Good afternoon. A warm welcome to all of you. This year we have expanded the audience to include staff from across the University as well as students. That was done at my request. It was not done to alter the traditional focus of honoring faculty service and distinguished accomplishments, but rather to enhance the visibility of those faculty we honor.

At the same time, this expanded audience is intended to symbolize an attempt to improve communication; to expand the circle of Creighton colleagues who can help tell the Creighton story.

There is a Mexican proverb that I am very fond of: "La gente hablando se entiende." "People understand each other by talking."

While I am doing the talking today, these comments are also an invitation for dialogue and conversation, as well as action. For the areas addressed below all have a direct impact on who we are as an institution, what we aspire to achieve in the not too distant future and the genuine challenges before us on multiple fronts.

In truth, this is not the convocation speech I would like to give. I would rather stand before you and exhort you to strive for greater things, promising greater rewards for your efforts, and look to the future with unbridled optimism. That would be easier, to be sure; but it would not be beneficial to the task at hand.

The comments that follow fall into three interrelated parts: (1) a review of the institutional response to the challenges of my Founders Day address of 2001; (2) an update on the status of planning; and (3) ending with an overview of the present climate and the concomitant challenges facing us.

To paraphrase another president: “We are at war, we are in a recession and we have our domestic challenges, but the state of the university is strong."

Last February I asked you to reflect on who we were as a University community, how we interacted with one another, how we addressed differences of race, gender, belief, orientation or disability; how our classrooms and clinics could be settings of empowerment for our students beyond the quality of their education.

I raised that challenge because I believe it is the responsibility of every person in the employ of the University to live out the Jesuit commitment of cura personalis - to have a personal care for each student and for each other.

I raised that challenge because I believe our curricula, student leadership opportunities and administrative policies need to communicate a stronger message of inclusion of all sectors. As Creighton seeks diversity in its students, faculty and staff, we have to prepare a campus climate that is welcoming, encouraging and responsive. We have to modify our way of thinking and acting to address this new reality.

I raised this challenge, finally, because the student climate survey indicated that the student subculture -- of student to student -- reflected other campuses and the nation as a whole, in that it is characterized at times with incivility and rudeness in all of its forms. These patterns are exacerbated by race, gender, belief and orientation.

Simply put, that kind of action is not tolerated on this campus, which is guided by Catholic ideals. Our role as educators must be to work actively to transform our students' hearts and minds, so that they can become women and men for and in solidarity with others.

At the heart of that first challenge was this question: how do we actively promote and reward development of a student subculture that is centered in mutual respect for differences and a celebration of human connectedness?

Specifically, I asked each area within the University to address the strong and weak qualities of its unique faculty, staff and student subculture.

What was the follow-up, the response, to this institution-wide challenge, you ask?

The response was overwhelming, not just quantitatively but also qualitatively. I was deeply gratified by the thoughtfulness of your responses.

You responded with scores of reflective comments on what we are doing well, what needs improvement, and recommendations for future action. I cannot list them all but I will share a sample:

We are doing well:
* the diversity component in the core curriculum;
* the diversity project in Arts and Sciences;
* service learning opportunities;
* Diversity Week;
* atmosphere of religious tolerance;
* interdisciplinary programs in areas of Native American studies, Black studies, women's and gender studies;
* enhancing the prominence of women in administrative decision-making circles;
* enhanced visibility of multicultural student services;
* establishment of the Office of Minority Affairs for the Health Sciences.

What we are not doing well or needs improvement:
* handicap accessibility across campus;
* need for more minority focused scholarships across all divisions;
* need to recruit and retain more faculty of color and more Native American faculty and staff;
* enhanced involvement with neighboring minority communities;
* increased participation of minority students in student government positions;
* need for diversity issues to become part of faculty development;
* work on student sensitivity towards minority patients in clinics;
* campus-wide recognition of minority student needs and accomplishments;
* create an environment that recognizes and values the nontraditional student across all programs;
* enhance cultural diversity in the Health Sciences’ curricula;
* better trained pre-health science advisors;
* be more attentive to student subcultures that involve students who must work, with disabilities, who are single parents, have financial concerns or history of abuse or feel isolated and unconnected with campus life;
* come to a common definition of “minority.”

