President John T. Casteen III
May 3, 2000

Ladies and gentlemen, thank you for coming today. This is the annual State of the University Report. I'm going to try to move as quickly as I can through the prepared materials, which are, I should tell you, somewhat less structured than usual because I want to leave some time for discussion of where we're going and there are some issues that I think might be of use to all of us. There are I am told exhibits and some refreshments in the lobby that'll be available after we're done and there ought also to be microphones in the aisles. I can see two here. Are there others? At the end of the session, when we start into a general discussion, I hope you'll be able to get to the microphones so that all of us can hear and at the end, I'll ask also that they raise the lights so that if you have difficulty seeing one another, maybe that difficulty will disappear at that time.

For those who have not attended these sessions before, I try to provide a very brief overview of where we are, often described in somewhat statistical terms to cover the basics about the University's condition. This year we are not reporting dramatic changes in such things as enrollment or the number of faculty and so that kind of information will turn up in the data digest that we publish each year. Rather, I'd like to talk a bit about how we can move from the planning phase of the Virginia 2020 Initiative on into an actual phase and I've decided to use as perhaps the most accessible example of how to apply the results of planning to future change perhaps should be the focus on the Fine Arts Commission because we have the most tangible results at this point from that one Commission.

Let me start with just a brief sort of summary view of some things that are important here. We opened our doors to students in 1825. At the beginning of that academic year, which I think was actually in the spring, altogether 40 white male students enrolled. By the end of that academic year, the enrollment was 216. In the year 2000 we enrolled at the beginning of this academic year, so actually in the last calendar year, 18,346 students, of whom one-third were graduate students and professional students. About a fourth of this entering class, as has been the case with other entering classes since about 1995, about a fourth are African American students, Asian or Asian American students, Hispanic students, members of other racial or ethnic minorities. In the overall student body this year, 52% of the students are women.

The faculty has grown in size and obviously in breadth and in its academic quality over the course of this period since we began. The first faculty consisted of eight men. We all know the story of Jefferson's search for the faculty and the way in which he brought here very young faculty members from Scotland, from German, from England, because he wanted to form a kind of new beginning on this continent. In the year 2000, the full-time instructional, research, and public service faculty number 1,838. Of those, a number somewhat below 30% of the total are women. The diversity of the faculty does not in any measurable way match the diversity of the student body; 88% of our faculty are Caucasian Americans and we differ as a faculty from the students we teach in many ways, but one is in that sort of basic assessment of what we are as a human community.

The operating budget on which we function today is dramatically different from the $15,000 that Jefferson acquired from the state. In the current operating year, the annual budget, the operating budget, including the Medical Center is something in excess of $1.1 billion. If we were a private corporation, and if you believe the numbers that are published each year in the magazine Virginia Business, we would fall in the range of third or fourth in scale in the state. The Mars Corporation, the candy bars company, and Booze Allen which is a Virginia corporation would be larger and our approximate peers would be [Dyncorp] and the Southern States Cooperative, so if you want to think of us in terms of how the corporate world measures things, that's the neighborhood.

We've expanded physically over the course of the last several years. In 1825, the buildings included the Rotunda, the Ranges, the Pavilions, the Lawn rooms, and a small number of other structures around those. Between 1825 and the beginning of this century, the University built altogether some 61 buildings. Those 61 buildings comprise 4% of the floor space that the University uses today. Our scale as of this fall--3,462 acres of University property here in Charlottesville. That's from the Central Grounds to the periphery of the University's property. Some 570 buildings. In recent years, as you know, much of our capital construction has come from sources other than state tax dollars which altogether comprise about 15% of what we've spent over the course of the last decade on the physical plant. We've added since about 1980 about 107 buildings. These include buildings here and at the College at Wise, the buildings in our research parks, the Northern Virginia Center at Falls Church. These comprise about 27% of the University's total floor space.

We've also grown in other ways and we are about to grow in very significant ways that'll be part of our lives for the next two or three years. Borges said that he's always imagined that paradise will be a kind of library. As you know, the library has been from the beginning a kind of foundation for this institution. The location of the Rotunda, the conception of the use of the Rotunda from the beginning put the library, the great collection of books, in Jefferson's phrase, at the very center of the University's existence. The library's grown. Over the course of the last decade it has added about one-and-a-half million books. Its Special Collections Library has grown with particular speed in the course of that period.

Last Saturday we broke ground for the new David A. Harrison and Mary Harrison Institute of American History, Literature and Culture, which will be the above-ground portion of the new Special Collections Library and will allow us both to support primary scholarship and to mount major exhibitions that will bring together archeological artifacts, unpublished materials and early imprints of books, and to make those available to students for their use in courses, to students simply for their general reference, to faculty, to the general community. Beneath the ground, as you know, in front of the Alderman Library will be the Albert Small Special Collections Library. This is a graphic showing the design. I want to make sure that everyone sort of understands what we're trying to do because as this project advances it will inconvenience us and it may help if people understand what it's about.

As you know, that is the location of Miller Hall currently housing the Office of Admissions, primarily. Miller was built third quarter of the 19th century to be a school of biology. It was an independent, privately financed adjunct to the University's program and the Miller School originally was only one story high. The second story was added after the first of two fires that decimated and somewhat weakened the building. Miller will be taken down as soon as the refurbishment of Peabody Hall is complete.

Among other things, Peabody will become the permanent home of the Office of the Undergraduate Admissions. I should note that in the course of the last several weeks, the original plan to finance that building by virtue of an increase in the student fee, specifically in this case, the application fee, has become unnecessary. The Governor in his veto day messages and proposals to the General Assembly recommended that the building be financed out of the General Fund. This is the Peabody work--$2 million from the General Fund, tax dollars and that the University be allowed to rescind the application fee increase for the future from $60, which is frankly on the upper edge of where it ought to be, to $40, which is what it used to be and is down around the middle of the pack, so this structure is where Miller Hall is now.

