####
 It is my happy duty to ask Professor Raymond Dawson to come and
join me and to ask Professor Lensing to come and read the citation in awarding
the Thomas Jefferson Award.

####
 Ray, Congratulations.

(Applause)

####
 It was a genuine pleasure. Ray was Dean when I was an
undergraduate here.

(...)

####
 I'd like to thank you for coming. I know that you're in the
midst of grading term papers and that it's somewhat of a sacrifice to leave that
duty and come out today. Thank you for being here. I would like to add my voice
to the chorus that has been thanking George Lensing for his marvelous service to
the University. It has been a great pleasure getting to know George this year and
working with him. And my job has been made immeasurably easier because of
George's competence and his patience with me. I'd also like to thank Jane and the
Executive Committee of the Faculty Council in particular for the work this year.
This last session provides us an occasion in which it's appropriate to reflect on
our successes for the year, clean up any messes that I may have made in the year,
and to look ahead. And I'd like to do those three things.

First, to the cleaning up of messes. I think I have three regrets with respect to
this year. One is I would like to apologize to Joy Kasson for a brusque response
to one of the questions that she asked which was perfectly appropriate and the
response was not. Joy had to apologize. I would like to express regret that my
remarks a couple of sessions ago about our research grant writing, or research
productivity, were mistaken by some to be criticism of us for slacking off in the
volume of proposals that had been submitted. Several people took it that way, and
it certainly wasn't intended that way. My remarks were made following a
conversation with Tom Meyer in which we conjectured that the fall-off in grant
proposals was a result of demoralization about the funding picture in Washington,
and it was my intent to assure everybody that while most of our money comes from
NIH, the NIH budget has not been decreased. There were many reasons that the
grants have fallen off, and that was only one of them, but that was the one that
concerned me at the time. And if I have offended anybody who has been working
hard to submit proposals or anybody who is not able to submit proposals because
you've simply run out of lab space, I apologize. And finally, a regret that the
Kenan professors issue played out the way that it did. I think everybody
understands now, or at least most people understand, that in announcing that the
next Kenan professors to be awarded would be awarded outside, and would be
awarded to people who have stellar teaching credentials in addition to their
research credentials, I was keeping a covenant with the Kenan Trust, which
covenant was in need of repair. I think people do understand that now. But the
issue raised the question of whether the Chancellor is adequately appreciative of
the teaching quality of this faculty. I am somewhat nonplussed that the question
should be raised, because you must remember that I was an undergraduate here. And
for those of us who were undergraduates here, there can be no mistaking our
appreciation of the quality of this faculty. It was at Chapel Hill that I came of
age, intellectually and personally, and I have only the deepest possible respect
for the quality of this faculty. It because of my experience here and my
appreciation of the quality of the place that I was so deeply moved to have the
opportunity to return here as Chancellor. It is an awesome responsibility. 
Awesome because I understand what a marvelous institution this is and so deeply
respect the faculty here. In fact, I still see the faculty here through the eyes
of an undergraduate. Unless you have been an undergraduate here you probably
don't understand that, although you might think of going back to your own
institution as Chancellor or President and imagine how that would feel. Every day
when I walk across campus I have flashbacks to my undergraduate years. In fact, I
have always held Chapel Hill as a model of the kind of institution that I was
trying to build at each of my three previous posts -- four, if you count Johns
Hopkins -- and if you doubt that, simply call up any member of the faculty who
was there when I was there and you will find that I constantly talked about
emulating Carolina in its development. So I deeply regret that my raising the
issue of recruiting for Kenan professors outside and focusing on teaching,
something that I did in response to a request from the Kenan Trustees, was
mistaken as an indication that I was not fully appreciative of the quality of the
faculty here.

Let me turn to our successes. They're more fun to talk about. The biggest success
is Dick Richardson. I am delighted that Dick has agreed to serve a term as
Provost. I have never worked with anybody with whom I felt a greater sense of
compatibility, of simpatico, or with whom I enjoyed working more than I enjoy
working with Dick. Dick, thank you for agreeing to sign on for a regular term. 
Another success that we've had, and it may seem premature to say this, is on the
issue of salaries. Salary compression. I'm convinced that we will make a
significant dent in the compression problem as a result of the revenue that will
be received from the tuition increase that will go into effect next academic
year. It's still too soon to say how much relief we will get for the general
salary problem from the Legislature. Probably you know as much about that as I do
if you read the newspapers. We are very close now to the short session, but it is
absolutely impossible to tell what the revenue picture is going to be because of
the tax cut question and other competing demands. But I am hopeful. I spent the
last three hours in fact with members of the Board of Trustees talking about our
situation with respect to the Legislature and we are generally optimistic. So I
am confident that we are on the road to addressing the salary problem and
certainly with respect to the $400 tuition increase revenue. That will make a
significant dent, no doubt.

I am very pleased with the administrative reorganization that we were able to
design and implement. It clarifies responsibilities. It enables us to be more
accountable. It establishes the Provost as the chief academic officer. And so far
as I can tell the administrative organization, reorganization, is working well. 
Another major success this year which you don't see immediately the effects of is
fund raising. Last year we finished a phenomenally successful capital campaign. 
And if we had behaved as most institutions that have just gone through a capital
campaign behave, there would have been a significant falloff in fund raising
receipts. In fact there hasn't been. This year we will have raised, when the year
closes, at least much as we raised last year in the last year of the capital
campaign, and it has been extremely important to us to sustain that momentum. It
will enable us now to continue to build toward the billion dollar capital
campaign that is somewhere in our future, probably about five years away. A
billion dollars sounds like a lot of money. For a public institution just a few
years ago, it would have been a lot of money. But our competitors are now in the
midst of billion dollar campaigns. I mean Michigan and Virginia, and we cannot do
less. Our success in the media task capital campaign and more importantly our
success over the past year causes me to be saying that we will be able to pull it
off.

