In this address, the Chancellor of the Los Angeles Community College District considers the major issues and challenges facing the District and its faculty, staff, and students. The Chancellor first identifies educational quality, especially within transfer programs, as a major challenge facing the colleges. He cites research findings revealing declining numbers of transfer students and the poor success rate of community college students whose objective is transfer. He advocates the implementation of academic standards for competencies and progress and reports on plans for revitalizing advisement procedures for transfer-oriented students. After recommending the establishment of a Commission on Transfer Education and outlining its possible focus, the Chancellor briefly reviews the new programs implemented at the District to strengthen the educational system. Next, professional development activities conducted and planned within the District are reviewed. The results of a study of the District's high technology programs are summarized prior to a discussion of the Health Occupations Study currently being conducted by District staff. After covering administrative considerations, such as revenue and community college auxiliary organizations, the Chancellor reviews progress in employee relations and briefly discusses a computer conversion project in fiscal operations. The address concludes with comments on increasing state influence and educational malpractice suits. (KL)