This structure and this one, are air handling and light sources for the building below. I believe that this also includes a provision of that same sort, but what you're actually looking at down here is an exhibition gallery and entrance area reached through these doors that lead into the Harrison Institute. On this space, in this space, the library will house visiting scholars, staff, preparation area, seminar rooms, and other facilities of that kind. At the moment, the plan does not include a physical connection to the Alderman building. In the lower level will be the stack storage and probably additional preparations area for the Special Collections themselves, so the second and 2M levels of the Alderman building that are currently committed to these uses will be freed up for other uses.

The concept of the library was somewhat difficult to develop. Your colleagues in the library and in physical plant have done extraordinarily good work with this. To oversimplify, what we're building here is two boxes. The outer box is intended simply to contain the inner box. The inner box mounts the library on these piers in order to raise the floor above the level where water flows beneath the ground on that side and as the water flows in, it also flows out. The inner box is heat, humidity, and otherwise controlled and that provides the protective environment for rare books and manuscripts. Now, forgive me for all the errors in physics in that, but that's what I was told about how it works.

For us, this is an expensive building, but it points to a priority that I think we have as a community and one that points to the ways in which we have to plan for the future. The reason for this design is that we have used up the bulk of the available green space in the central part of the University's Grounds. We are developing now another way to bring core facilities together here in the Central Grounds. The work will require about two years. It ties into the ongoing work of the [E Text] Center, the work that's being done now in the Robertson Center which is the Media Studies component of the Clemons Library. The electronic linkage to Special Collections has become a major part of the University's point of interconnection with the world around it. The E Text Center is currently experiencing about 1.6 million hits per month on its web pages, so it has become, if you will, a major publishing house by which the University, its faculty, the people who work in the E Text Center, communicate with the world. The holdings there currently are about 45,000 on and off-line text in the humanities. We publish those in some 12 languages. There are about 50,000 related images that are currently accessible through this site. These images are book illustrations, covers, manuscripts, newspaper pages, page images from the Special Collections Library, museum objects and so on.

I should say also that by our linkages with the Flowerdew Hundred Foundation we have another type of web site that also is being heavily used by scholars. Flowerdew is incrementally putting on line images suitable for use by archaeologists, by art historians, by physical anthropologists and by students and the general public, but images having to do with, at this point, almost 400 years of settlement that have been documented on that site by way of the archeological work that we sponsor there.

The Robertson Center, as you know, is an example of a privately funded adjunct to the University's curriculum. The original gift from the Robertsons has allowed both for the creation of a significant endowed chair in media studies, a chair that we imagine as being instrumental as we move toward another definition of our disciplines related to the ways in which digital media have become significant in visual studies, in studies of the printed text, in the integration of film into traditional bodies of literature, and so on. It also allows us to consolidate media resources in such a way as to make available to faculty and to students and, as we can, to the general public, the kinds of education in the use of new devices, new tools, that allow us to dominate the tools.

As you know, as we have moved forward with the University's planning for the next, let's say, decade, we've struggled with the reality with, first of all, the planning for the last decade did not work because just as we began moving forward on the very vigorous plan to increase enrollment and to work with the state on meeting the state's educational needs, something like 10% of the operating budget was withdrawn and we had to go through a fairly radical process of refinancing the University and eventually moved into the Capital Campaign and so on. We have, as you know, gone through processes of planning during the last 10 years that have begun to bring resources and enterprises into a kind of synchronicity, but we're still playing catch-up and the planning that is now going forward under the 2020 Commissions combined with other work that I think at this point we know we have to do in the course of the next two or three years ought to help us bring the two together.

I'd like to go to a second visual that begins to talk about why it is that planning to remain excellent, planning to grow, is a complicated thing. What these number represent is the State appropriation per student from in state. That is per in-state student and the public universities that most nearly approximate our programs. I should tell you that one can produce numbers that are even more dramatic in showing contrast than these are. The University of California at San Diego, for example, in which by some reports as many as 60% of the undergraduate students major in biology and related fields. UCSD is not here. These are to the extent that it seems to be possible apple and apple comparisons. There are different reasons for the records and the various states. North Carolina chose in 1958 to develop a low tuition, high tax support system of financing the University of North Carolina at Chapel Hill and the other institutions there were folded into the UNC system. In the same year, and again in 1978, the state of Virginia decided to go in the other direction--to have higher tuition and lower levels of state support. This is, with the exception of UCSD, the highest state appropriation per in-state student from tax dollars in the country at this time. Very frankly, it's a major reason why if you follow the statements made about purposes and goals by UNC's leaders they make clear that their intention is to surpass us. I don't think that's a bad intention. I think a certain amount of competition's useful and I think also that their record of collaborating with us through the Research Triangle, through the National Humanities Center, and so on, ought to give us a certain amount of comfort with regard to their purposes.

But you start with that number and then if you want to drop down to this number and that'll tell you something about the spread. With the exception of dollars appropriated for faculty salaries, a simple way to understand what's happened here is that this appropriation has not changed in notable ways since 1990 when the appropriation was reduced. I guess '91. What may be in some respects more cautionary is this middle group of three, because Berkeley is well along in its planning for a revitalization of the sciences at Berkeley. It may seem difficult to perceive from a distance, but the sciences at Berkeley suffered because of budget cutbacks between 1991 and 1996. The money was restored in 1996. About 60 days ago, Berkeley published its plan for redeveloping its core science facilities. In the course of the last week, I have received a similar plan having to do with the humanities and social sciences, so the kind of the planning that we are doing is also going on at other places. And from at least my initial read of Berkeley's plans, they are extraordinarily good and I think that we should be aware that our sister institutions, our competitors, if you will, are not standing still. That the work that we do as part of a broader kind of mainstream.

