On most fronts the new academic year is off to an excellent start. This fall we have record enrollment at the University — 20,969 students — and we were able to produce that increase of over 630 students without compromising the quality of our student body. In fact we were able to produce that increase in enrollment while simultaneously increasing student quality. The average ACT remained the same, which means, on average, the typical student admitted to the University this fall was in the top quarter of his or her high school class.

Last year, in the entering class we had 52 National Merit or National Achievement Scholars. This fall we had over 90. The ability of The University of Alabama to attract the best and brightest — which is the cornerstone of our vision for the future of the University — is being turned into a reality by the remarkably effective recruiting efforts of our entire academic community. Roger Thompson and his staff in enrollment services are to be commended for an extraordinary effort this past year, but the faculty and the staff and the student body of this University should also be commended because the success of our recruiting effort has not rested on enrollment services alone.

We have been able to make the recruiting process at The University of Alabama a very personal process. We are connecting more effectively and more frequently with students, and, when faculty and currently enrolled students contact potential students, we send a very powerful message to their parents — and parents are increasingly supportive of their children attending the University. We've set a very aggressive growth goal over the next decade for the University. We have said we will grow to 28,000 students.

We cannot achieve that growth depending solely on the state of Alabama. Over the next decade the number of graduates from Alabama high schools will only grow from 3 to 4 percent. If we are to grow The University of Alabama, facing the relatively low increase in high school graduation rates within our own state, we have to look elsewhere. We've chosen to recruit aggressively in Texas, Georgia and Florida. Texas' high school graduation rate is projected to grow by over 30 percent in the next decade, Georgia by over 25 percent, and, in Florida, the figures are comparable. We've selected those states also because they share one other attribute in common. Their flagship institutions are finding it increasingly difficult to accommodate the student populations of their states. We have completed hiring four new recruiters. One will live and work in Dallas, one in Houston, one in Atlanta and one in Florida.

By recruiting aggressively in these states, we will be able to stay on our trajectory to slowly and steadily grow the student body of The University of Alabama — growing in quality as well as quantity. One indication that we have not sacrificed quality in our effort to grow is Honors College. This fall we enrolled 583 students in Honors College, up from 430 the year before — an increase of over 35 percent.

The merit raise pools for faculty and staff this year were the greatest in well over a decade. When I arrived on campus, I was told that one of our goals was within five years to reach the Southern University Group average for faculty salaries. As I said at the time, setting a five-year goal of aspiring to be average is not a particularly strong motivation for anyone. The personal goal that I have set is to reach the 75th percentile within five years. Almost everyone I've talked to — faculty and staff — has said we won't get there. They may be right, but I would rather fall a few percentage points short of the 75th percentile than I would breathe a sigh of relief as I slid over the 50th percentile. We cannot attract and retain the faculty and staff that this University needs and that the young people we are recruiting deserve if we do not have a competitive salary structure. And we will have a competitive salary structure.

Our construction activities are progressing very well. The three new residence halls are on schedule. The Human Environmental Sciences research building is on schedule. In January, Bryant Hall, the new athletic center, will open and John Deaver and his staff will continue their excellent work helping our student athletes be successful in the classroom. Plans for the renovation of Coleman Coliseum are on track, and immediately after football season, the renovation of the football stadium will begin. The tennis and soccer facilities have recently opened.

Three new residence halls are under construction and will open in the fall of 2005. When the Board of Trustees convenes next week, we will ask preliminary permission for three additional residence halls which will be scheduled to open in the fall of 2006 when The University of Alabama will go to mandatory freshman housing.

Deferred maintenance remains an important issue on our campus, as it does on any university campus where the university has been around for a large number of years. The challenge is somewhat greater on our campus because we have not paid adequate attention to maintenance. This spring we had a bond offering of $229 million that sold out in less than half a day at three basis points less than we had forecasted — a very strong endorsement from the financial community. Some $30 million of that $229 million will go to a deferred maintenance program that is beginning this semester.

We are very optimistic that we have identified a source of federal funds that will also support our renovation efforts and that those federal funds will be available at approximately the same time that we are winding down the renovation and repair efforts that will be funded with the $30 million of bond funds.

Unfortunately, one part of our fall semester that did not begin well was the tragedy involving Kirk Wilder. I've had an opportunity to talk with both of his parents and to meet with his father. We are still hopeful that he will recover, but currently his condition is serious.

