on-line offerings.

• The State Department of Health has recently been funded to develop a statewide cancer control program with the support of the University, thus helping to energize the Healthy North Dakota initiative. We continue to work cooperatively with the State Health Department to combat poor health habits and premature mortality among North Dakotans.

• We need to help the public put our tuition costs in perspective. Most people overestimate the cost of tuition in public four-year institutions. Despite increases over recent years, precipitated by declining state support of public higher education, public institutions like UND remain highly affordable – the average is around $4,000 a year for most public universities. The economic and social payoff from a college degree continues to be high, and, in fact, has never been higher. A college education remains the single most important financial investment most families will ever make.

• As we seek to implement and develop the Red River Valley Research Corridor concept, our primary challenges will be to achieve our own goals for external funding and the health and scope of our research enterprise. Nonetheless, there will also be a challenge connecting what we have done best, traditionally, to the economic growth and reinvention of the Upper Great Plains. We must continue to take a lead role in shaping the future of North Dakota. Such a challenge may be daunting, and there may well be justifiable fears about how we preserve our core mission as we embark evermore on this path. However, we must do it, if only out of self-interest.

• Later this month we are looking forward to hosting a group from the University of Manitoba, including its president. A group from UND has already visited the University of Manitoba, where we spent a day exchanging ideas for future collaborative projects. This return visit will help move us along toward a new order of cooperative interaction with that great university north of our border, and will indeed become part of the Red River Valley Research Corridor complex.

• Centers of Excellence. I’m pleased to report that we’ve made some good progress with respect to Centers of Excellence. We have a general consensus on the criteria that we use to identify existing Centers of Excellence, and even an outline of how we would go about identifying potential Centers of Excellence. The concept of the Centers of Excellence received quite a bit of gubernatorial and legislative attention this past year. It remains imperative that we come together on a common vision of what these Centers are, can be, and what they would mean to the future economy of the state. I’m proud to say that the University has many areas that already qualify as Centers of Excellence in Research, and this year we will begin to identify programs of distinction – programs that characterize the University as a great university. We do these things not to diminish our interest in supporting all dimensions of the University, but to acknowledge the reality that we cannot be all things to all people. We must decide what it is we are going to be rock-solid good at, and we are going to have some areas that are clearly extraordinary and among the best in the world.

• Private Funding. With the UND Alumni Association and Foundation, we will embark on the planning and execution of a capital campaign to coincide with the 125th anniversary of the University’s founding. Clearly, the University needs the margin of excellence that private support brings, just as it has done so for all of this nation’s great universities. Leading into this comprehensive capital campaign is the vibrant, well-organized capital campaign currently under way in support of our College of Business and Public Administration. This campaign, which is just coming out of its quiet phase, has already exceeded what was an initial $10 million goal, and we are well on our way to a new goal of $20 million.

I am asking the leadership teams of each college and equivalent unit to get more seriously into the fund-raising/development business, working in concert with the Alumni Association and Foundation.

• Facilities. The University continues to have some significant levels of deferred maintenance that need attention. The State’s long-term financing plan calls for a formula increase in the annual support provided by the state for reasonable repair and maintenance. This standard targeted revenue has yet to be achieved, however. There will be some exciting new facility developments in the near term, many of them under way now or soon to begin. These include a Wellness Center to serve our students, faculty and staff; and an expansion of the Ralph Engelstad Arena complex to include a basketball/volleyball facility.

• We must work to improve campus climate. Toward that end, I am asking all who work here to take part in a training program designed to make us more acutely aware of what constitutes protected-class harassment under the law and more alert to our individual roles in making UND an increasingly better place in which to work and learn. Also, a Campus Climate Council – which I chair – was empaneled last year and we have appointed a Diversity Advisory Subcommittee.

• We must work harder to ensure security and privacy in handling personal information.

• We must build strategic planning and accountability for success even further into our culture. This should include continued leadership in finding ways of both enriching and extending learning opportunities via technology.

• We must all be ready for the upcoming 10-year re-accreditation process by being informed. Please, at a minimum, read the evaluation summary of our self-study report.

• I’m as proud as I can be of our intercollegiate athletic program. The challenge is to keep intact our standards for our athletic programs and the connections that they so well demonstrate to our academic programs. Regrettably, pressures abound across the nation to do otherwise. All too often, intercollegiate athletics has become something other than what it once was, namely something that had value as part of the education of all students. We are going to make all necessary efforts to keep our intercollegiate athletic program connected by defining the ways in which it resonates with and supports the core academic mission of the University.

• Above all, we need to find a way to continue to make sure we put student learning first. We must continue to think that our involvement in research and service, as well as in teaching, has first and foremost to do with learning, either modeling learning for students or providing them with real-world learning opportunities.

In his book, Good to Great, which was used in the Project Learn initiative in Student and Outreach Services at UND, author Jim Collins indicates that a surprising number of things had nothing to do with distinguishing companies nationally that went from good to great, compared to companies that remained just plain good. They found that greatness was not a function of circumstance, nor was it always driven by a deliberate strategy to move to greatness, per se. Technology apparently had little or nothing to do with it. Strategic planning didn’t distinguish great from good. Chief executives seemed to have little, if anything, to do with greatness. Most examples of greatness, it appears, had more to do with leadership putting the right people in place and keeping the organization focused.

UND is, and must continue to be, a great university. It has been said by many that good is the enemy of great. In an organization likes ours, limited as we are in the resource base that we have, it will be our fate that we cannot be great at everything we do. We must, of course, be good at everything we do. Beyond that, we must have a number of features that are truly distinguished and that truly stand out well beyond rhetoric into the substantive meaning of what it is to be great, to be among the best in the world.

The University of North Dakota at Grand Forks, the largest institution of higher learning in North Dakota, South Dakota, Montana, and Wyoming, is classified by the Carnegie Foundation as a “doctoral/research-intensive” institution. This ranking puts it in the small group of nationally important universities whose missions extend beyond undergraduate instruction to include graduate education, research, scholarship and creative activity, and public service. UND has long been characterized by its solid foundation in the liberal arts, a comprehensive array of colleges and schools (including law and medicine), a manageable size, high-quality students and faculty, a varied curriculum, rich cultural resources, and an outstanding record of alumni support.

Enrollment: 13,034

Academic divisions: John D. Odegard School of Aerospace Sciences, College of Arts and Sciences, College of Business and Public Administration, College of Education and Human Development, School of Engineering and Mines, Graduate School, School of Law, School of Medicine and Health Sciences, College of Nursing, Division of Continuing Education.

Programs of study: undergraduate, 89; master’s, 54; one specialist’s diploma; 21 doctoral programs;medicine (M.D.); law (J.D.).

Annual operating budget: $301.3 million.