UCLA does not have the kinds of planning initiatives, to my knowledge, that Berkeley has, but UCLA is clearly going to have to move very quickly to stay up with Berkeley in the areas where the two institutions compete, and they do compete. Michigan has recently completed a long-range plan for financing science facilities largely out of state debt financing. The upper middle west Big 10 institutions have all suffered, as you know, in the rankings over the course of the last decade or so, and in virtually all of them--the great exception at the moment appears to be Wisconsin at Madison--there are well-developed plans with substantial state support, especially in the form of debt financing, public bonds, to recapture position that they lost when their funding collapsed in the early '90s. In all of the cases above us, the states restored the core funding by 1996 and the issue over the last four or five years has been how to couple that core funding with appropriate private funding to bring them up to approximately our level of operation. Michigan has completed a major capital campaign. Ours will, by the time it's all done, surpass the Michigan campaign in terms of usable dollars and total dollars that are acquired from it. I can't get reliable or good figures on what's happening in the Berkeley campaign, but I think it's fair to say that the kind of private support that Berkeley has been able to attract over the last 25 years says that in addition to the state of California money, there will be substantial other resources.

Then a footnote to all of this--why does this matter? This is one measure of capacity. Now, it's a measure of capacity that needs to be adjusted in various ways. One way to adjust is to look at the efficiency of the operation and if you adjust these numbers for the kinds of efficiency you can measure by looking at what the university produces, U.S. News does some of this in its ranking process, then the numbers begin to move not toward equality but they begin to move in such a way that our base number begins to look a lot better. Believe it or not, we put less into, say, physical plant than UCLA does. On the other hand, walk that campus and you'll see them doing that. We do not face the kinds of infrastructural redevelopment costs that Chapel Hill has because of the wearing out of a number of core facilities including facilities in the science.

In the case of Ann Arbor, the infrastructure for the sciences is particularly impressive and obviously all of these institutions have had over the course of about 50 years dramatically greater public investments in scientific infrastructure than we've ever seen, so as we think about where we have to go, one thing to understand is that our neighborhood is moving. We ought not to compare ourselves in a kind of tunnel vision way to public institutions because our competitors are both public and private, and because also we are at considerable physical distance from the institutions in this chart, but having said that, we need to understand that the entire neighborhood is moving. Yale's recently announced plan to use debt financing to provide about a billion dollars in new science facilities, half life science, half not life sciences, is a clue as to the intensity of investment in the scientific infrastructure that will inevitably occur over the course of the next 5 to 10 years. Our effort to define our needs is simply a part of this broader mainstream of what's happening in institutions of our kind.

We are in a sense poised between two seats here. We are not a land grant university. We do not have the kind of historic base in federal research support that accounts for a good bit of the very fine infrastructure that exists in Blacksburg and supports Virginia Tech. On the other hand, we are blessed by an extraordinary relationship with Virginia Tech, both individual faculty relationships and a broader institutional relationship that benefit us in all sorts of ways, as I hope also the relationship benefits Virginia Tech.

On the other side, we're not a national privately financed research center. We're not Chicago. We're not Stanford. We're not Yale. Part of the challenge here is to define what we are in ways that can be accomplished without the first word being something like not. We're not this. We're not that. The affirmative statement of what we are becomes an essential part of institutional strategy in the near future.

The assets that we have are in many respects very obvious ones. Superb faculty. Loyal faculty. The number of faculty members who left during those years when the state kept adjusting the state's balances by adjusting faculty salaries, the number who left is a tiny number. We have retained first-rate people. We have seen faculty members in a sense restart their own careers as their disciplines have changed and move into electronic technologies, move into ways of teaching, new ways of conducting research, not because of the support available but in spite of the support available and that kind of resiliency in the faculty is a major asset. It's one of the factors that lies behind the extraordinary ratings the faculty receive and the reputational rankings that are used by, for example, the U.S. News folks and others who do those popular rankings.

We're efficient. There is a visual here that simply has to do with the history of funding of the kind that we're talking about. If you cannot see on the screen, let me help a bit--the top line is North Carolina, then Michigan, then Berkeley, then Virginia. These are historically the four dominant public institutions of our type. It's important to register that at no time in the last 10 years has our funding ever reached even the lowest level among the peer institutions, that we have always operated with resources that fall somewhere between 55th and 65th in the ranking of major universities and that the return on the dollar is simply dramatically greater historically. These are E and G expenditures, by the way. This is not capital spending. This is not buildings. This is spending on educational and general expenses of running the University.

What I think ought to concern us is the following--first, that the recovery that occurred in other places by about 1996, the lines before 1990 would come down because the funding levels were up in this range previously, but as the others recovered, we continued to follow essentially a flat line of increase and do so even now. The last couple of years reflect the Governor's commitments to faculty salaries, but then look at this line. One of the myths in Virginia is that UNC is about to collapse. The next time you're tempted to believe that pull out your copy of this chart and look at the history. That's the trend setter right there and that's our neighbor. Physically or geographically, that's our nearest competitor.

The lines for Berkeley and for Michigan kind of interest me, because what you have there is a fairly constantly slope that's roughly parallel to ours. Now, we start off with the fact that we're demonstrably more efficient than they are. We get more for the dollar. I think that ought to encourage us. We ought to be constantly aware that we have within our region the genuine powerhouse that intends to be dominant. Its new chancellor made that statement in the press conference that he held just after he was elected last week. That's not to be dismissed. They're very serious about that. The state of North Carolina has been integrating its economic development and academic investment strategies for, what, 25 years. When I was in state government in the early '80s, we were told not to pay any attention to the Research Triangle. It was all done with mirrors. If you believe that, I have things to offer you for sale, but they did not do it with mirrors. They did it with dollars, and the evidence is in this chart. On the other hand, in this part of the chart, let's not get discouraged and leave the field. That's durably over time the national competition. So, to intend to perform at or above their level is not an unreasonable aspiration.