A sampling of University-wide recommendations:
* increase funding for diversity projects across campus;
* develop a zero-tolerance policy on discrimination and harassment of any description;
* enhance training for all supervisors -- in academic and support areas -- to deal with diversity and cultural sensitivity;
* work to create a network of services to support the "at risk student;"
* Health Science areas should enhance education on multicultural health issues;
* clarify the importance of service activities directly related to Creighton's mission and values in rank and tenure decisions;
* make supervisory training mandatory to foster respectful treatment of students, patients, and clients;
* offer a noncredit elementary Spanish course for staff working directly with Spanish speaking employees, clients and patients;
* be more generous in expressing gratitude for a job well done and for going that extra mile or extra hour.

While not an exhaustive listing in any of the above categories, this does give you a flavor of the serious and reflective responses that have come in from across the campus to address this key concern of mutual respect as we strive to build a meaningful and useful community. The new challenge is to implement these recommendations and to work on changing the way we think, act and respond to individuals and issues related to diversity.

Action will follow from these words. Several initiatives in human resources are already in place.

Last February I also spoke of a renewal of Creighton's institutional self. This involved three actions: academic program review, an incentivized new program development policy, and enhanced extramural funding.

There has been no progress on the incentivized new program front, but we have made limited progress on the other two. Select program reviews are taking place, but not University-wide. We had several national accreditation on-site visits, which resulted in "excellent" reviews for programs in occupational therapy, physical therapy and nursing. And the asynchronous web-based Doctor of Pharmacy recently won approval. Congratulations to all of those involved and thank you.

There remains, however, a need for regular program review across all divisions within the University. Our present fiscal situation suggests, among other things, that we are too fat! The increase in credit hours has not kept up with the increase in faculty and staff hirings. So an "academic Weight Watchers program" will be introduced at each college and school level to review and determine their essential needs.

The Creighton Institute housed in west Omaha has been restructured, resulting in the merger of the Institute with University College. Our Informational Technology degree programs remain intact. And professional development and certificate programs will be offered in west Omaha.

We have made some significant progress in enhancing our external funding for university-based research. Fiscal year 2000-2001 has brought a 40% increase in NIH funds for the School of Medicine. For the last year Creighton faculty throughout the University have been awarded extramural funds in excess of $26 million for training, service, and research activities. This represents a 5% increase over the prior year and the trend is continuing to go in the right direction. Again, congratulations to those involved.

Given all of this, I continue to have great expectations for you. With serious program review, creative incentives and niche marketing, as well as enhanced external program and research funding across the campus, Creighton will not only continue to be that outstanding institution it is today, but soar to new heights.

And this brings us to a second point: Where are we in planning and campus expansion? I have been rereading Alice in Wonderland. One does strange things in this weather and I revisited the familiar episode where Alice asks the Cheshire cat for directions.

"Where do you want to go," asked the cat? "I do not much care," said Alice, "as long as I get somewhere!" "Oh, you are sure to do that," said the cat, "if you only walk long enough."

Unlike Alice, I think we have a clearly defined destination in mind as we plan our future. Here is a summary of that guiding vision:

"Creighton University will be a national leader among faith-based universities by fostering a highly distinguished, flourishing community of teacher-scholars and students actively engaged in learning, research, and service.

The Jesuit tradition of personal care, spiritual growth, integrated learning, and justice education will prepare women and men for responsible leadership, professional distinction, and committed citizenship."

With that as the starting point, we launched the most recent strategic planning initiative in summer of 2002. With the departure of Dr. Dougherty, the planning process passed to the capable hands of Dr. Braden.

A representative steering committee of nineteen faculty, staff and students prepared the initial document. It contained nine goals.

Nine subcommittees involving ninety-two additional members of the Creighton family further refined these goals. Their planning document was posted on the web in early November 2001 for community comment.

During Martin Luther King week, the executive officers of the University spent two days reviewing and refining the November document. The resulting document is posted on the website, providing yet another opportunity for community input.

Creighton will:

* embody the Jesuit Catholic vision of educating the whole person for solidarity with the human community -- serving others, promoting justice, cherishing diversity -- for the greater glory of God.

* be highly distinguished for the quality of our teacher-scholars and graduates and recognized for innovative, integrated learning.

* provide a living-learning environment that affords students the opportunity for enhanced social experience, spiritual growth, and service.
* establish a welcoming community that reflects a rich and balanced diversity.
* engage Creighton's key constituencies to participate in the mission and vision of the University.
* establish an attractive urban learning and living community for the fulfillment of the University's mission.
* steward its resources to ensure financial security and funding for strategic initiatives, provide just compensation, and remain financially accessible to students from diverse economic backgrounds.
* enroll an optimal number of students to ensure a high quality, diverse, and predictable student population.
* support, facilitate, and promote the effective and efficient use of information technology in learning, administration, and scholarly activity for students, alumni, faculty, and staff.