Looking ahead, many of you have heard me say on various occasions, in various
ways, and in fact, some of you are getting tired of hearing me say, that there is
a tidal wave of change that is going to sweep over higher education in the coming
decade or so. I have absolutely no doubt about that, and if we had 30 minutes
more than I'm allowed, I would I think be able to convince you of that. Every
institution will be profoundly changed, some time over the next decade or so. And
we have the luxury at Carolina of being able to put ourselves largely in control
of our own fate. This is a fundamentally strong Institution. You have to look
very hard to find anything at Chapel Hill that is broken and in need of repair. 
We have exceedingly strong faculty. We have an exceedingly strong undergraduate
student body. We are as competitive for students as any institution in the
country. We have a very sound financial base, both with respect to the
appropriation from the Legislature and with respect to our new found prowess in
fund raising. We have a good physical plant, in spite of the fact that a lot of
the classrooms need renovation, the deferred maintenance problem here is
significantly less than the deferred maintenance problem of any institution that
I'm aware of. So we have a lot of strength. We are not in extremis. We are not in
crisis. That means that we have the luxury of taking the time to assess the
changing world around us, to determine where we want to go, to decide how it is
that we need to get there, and then to begin the process of taking ourselves
there. That's a process of discussion, first of all, which I have begun
fruitfully, I think they would tell you, with the Executive Committee of the
Faculty Council this year. I look forward to expanding that dialogue next year. 
And I think that next year will be a year for us collectively as a community to
reflect on the world around us, how it's changing, and how we must change to
accommodate it so that we can assure ourselves that we will provide for the State
of North Carolina a University that takes a leadership position in higher
education in the country for the 21st century, analogous to the leadership
position that we've had in the 20th century. We are blessed to be able to do
this, to undertake this process in a deliberate and deliberative way without the
wolf being at the door. Those are my reflections on the messes that needed to be
cleaned up, successes that we've had and some look at what's ahead for next year.
 I'd be delighted to address any subject or answer any questions.

####
 Well, as you know, or I think you know, and this leads to your
compliment, capital renovation and repair of classrooms is our highest priority
for the capital budget this year. We have received two fairly strong
appropriations over the past -- this current year and last year -- for our
renovation and repair, and we have a new classroom building on the drawing
boards. The site is the corner lot where Swain and Abernethy and the Scuttlebutt
are located. That's the reason that we decided to tear down the Scuttlebutt
rather than to rebuild it. Tear it down we had to do; the question was whether we
rebuilt it or just left the space vacant, and we will leave it vacant because
that's the site of a classroom building. The Kenan-Flagler Business School, as
you probably know, will come on line fairly soon, and when that building is
complete, if will afford 200,000 square feet of new space, and no new programs.
So that's going to relieve the compression substantially. What will happen is
that the Business School will move out of Carroll. Journalism will move into
there. That will be done fairly quickly. And then we will have some swing space
freed up by Journalism that will enable us to begin systematically shutting down
some or all of some buildings for renovation and repair. That's the plan. With
respect to the question of enrollment increases as you appreciate. Right now we
couldn't increase enrollment. For one, we just don't have the space to do that. 
And the crunch is going to come on the State before we could reasonably expect to
build new facilities to accommodate enrollment increases. So while it is
appropriate for us to ask the question -- How could we do our part in
accommodating this 30% increase in the number of high school graduates between
now and the year 2010? -- because of our space problems, there's not a lot that
we can do. And I think any significant increase in enrollment would not be
appropriate for Chapel Hill anyway. I think what we should be doing and we have
begun doing, is to look at alternative mechanisms for addressing this 30%
increase such as telecommunications-based courses delivered to the 54 community
colleges spread around the state. That would be much more cost-effective. And
that's something that we are doing. But a classroom building is on the drawing
boards. The case to be made for it is clear. It's easy. It will move along
through the capital process I am confident. But as soon as Kenan-Flagler opens I
think everybody is going to notice a difference on campus. Although, and when we
build the Black Cultural Center, of course, it will have a number of classrooms
in it as well. We don't know obviously the target date for that because we
haven't completed the fund raising. But that will provide some relief.

####
 Thank you very much.

(...)

####
 Each year we are privileged to confer the Philip and Ruth
Hettleman Awards for outstanding scholarly and artistic achievement by young
faculty. 1986 was the first year of this award,. Established by the late Philip
Hettleman, UNC alumnus and resident of New York State, Philip and Ruth Hettleman.
 The award recognizes outstanding young faculty who themselves symbolize the
aspirations and excellence of the entire faculty in advancing the frontiers of
knowledge and understanding across a broad range of disciplines. I am honored to
announce the awards as follows - and let me ask you please to come forward when I
announce your award.

Corey Dauber, Department of Communication Studies (applause)

Shannon Kenney, Department of Infectious Diseases (applause); and

Holden Thorp, Department of Chemistry (applause)

Professor Jianqing Fan of the Department of Statistics is out of the country and
has already received his award.

It gives me great pleasure to introduce our new Vice Chancellor for Student
Affairs, who comes to us from the University of Maryland Baltimore campus. 
(applause) I have worked with Sue in a previous post and I can tell you that she
is fantastic.

Let me remind you that tomorrow is University Day and it would be a delight to
see all of you. I have been assured that we're going to hear the best University
Day talk that's ever been given. Just to turn up the burner a little bit Doris
Betts is our University Day speaker, and I know that this will be a labor of love
for her and the love that she put into her talk will pour out of it I am sure.

I'm sorry that Dick Richardson is not here. He had to at the last minute to
represent me at another meeting. I want to thank him for the work that he's done
over the past year. Dick has done a superb job, and it's just been a joy to work
with him as it is with Elson and with all the people that I associate with on a
daily basis. I can say the same for Jane Brown. It has been a joy to work with
her, and it has also been very gratifying to work with your Executive Committee. 
This is my fourth Faculty Council committee, actually ninth if you count all the
ones that I worked with a UMass, and I've never worked with a Faculty Council
committee that has given me the degree of sympathetic response that I have from
this committee. I think it's fair to say that as regards this University and
where we want it to go, we are exactly where we want it to go, we are exactly in
sync with each other. And I think that bodes well for us all, and it makes life a
lot more fun. So my thanks go to all those people.

Jane has asked me to report to you on a report that I made to the Advisory Budget
Commission. This commission initiates the budget process every year with visits
to every state agency. They report back to the Governor on the needs of those
agencies and that initiates the budget development process from the Governor's
perspective. The University budget request was approved by the Board of Governors
this morning. So that is already in process. But as regards the Governor's
recommendations to the General Assembly, this is the first step of that process.