Total expenditures per student -- I want to give you some numbers because the numbers themselves also tell us something about where we have to go. I'm not, again, including institutions like UCSD that are so specialized. At UCSD I think the number this year is between $42,000 and $40,000 per student from all sources. Chapel Hill--$37,722. UCLA--$37,762. Michigan--$32,980. Berkeley--$30,895, and the University of Virginia, $25,334. The fundamental force that drives that disparity is the state cap on tuition for in-state students. What we have there is a steady state dollar stream from mixed sources. Earlier from tuition and then with the 20% rollback, that money is replaced by General Fund money. The General Fund curve appears to jump, when in fact it's a dollar for dollar swap and then we face the problem that our competitors are not able to charge substantially more than we charge in the form of in-state tuition and I should tell you that I'm beginning to wonder whether we are at or near the price point with regard to the tuition charged to out-of-state undergraduate students. The reasoning has been in the past and the evidence has been that no one could say what the price point really was because we had never seen a case where there was price resistance with regard to the tuition charged to out-of-state students. At this point, out-of-state students are paying about 134% of educational costs. The 34% provides for financial aid based on need that's distributed to out-of-state students. The state does not contribute to that, obviously. It also includes a substantial contribution to the cost of educating in-state students. The mix of in-state and out-of-state has come to have a dramatic impact on our capacity to finance instruction, so that said, it's important to understand why, or it helps to understand why, we are so concerned when there are threats to adjust that ratio, both on objective criteria having to do with the financing and on criteria having to do with the University's larger credibility as a major national or global force in education.

I think we need to say that it's good to be efficient. That we deliver a lot for the dollar at this level of expenditures. That there is a kind of approximate ratio where roughly twice as much as the state provides per student plus something is the usual level of spending in institutions like ours, but that there are limits to what efficiency can do. Colette and Leonard and others who have worked to transfer costs and dollars from the non-instructional part of the University's budget over to the instructional part have ultimately done wonders for us for over the course of the last decade or so, but we have probably come to and passed the point when efficiency alone can be an equalizer for us. We're facing now the need to find some mechanism that will allow us to refinance the basic academic program just as we've done before. We did that between 1991 and 1995, so it should not panic us that we have to do it, but the numbers ought to tell that we do indeed have to do it.

We go into this with some strengths. We know how to raise money. We know how to use the money we raise to finance academic enhancements. We know how to manage money. If the University of Virginia Investment Management Company, [UVMCO], which Leonard and Alice Handy and others developed along with the Board of Visitors has produced dramatically better total returns than the endowment was generating previously and the endowment has once again become a really major factor in the overall financing of the University's academic program. We know how to use leverage. The most interesting case of that which I will not treat in detail now, but if you're interested I'll ask Leonard to explain it in the discussion afterward, is the financing of the new Darden School. No state money. Very unusual mechanisms to get the most out of the dollars used in the building. Very elaborate financial transactions involving our selling bonds and the Darden trustees and foundations working together to use revenue generated from gifts and from the Executive Education Program to finance a set of structures that would never have been built under the state's customary ways of building and financing.

I mentioned in various places earlier the extent to which debt financing is elemental to the plans that our peer institutions have for the future. Yale's announcement on the new science investment was simply that they would raise as much money as they can raise over the course of the next four years and then they would use debt financing to do the rest of the construction. There's an element of promise in that in which Yale is saying we are going to do this and saying we will do it by putting together various ingenious ways to accomplish the purpose. The decision by the governors of the upper middle western states to use debt financing to rebuild the scientific infrastructure in the major Big 10 science powers is a very important clue as to what's happening there, and virtually all of the new construction that is currently in the science plan at Berkeley is to be debt financed.

Now I will tell you that we do have some capacity with regard to debt financing through the University itself. Obviously the solution one hopes for to a problem of this kind is something like the general obligation bond bill that was voted by referendum by Virginia's voters in 1992. That may well be something that comes along in the course of the next year or so, but we've asked also for a careful examination of what the University's independent capacities might be. In order to use debt financing, you have to have also a stream of cash to use to amortize the debt, so this is not free money. It doesn't drop off trees, but we are dealing in an environment in which that particular kind of financing is fundamental not to what the weakest institutions do. One does not walk away from a mechanism because Yale uses it. These are the very strongest institutions in the country that are using these mechanisms, so there is something there that Leonard and Alice and the Board will need to work on pretty vigorously simply to make sure that we do not give up in a race because of the absent state infrastructural support at this point in our history.

I'd like to show you one product of the work the 2020 Commissions are doing. I think what I'm going to do is ask you to just give me a second to move through some comments by way of preamble and I want to explain what this is and use some other slides. We have assumed in the 2020 Commission work there are four primary commissions at this point and a couple of special purposes commissions such as the one on athletics. We've assumed that the University's purpose is to be what its founder called the bulwark of the human mind in our hemisphere. We've made the assumption that the purpose is to be second to none. We've done that with an awareness that the strategies that we use together to be, again using the popular rankings, to be the best regarded public university in the country in the decade just passed, but that strategy had a kind of finite life span, that the kinds of resource base that I'm describing in showing you the numbers for our close competitors, those dollars say something about capacity. Our strength at the moment lies in an extraordinary endowment balance sheet. We start with the phenomenon that assuming good management, assuming [501 / __________] stability in the markets, one of the things that we have built by managing funds well and putting new funds in the course of the last decade is a kind of fortress balance sheet that is a major asset as we move forward.