The document will now be returned to the original steering committee for fleshing out with strategic objectives, timelines and points of accountability. It is my hope that a final draft will be ready to present to the Board of Directors, for their review, at a June retreat.

These early phases of planning complement our proposed campus expansion. There has been much speculation surrounding our intent to expand the campus eastward to complement the convention arena project and the redevelopment of downtown Omaha.

The Board of Directors has approved "in principle" the physical expansion of the campus eastward from 20th-to-17th Streets, and to the north from Cass to Cuming. The closure of Burt has not been requested at this time, but remains a candidate for later discussion.

As mentioned previously, this expansion is both a historic opportunity to enlarge our physical footprint as well as an opportunity to decompress the volume of usage on the center of campus and make the campus more inviting and attractive to current and prospective students.

This does not signal intent to become a significantly larger institution. In fact, the deans of all colleges and schools are presently working on a multi-year plan for the optimal size of each unit. Those results will be calculated into the use of the newly acquired space.

Some needs are evident, however, including expanded green space, parking, upperclass and professional student housing, and recreational facilities.

There is an important clarification to be made before moving to the last topic, namely the purchase of property. Creighton has acquired some significant new property. The funds used for these purchases were specifically earmarked for that intent.

Although the Board authorized the use of unrestricted endowment for this purpose, we have chosen not to go that route. Rather we are exclusively using unrestricted gifts or short term borrowing against our line of credit.

The point to be made in this public forum is that none of the funds for property purchase have come from University operating budgets. This is what we refer to as "one shot dollars." This money could not be used for any on-going expense such as benefits, compensation, or utilities. So the rumors that the salary salvage money went into property purchases are erroneous.

One last thing about planning: my experience to date suggests that Creighton has been operating on an inward directed philosophy where the primary objective was to manage the budget and not much else. Important as that is, of course, there is a genuine need, if not an urgent need, to adapt an outward directed "marketing" philosophy that is directed to the long-term relationship of both its external and internal “customers” -- students, client and patients -- and the exchange of services and funding between them.

That change is necessary to assure long-term success and wean the institution away from short-term solutions to new and on-going challenges. Indeed, there is a sense of urgency to implement this change.

The third and final point concerns the fiscal wellness of the institution and related issues.

The aftermath of the September tragedies, the reality of the present recession, increasing federally mandated regulations, the explosion of health care costs, and the downswing of the stock market all are having a negative impact on our financial flexibility.

Creighton is not alone, of course. The media is filled with familiar names like K-Mart, Union Pacific, Ford Motors, Qwest, and Enron, St. Thomas and the University of Nebraska not to mention federal and state government deficits. Corporate downsizing, restructuring, Chapter 11 bankruptcies, and pink slips are familiar story lines across the country and, indeed, across the globe. Creighton and Omaha are not exempt from these swings in economic fortune.

As you know, last year we had a shortfall in freshman enrollment. While we believe it was a “glitch” in an otherwise stable enrollment pattern, nonetheless, the reality remains that the smaller class with its attrition will be with us for three more years; as will be the diminished revenue stream. We also experienced significant underenrollment in occupational therapy, physical therapy, nursing, and the Creighton Institute, with the same financial implications.

As you know, we undertook an intensified and more purposeful approach to recruiting the undergraduate class of 2002. Vice Presidents Braden and Callone, working closely with the Admissions and Financial Aid Offices, have done an excellent job in recruiting a healthy applicant pool. Early findings are positive. I am cautiously optimistic that we will see an increase in new students come August. Thanks to all of you for the coordinated effort across the University. As I have been heard to say, "It takes a whole university to recruit a student."

To meet the growing competition and to attract the most qualified students, as well as providing assistance for financially needy students, we increased financial aid/tuition discount cost by 13.2% or $2.4 million.

The University also is faced with an ominous national trend, namely, increasing health care costs and employee benefits cost. With considerable effort, we have contained our increase to around 13%, or $2.3 million dollars. So there is a significant new cost attached to providing quality health benefits for all of our employees without passing on excessive costs to you/others. (Indeed we protected our employees.)