The first thing that I did was to report to the Commission on the uses that we
have made of the enhancement funds that we were given by the Legislature this
year. I want to make sure that everybody appreciates the significance of the
budget increase that we got in the form of the $9 million academic enhancement
funds. This appropriation is the result of an effort that I undertook 364 days
ago, University Day last year. We had just been through the tortuous process of
passing the tuition increase that had been approved by the Legislature,. The
Legislature had given our Board permission to approve an across-the-board tuition
increase of $400. And it occurred to me that it would be a show of good faith if
the Legislature were to match the money that students and their parents were
putting into the University to enhance faculty salaries and to enhance the
Library, by giving us a general fund appropriation that would match that amount. 
And so checking with Representative Brubaker, Speaker of the House, and Senator
Basnight, President Pro Tempore of the Senate, I found that the legislative
leadership would be supportive of the idea. In my University Day address last
year I issued a challenge to the Legislature, and, mirabile dictu, they gave us a
budget that matched the revenue that we go from the tuition increase. As we were
working to secure this appropriation, I at several points got inquiries from
members of the Appropriations Committee and from the leadership about what the
University would do with the money. And I wrote them a fairly lengthy letter
explaining that we had three priorities. First was faculty and staff salaries. 
Next was graduate student health insurance if they didn't get funded in the
general budget. After that the other two priorities were technology on campus,
improving our use of technology and our capacity to use technology by providing
more infrastructure for the campus, and then the other priority was outreach to
the public schools, recognizing that probably nothing is more important right now
in this state than securing our future by improving the quality of our public
schools. Those ideas were persuasive and the Legislature gave us the
appropriation. So I wanted to report to the Advisory Budget Commission on the
uses of the funds.

I also took the occasion to say to them what I will say to you - how important it
is to have these funds. This appropriation was funded with recurring revenues,
which means that it will be a permanent increase in our budget. It was the
Legislature's intention, recognizing that the tuition increase was permanent,
that these funds should be permanently put into our budget. And so they have
been. And for that reason they will be available to us to use on an annual basis
for one-time expenditures that will significantly enhance our capacity to improve
in various areas where we recognize the need for improvement, and where we
recognize the need for investment that will keep us abreast of the changes taking
place in the world of higher education, and in the external world. It is, if you
calculate it in these terms, and it is accurate to do so, it is the equivalent of
a $200 million endowment, because it would take about that much money to generate
that level of annual income for discretionary spending. So I told the ABC
Commission how grateful we were for that money; that it was my intention to
report annually to the Legislature on the use of every penny of that money, so
that the Legislature would understand that their investment in the University was
returning dividends to the people of North Carolina.

We have decided to use the enhancement appropriation this year in four areas. The
first is to add a half a percent increase to the faculty salary increase. We and
NC State were left out of the half a percent salary increase funds provided to
other campuses in part because we had the benefit of the $400 increase last year
and had gotten the enhancement funds this year. So that was the first use of the
funds. The second use of the funds, because they did not fund graduate student
health insurance in the general budget, will be to provide graduate student
health insurance. The exact cost of that remains to be seen, but it is in
somewhere in the $2.5 to $4 million dollar range. We will try again to get that
into our base budget next year. While that's wonderful for our graduate program,
it still leaves us at the bottom of the list of top twenty universities in terms
of level of support that we give to graduate students. So it is a beginning, but
it is certainly not the end of our effort to improve the level of support for
graduate students. The other two areas, then, where we will apply these funds for
this year are in building our capacity to use technology on the campus and there
we are still working to try to identify the programs to be funded. Aaron Nelson
in the Student Government this week send me a list of requests of , I think,
about eight areas , all of which are good, all of which would be good
investments. And Elson and Dick will work with Aaron to try to fund as many of
those as we can, as fully as we can.

We also recognize that many of you are in the position that I was in a couple of
years ago. That is, you've got a computer, you use it for word processing, but
not for very much else. And you've always thought that it would be nice to
enhance your lectures with the use of graphics, but you really don't know how to
go about doing that. And the only reason I can say that I was in that situation
and I'm not now is because I spent enough time in our Institute for Academic
Technology, which is headed by Bill Graves, to now understand how I could build
an introductory Philosophy course that would be enhanced or enriched by use of a
CD ROM based imagery and computer graphics. So we want everybody to have the
experience, if they want it, that I've had over the past year. The Provost is
developing a program of grants to faculty members to encourage them to use, to
explore the use of technology in your own teaching. And I'm optimistic that that
will be a great benefit to us. We recognize that we have a long way to go in
bringing ourselves up to the level of Western Carolina, for example, in wiring
our residence halls for technology. We don't really have, we didn't get enough
money out of the Legislature to do that, but the Board of Trustees has decided to
enable us to borrow to accelerate the wiring of the residence halls, so that
every student in her residence hall room can sit down at a PC and plug into the
Internet. Right now, Old East and Old West are the only residence halls in which
students can do that. We have a number of other residence halls where we have
common rooms, computer rooms, but not in students rooms. And just not to
embarrass us, but simply to state the truth, most universities now, public and
private, have given that level of access to their students in their residence
halls. Western Carolina was the first in this state to do so. Wake Forest does
and has gotten a lot of good, well deserved publicity this year for that.

The other area that I mentioned to the Advisory Budget Commission was outreach to
the public schools. And there we have two projects that are well along this year.
 The first is something that goes under the acronym LEARN North Carolina. If I
can remember it, it's Learners and Educators Assistance Resource Network of North
Carolina. What it is is an effort on our part , a partnership of the Institute of
Academic Technology and the School of Education to teach public school teachers
how to use computers in the classroom.. We have four pilot sites: Chatham County,
Johnston County, Charlotte-Mecklenburg, and Buncombe County-Asheville. And the
project, as I say, is underway now. It will be expanded next year. And, again, I
hope that's something the Legislature will see fit to incorporate into our base
budget.

The second project we're doing with the public schools is one that I am
passionate about, and that is to work to reduce attrition among new school
teachers. Probably you've read in the newspaper that if you project in North
Carolina the past two years' attrition forward for five years, those attrition
rates have us losing more than 50% of our new school teachers within five years. 
And that's just unacceptable. It is very often the brightest and best who leave
the teaching profession simply because they're able to easily get a job
elsewhere. In fact I overheard two bank executives talking at a cocktail party in
Charlotte a month ago, and they were saying that the best recruiting ground that
they have for new young bank executives in their training programs is public
school teachers, because they work hard, they're bright, and they make great bank
employees. Well, I don't wish ill to the banking industry in North Carolina, but
we're eating our seed corn if we take teachers out of public schools and send
them into the banking industry. That is shortsighted. So we want to work to
reduce attrition among public school teachers. And the thing that we think we can
do first is by linking them electronically with each other, that is giving them a
computer, a modem, and paying their phone bill, we can enable them to overcome
the sense of isolation that they feel. And I have been acutely sensitized to this
because my wife's daughter was last year a first year teacher in Charlotte, and I
talked with her almost daily about the frustrations that she was experiencing. 
And the thing that was most hurtful to her was that she felt like she was alone
in the Universe, that nobody understood her problem, and nobody had a problem
like hers, and it was just terribly daunting. Well, the truth is that virtually
every new teacher encounters problems they didnít expect, and that's something
that we're going to address. But whatever our success in the future in addressing
that, the truth is that now they are not well prepared for a lot of the problems
that they encounter, so we're going to link them electronically to each other so
that they can talk at the end of the day, via email, about their frustrations,
give coaching tips to each other, and we will link them with master teachers in
the schools who can give presumably even better coaching tips to them, and with
faculty here in the School of Education to monitor and mentor the process. That's
something that I think will go a long way to overcoming the sense of isolation
and frustration that new teachers feel. By the way, our North Carolina Teachers
Fellows Program, which takes the brightest and best from our public high schools
who are willing to go into the teaching profession, gives them tuition support
here, is a program that has the highest attrition rate, so that our best are the
ones who are frustrated most and first and leave soonest. So, we're working with
the North Carolina Teaching Fellows, last year's graduating class from Carolina. 
And they are our pilot project.