On the other hand, we also know that we have to imagine things that are beyond our current reach and that has been the business of the four commissions that have been working for about the last 18 months. The charge to them was to generate strategies that would be capable of doing in the future at least what we've done in the past. Let's start with the Fine Arts Commission. I usually start with the Science Commission, but the arrangements of the graphics are such that I'm going to stay with this for just a second. They were asked to deal with the fact that we do not have state-of-the-art facilities for any of our fine and performing arts disciplines. In some cases, such as architecture and drama, the facilities are basically sound but they are overcrowded by a good bit. We don't have facilities for the entire range of academic work done in those buildings and obviously facilities of the kind that we have put some limits on what faculty can do with regard to curricular innovation or change, new kinds of public service, expansion of programs and so on. Music, studio art, art history, the other arts disciplines that fall within that Commission's purview are all operating with facilities that are at best jerryrigged. They are accommodations of various kinds, buildings that didn't work for some purpose and were recycled for some other purpose, so the need for this kind of precinct planning is crucial.

What you have here is a view of the back side of Carr's Hill and I want you to start with me here on the concept. My house is probably that shadow there. This is the design wing of the School of Architecture. This is the Fiske Kimball Library. The existing drama building is here. This plan calls for the development of a new Bayly Museum on an odd footprint. It doesn't have quite that hitchhiker's thumb shape upside down that you have there, but it is going to be an usual footprint because of the terrain. There's an attempt here to make use of this end of the Lambeth Field's colonnade, both as a design feature and as a pedestrian access way. The intention is to use this project as one major step in the Ground's Walk project. This bridge is not, as I understand it, currently in the plan. This is the beginning of a new Fine Arts Library that extends at the level of the ground level here--these are windows--but winds up being somewhat below ground on this side. This is the concept plan for the new Music Building, the Drama Building's to be expanded in a way that I will show you shortly, and, of course, the School of Architecture itself needs additional space. This is the location for the little amphitheater that we imagine as being the connecting out door space for this part of the Grounds. One commentary on our times is that every departmental vision of what these structures might do or be includes a cafe. That's the cafe.

This, as you may know, is a gift from the Commonwealth of Virginia. This is the initial stab at what the shape might be of the new studio arts building. The structure is 100% funded by the Virginia General Assembly. It was added to the Governor's original budget by the General Assembly. It was put in on both sides and we were also given as part of this project the planning money necessary to begin the renovation of the interior of Fayerwether Hall as a future home for the Department of Art History.

Now, the design of the studio building poses some special challenges. First of all, you will see in a moment on another slide that we have discovered that this precinct area is really not large enough for the fine arts facilities, so we've had to rethink some of the configuration. Parking in this vision is over here in this strange piece right here that extends off that way. A 600-car parking garage is part of the plan, but the studio structure, if you think about, does not readily conform to our customary pattern of buildings with porticos and columns. It needs tremendous amounts of window space, especially window space on the northern side of the structure. It really defies our design conventions. We have had, as you know, very divisive discussions about the design for an architecture building that is intended to go right here. The debate had to do with whether or not it could be adapted in some way to become a kind of pseudo-Jeffersonian structure and eventually a major gift that would have provided for that building was returned to the donor because the Board and the donor could not reach an agreement about the shape of that building. In this case, we really do have to deal with this. The School of Architecture has provided leadership from the start. As you may know, Harry Porter when he was Dean had a tremendous impact on the ways in which the Board has been able to think about its function as our design review board. But this is not a walk. This is a very hard one.

Can we go to the next slide? Let me start up here in this corner. The new design for the University Art Museum is still in the early planning stages. I can't tell you that that's the footprint of the building as it will eventually emerge from the ground, but I will tell you that if you go over there and look, you will see that something like this is essential, and there is no way that I can imagine to develop a Jeffersonian facade for structures that need to use land in the ways in which the museum structures do. This phase of the museum is 40,000 square feet. The current museum is 18,000 square feet. It includes academic space. It includes a good bit of landscaping relating to the Grounds Walk. Students or others will walk around the colonnade here, come under covered arcades with landscaping above them through the museum, come to a somewhat rebuilt Beta Bridge and then disperse in various ways through this new precinct. The precinct itself, the parking structure, this 600-car structure, the music building, a covered arcade between music and drama. The darker section here is the expanded Drama Department to provide for dance and for other accommodations that are necessary to expand the curriculum. The library structure is imagined as extending over this area, a little amphitheater goes right in here. There's the studio building that's already financed. We do not have at this point a firm plan on how to reuse the Bayly building. An obvious use for it in the near term is to accommodate expansion needs in either architecture or art history, but that remains very much an open question at this point.

I want to show you a new piece of this design that some of you've seen, right here. As you may know, we are the last institution of our scale and kind to have no concert hall. This structure which is up on the edge of Nameless Field behind the Alderman Library--there's the expansion stack space right there--is a performance center. A major concert hall with dance space, that is space for ballet, with space for music, with accommodations for other kinds of performance, to be connected as apart of the Grounds Walk project by a bridge across University Avenue in such a way that one would naturally walk in here over this way to drama and over here to the parking spaces, so the parking could be had either this way in the Newcomb Hall garage or to the north in the new arts precinct garage.

... it's not in my plan, but Pete Anderson and Bob Chapel and Clo Phillips and the others who have worked to give us a practical way to approach this problem have done yeoman service. My sense also is that we are well on the way with regard to financing this. To have the studio building paid for up front is an extraordinary kind of a break, and to be able to begin now to plan the ways in which academic programs can develop as the necessary square footage comes on line is a great boost for the work done by the Commission.

