June 1, 2004

Dear Colleague:

With the 2004 commencement season behind us and the fiscal year drawing to a close, I would like to take this opportunity to thank you for another year of success, commitment, and hard work.

What a momentous year this has been! Each of you should take great pride in the outstanding accomplishments that distinguish the University of Miami.

This letter is the first in a series of correspondence that I will write to keep you informed of some of the opportunities and challenges we face as an institution of higher learning. I am calling this letter "Dialogue," since most of the topics will relate to conversations I have had with faculty and staff members and that I think merit being shared with others.

Our boldest move by far this year was the launch of the billion-dollar Momentum campaign in October. With more than $606 million already raised - a record $249 million this year alone - we are well on our way to reaching our goal by 2007. Of particular note was the spectacular $33 million gift from Phillip and Patricia Frost to name the School of Music.

All measures of quality are on the rise and breaking records. We had 18,500 applications for 2,020 slots for next fall's freshman class, which translates into a greater degree of selectivity, which in turn translates into higher quality. The mean SAT score for entering freshmen last fall was 1234, up dramatically from 1208 just three years ago. We also continue to be extremely successful in recruiting outstanding individuals from around the country to join our stellar faculty. The faculty is increasingly more productive in terms of peer-reviewed research, and this year's sponsored program expenditures are expected to significantly exceed last year's $243.8 million.

The long-anticipated University Village student apartment project on the Coral Gables campus was approved this year, following successful mediation with our neighbors. We broke ground on an impressive new Clinical Research Building and Wellness Center at the medical campus; our medical school colleagues also will get their long-awaited Faculty Club. Before the end of the year, we intend to get approvals for a new wet lab and a biomedical research resource center on our medical campus. The Jorge M. Perez Architecture Center is now under construction on the Coral Gables campus and will be followed shortly by the M. Christine Schwartz Center for Nursing Education. Planning is under way for a new Student Center, a new Alumni Center, and additions at our Schools of Business Administration and Communication, and serious renovations are being planned for the Cox Science Center and the Merrick Building. The Rosenstiel campus facilities also are undergoing a review, as are School of Education and art facilities.

The University also was selected to host the first Presidential Debate, which will take place on campus on September 30. There will be some disruptions to parking and academic activities that week, but I'm certain our community will handle them with grace and good humor. Earlier in the fall semester, James Carville, Mary Matalin, the Dalai Lama, and others will be on campus for presentations. This is a once-in-a-lifetime oppor-tunity for our University community - especially our students - to experience firsthand one of the most historic events of our time. Our theme for the debate is "Celebrating American Democracy and Diversity."
We think this slogan captures perfectly the spirit, purpose, and resolve of our nation. And what better place to celebrate the ideals of democracy and diversity than right here in our South Florida community.

Like universities around the country, we also faced several challenges this year. In true Miami style, however, we are facing them decisively and head-on. Among our ongoing challenges are finding a solution to the complex issue of medical malpractice, developing an equitable plan for a community hospital, addressing pressing space needs University-wide, and continuing to build suitable housing for our students.

We will have two major dean searches commencing this summer. In the School of Communication founding dean Ed Pfister is completing two decades of fine leadership. And in the College of Arts and Sciences James Wyche has chosen to step down to return to his research and teaching. We wish them both well.

Another challenge that we faced this year was an under-funded defined benefit retirement plan. As you know, our staff are members of this plan; the faculty participate in a defined contribution plan. Defined benefit plans in universities as well as in corporate America have taken a beating - experiencing significant investment losses in the past few years. The University of Miami is no exception. As recently as two years ago, our UM plan was over-funded. However, this year a combination of negative investment return due to declines in the stock market, coupled with gradual increases in staffing, resulted in an under-funded situation.
I cannot stress strongly enough that we are fully committed to maintaining the retirement plan for current participants. The University, therefore, made a significant contribution to its defined benefits retirement plan this year. Most of the funding came from a low-interest loan. The debt service on the loan is being funded by the schools, colleges, and administrative units, which is why most units throughout the University are experiencing tighter budgets for the upcoming fiscal year. We are also exploring the possibility of new employees entering a defined contribution plan.

Employee health care costs are a continual challenge for the University. We have at least two study efforts under way: Faculty and staff are looking at how we can contain skyrocketing costs while still providing attractive benefits. It will not be easy, but we will try to develop a plan that strikes the right balance.

Universities are pillars of strength, and the University of Miami has always been exceptionally strong. That strength comes from our incredible work force - our people. We are nimble enough to seize opportunities as they arise and ambitious enough to create opportunities where none existed.

It is a privilege to work with such talented and dedicated people. Your collective efforts are what make this University a terrific place to work and to learn. Thank you for your continued commitment. Feel free to e-mail me at dshalala@miami.edu regarding this periodic update or any other University issue.


Donna E. Shalala

Office of the President
P.O. Box 248006 Coral Gables, Florida 33124-4600
305-284-5155 Fax 305-284-3768