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UT President John Petersen delivered his annual address Wednesday to the Board of Trustees meeting in Knoxville. Here is the text of his address:

Was it really 12 months ago that I stood before this Board for the first time?

Even at the fast-forward pace we have been on, I have had to curb my natural impatience and realize we can never get everything done as fast as I would like. Recognizing there are areas where I would like to be a little further along, overall I am pleased with where we have gotten and am confident we are on the right track.

So I say thank you again for the opportunity you gave to Carol and me…for the welcome we have received…for the confidence placed in me…and for the support you have provided.

Be assured there have been daunting days…but at the end of almost all of those days, there has been a satisfaction…an excitement…and a determination to come back and do it all over again. I am grateful for the opportunity and I am more than ever convinced that together we are on a road to great success for this University and, indeed, for the State of Tennessee.

The decisions made during this first year of my administration are targeted toward the long-term success of the institution and the unique opportunities I am convinced lie ahead. Thank you for your help and your support in making that possible.

Assembling the Leadership Team

Among the most critical tasks has been assembling the leadership team to build the strongest UT possible. I saw our most critical need as enhancing the academic leadership to help move our University to a position of greater national prominence in research and scholarship. I am excited about the appointments thus far and I believe their impact is already being felt.

Executive Vice President- The appointment of Dr. Jack Britt put a substantive academic leader and strategic planner in the number two position in the UT system.

Vice President for Research- The newest appointment-announced this week and before you for final approval on tomorrow-s agenda-is Dr. David Millhorn as Vice President for Research. Dr. Millhorn is an internationally renowned biomedical researcher and is in that category of world class talent that will be the point of difference in achieving our goals.

This position is absolutely critical as we build the research/scholarship enterprise of UT. The President/EVP/VPR trio will drive the academic vision for the next decade. I appreciate the job done by Fred Tompkins who has served ably in an interim role for research.

Vice President of Public and Governmental Relations- As you know, Hank Dye, a veteran communications professional, joined us April 1 and is developing a communications direction, both internally and externally.

Chancellor of the Health Science Center- The appointment of Dr. Bill Owen has already made a significant impact on our operations in health care throughout the state. I sense a real excitement on the campus and in the community.

Chancellor of the University of Tennessee at Chattanooga- The appointment of Dr. Roger Brown, who began officially just last week, brings a strong academic leader to UTC. Dr. Brown’s experience at UNC-Charlotte, is an excellent model for how you bring a metropolitan, urban university to prominence in a system where you also have a flagship, research university. We continue to thank Dr. Fred Obear for his above and beyond service this past year.

These two highly qualified new chancellors join Dr. Loren Crabtree at Knoxville and Dr. Nick Dunagan at Martin, two proven academic leaders. I am extremely confident in this group of chancellors and am pleased with the working relationships that have emerged.

Three critical team hires remain:

Vice President for Development- This search is nearing completion with an impressive pool of candidates in the mix. This is another critical selection to support our ability to raise the external funding necessary and to lead in planning and executing our next major gifts campaign. We are glad Jack Williams has agreed to stay on to help in fund-raising and appreciate all he has done for the University over the years.

Chief Financial Officer- This search is continuing and we are determined to make certain that we have the pool of candidates necessary to select a financial leader that will help the EVP finance our strategic initiatives. Optimizing our current funding, being creative in the management of our budgets and investments, and helping to find new funding sources will be important to the future success of UT.

Vice President for Agriculture- There is no more visible part of our University system than the Institute for Agriculture and no entity that operates more effectively. I expect this search to be accelerated in the coming weeks, but in the meantime, Buddy Mitchell is doing a truly excellent job as the interim leadership.

I am confident when these appointments are completed-along with the other very excellent system officers who serve so ably-we will have the team in place that can lead this organization with great effectiveness. We will assemble this group in September for a strategic planning retreat that will provide an opportunity to set our direction together.


We are in the process of developing a new scorecard for the University of Tennessee System. Be assured the metrics developed will be fewer in number and easier to understand. And the measurement will include tangible demonstrations of cost savings and fiscal management.

If we look at Governor Bredesen’s budget priorities there are three clear categories at the forefront:
– Research (including its impact on economic development),
– Student access (increasing the number of students educated at colleges and universities in the State of Tennessee)
– Student success (graduation rate, K-12 and higher education).

Distinctiveness of Campuses/Budget Planning Process

The five campus sites in the UT System are all distinctive and bring different strengths and goals to the system. Our campuses need to have flexibility in setting fee structures. One size does not fit all. We began this year the process of working with each campus to differentiate programs and to build budgets accordingly.

These are the steps followed on each campus:
1. Determine the key expenditures of each campus over the last five years.
2. Study the method in which the budgets in the key areas were enhanced (new money, reallocation of funds, cost cutting or a combination of all three.)
3. Establish the series of priorities and justifications for the upcoming year and indicate which priorities would be funded as a function of tuition and fee increase levels.

The final budget proposals you will see tomorrow are the first examples of this process.

Balancing the Funding Equation

Obviously the struggle to maintain quality in the face of flat state appropriations and inflationary impact has created concern among our constituencies. The challenge is to balance the funding equation of providing quality programs with the cost to our students.

The bottom line is the total cost for an in-state undergraduate student living on campus in Knoxville-including tuition, housing, room & board and all other fees will increase just 7.7 percent in the budget proposal we are making. That represents a total cost increase of $754-almost half of which can be covered by the $300 increase in a lottery scholarship.