Before we go to the Science Commission, let me show you something else. In June the mural that has been given to the University for the Old Cabell Hall, the lobby up here, will be installed and there will be ceremonies in the fall in connection with it. Let's see the first of those. Behind me, as you know, is the reproduction of Raphael's "School of Athens," that is itself a reproduction of a reproduction that was in the annex to the Rotunda that burnt in the year 1895. This is Lincoln Perry, the artist commissioned to do the mural. Lincoln has worked on this project for two-and-a-half of three years. I think that most people are going to share my sense that this is really an astounding kind of accomplishment. He has, in the first place, used the basic language of the "School of Athens" to try to describe the experience of a student going through the University. The mural begins with her entry into the University, with the preliminary part of her experience. It extends around the lobby. Here she is emerging from one of the tunnels when she first comes in. She's looking to see what's here. We had a little trouble with the wash-out here, but I think you can get enough of it. There's the expectancy as she comes in. These are from different sections of the mural. This has to do with the ways in which University rallies around her.

There's a kind of a moral purpose in the set of images that frankly have a lot to do with the attempt to recapture some of what Raphael did, but also a great deal to do with the kind of didactic purpose having to do with the University itself as a living community. In this particular picture, she has a sprained ankle, and persons at various levels are doing things with her. This is the representation of the community. Over here is the beginning of the end. This is the student. These students are involved in various activities that are part of student life and they may not be what you guess. This figure who appears to be out [65 / __________] who is in fact based on this figure. Lincoln has attempted to find ways to connect the classical vision of the institution with his contemporary vision largely through the ways in which he has arranged __________ people. This man __________ is based on this man [who is reading]. The colors in Lincoln's work, as you know, are quite spectacular but here you have her beginning to pull away from the daily life of the University. You have a kind of inspirational assertion of where the University comes from. You have the daily business of the institution going on, and then as she proceeds, we follow her through the process of departure. There she is moving out into the world, and this is the representation of Finals. She is doing what she's done as a student. She's a music major apparently. She's wearing her graduation gown and then she begins the process of departure.

Let's have the last slide. The Tree of Knowledge is [77 / __________]. There's a phenomenal final slide that Lincoln added that has to do with what she is as a human being after this experience of education. This is the Cabell Hall lobby. These are the arts and sciences recognitions of donors up here. This is the way the panels will look when they're installed in June. I have to say that I think both the conception of this thing and the delivery of it-- Don Innis and the Brown family, Lee Brown and his family, Mortimer Caplin-- I hate to get started with the list because I don't have all of it front of me, but an amazing number of people who've been involved in rethinking the arts here have taken this on as a project and I have to say I think it'll be quite wonderful, both because of what it is as a work of art and because of the way it references and cross-references the way of life here.

The Science and Technology Commission--I'm going to move fairly quickly through these others because I don't have graphics to show you. This Commission is, among other things, beginning now to move forward with specific plans to enhance the sciences. The report should become available in draft form in the course of the next several weeks. We'll work on them over the course of the summer obviously. One announcement that I am happy to be able to make today is the establishment of a Science and Technology venture fund within the University. The fund provides for a total of $1 million to be invested in the years 2000-2001. The sources are a half million dollars in a special allocation from the Pratt Fund, a quarter millions in the Equipment Trust Fund, other funds from the Commonwealth Fund. This has been treated as an addendum to the budget process and is now in place. The goal is to grow this fund. We see this as seed money that can be awarded to faculty on a competitive basis. We wanted to provide exploratory grants, one-time grants, in the range of $25,000 to $50,000 to pay for workshops, for preparation of materials to be used in multi-University activities, advancement awards in the range of $100,000 to a half million dollars. We see these as being awarded each year for up to three years as a means of advancing some established area within the sciences.

Much of the work obviously has to do with facilities issues that are not unlike the ones in the arts, but they are much more dispersed because of the fact that MR5 and MR6 bring together sciences that have historically been on the engineering and traditional science side of the University's Grounds with the basic sciences in the School of Medicine. Bob Carey and Dick Miksad and others have moved us very quickly in that direct, but we have a tremendous amount of work to do in conceptualizing the facilities and financing them and of bringing them on line.

The Public Service and Outreach Commission is, at this point, going through a final session of interviews having to do with how the public services we provide are accepted by local officials, by local business leaders, by state officials and so on. There's a web site called Outreach Virginia that is in its final phases of preparation. We intended this to be the essential link between the University's public services activities and its broader publics.

And we are expanding service learning opportunities. There is, at this point, a proposal for a fourth credit. The point will be to have students and faculty work together to create public service components in various courses already taught. We have, as you know, created a 10th school by designating the former Division of Continuing Education as the School of Continuing and Professional Studies. That is related in part to the successful beginning of the Bachelor's of Interdisciplinary Studies Program but there are other programs of that kind that needed to be added. In addition, of course, we have the Darden School's expansion in northern Virginia. The Darden at Dulles concept is part of the Batten gift and we have a number of school-based initiatives that, I think, important in thinking about this one.

The International Programs and Activities Commission is working to give us a design to make the University a genuinely global institution over the course of about 20 years. They're interested in bringing international broadcasting back to the Grounds. They're working to coordinate international activities that already exist. There's a committee now at work on the final stages of planning for the new International Residential College in the area of Mary Mumford and Gwathmey and those buildings are scheduled to open in the fall of 2001, and we now have-- We’re at the point of making a first call for faculty applications and nominations for positions that have to do with overseeing new international programs. We do not have all of the pieces of this put together, but the major activity will occur in the course of the next several months.