Another thing that I talked with the Advisory Budget Commission is something that
I have mentioned to you before, and that is the 40,000 student increase that is
projected for North Carolina between now and I think the next school year of
2010. Present projections show there'll be 40,000 more high school graduates in
the year 2010 than there are this year. That will put an enormous burden on
public universities to absorb those students. The Legislature is acutely aware of
this phenomenon that is looming on the horizon. They have begun asking us what we
are going to do about it. There are campuses in the state that can expand
enrollments, UNC-Charlotte, for example, has plans to double its enrollment,
UNC-Wilmington can increase substantially its enrollment, and on some other
campuses as well. But we can't. We, as you know, are bulging at the seams. Our
classrooms are overscheduled as it is. So we are not in a position to do very
much to absorb more students, but we can do something. We can make better use of
our plant, physical plant, which is underutilized after 5 p.m. in the evenings. 
And so we have begun working to develop a baccalaureate program, a bachelor of
liberal studies that could be offered in the Evening College or in a weekend
college and thereby absorb some of this 40,000 increase that's anticipated. But
we also can, I think, possibly, develop programs that we teach via digital
technology at distant locations in the State of North Carolina. You may have seen
an announcement in yesterday's paper that we have agreed to join a project that
IBM has created called Global Campus, IBM Global Campus. So far we have only an
affirmation to work together. We haven't really agreed to anything beyond that
except that we know that IBM has the infrastructure to deliver distance education
and we have the capacity to supply content. Wake Forest is also working with IBM,
and so is the California State University System. And there are some areas that
we know right away will be served by this project. For example, the Board of
Governors just this morning appropriated, I think it was $350,000, to the School
of Public Health here to do an MPH program for public health practitioners who
are out in public health agencies in the State of North Carolina and who want to
get their Master's degree, upgrade their skills and knowledge. And that will all
be done via distance learning. It will be done via email, CD ROM, interactive
video, and IBM can supply the backbone for that program. So that's an example. We
know that in continuing medical education, continuing dental education, there
will be immediate applications. What we don't know is whether there will be much
to offer in the traditional liberal arts disciplines. If you've given any thought
to putting liberal arts courses on email or digital technology, taking the live
human contact out of it, you see what a challenge it is to sustain the vitality
of it, the vibrancy of it, and the essence of it that makes it meaningful
education. And I am not convinced yet that it can be done in a way that sustains
a level of quality that makes it acceptable. But I suspect it can. I've toyed
with doing it, for example, in an introductory Logic course. Thatís probably the
only Philosophy course I'm willing to concede that could be digitized and taught
as effectively with electronic technology as it can with a professor in a live
classroom. But I'm convinced that you could teach Logic that way. And there are
probably other liberal arts courses that will work that way as well. But the one
thing that we confront is a sea change in the external environment where this
digital technology is going to be everywhere with us, and it's going to change
all of the rules by which universities interact with the external world. I'm
going to say more about that the next time we get together. But I did want to
make you aware of it and to say something about the IBM partnership.

Just a couple of other things. Let me encourage you, if you haven't done so, to
support the bond issue that is before us in the upcoming election. There is a
public referendum to approve a school construction bond. This is something that
was discussed in including with the higher education bond bill a couple of years
ago. It was not - I wasn't around so I'm not sure what the reasoning was. But I
know that at that time public school teachers, principals, superintendents,
boards of education, were very supportive of higher education's bond bill, and we
should now be supportive of theirs, not as tit-for-tat, quid pro quo, but rather
because that is our future. Public schools educate the students who come to us,
and there is a desperate need right now for school construction funding
throughout the State of North Carolina. And so I am lobbying with you to support
the bill and to persuade others to support it as well.

There is a resolution on the Agenda regarding privatization, and let me just say
something about that. The issue of privatization is one that is vexing for me. 
And it should be for all of us. It is a significant morale issue for our
housekeepers and lately our groundskeepers. I'm not sure how they entered the
picture or why their anxieties have been elevated, but they have. We had,
yesterday, day before yesterday, a recognition luncheon for a lot of the
maintenance workers, police, groundskeepers, and food service workers who worked
above and beyond the call of duty during the hurricane to keep students fed and
to maintain the safety on the campus. And when I walked around before the lunch
the anxiety in the room was palpable, and when I spoke to people, it was
palpable. People are afraid of privatization because they are afraid of their
jobs. And I deplore that that's the current mood on campus. If I could do it, I
would just decree that we're not going to privatize housekeeping, we're not going
to privatize groundskeeping, but it's not within my power. This is an issue
that's before the Legislature. It's an issue that's before the Board of
Governors. And it's a complex issue. We already privatize, I think, about a
hundred different services. Some of them, let me just read you a list: vending
services, refuse pickup services, dumpster rental, elevator maintenance services,
pest control, towing services, international mailing services, bookbinding
services, banking, carpet installation, hazardous waste disposal, elevator
maintenance, food service, furniture upholstery, travel services, laundry
services, microfiche services, child care services, and of course, we have
privatized the Lenoir Hall food service and the Carolina Inn. Very often, as in
these cases, it makes sense to privatize, and nobody is hurt by our doing so. The
Carolina Inn is a good example. The last year we operated the Carolina Inn we
lost hundreds of thousands of dollars on the operation of it. We then closed it,
refurbished it, and outsourced, privatized the running of it, contracted it out
to a hotel company, Doubletree. And this year, after all expenses are paid,
including the amortization of the cost of renovation, we will make between
$300,000 and $400,000 profit in a profit-sharing plan with Doubletree. Every
penny of that will come here to the Library for its use. So that is new money. It
will go into the Library budgetósorely needed. And I think it's fair to say that
the employees at the Carolina Inn are reasonably happy. While the housekeepers
there make less than our housekeepers, they participate in a bonus program, an
incentive bonus program, that will result probably in their making as much or
maybe more, and they have significant job advancement possibilities. So, I'm
satisfied that the contracting out the running of the Carolina Inn was a good
idea.

