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upon an independent appraisal of the land. Since we feel the Estate's appraisal is substantially higher than current market values (a view possibly shared by the Estate), an independent appraisal is being obtained, and a decision will be made, in consultation with Mr. Webb, on whether a bid consistent with available funds will be submitted. If the property cannot be secured at a reasonable price, it was recommended that the $325,000 earmarked for this purchase be retained in a land acquisition reserve fund for future land purchases at the Bay Center. As outlined at the May meeting, there are two other properties contiguous to Bay Center property which might become available in the future, as well as some 600 acres of land currently used by the Center which it does not own but on which it holds covenants of restricted use and option rights to purchase at favorable prices; while portions of these lands may be given to the Center, we anticipate the need to purchase some further acreage. Specific authority from the Board will be sought for any such purchases, but it would be prudent to begin reserving funds at this point.

The level of income and expenses from [[underlined]] Special Purpose [[/underlined]] and [[underlined]] Restricted Trust Funds [[/underlined]], as well as [[underlined]] Federal Grants and Contracts [[/underlined]] is projected to be higher in FY 1979 than was anticipated when the budget was prepared. Items affecting this estimate include:

(1) Certain  activities of the Cooper-Hewitt Museum (membership program, admissions, fund-raising auction proceeds) are now accounted for as special purpose rather than restricted funds, since these moneys are not legally restricted by outside sources;

(2) Investment income to both special purpose and restricted funds will be greater than expected due to higher interest rates paid on those fund balances;

(3) Although extremely difficult to estimate, it now appears that restricted gifts for the year may exceed $2.0 million ($1.4 million budget);