A number of next steps--I don't want to leave this out. We need now that we have at least in draft form strategic plans for areas where we had a consensus that we have weaknesses we want to address. We need now to go back and take a look at the holistic character of education here. That has to do, I think, with looking at core academic quality, at strategies to sustain our very best programs and schools, strategies to see to it that we don't lose our direction as an institution even as we face up to the costs and obligations that go with filling in structures that are not presently here. The School of Law, the Department of English, the Darden School, the basic science programs in the School of Medicine, the School of Architecture, any number of centers of excellence of that kind need attention at this point as we think through the longer range strategies for pulling this together. We'll be asking several of you to take part in that.

John Ciardi -- when he decided to go to Middlebury -- said that he saw a University as being what a college becomes when the faculty loses interest in students. I don't think that's the way we are and I don't think that's where we intend to go, but I will be asking for very careful attention to the undergraduate experience and to the experience of students in intensive graduate programs, students in the School of Law, students in the Darden School, thinking about them as developing humans, women and men, who deserve the very best that we can provide. That has to do with curriculum but it also has to do with the quality of support, the quality of international faculty, the ways in which we engage students and our own work as faculty, and those issues, in my mind, are the natural next steps as we begin to implement these strategic plans.

We believe in the concept of the residential college. The two that are in place have been extraordinary successes. The third one that will be coming on line in 2001, I believe, is going to be a major step forward for us. Leonard and Colette have worked through the Board now, the fundamental designs for another language house to be built over near the existing French and Spanish houses. We will continue to develop that kind of coherent residential life. We need to develop good models for engaging faculty in students' lives, not just in those colleges, but also in the first year dormitories and in other places where students live.

And at the same time, we need to look constantly for ways to make the curriculum serve our students better. Our entering undergraduate students come with extraordinary academic credentials. An issue in planning a curriculum for students of this caliber is always to avoid impeding their progress, to push them as rapidly as they're ready to move toward the most aggressive kinds of faculty engagement, in research, in creative scholarship and so on, so all of that is on the table in my thinking. I would like to see us move forward with additional residential colleges. There is a kind of pace established now. We have two fairly aggressive programs in the next two years, but beyond that, we need to begin to develop a long-range plan to see to it that academic life and residential life here are part of the seamless whole for the vast majority of our students.

I need to tell you that Penny Rue, the Dean of Students, is working with a group of students and alumni and faculty members and others on a re-examination of what the University relationship is with sororities and fraternities. This is not a crash program but there are problems. The facilities are in dire shape in some cases. A few of the houses have serious financial trouble. The suggestion that the change in rush date was the reason for their problems has been pretty well discredited by a study done by some Darden School students who were commissioned by the fraternity leadership to look at the issue, but it is obvious that there are long-term issues having to do with financial viability, with the character of residential life in the houses, and so on. Both Penny and faculty members who serve as mentors to a number of the houses deserve to be acknowledged as having provided unusual leadership in this regard.

I wanted to say a couple of things about issues that don't fit the natural outline but they're important. We have seen some measurable progress with regard to alcohol abuse on the part of students. We've also seen some cautionary evidence in the last several days as we have begun to count the number of students who were injured in some way in connection with the Foxfield Races. I think it's critical to understand that self-destruction is not a natural byproduct of a collegiate experience and that faculty members in particular have obligations both with regard to personal instruction, personal witness, with regard to the necessity that students take proper care of themselves, and I guess also with regard to setting the kind of example that demonstrates what it is to be a responsible and thoughtful and happy adult, so I take that to be part of our natural business as a faculty.

We have seen evidence of . . .once again, this happens cyclically, but of once again a resurgence of certain kinds of violence around the University's Grounds. At this point, I would say that we don't have evidence of a major problem, but assaults, reports of fistfights in various places where students live have alarmed a number of us. There is parents' group that's working with local landlords that have developed a checklist for students to use when looking for apartments or shared houses. This is one element of an ongoing effort to make the Grounds and the neighborhood around the Grounds safe environments for students. The publicity about violence is itself sometimes cautionary on one side. It sometimes cautions people to use the environment wisely, but obviously the work done by Student Council, by the Dean of Students, by this parents organization, that work is crucial to maintaining a wholesome environment.

Student self-governance is a crucial matter within the University because of its educational role for the students. The Honor Committee is undergoing at this point a self study with a good bit of faculty and I think Board of Visitors involvement. One of the issues there has to do with improving the experience of minority students with regard to the Honor System. There are other issues having to do with process, procedure, timeliness, and so on. If you have advice to offer on that topic, I think I can promise you that the Honor Committee itself would be grateful for that.

Pat Lampkin who's the Associate Vice President for Student Affairs, is beginning in the near future a working sabbatical in which she will undertake a broad re-examination of a lot of issues in student life. She'll look at the quality of the environment for learning with the dormitories and elsewhere where students live. She's going to provide a kind of outline for improving student life in this time span leading up to 2020 that we've described, so a lot of the issues that I've touched on are issues that Pat will be working on, and I hope that if you have suggestions to offer there, you will speak to Pat directly.

One of the most important events of this year was the publication of a Task Force Report that was prepared by an organization that is now called the Women's Leadership Council. We have had two major events related to that, the most recent one, a forum sponsored by the Faculty Senate. We are working now on implementation of a number of the recommendations that are included in the 1999 Task Force Report. This Report deals with equity, with the climate in which women work and live within the University, and recommends a number of improvements. The current stage of work which is built on some suggestions made by Claudette Dalton at the Faculty Senate's session, the current phase has to do with beginning to set priorities to arrange the Task Force recommendations in work plan format, the Women's Leadership Council has already begun meeting regularly with the Cabinet. The goals is to move us toward genuine equity and I have to say that we discover in this process repeatedly ways in which we somewhat miss the point.