As you know, lately the public has come to expect that government can do
everything better, faster, cheaper, just like private industry. Corporations
discovered that they could save money and improve quality if they focused on
their core competencies, to use the jargon of the day, and contracted out
everything else. That's what led to the Legislature's looking at this issue. It's
something that's in virtually every legislature in the country. It's not unique
to North Carolina, certainly. And they are asking of universities and other state
agencies how you do what you do better, faster, cheaper. We cannot escape from
addressing that question. But in answering it we have to work assiduously to make
sure that there is another consideration, and that is that in the changes that we
makeóand change we must if we're to survive and thriveóin the changes that we
make we are attentive to the human aspect of the consequences of change. And it's
for that reason, that I say that if I had it within my power I'd just say with
respect to housekeeping, we're not going to privatize it. Because the human cost
of doing so, in anxiety and disruption is greater than the value that can be
realized. Now I may be proved wrong on that, but I'm convinced, in talking with
housekeepers that the human cost of doing this, of creating the anxiety we've
already created, (...) in a community that values community, that values the
human interactions, relationships that are established, and where the strength of
the Institution comes largely from our feeling in a sense of a community. What
makes academic communities strong is a sense of common purpose, common interests,
common mission. Anything we do that undercuts or damages that sense of community
ultimately affects the quality of what we do, the quality of education, the
quality of academic research. And so, this is a perplexing, challenging, and
troublesome issue for me, and I just wanted to give you some perspective on the
things that I think about it.

Finally, you also have a report from the Intellectual Climate Task Force today,
and I want to acknowledge especially Pamela Conover and her subcommittee chairs
for the enormous amount of energy and enthusiasm. I've never seen anything quite
like it. I am convinced that it's going to be self generating, that as they get
moving on the substance of their work, the commitment, the quality, the
enthusiasm will only grow. And I hope that they will focus on one issue that
arises when you think about the IBM partnership and the digitization of liberal
arts education, or baccalaureate education, and that is that even if you and I
both know, that even if you could put our courses into digital format, and enable
the student in Kansas to get a degree from the University of North Carolina at
Chapel Hill without ever setting foot on campus, you would have lost something
that is at the very essence of liberal arts education, and that is what goes on
outside the classroom in the context of an academic community. John Dewey
observed that most of the skills that we employ in life are not ratiocinative
skills. They're rather the kinds of skills that you acquire, that you learn by
doing, I think was Dewey's locutionóthat you acquire in the course of interacting
with other people, being in a residential campus setting. So we recognize that a
very great deal of the education that takes place here takes place outside the
classroom. It takes place in interaction between faculty member and student,
student and student, dormitory roommates, athletics, intramural athletics,
student government activities, The Daily Tar Heel, the things that students are
involved in. So that a very great deal of education here for which we are
responsible happens outside the classroom, and I don't think we pay enough
attention to it. I don't think we spend enough time asking ourselves, how could
we make it better, are there parts of it that need to be improved, and it's in
that regard that I trouble and am troubled so over the issue of student drinking.
 Because I know we are failing our students and we are failing to meet the
expectations of their parents and society if we don't address that question. And
I don't pretend that it's easy. Sometimes I get very pessimistic about my ability
to do anything about that issue. But I know that we have a moral imperative to
address the issue. And so (...) address all of the issues associated with
education takes place in a residential setting that goes on outside course
content. It doesn't necessarily go on outside the classroom, but it goes on
outside course content. So I hope the Task Force will look at that. I know that
they will, and I look forward to engaging with them in discussion of those issues
and with you as well as their work moves along. Let me stop there and apologize
for being a little wordyóI didn't intend to go on this longóand address
questions.

####
 Now I'm sorry Dick is at the other meeting. We fully intend to
enable the creation of an environmental program that will have a strong
undergraduate student component. The problem is, as you might have guessed, is
one of resources. We don't have an appropriation that would enable us to fund
that program. But I believe that if there was ever an example of a need that
argued for a reallocation of resources, this is it. The challenge is to work with
deans and chairs and to identify resources that can be reallocated. One of the
challenges of environmental studies, as you appreciate, is that it cuts across a
number of schools. In fact, it's hard to think of a school here that doesn't have
some potential involvement with environmental studies. So, you're talking about
providing the resources, the money, for something that is not housed in one
school. If it was housed just in Public Health, then you could reallocate
resources within Public Health and the Dean presumably would know how to do that.
 But we're talking about reallocation across the campus that is much more
difficult to do. And, so that's where we are stuck right now, but I'm convinced
that we have to do it. And that it is a test of adequacy for our ability to
manage our own activities whether we can do this successfully.

####
 Right. I knew that we had prepared one; I didn't know that it
was here. That was the very first question that I got in my very first meeting of
the Faculty Council last year. And as a result of being sensitized, I went over
to Venable, looked at my old chemistry classroom, and then went around and looked
at all my old classrooms, and I agree that there is a crying need. We have
greatly accelerated renovations. We will accelerate it again if the Legislature
appropriates roughly the same amount of money this next year for classroom
renovation as we had last year, which is really a blessing that the State
Legislature is appropriating this much money. I know that per square foot the
University of North Carolina System is getting more than any other public
university in the country for renovation and repair right now. And so we'll move
again quickly. With respect to retrofitting classrooms for technology, we're
focusing first on the new buildings to make sure that we don't miss the
opportunity to wire them the first time correctly. And we're going back and
looking at plans to do that. And then the Technology Task Force will identify
other classrooms. And this may require some reshuffling of the uses of classrooms
and the designation of classrooms or the priority designation for some
departments. Because what you want to do is to do some "smart classrooms," in the
jargon of the day that could be used by every department. That's what we're
trying to do.