Without taking anything away from the seriousness of that tragedy, if you compare figures involving safety on the campus of The University of Alabama with other major public universities, we are, at the very least, at the average, if not above average, in terms of safety. The fact that we are taking steps to make the campus even safer is not a signal that the campus is not safe, it's a signal that The University of Alabama recognizes that safety has many dimensions. Our students, faculty and staff must be safe, which they already are. They must feel safe, and we can take steps that will increase the likelihood that they do feel safe. And the campus must be perceived as being committed to and caring about safety. In the weeks ahead, the University will take steps that will send a clear and unequivocal signal to all who are interested in this University that we have no higher priority than the safety of our students, faculty and staff.

We've generated a substantial amount of momentum this past year, and I believe we can increase that level of momentum in the coming academic year. To do so we will have to maintain the focus, the commitment to excellence on every level and the sense of urgency that has produced the dramatic progress that we have realized this year. That progress should not be a signal to relax; it should be a signal to renew our commitment to the sense of urgency and the focus and the commitment to excellence that has produced the progress of this past year.

This year, we will again approach the Board of Trustees for a modest increase in tuition, we will produce continued growth in enrollment, we will continue to emphasize out-of-state recruitment because out-of-state students pay over three times in-state tuition. From modest tuition increases, from growth, from changing the revenue mix by increasing the percentage of out-of-state students, we will be able to generate the stream of resources necessary to allow the University to continue to make progress in becoming a Tier One university.

I believe that under Vice President Margaret King's leadership Student Affairs can become one of the defining attributes of the University, playing a pivotal role in shaping the quality of student life on this campus. Much of the learning that takes place at any university takes place outside the classroom and apart from the classroom. Under Dr. King's leadership, I believe Student Affairs will create an environment on this campus that will become one of the signature features of the University and help us attract the best and brightest.

Distance education will receive significantly more emphasis. The University of Alabama taught courses last year in 18 countries. We had nearly 3,000 students on our Gadsden campus. We are going to continue to expand both our international teaching opportunities as well as the Gadsden campus.

While we already have entire degree programs available online, online education must assume a more important role on our campus. Providing educational opportunity is an integral part of our mission and our responsibility. Online education does not just help those who cannot come to campus. It can be invaluable to the men and women enrolled on this campus. Many of our students, if not most of our students, have to work. Juggling work schedules and class schedules becomes a challenge. As we are able to put more of our undergraduate curriculum online, the ability of our young men and women to make more rapid progress toward their degrees will increase. If we can make it possible for our students to both work and make good progress toward their degrees, we will be serving them well and serving the University and the state well.

The area of research will receive significantly more emphasis in the coming year. Under Vice President Keith McDowell, we are strengthening the support service for research. But as a faculty, we have an issue that is imperative to address, and that is our ability to capture the full measure of indirect costs. Last fiscal year we left approximately 8 percentage points of indirect costs that the University fully qualified for on the table. Ball park estimate - three million dollars that we could have had to support faculty research, to provide start- up funds, to strengthen research labs, we left on the table.

Far too many of us still believe that the best way we can be competitive is to keep indirect costs requests in our grant and contract proposals as low as possible. That is not true. Proposals are evaluated on their merits. The universities we aspire to be like capture their indirect costs. In large part, these universities have the research support that we do not because they capture all of their indirect costs. Our indirect costs recovery rate should be 49 percent. We are currently at 41 percent. We will be going to Washington in the near future to ask that our rate be increased. In reality, we will not close that distance in a single year. Optimistically, we will see at least a couple of percentage points added to our indirect cost rate.

Another factor that is holding down our ability to capture our full indirect cost rate is cost sharing. Neither Vice-President McDowell nor I am suggesting that the dollars that have gone to our faculty in the form of cost sharing haven't been needed, but there are ways to provide that same financial support without using the cost-sharing mechanism. The faculty of this University is strong enough to compete without such a level of reliance on cost sharing — strong enough to compete requesting the full measure of indirect costs that we need to support our research enterprise.

When the Board of Trustees meets next week, I am confident that we will obtain approval for a capital campaign. The quiet phase of that campaign will end early next fall. The goal, when it is announced next fall, will be very aggressive. The theme of this capital campaign will be "The Campaign For Students" because the largest single category of funds that we will be raising will be student scholarship support. We must have more scholarship support if we are to compete for the best and the brightest.

The people across the state of Alabama are sensing what we sense here on campus — momentum, a growing sense of pride, a growing sense of excitement. We have a very clear vision of what we want our University to be, and we have the commitment and the people to turn that vision into a reality. Resources will not stop us from moving forward. We will generate the resources one way or the other. We have made a good beginning on one of the most important transitions in the history of The University of Alabama. That transition will be a work in progress for many years, but the goal is worthy of our sustained commitment and our sustained efforts.