One of the most interesting issues raised at the Faculty Senate's forum had to do with the fact that our Task Force had not included women in the lower classified grades who are the majority of women working within the University, so the Women's Leadership Council is working now to engage women as members of the Council and as participants in the process. The meetings with the Cabinet will be roughly on the order of once a quarter. There will be regular reports to the community. I would say that the work done by that Task Force has been beneficial in areas that extend well beyond simply gender equity concerns. A very important report with regard to the condition of minority persons within the University.

Finally, a few words of appreciation. I've had occasion to mention the extraordinary quality of faculty work, the loyalty of faculty who have worked with the University during hard years, and I hope are now beginning to enjoy some of the benefits of the work we've done together to make the institution a stronger one. It's impossible in a session of this sort to recognize all who are retiring from the faculty, but we are watching, as you know, from year to year now, the retirement of a generation of faculty who shaped the University as a center for excellence in the broad sense. Those who came here in the late '50s and the '60s and who built for us the expectations of excellence in disciplines across the board. For all the good that we've done with projects such as the 2020 Commission's work, the truth is that the building blocks begin with the arrival on the Grounds of this generation of faculty who were not prepared to settle to be second best.

I just wanted to read some names to you as samples of the quality that we have experienced and the leadership that is at this point beginning to move away from active involvement in the academic lives of our departments. Marvin Rosenblum from Mathematics. Doug Day and George Garrett from English. Jeanne Fox from Nursing. Mario di Valmarana and Ed Lay from the School of Architecture. Ann Antrobus, our Registrar, in the University's Administration. The list is about 100 names. That's about typical for a year in this period. What I want to say is symbolically to all but specifically to those whose names I read is simply that the University is a better place in every respect for your not only coming but for your determining to reshape it in ways that are beneficial to all of us. We treasure the contributions made by faculty who are at this point retiring.

I want to acknowledge that our deans have done yeoman's service this year and in prior years. We ask our deans nowadays to do something that we've never before asked deans to do, and that is take responsibility for financing their schools. That is a fundamental difference in the function of the dean and frankly without that function we could not pretend to be a first rate national institution, so as we talk about all the things the University does, I think it's critical to recognize the uncommon demands that we make on those of our colleagues who take on the deanships and also the unprecedented performance that they have to show for their work together and with you.

Now, alumni--alumni don't come to sessions of this kind, but when you can count 140,000 donors to a Capital Campaign of the kind that we have run, and then do one more thing and that is go out and talk to the donors about what to do next and hear from them that the next thing to do is to come back and ask for more. You have a kind of documentary evidence of the prospects, the possibilities, for the future that that's very very important evidence. Bob Sweeney has put together a program called Envisions that is part of the 2020 program. These are half-day programs in areas where we have had substantial success in the campaign. They use the 2020 themes very deliberately. I think I've attended all of them so far and I can tell you they have been both rigorous in the sense of rigorous examination of the assumptions we make and so on, and very positive. The advice after we talked through the hard choices the University has to make in order to maintain excellence to grow, the advice is to go for it. And when we ask where are the resources, they say come back and talk to us. Show us your plans, so the 2020 Commission members are, in a sense, shaping blocks on which we will build the programs that they're planning for us.

There's a place for a certain kind of idealism in the end of a speech of this kind is not a bad one. This institution has had a unique role in the shaping of the American republic and also of our system of education. We meet about 100 yards from the site where three presidents of the United States convened to lay the cornerstone for what was to be the great national university, the first one conceived as a public university on the scale and with the kinds of excellence that were identified in those days with the European universities. We've expanded in all sort of ways. We have what I think is an intriguing and remarkably invigorating relationship with the founder who increasingly, as we understand more and more of the obscurities about his life, his times and so, who increasingly seems to embody both the easiest-to-grasp and the most idealistic and the most complex aspects of our national experience. The ways in which that relationship drives the institution's character seem to me to be very very important to acknowledge. This is not a place where mere hero worship does it, because our hero is a genius of such extraordinary complexity and so on that it is very difficult to make any simple statement and believe in it as you make the statement.

The University was in its beginning a uniquely American assertion about national independence and about personal freedom and about merit as a component in building communities. Faculty and students live and build that notion about this institution every day. The State of the University can be summarized something like this: it is old but it is not as old as it thinks it is. It is excellent. It's probably not as excellent as it thinks it is. It's going to get even better than it is and it will do it because of the human talent, the determination, the extraordinary consensus about the necessity of excellence in building the next generation of leadership, and in building citizen freedom that embodies the aspirations of faculty and students every day.

I will tell you that the greatest pleasure of my life has been serving as your president and the pleasure is tied up in the admiration for the work that individual persons do here. To have an institution whose students have the range and the quality, the vigor and the ambitious optimism that ours have is a tremendous source of pleasure and excitement for me. To work with colleagues who take care of the University's Grounds, who think about the University's buildings and teach here, conduct research here, sustain superb libraries that serve all of us, who plan our future, is a rare and wonderful privilege. So thank you for those things.

And as we think about the successes that have been widely reported in connection with this Capital Campaign, as we implement the plans that are being developed now by the 2020 Commissions and move to the next stage, let's do it with a sense that the work is not only important and necessary but also exciting and thrilling. That to have the chance to shape the University of Virginia in this period is a rare and wonderful sort of privilege that we share, that belongs to all of us, so let's do it with vigor, let's do it with a sense that it's an important thing to do, perhaps the most important thing we could do, and let's understand from day to day that what we're doing is building the bulwark of the human mind, that our founder said this place would be when he sat up there on his mountain and dreamed this place up out of nothing. That imagination, that kind of vigor, that kind of vision, has to got to be our common property if we are to continue succeeding in what we do.