####
 It's $125 million system-wide. Elson, do you remember what our
appropriation was?

####
 Yes. Anything else? Well, again, I apologize for going on so
long. Thank you.

(The following occurred later in the proceedings)

####
 You're obviously correct. We are a 200 year old campus, and some
of our buildings show it. Probably every classroom that was built before the last
ten years needs renovating. We are moving as quickly as the Legislature
appropriates money to enable us to do so, and we have a priority list. And
probably the classrooms that you referred to, as bad as they are, are not very
high on the priority list, because there are others that are more crying out for
renovation. We're moving as rapidly as we can. As I say, I was very frustrated
this summer, because I thought the day after classes ended, the workmen would
swarm over campus and we would be well underway, and it took six weeks. But we
are cognizant of the problem. We're moving as quickly as we can. And we have
accelerated this classroom renovation to the highest priority for use of
renovation funds. And we did that directly as a result of this meeting last year.

####
 With regards to ends, not necessarily as to means for achieving.

####
 I just wanted to say I don't think anything is as important in
attracting bright students as faculty participation in recruitment. So I heartily
endorse that we pass it unanimously.

####
 Just a few minutes ago I stood on the steps of South Building
with three members of the Housekeepers Association steering committee and read to
the press the following statement: "The University and the Housekeepers
Association steering committee have agreed in principle to resolve their dispute
and have made substantial progress toward finalizing that agreement. The parties
need a brief additional period of time to consult with their various
constituencies before presenting a definitive agreement to the presiding
administrative law judge." It was the happiest moment in my 14 months at Chapel
Hill.

(applause)

I wish I could tell you more--thank you--I wish I could say more, but we have
agreed that we won't until we've reached absolute, final agreement and all of the
various constituencies have signed on, and so, regretfully, I will not be able to
say anything else about it, except to tell you that I am enormously pleased.

The glass ceiling report: I'm very pleased to have it, but I want to make sure
that everybody understands that I think it's essential that we address the
concerns that have been expressed in the report, and we will be conducting for
Health Affairs the same study that we did for Academic Affairs, to ensure that
we've got comparable data for the entire University, and that we will be
continuing to collect data on an annual basis.

There's been much discussion about the classroom repair and renovation, and I
just wanted to give you, as I said I would last time, a report with respect to
where we are. We have designated $1.7 million for classroom improvements. The
Classroom Advisory Committee--that's the faculty committee that I keep referring
to--evaluated the various needs, and they've identified 46 classrooms most in
need. Those renovations will begin almost immediately and will continue through
the spring and summer terms. Classrooms will be taken off-line as the renovations
begin. The work will be done by our Physical Plant and by outside contractors,
and I obviously beg your indulgence for the inconvenience as we shift classrooms
around. I assure you the inconvenience will be rewarded at the end of this
process. We also have $1.7 million designated for lecture hall improvements. 
Highest priority for those go to Venable 207 and 268. Anybody who's seen those
classrooms or those lecture halls will understand why. For those we've received
the architect's proposals, and we have plans to pull them off-line beginning late
spring, and they will be off-line through the summer and the fall of '97. That
work will be done by outside contractors. Murphey Hall: $2 million has been set
aside. We have received the architect's proposal, and will begin renovation in
the summer. The Business School, as you know, will vacate Carroll Hall the summer
of '97. Carroll Hall renovations will take place through the end of '97 and '98,
and the School of Journalism will move in in the fall of '98. Howell Hall will be
designated as swing space during the period of renovations, and Murphey will be
vacated and renovated in '98 and '99.

Last week I asked the Provost to begin inaugurating an undergraduate major in
Environmental Studies. We will present it to the President and then to the Board
of Governors, for their approval. We hope to have it up and running in the fall
of '98, but by the fall of '97 we will have identified the courses so that
students will know what will be required in the major and can begin taking them. 
We haven't worked out the details of the administrative organization of the
program. That is one of the things that has held us up for so long. But when the
students came and presented me with the six petitions and urged what they've been
urging for so long, it seemed to me that it was imprudent to wait any longer. In
fact we were beginning to look silly, I thought, and so I've asked the Provost
just to go ahead and we will iron out the problems as we move along with the
development of the major.

Some of you know that the administration of the M.P.A. program is moving from
Political Science to the Institute of Government, and the Provost has been in
charge of that process, has done a good job with it. The program will continue to
be jointly taught by the Political Science Department and members of the
Institute.

You read in the local paper the report on advising that was done by General
Administration. I have met recently with the Student Congress, and I think it's
fair to say the strongest expression of discontent that I've received in that
meeting, where I invited them to share all of their discontents with me, the
strongest expression of discontent came with respect to advising, and I think we
have a problem. Now I gave a litany of my experience with advising at all of the
posts that I've held previously, and pronounced that I thought that advising was
pretty good here. I still believe that, but the fact of the matter is that the
General Administration did a survey of graduating seniors who found only 47%
satisfaction here, which put us 13 points below the next lowest institution in
the UNC System, and 24 points below the median for the universities in the
System. And I think you will agree with me that we have a challenge here. We owe
it to our students to figure out how we can do a better job and get a higher
satisfaction rating. So I'm going to discuss with the Intellectual Climate Task
Force the possibly of adding this as an additional charge, supplemented by
additional personnel as may be needed. But I think we rightly know we owe it to
our students to get to the bottom of the problems and do a better job, and I'm
committed to doing whatever is necessary to enable us to do that.

You have on your Agenda for today post-tenure review. This is an issue that I
have thought a lot about for the last several years, and an issue that I've
talked a lot about in North Carolina since I started over a year ago meeting
individually with members of the Legislature, and I've looked closely at the
situation here, especially with the help of the Chancellor's Advisory Committee. 
It is obvious to me that we don't have a problem which post-tenure review will
address except that we have a problem with perception out in the broader world. 
And for that reason I think we have to do something. But we have so many
processes of review already for post tenured faculty that it is arguably
excessively burdensome already and anything additional that we did I think would
be supererogatory, and I hope that what we will be able to do is simply to bundle
together the best of what we are already doing and let that we our post-tenure
review process. But obviously it merits discussion by you before I pronounce what
we need to do. But the one thing I am absolutely sure of, beyond the shadow of a
doubt, and that is that we don't have deadwood. The local culture, the values,
the intellectual values, of this campus have ensured that all of us have remained
adequately productive in the scholarly arena and in the teaching arena, and we
just don't have a problem. But, as I say, what counts in the world of politics is
perception more than reality, and so I regard it as my job to change the
perception in the minds of members of the Legislature and the broader world, and
will be looking for your help in doing that. But I'm happy to say that we just
don't have a problem. Now I think it's also important that we defend more
vocally, more articulately, than we have, the whole institution of tenure. People
tend to defend it by pointing to the initial reasons for it, having to do with
academic freedom, and the detractors of tenure will tell you that there are other
ways of guaranteeing academic freedoms, such as the First Amendment and
contractual rights, and so forth. But there are many other benefits from a system
of tenure well administered as ours is, and one just occurs to me from my own
field. It promotes inter-disciplinary work in a way that if you didn't have it I
don't think could be encouraged. For example, in Philosophy I remember when
Applied Ethics first came to the fore, and now every university has Applied
Ethics courses--Legal Ethics and Environmental Ethics and Business Ethics and
Medical Ethics--as a standard part of the Philosophy curriculum. But I well
remember when those were radical courses, and, while undergraduates wanted them,
faculty were reluctant to teach them, especially junior faculty, and so people
who had the security of tenure took on those courses first. They really brought
about almost a revolutionary change in undergraduate teaching in Philosophy. So
that is another benefit of tenure. And I think we need to be more articulate in
defending the institution of tenure, especially where we can demonstrate, as we
can here, that it doesn't have the negative consequences that it is sometimes
seen to have elsewhere.

