Last October, our Board of Trustees directed the St. Thomas administration to keep St. Thomas as affordable as possible for our students. The board politely but firmly laid out a challenge: reduce expenses, generate more revenue and cut in half undergraduate tuition increases, which have averaged 6.2 percent a year over the past five years.

The trustees had growing and legitimate concerns about the impact of the recession on the ability of families to pay for a St. Thomas education, and they worried whether – with tuition approaching $30,000 – we might price ourselves out of the market. Their message couldn’t have been clearer: We can’t continue to do business the same old way

It was the most formidable budget challenge that I had been presented with in my nearly 19 years as president of St. Thomas. We always have looked for ways to cut costs and increase revenue, of course, and I believe we have been good stewards of our resources. But I also knew how difficult it would be to start the annual budget process with parameters that differed so markedly from previous years.

To our good fortune, our trustees didn’t walk away from the table after issuing the challenge and wait for us to come in with a plan. They worked closely with us to achieve our objectives, serving as members of a task force that, in the words of Executive Committee Chair Burt Cohen this week, was able to complete “a killer assignment.”

The result, as you will read in the Bulletin Today story, is a 2010-2011 budget that levies an undergraduate tuition and fee increase of 3.5 percent. The comprehensive fee, which includes room and board, will also increase by 3.5 percent.

The task force also identified a set of so-called “key drivers” that will guide the development of our operating budgets indefinitely – not for just one year but, we hope, for many years. Here they are:

• Target undergraduate tuition and fee increases in the 3-4 percent range, allowing for some variation as a result of inflation. This replaces 6 percent increases, which had been the norm over the past decade, as our objective.

• Maintain traditional-aged undergraduate enrollment. This replaces the growth that we have seen in the last decade, when the size of our freshman class grew from 1,046 in 1999 to 1,352 last fall. Fewer students will graduate from high school this decade, and we also don’t have enough classrooms, faculty or residence hall beds to allow significant additional growth on the undergraduate level.

• Maintain financial aid levels and protect the academic profile of the incoming class. We are committed both to keeping St. Thomas affordable and maintaining an average ACT score above 25 for each incoming freshman class.

• Continue to invest in the Opus College of Business to ensure AACSB accreditation and, as a result, generate significantly higher graduate revenue. This initiative has been under way for several years, and we are hopeful we will receive accreditation next year – recognition that will enhance our reputation and help us to attract stronger students and generate more revenue.

• Continue to invest in the School of Law and its pursuit of a national ranking. We have made great strides with the law school since its opening less than nine years ago, and I am convinced we soon will be ranked among the nation’s top 100 law schools.

• Deliver annual pay plans and not lose ground on faculty compensation vs. benchmark institutions. I had to swallow hard last year when we could award only $500 pay increases to faculty and staff, and I dearly wish next year’s pay plan could be greater than 2 percent. You have my word that, economic conditions allowing, we will seek to deliver larger increases in subsequent years.

• Complete construction projects related to ensuring enrollments. This objective relates to the new Anderson Athletic and Recreation Complex, which will open in August, and the Anderson Student Center, for which we will break ground this spring. These buildings are absolutely vital to our ability to remain competitive in attracting undergraduate students.

• Continue initiatives to strengthen the Catholic character of the university. I am proud of the many new programs created over the last two decades and how we have strengthened core programs such as St. John Vianney Seminary and the St. Paul Seminary.

• Achieve capital campaign goals by October 2012. We have an ambitious $500 million goal for our Opening Doors campaign. I am pleased by the progress – we are at $385 million and climbing every day – and I am confident we’ll achieve our goal.

• Contribute a minimum of $1 million annually from operations to our quasi-endowment fund. This fund, akin to a savings or reserve account that funds special projects, declined in recent years as we purchased property, opened the law school and expanded the Minneapolis campus. We need to rebuild the fund.

• Implement the cost-saving recommendations presented to the task force. We are well on our way with many of those recommendations, as specified in the Bulletin Today story.

When you look at these “key drivers” in ensuring a financially healthy St. Thomas, they in various ways reflect the three strategic directions the Board of Trustees established nearly a decade ago: access, excellence and Catholic identity.

We want to make sure a St. Thomas education is affordable. We want that education to be the best that we can deliver. And we want it to reflect our 125-year heritage as a Catholic institution that lives out our mission statement to educate students “to be morally responsible leaders who think critically, act wisely and work skillfully to advance the common good.”

Please join me in this effort. I know it will be a great challenge, just as was the challenge to reduce our annual tuition increases. But I have no doubt that, working together, we can achieve our objectives and provide an even stronger University of St. Thomas for generations to come.