Some years ago, embarking on the transformation of the University of Cincinnati, the administration and our Board of Trustees determined that financial viability is an absolute necessity to ensure success. Although we would continue to serve as a public institution, we would budget as a private institution. We would at all opportunities match costs to savings, and we would invest in quality.

The past decade has demonstrated the wisdom of this approach. State support for the University of Cincinnati has dropped from 42 percent of our budget to 29 percent.

During that decade, we cut $71.4 million from our budget - not only to meet inflation, but to reinvest in quality programs and new initiatives.

Energy conservation is one way we accomplished this. Through a combination of technology overhauls and return-on-investment strategies, we have decreased energy costs by more than $5 million each year, and we have plans to save another $4.7 million annually. The University was honored in March 1997 with the Partner of the Year Award of the Environmental Protection Agency's Green Lights Program for saving electrical costs while preventing air pollution. It is estimated that UC's environmental activities have prevented 68.7 million pounds of carbon dioxide emissions.

What does this $71.4 million mean to our students? Spread over 10 years, these budget cuts average $7 million annually. That is $275 saved each year for each full-time equivalent student. Over the same decade, tuition increased by $2,100 - or about $210 per student per year. In other words, the University of Cincinnati more than matched any tuition increase by corresponding cuts to our budget.

A recently released study shows that Ohio's state universities are a good investment for Ohioans - and that the University of Cincinnati's $2 billion economic impact may be the best investment of all. The study, published by the Inter-University Council of Ohio, is titled "Ohio's Education Portfolio 1996: An Economic Impact Statement."

The University of Cincinnati, according to IUC measures, does better than any of the state universities. "The champion university for economic impact might be the University of Cincinnati, which pumped 12 times as much into the economy as the state invested in the school," reported the Columbus Dispatch.

That impact resulted from strenuous attention to the budget. Between 1991 and 1993, the University of Cincinnati eliminated 1,000 positions to streamline our operations and strengthen our budget.

Standard and Poor responded to this and other initiatives by raising the University of Cincinnati bond rating to its highest mark ever: AA. Factors cited by Standard and Poor's were the size of UC's endowment - among the largest of public institutions - and the reorganization of the University Hospital as a separate not-for-profit institution.

After four years of virtually flat funding, the University of Cincinnati enjoyed a record year for external support in 1996-97. Total funding from external grants and contracts - mostly for research - reached $109 million, up nearly $8.5 million from the previous year. Robert Gesteland, vice president for research, credits faculty productivity for the increase.

In its first year of operation, a University of Cincinnati Medical Center effort to build commercially viable companies from university-based biomedical research has grown from two to 11 tenant companies. During the next year, it is projected that companies supported by the incubator - known as Bio/Start - could raise $5 million in venture capital from outside Ohio, creating more new jobs and patents. Bio/Start is planning an expansion that will allow for up to 30 participating companies.

Our success in transforming the University of Cincinnati has also earned investment.

The Procter & Gamble Company has embarked on a $15 million partnership with the University of Cincinnati that includes new chemistry labs, a revised business curriculum, and efforts to prepare students in elementary and secondary schools for college.

Procter & Gamble recently awarded a $7.5 million research grant to our College of Medicine. The college was also the recipient of an $8 million research grant from Marion Merrell Dow.

The National Science Foundation has awarded UC a $1.1 million grant to redesign the chemical technology curriculum in the College of Applied Science.

Honors-PLUS, the University of Cincinnati's innovative undergraduate business program has been named in honor of corporate leader Carl H. Lindner. Honors-PLUS combines a challenging classroom curriculum with business experience and mentoring. Lindner has supported the program through a $5 million gift.

A $2 million gift from arts donor Patricia Corbett in honor of long-time dance professor David McLain will be used to endow the Corbett-McLain Chair in Dance at the University of Cincinnati's College-Conservatory of Music. The gift will fund scholarships, visiting scholars, and productions in addition to the salary of the Corbett-McLain Professor.

The University of Cincinnati has signed a three-year agreement with the Gartner Group to provide UC faculty, staff, and students with access to Gartner Learning and Gartner Research IT services. The agreement includes a $675,000 grant to the University of Cincinnati.

During the past decade, we have nearly doubled the number of individual donors to the University of Cincinnati, from 23,000 to 42,000. The amount of funds raised has nearly doubled as well, from $25 million each year to nearly $50 million.

Earnings from fund raising and our endowment have become increasingly important to the university budget. In 1987, fund raising accounted for $21.5 million of our budget - about 6 percent. By 1997, such funding constituted nearly more than $44 million, about 8 percent of our budget.

As we have sought stability for our budget, we have sought diversity as well. Income from patents held by the University of Cincinnati has skyrocketed during the past decade and today we earn more than $2 million a year from our patents and technology licenses. This income is more than any other university in Ohio and ranks 22nd in the United States.

The University of Cincinnati ranks 54th in the nation in total federal support and 59th in research and development funding.

Our endowment, at $680 million, ranks 40th in the United States. Based on endowment dollars per student, the university ranks 11th among public universities.