You're also going to discuss today the proposed bus tour for new faculty, or
relatively new faculty. That is something that I know, as a result of my travels
around the state, will benefit us enormously. Everybody knows that I believe the
biggest problem that I faced when I arrived here last year was the perception out
in the rest of the state that somehow Chapel Hill was aloof from the state, had
an image of being detached, not interested in the rest of the state. That, I'm
happy to say, is an image that we're having a fair amount of success dispelling
as we travel around the state and build support in the state. On the hundred
county tour that Iíve undertaken, I go into a part of the state that I haven't
been in before, typically will visit and meet with public school officials there,
with business and community leaders, and always with the legislators in that
district. And I think that this effort is going to be a great benefit to us. It
is building a lot of support for Chapel Hill out in the rest of the state, and is
dissolving this image of us as somehow aloof from the rest of the state. And one
of the things that I talk about out there is all the ways that we benefit every
corner of the state - which we do.

Just one more point before I stop, and that is, I keep hearing misgivings about
my drumbeat theme that we have to change, especially that we have to adopt the
new digital technologies. And I just want to make it clear that when I talk about
our changing, I'm talking about our changing in order to remain the same. The
strength of Carolina, historically, has been in its scholarship and its teaching.
 Its strength in the future will be in its scholarship and in its teaching. My
vision for Carolina is what I assume is the vision of everybody here, and that is
that we will occupy in American higher education the position of leadership in
the 21st Century that we have in the 20th Century. But in order to do that I
think we have to take cognizance of the changing external environment, and in
competition for students I can tell you that bringing digital technology into the
classroom is something that we absolutely have to do, and sooner rather than
later. I am anxious, frankly, that we are not doing it as fast as I believe we
should. And that's the reason that I've identified the flexible funds this year
for the faculty grant program. We have received such good proposals that I'm
going to take funds that I had been holding back and commit them to funding more
grants in that program than we had originally intended to fund, because I think
that's just giving faculty the freedom, the latitude to experiment with the best
way to get digital technology in the classroom. The other area where digital
technology is going to bring about, I think, revolutionary changes in higher
education is in distance learning. And, as you know, if you've been reading my
remarks in the paper, I think we have a responsibility to do what we can to make
education available to citizens in the state who would not otherwise have access
education at Chapel Hill for various reasons. And we can do that through digital
learning. But I also believe, very strongly, that within the next five years
you're going to see the major universities in this country, and primarily the
public universities, are going to be developing digital education, distance
learning for worldwide markets. There is an enormous thirst out there, especially
in developing nations, for American higher education, taught in English, which
has become the international language of business and commerce and science. Those
universities that get into this arena first are going to realize enormous
revenues, simply through volume of transactions, in distance learning. And the
question is, well, what will they do with those revenues? What they will do with
those revenues is supplement existing budgets, which will enable them to repair
classroom facilities, pay graduate students more, pay faculty more, that is, win
the competitive race that we are in with our competition. And so, if we want to
occupy this position of leadership that I think we all want to occupy, we had
best recognize what the competition is beginning to do and that we need to be
doing it ourselves as well. And so that's the nature of my passion of getting
into the business of distance education. Obviously, in anything like that the
challenge is to maintain quality control so that we don't , we don't lose any
quality and that we are proud of the degrees that we offer, the courses, through
distance learning, and that will be our passion as we move forward.

There's much else that I'd like to say, but let me stop there, and invite
questions or comments. Okay. I have to take leave of you about 4:00 to go off to
a fund-raising event, and I apologize in advance for that. Thank you.

####
 I'm out-of-order, but may I say something? Steve is absolutely
right. Our benefits level is lower. There's a greater gap between our benefits
and those of our benchmark institutions, which now are Michigan and Virginia,
than there is a gap between our salaries. I'm aware of that. What I'm working on
with the Legislature is a compensation package, which includes salary and
benefits. But you're absolutely right that we have not kept pace with the
benefits. And I just wanted to acknowledge that and let you know that I'm working
on it.

####
 Please stand for a moment of respectful silence.

####
 Jane has given me thirteen minutes.

(laughter)

I put a couple of handouts on the back table. I hope that you found them. The
first one is an unveiling of sorts. These are the Chancellor's Task Force for
Instructional Technology Faculty Awards. This is the program that I announced to
you earlier, that comes courtesy of the Legislature's budget increase -- the
so-called academic enhancement funds that were given to us by the Legislature in
the last budget in recognition of the contribution that students and their
parents are making to the cost of education, the increased contribution
representing a $400 per student tuition increase that was levied this fall. And
when I was arguing with the Legislature for this appropriation, I was asked what
would I do with the money, and, as I've told you, I said that the first priority
would be graduate student health insurance. The second priority would be
technology investment on campus to bring us up to speed in comparison with other
major universities. And the third priority would be outreach to the public
schools. This represents an investment in the second priority, that is, that of
instructional technology, and, as most of you know, the way the program came
about, we issued a request for proposals. Dick Richardson appointed a committee
-- or perhaps I appointed it -- but Dick constituted it, and these are the first
awards, there's represented here about, well, 1.25, 1.26 million dollars. I was
enormously pleased with the submissions that we received. When we decided to do
this, I thought if we got 20 good proposals, it would be a real victory. We got
120 good proposals. And so, what I've done is to go back, when I saw how good the
proposals were -- I went back and added a couple of hundred thousand dollars. 
That didn't satisfy the need; there are a lot more good proposals. We're
scrounging now to come up with more discretionary money that we can put into the
pot, and the task force will go back to the proposals and do another review and
make more awards. But I wanted you to see, before the semester ended, the kind of
awards, the kind of projects that are being funded, and we have listed here also
the amounts. I think the largest is probably the Department of Music, the digital
technology classroom. We are, in Music, as we are in just about every area,
behind the curve of the best universities. I recently had occasion to visit the
Music Department at the University of Kentucky, and saw their very impressive
digital music technology. And this will help to bring us up to speed. And that is
there reason for the size of the grant, is that this is just an expensive area,
and when you're building from virtually nothing, it takes a lot of money to do
so. So I thank all of those who submitted proposals. I congratulate those who
already know now that they have submitted a winning proposal, and I wish well
those who are still waiting to hear from the committee. I just couldn't be more
pleased with these grants, and I think that you'll see major results come from
them. And I think this is the beginning of a shift of focus on campus in the way
that we use technology to enhance undergraduate education. And graduate education
and research will be secondary beneficiaries of what we're doing. Let me also say
something to those of you who didn't even think of submitting a proposal because
you couldn't imagine how you might use a technology grant. I'm probably in your
camp -- I can't imagine what I would do as a Philosophy teacher to make use of a
grant like this, and so I want to make sure that people understand that good
teaching, even great teaching, can take place with no more technology than even a
piece of chalk and a blackboard. I understand that. But we are in an era when
good teaching can be in many cases enhanced by technology.

