There have been some very exciting things happening on the campus of MSU-Northern. Our new campus courtyard is done and looks fantastic. We are in the process of replacing the windows in Pershing Hall to go along with the new heating and ventilation system that was installed last fall.

Our new Lewistown campus (the old BLM building) is currently being renovated and is scheduled to open this fall. This project was funded solely with private funds raised by the community of Lewistown. This facility will make it possible for us to offer more programs such as our business degree in Lewistown.

I am pleased with how MSU-Northern's came out of the recent legislative session. The $480,000 in earmarked Resource Indemnity Trust (RIT) funds were replaced with general fund dollars. While this is not an increase to the budget it does mean that we will no longer need to revisit this topic each legislative session.

We received $400,000 for a new heating and ventilation system for the Library and Gym as well as spending authority for up to 3.2 million for renovations to the Armory Gymnasium. The renovations will be funded through private donations as well as the gym fee that is currently in place. This project will be phased in over several years as the money becomes available.

We also received $850,000 in planning money from the long range building fund for the renovation of our auto tech building. This money will take the project through the design phase and will place us in a good position to receive the funding to complete the project during the next legislative session.

I want to extend my appreciation to our local Legislators for their help in getting the funds for these projects as well as approving a budget for the university system that reflects a zero percent increase in tuition for resident students. This is very positive for our students as it will make their college education more affordable.

We received a WIRED grant through Governor Schweitzer's Agro Energy Plan to establish a Bio Energy Innovation and Testing Center which will help foster and promote the production of bio diesel, bio lubricants and other bio energy products in North Central Montana. We are very excited about the potential this research will have to draw Bio Diesel companies to the Hi Line.

Several years ago we hired Critical Data to help us identify the areas we need to improve in order to stabilize our enrollment. The report told us we needed to improve our campus facilities, residence life, marketing and recruiting efforts. While we have been able to make many gains in these areas, the progress has not matched the declining demographics of our region. Since 2004 we have experienced a steady decline in enrollment which has forced us to make several changes to our curriculum and staffing. We have had to trim approximately a half million dollars from next year's budget (FY08). While we have had to eliminate some positions, the vast majority of the cutbacks have been taken from temporary appointments, retirements, and consolidation of positions.

This past year, every unit of the Montana University System fell short of their enrollment projections, with the exception of UM Western. With the declining high school demographics in this region, this should be no surprise to anyone. Each unit that did not meet its enrollment projection had to revert monies back to the state. The Montana university system reverted over $2.3 million back to the state in general fund dollars with Northern's share being $284,000.

We have made budget adjustments in a way that minimizes the impact on our programs and does not adversely affect our recruiting efforts. We continue to focus on improving our residence life and currently have a record number of students signed up to stay in our residence halls this fall.

I want to thank the state of Montana, our alumni and our community for its continued support. We are making some changes at MSU-Northern's but I believe they are essential to our future.