Dear Colleagues,

I am grateful to the university community for pulling together last year to
meet the financial obligations of UTC.  You successfully served the 8700
university students in their educational pursuits, paid off some lingering
obligations - and closed the fiscal year "in the black".  The university's
fiscal officers reported an increase in our required contingency fund of
$190,143.  This brings the total of our unrestricted fund balance to $936,599.

We enter our new academic and fiscal year with no "mortgages" against
l999-2000!

The $64,197,964 "Education and General" state budget, augmented
by an additional $16,000,000 in donor support, federal and state grants,
and the UC Foundation, represents the university's best planning and
budgeting to the consensus of priorities for l999-2000.

During l998-99, the university community demonstrated significant fiscal
restraint and reallocation.  Beginning in the Fall, we "held" $1,100,000
from departmental accounts and added still another "belt-tightening" of an
additional $900,000 during the last quarter of the fiscal year.  Those
$2,000,000 were augmented by approximately $800,000 in donor gifts targeted
to the university's unbudgeted 98-99 needs.

The $2.8 million reallocated in l998-99 allowed us to repay the $l million
scholarship deficit from l997-98, pay off a $192,000 athletics deficit from
l996-97, remove a $233,000 deficit in the Y2K account, pay a $46,000
loss in recovery accounts, fund a l997-98 $94,000 contract
settlement, return $366,000 to restricted accounts,  pay $340,000 in
l998-99 faculty salaries which had not been budgeted, pay actual
over-expenditures in l998-99 athletics of $84,000, pay $281,000 in
unbudgeted l999 summer faculty salaries, and increase funding to l998-99
adjunct faculty needs by $330,000.

While the campus scrimped and saved to accomplish the strong fiscal
position, the generosity of the Chattanooga community also increased
dramatically.  During the past year, a record of nearly $7.4 million was
contributed to the university by its alumni and friends.

As a result of the efforts to remove the confusion over university finances
and budget assumptions and because of the outstanding fiscal performance in
a very lean l998-99, we enter this year significantly better focused on the
future - "un-mortgaged" from any carry-over expenses from last year.

Congratulations and thanks to all of you.  With the glaring absence of any
state funded salary increase money painfully noted, the rest of our budget
ought to give us much better operating parameters.  I look forward to a
great year at the dawn of the new millenium.

Thanks,

Bill Stacy