I also put on the table a copy of the criteria that U.S. News and World Report
uses to rate universities in its annual rating. I realized from some discussions
that I've had with a number of members of faculty who were expressing some
reservations about the Chancellor's apparent obsession with jumping over Virginia
and Michigan in the U.S. News and World Report rating to be the best public
university. And I wanted you to see that if we were setting out to improve
Carolina, as we should always be working to do, these are roughly the measures
that we would use. And that all of us will benefit from our effort to climb in
the rankings. For example, just to be self-interested about it, faculty salaries
are one of the measures, or total faculty compensation, that is used. Another
measure that's used is the quality of the student body, measured by the quality
of the incoming class. So all of these are indices with respect to which we
should want to move up in the rankings, and we will all benefit from the exercise
to do so. The U.S. News and World Report is simply a way of keeping score, and it
is also an acknowledgment that whatever we may think of ratings like this -- and
there seems to be an American obsession now with ranking things -- whatever we
may think of that obsession, the truth is that the public pays attention,
prospective students pay attention to these rankings. Universities will tell you
that they can track their admissions pool, application pool, by where they are in
the U.S. News and World Report survey, and whether they climb or fall in the
succeeding year. And so the world does pay attention to it, and so, for that
reason we need to do so as well.

We are beginning now to put together our budget priorities for the next session,
full session, of the Legislature. I have already begun speaking with members of
the Legislature about our budget priorities. As you understand, we are part of
the general University System. The Board of Governors has established its
priorities in consultation -- the President recommended them to the Board in
consultation with the chancellors, and you've probably already seen some notice
of that in the Press. As I talk with members of the Legislature, obviously in
talking with them I will emphasize various areas of importance to us all,
consistent with the Board of Governors' priorities, but paying, making special
emphasis with respect to those that are of greatest importance to us. My highest
priority this year will be, as it was last year, salaries. My objective is to get
us up to the level of Virginia at the Full Professor rank. We are, last time I
looked, and we don't know what Virginia's salaries are this year, but last year
we were about $10,000 on the average per faculty member below the University of
Virginia -- at the Full Professor level. Now, at the Assistant Professor level we
were, I think, about dead even with them last year, which I think is very wise
for us to have put our investment dollars in attracting the best faculty at the
entry level rank. But it is foolish of us to under-compensate, relative to the
competition, our senior faculty. And so my objective is to Full Professor and
Associate Professor salaries up to the level of the University of Virginia. 
That's the indexical institution that we use: it's public; it's nearby; the
Legislature understands that we are in economic competition with the State of
Virginia, so it's a fairly easy sell to make that we ought to be paying salaries
that are competitive with the University of Virginia. Other priorities that I'm
emphasizing: the graduate student heath insurance -- we funded it this year, but
we funded it out of the enhancement money that we received, so it would be good
to free up those enhancement dollars to invest elsewhere. And that's a priority
of mine. Another priority is for technology. The Board of Governors has asked the
Legislature for a substantial amount of funding for technology -- I think if the
full amount were funded, there would be in excess of $3 million, as I recall,
coming to this campus. So it is an important item for us. Libraries continue to
be a priority. Another which we had last year is reduction in the overhead
receipts for sponsored research. Right now the State recaptures 10% of our
overhead funds, and some states will give, en--, incentive funding to their
public universities to encourage them to get grants and contracts from outside. 
And while we would like to have incentive funding, we'll begin with, at least,
their not taking the money away from us and providing a disincentive for our
faculty to compete for grants and contracts. So, that is another priority. An
additional priority is graduate student tuition remissions. We did get a number
this year from the Legislature. We are asking for more next year. Another area
that we are seeking some help from the Legislature is in he area of, what we are
calling, regulatory relief. That means that, in particular, we would like to be
enabled to manage our own construction contracts and our process for designing
buildings, There is, we think, a possibility of doing it with considerable
greater speed and less cost if the General Administration is able to oversee
construction projects on the campus. I've seen this done in other state
universities and it works very well. With respect to capital budget, we are
asking for a number of projects. One is the renovation of the House Undergraduate
Library; that's a $6 million item. Another is addition to the Beard Hall School
of Pharmacy; that's an 8, $9 million item. We are asking permission to build a
new Student Services building; that would be $18 million. That would be a
self-liquidating project. Another is the Institute of Government building, which
will virtually double the size of the Institute of Government. And, finally, the
Hill Hall Music Library addition, which is, I think, is an $8 million item. So
those are all the capital projects. There're in the Que. Obviously they will not
all be funded this year, but we expect that eventually they will. They are all
easily defendable priorities.

And finally, some of you may have noticed that today a construction fence has
gone up around the Old Well. It looks unsightly, and I wanted to explain that to
you. We've decided to dismantle the Old Well and replace it with a fully
digitized holographic image

(laughter)

thus we will have the world's first virtual Old Well. The truth is, the paint had
begun to peel, and we're replacing the paint. It's lead-based paint, so we had to
build a fence around it to keep it -- but not the white columns. If you've been
eating little chips of paint from the white columns, that's okay. It's the dome
that's lead-based paint. So, in order to remove it, we have to keep the children
away from it.

Thanks for your attention. I'd be happy to answer any questions or address any
topics that anyone wants. Okay. Thank you, Jane.