"I am very happy to report to you today that the state of our university is strong," McDavis told the standing-room-only crowd gathered in the Walter Hall Rotunda for the 40-minute address.

He noted in particular the 50 nationally and internationally competitive awards Ohio University students earned last year -- including a Marshall scholarship, the first new residence hall to come on line in 30 years and the start of construction on the new Academic and Research Center to be funded primarily by private gifts. After detailing a long list of academic achievements that spanned the past year, McDavis gave credit to Executive Vice President and Provost Kathy Krendl and the college deans.

"It is very clear that Dr. Krendl and our deans have been extremely busy," he said. "In partnership with the faculty, staff and students in their colleges, they have accomplished much to further our academic mission in a short amount of time."

Change and the opportunities it brings were major themes throughout the speech. Many achievements the president cited have resulted from purposeful initiatives, including organizational restructuring, new facilities, targeted recruiting efforts and partnership initiatives.

He also addressed challenges that have created opportunities for beneficial change. For example, Ohio Board of Regents Chancellor Eric Fingerhut's expectation for public universities to operate more efficiently is being fulfilled at Ohio University with plans for smarter approaches to purchasing and shared services centers -- changes McDavis said will save money and enhance services.

"Our heritage teaches us that our university is resilient," McDavis said. "We weathered tough times because we addressed each challenge as a community. And today, once again, we are rising to the occasion."

Despite dramatic changes brought on by external forces, he said many things remain constant.

"We hold true to our core values, which are the fabric of our institution and serve as guideposts for our academic priorities," the president said, noting such values as student engagement, collaboration and partnership, and a commitment to the region.

"Most importantly, we value our people for their knowledge, skills and determination," he said. "Our university is bursting with caring people who think big thoughts and dream big dreams."

These values have been applied to assessing and refining institutional priorities through the Vision Ohio strategic planning process. McDavis detailed the timeline of the process, from the Board of Trustees' directive in 2004 that a strategic plan be developed through the scheduled presentation to trustees next week of a draft implementation plan developed through a collaborative process.

"Drafting of the Five Year Vision Ohio Implementation Plan is an important step. It will help us make strategic investments and position our university to turn our challenges into opportunities," McDavis said. "It also proves the promise that Vision Ohio is a living, breathing document."

The president also said he would propose to trustees that next year's initiatives -- focusing on strengthening undergraduate education, making targeted investments in graduate education and research, and enhancing student recruitment and retention -- be funded from institutional reserves and carryforward accounts in an effort to move away from the past practice of cutting budgets to reallocate to strategic areas.

The audience responded with standing ovations to news of two major gifts to the institution.

McDavis announced that the university and the Russ College of Engineering and Technology recently received $5 million from the estate of alumna Beth K. Stocker, bringing total giving by Stocker and her late husband, alumnus C. Paul Stocker, to $31.9 million. (See related story.)

The president also shared news that the estate of longtime friend Dolores H. Russ would provide an estimated $80 million in securities and real estate for the Russ College, named for Russ and her late husband, alumnus Fritz J. Russ.

"There are many details yet to finalize, but I wanted to share news of this transformational gift for our university and our Russ College with you today," he said.

After the speech, Russ College Dean Dennis Irwin put the gift in perspective.

"For the Russ College, a gift of that size completely changes the face of the college," he said. "The things that we've decided to invest in strategically are now going to be accelerated by a factor of 10."

Without the support of the Russes and the Stockers, he said, "this would be a different college."

Sharing the big picture on private giving, McDavis said that seven months into the fiscal year, the university has raised $14.6 million toward an $18 million goal. "We are on pace to have an outstanding fund-raising year," he said.

McDavis also acknowledged the support of legislators in helping the university secure federal appropriations totaling more than $2.3 million.

Looking toward future challenges, the president charged the audience with the words of Abraham Lincoln: "We must rise with the occasion. As our case is new, so we must think anew and act anew."

Noting the need to be more strategic and more creative as we "think anew," McDavis pointed out that higher education has become highly competitive, with other institutions working to attract the type of students traditionally drawn to Ohio University. Shifting demographics and an estimated 10,000 fewer high school graduates in the next five years "will challenge us to become even smarter in our recruiting efforts," he said.

Recent developments are promising, though. McDavis said applications are up among prospective students in geographic areas targeted by "The Promise" marketing campaign, which featured some of Ohio University best and brightest students and the faculty who work to ensure their success. Recruiting efforts also have resulted in a 21 percent increase in multicultural student applications, an 8 percent growth in out-of-state applications and a 97 percent increase in applications from prospective international students, he said.

McDavis also cited an increase in student quality as evidenced by a drop in the number of first-year and transfer students on academic probation, a trend he attributed, in part, to increased participation in learning communities.

The president noted the challenges posed by Ohio's economy, including projections for a large state budget deficit, at a time when state government has emphasized the need for a renewed commitment to higher education.

Noting that the state's shift away from a manufacturing economy is fueling the need to increase the number of Ohioans with college degrees, McDavis said regional campus programs and University Outreach partnership initiatives are addressing the need for economic development, professional development and workforce entry programs -- all of which are crucial to the state's future viability.

In closing, McDavis expressed understanding that it is difficult to move out of a comfort zone and embrace a new direction for the university.

"I believe that the reason we are working so hard is because we are doing it for our students, for our faculty, for our staff and for all of those who will come after us," he said. "Indeed, our hard work is for a brighter future for Ohio University. We are preserving our university's legacy and making it even stronger for future generations."

In a press conference that followed the address, McDavis said the focus now is on "how we begin to implement our plan and matching resources to the strategic priorities."

Noting the commitment to fund first-year Vision Ohio initiatives without budget cuts, he added, "We really tried to look for a different way than we have in the past, and I think we came up with some creative ways."

Vice President for Finance and Administration Bill Decatur said about $3 million to $3.5 million in one-time, carry-forward funds and $1.5 million in base budget reserves would be used to jumpstart the implementation plan's strategic initiatives.

"The focus in that first year is on academic priorities that we believe will generate revenues," Decatur said. "Our focus is going to be on revenue generation and multiple strategies related to that."

McDavis also was asked about an informational picket by members of AFSCME Local 1699 outside Walter Hall. The president said the university would continue to work through the steps outlined in the contract with the bargaining unit.

Krendl recognized the effort the campus community put into the strategic planning process, saying it has been a "really positive experience."

"I commend the constituent groups for doing such a wonderful job," she said, adding that the groups have "done their homework" and raised good questions for discussion.