Like you, Creighton is not exempt from increased costs in insurance premiums. This year we will experience increased rates in malpractice, property, auto, liability and other areas of insurance. This is estimated to cost an additional $300,000.

The most costly new federal mandated regulation is the Health Insurance Portability and Accountability Act or HIPPA. This act mandates a standardized format, use and security of electronically stored and transmitted health care information. A major component of this act deals with privacy and information security. This will result in an on-going cost in excess of $250,000.

We have made significant investments in new administrative software systems. When fully implemented, these systems will further enhance our effectiveness in a number of areas (including student recruitment and information management, fundraising, donor relations and personnel management). Some benefits are already being realized, but additional resources are needed to support these systems and allow us to take full advantage of their capabilities. We have estimated these needs to be in excess of $150,000 for next year.

On another front, one of the things that Creighton has not done well across the years has been facility maintenance. This neglect has resulted in staggering deferred maintenance costs and a significant deterioration of the physical plant. The era of benign neglect is over.

A modest deferred maintenance line has been put in the budget (really started last year), some ADA access issues will be addressed this year, and, most importantly, our newest buildings will get the maintenance they need to stay current and functional. In December the new integrated science building will be ready for occupancy. We estimate it will take $250,000 to maintain that building for the last seven months of the 2002-03 budget.

You know as much about the declining stock market as I do, comparatively speaking. Creighton actually did pretty well when all is said and done. We experienced a 4% decline in our portfolio value during 2000-2001. But that, of course, over time will have a negative impact in the drawdown from the endowment to both scholarship funds and general operations.

Now that I have your attention, let me share with you some of the implications of the above data.

We developed nine different budget models in an attempt to balance competing needs and priorities with the University's values and mission. We were ultimately successful in producing a balanced budget. At this point in time we are not projecting a deficit for FY 2002-03. But that balanced budget comes with a cost.

How did we get to this balanced budget? We made some bold decisions, did a few unconventional things and took some risks that will not make me popular. But in doing that, I hope, I have created a sense of urgency. If that is the case and urgency replaces complacency and replaces baseless happy talk from anywhere in the institution, then I have succeeded.

In challenging institutional complacency it is not my intent to increase or create anxiety; rather it is to underscore the need for accountability, collaboration, cooperation, and genuine program and needs review and assessment.

Some of the unconventional things we did:

-- We did not discontinue the University's contribution to the employee retirement program (a $ 7.5 million solution);
-- We did not excessively increase your co-payment in the health care package;
-- We did not lay off employees or send out pink slips -- you all still have jobs!
-- We did not discontinue tuition remission for faculty and staff.

All of these actions would be short-term, controversial but easy things to do. They have been done by countless institutions/organizations across the country. Our decision not to take the easy way out was made in light of Creighton's mission and our identity as a faith-based institution. (I will not balance the budget by terminating staff without a thorough review of our staffing needs.)

At the same time the hiring freeze continues and all vacant positions -- staff and faculty -- will be filled on a priority basis. And, I suspect, not as generously as in the past. (We will have to do more with less.) Again, student credit hours have not increased as rapidly as has staff expansion.

An important program to restructure our staff classification and compensation system was started several years ago. As we near the end of that program's implementation, it is critical that we maintain the momentum of prior-year efforts. The new budget again will contain funding ($100,000) to bring staff up to their predicted salary levels based on the new classification system.

Salary compression and market competition are especially acute in certain areas of faculty compensation. These issues require our immediate attention despite the current austere budget circumstances. As a result, salary adjustments of approximately $400,000 will be allocated to address targeted areas where the current needs are most critical.

However, much to my dismay, after we address the most critical adjustment needs, the sad fact is the remainder of the faculty and staff will not be getting any additional compensation increase this year.

It is my hope that by midyear, after enrollment and other revenue sources have been calculated, that the University could provide a "bonus" to the faculty and staff. This is very hard news to deliver. However, I believe it had to be delivered and delivered by the president. There is none more disappointed than am I. And I am aware that this conversation has just begun.

Lest you think I spend all of my time dwelling in the shadows of the budget garden, there are, indeed, shards of light to lift our spirits.

We are currently in the silent phase of our next comprehensive campaign. Thus far the results are very encouraging, the economy not withstanding. To date, 11 major benefactors have made pledges. In the previous campaign their gifts totaled $7.5 million. To our current campaign, these same donors have pledged more than $23.5 million.