The cost spread between attending the flagship research institution, UT Knoxville, and any of the other four-year public universities in the state is less than $900. Clearly there should be a wider differential based on the cost of delivering the kinds of programs and teaching available on the Knoxville campus.

In the short term, given the needs and the available resources-and despite making cost cuts throughout our programs-we have no choice but to seek tuition and fee increases in order to maintain the quality of education our students deserve and demand.

We are attracting more students and a higher level of students as demonstrated in an increase of the average grade point and the average ACT scores of incoming freshmen. Keeping these best and brightest students at home will greatly benefit the state’s economy in the long run. With that success comes the added pressure to provide a top quality academic experience.

We have a critical educating job to do. We have heard encouragement from legislative leadership and we will work diligently in the coming months to engage lawmakers to help them understand the need and the value of support for higher education. We have to give them information and provide it in a way they understand and can support.

Between now and December, we will be working with our friends in the legislature to talk about state support for higher education. We want to have an open and honest give-and-take with them to reach consensus on the critical issue of state appropriations and their effect on the need for tuition increases. We believe that kind of partnership can serve everyone well and we intend to work hard to achieve it.

We recognize we can’t look only to the legislature and our students. We must and we will do our part to cut costs in addition to obtaining the resources we need to provide a top quality education. In an operation that is 77 percent people, significant budget cuts are difficult. Our administrative costs are down over the past 10 years and cost per student is flat for that time frame.

A good example of cost cutting is in Knoxville where Chancellor Crabtree has eliminated two colleges and eight departments and turned these cost cuts into more than $20 million in funding for academics. Just this month, the Knoxville campus announced an administrative reorganization that cut $250,000 in costs-again creating funds for top priorities.

System Role in Internal and External Partnerships

The ability of each of our campuses and institutions to be successful will depend upon two major issues:

First is creation of a strategic budgeting framework that supports difficult decisions that are necessary to focus on excellence.

The second is our ability as a system to build partnerships between various segments of the institution, as well as with external constituencies such as ORNL, St. Jude Children’s Research Hospital, Vanderbilt Medical Center, Memphis Bioworks Foundation and others.

Oak Ridge National Laboratory is a unique partnership and clearly it affords an opportunity for us to have an “only one in the world” status in several areas. The technology being developed a ORNL everyday will be among the key determining factors in the world-s future economy and clearly we need to maximize this opportunity. We are committed to working this year to better communicate our involvement and to become more visible in the partnership. Our new Vice President for Research already has a strong working relationship with Oak Ridge and will enhance those efforts.

Maximizing Financial Resources-Leveraging Partnerships

Partnerships and strategic initiatives are what drive our ability to maximize resources. We will do this with our State Appropriations, our Grants and Contracts, and our private giving. These are examples of partnership matches to this point:

State of Tennessee-
– Proposal to the Governor to fund top faculty in conjunction with Oak Ridge National Laboratory and our four areas of joint expertise: biology, computational science, neutron science, and nanomaterials. ORNL has committed $10M of continuing funding if matched by the State. The Governor placed the first $2.5M in his budget which was just passed.
– In addition, the Governor has placed $25M in his budget request for an Electrical and Computer Engineering Building to match a private donation of $12.5M for the building and $5M for programs.

U.S. Congress-
– Buildings for three of the four joint institutes with ORNL were funded by the State of Tennessee as part of the UT-Battelle contract.
– We have requested the fourth building for the Joint Institute of Advanced Materials to be funded from the Federal Government. The total cost of the building and major equipment is $45 million. The Governor has agreed to cost share $15 million if the building is funded by Congress.

Private Giving-
– As we continue to raise money for our annual giving and finish the feasibility study of the upcoming Major Gifts Campaign, we are starting important initiatives like capital funding for the Baker Center.
– Our goal is to raise $12M in funding for the building by the middle of November in order to enable the building project to begin.


For the past year, everywhere I have been, I hear time after time, the comment “I didn’t know that.” We have to change that. The University of Tennessee has a great story to tell. We have been reactive in our communications philosophy. We must become proactive. We must develop a consistent brand message. We must be determined in spreading the news. We must make certain that our key audiences-legislators, students, parents, donors, faculty, staff, media-all understand the value the University brings to all Tennesseans and the importance of investing in our success. There is much work to be done but we are focused on this key priority.


My first year as President of the University of Tennessee was a year of building a team and establishing a framework for strategic growth of components of the UT System. As is the case in any endeavor, the proof will be in the implementation of the vision. Our principal challenges will be to assemble the personnel necessary to build quality, world-class programs and to find the financial resources to fund this strategic vision.

Five Primary Goals for the President for Next Year
1. Complete the search process for the management team
2. Solidify a strategic budgeting process for all budget centers at UT
3. Build a strong relationship with our major funders (Governor/Legislature)
4. Complete work on the “Scorecard” and set appropriate benchmarks.
5. Oversee reworking of Case Statements for the Major Gifts Campaign.

Five Primary Goals for the University of Tennessee for Next Year
1. Oversee development of strategic academic plans for all campuses.
2. Develop strong evaluation and reward structures throughout the organization that encourage quality performance.
3. Look for a sustained source of funding for capital projects.
4. Establish strong, proactive and consistent communications programs both internally and externally.
5. Examining and readjusting the overall University of Tennessee administrative structure to be consistent with our goals and strategies.

The University of Tennessee is poised to be the fast rising star in public higher education over the next decade. Board leadership, state leadership, national leadership, community leadership, external partnerships and the opportunity to hire excellent faculty should position the University for that kind of success.

Job One for me is to assemble the staff and formulate the plan that will lead the way. I look forward to that challenge…and I thank you again for your confidence and your support.