As a construction update, the integrated science building is on schedule. The mild winter allowed an opportunity to get most of the steel infrastructure in place and the floors are being poured as we speak.(There will be a topping off ceremony on Thursday, February 14, 2002, at 3:00.) The Kiewit Center's south facade was completed in October, thanks to the generosity of the Kiewit Foundation.

This year we welcomed a new dean to the College of Arts and Sciences, Dr. Tim Austin. He has hit the street running, despite the complexity of this undergraduate college, and has already shown steady and insightful leadership. In July we will welcome Christine Wiseman as the newest member of the administrative team. I believe she will do an excellent job as academic vice president. She participated in the planning retreat with great enthusiasm (she is aware of our fragile fiscal situation).

I would be remiss, if I did not publicly thank Dr. Barbara Braden, Dean of the Graduate School, for serving this past year as Interim Vice President for Academic Affairs. Dr. Braden is doing an extraordinary job lending her talent, time, experience and mission rooted loyalty to some challenging and vexing issues.

This year we have strengthened our relationship with the Archdiocese in a variety of ways. The most exciting of these initiatives is the initiation of a new post-baccalaureate service program in the Department of Education: “Mentoring Academic Gifts in Service” or MAGIS.

The purpose of this program is to develop a corps of highly motivated teachers to serve in underserved Catholic schools. MAGIS students make a two-year commitment to teach in Catholic schools while living in community, pursuing professional and spiritual development and working towards a Masters in Education.

At the same time the Theology Department and the Archbishop have developed a mutually satisfactory approach to implementing ex corde ecclesiae, the papal directive on teaching Catholic theology at Catholic universities.

In keeping with a century-long tradition, Creighton continues to serve the greater Omaha community and beyond. The Department of University Ministries and the Creighton Center for Service and Justice reports that more students are involved in service outreach and they are reflecting on its meaning more deeply. All of the spring break service projects are fully subscribed to, as are the ILAC programs for spring and summer.

The on-line ministries web site continues to extend Creighton's presence, literally across the globe. (That site, which offers many resources, is now the most visited site at Creighton.) Each daily reflection, written by 50 of us, is read over 5,000 times. As one of the reflection writers, I am very gratified by the responses we receive. I am also very pleased with the service Creighton offers to a growing international community. Fr. Andy Alexander and Maureen Waldron deserve our heartfelt thanks for their efforts in this important undertaking.

Creighton also continues to serve the greater Omaha community through its clinics and off-campus sites. This past year over 360,000 patients visited our medical clinics; 60,000 patients visited the Dental Clinic; while 1,500 low-income families were assisted through the Law Clinic and its South Omaha Spanish legal aid site.

We are making progress in building a more diverse community. The African American retreat, the Latino/Latina retreat, and the Native American retreat are key programs that are enhancing Creighton's reputation as a receptive and understanding campus at both the undergraduate and professional levels. A special word of thanks to Tami Buffalohead-McGill, Ricardo Ariza, and Dr. Sade Kosoko for what they do to enhance our multicultural community.

Dental students had a 100% pass rate in the first attempt of the most recent part one of the National Board in dentistry.

In the area of athletics, we should be quite proud of our student athletes. They are fulfilling both parts of that description. The overall semester average for the fall 2001 was 3.28, with a cumulative grade point average for all student-athletes at 3.21. At the same time we are experiencing winning seasons in both women and men's basketball, and doing so with very young student athletes.

Let me close with a comment about September 11. The visible tragedy of that autumn day is seared on our memory; the response resides in our hearts and spirit. For all the horror of those events they catalysed us as a community; neither Catholic nor Jew, Christian nor Muslim; black or brown, yellow or white; Native American or international student; male or female; rich or poor; student, faculty or staff; freshman or law student; there were not distinctions among us those days. We worried, prayed, and cried with a sameness. You embraced each other, listened to one another, and comforted one another.

In doing that, you personified what Creighton aspires to be: a community of women and men in solidarity with others. It was a wonderful moment bred in such horror. Let that spirit continue to abide among us as we face the challenges before us.

The future is hopeful. The challenges before us are real. But a new horizon opens before us. And we are a hope-filled people. As the prophet Isaiah wrote: "I have a plan for you, says the Lord, a plan of freedom and of hope."

It may be safe to say that at no time in the immediate past have we needed each other more than today as we strive to build our tomorrow. For my part, there is no place I would rather be than here at Creighton at this time of challenge and change.

May our common God bless you, your family, and our common enterprise.

Thank you.