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but the Institution expects increasing support for various operations in future years, especially the Astrophysical Observatory.  Finally, expenses associated with operations funded by restricted trust fund resources are expected to remain relatively stable, and these will continue to be accommodated largely by income related to restricted fund investments.

The trust forecasts assume the Institution will continue to make measured progress in increasing its capital reserves (endowments), thus approximately $2,000,000 a year is incorporated into the projections for this purpose.  In addition, trust support for fellowship stipends, collections acquisition, research, and other educational activities is projected to be slightly higher in future years if economic conditions permit, and if the Institution's auxiliary and revenue-producing activities continue to perform in a satisfactory fashion.  In addition, if conditions permit, as a measure of its commitment to the future development of the South Quadrangle, the Institution intends to allocate $1,000,000 to $2,000,000 of its trust proceeds annually over the planning period towards the construction requirements of that high priority project.  Efforts are being made in FY 1982 to obtain $24,135,000 in construction appropriations, or about one-half of the total estimated construction costs.  Additional emphasis will be given to raising funds from private donors to finish the project during the planning period.

Major additions to physical facilities to be completed over the next five years, in addition to the Quadrangle, consist of the Museum Support Center, which received appropriations for construction in FY 1980, and the Zoological Park Rock Creek facilities.  Improvements and contemplated changes to other facilities include the installation of fire detection and suppression systems, the correction of other hazardous conditions and attention to handicapped persons access, the provision of renovated and new facilities (especially at the Institution's field activities such as Mt. Hopkins, Arizona, and the Chesapeake Bay Center), and a continuing program of repairs and maintenance of all Smithsonian buildings.

[[underline]]Notes on Financial Projections[[/underline]]

The tables were designed to show trends in the Institution's future year resource patterns, and to reflect the changes and growth contained in the narrative portions of this report.  The FY 1980 figures are end-of-year estimates for expenditures and income prior to closing the books of the Institution.  FY 1981 figures are based on Congressional approval of the federal request now pending Senate and joint conference action, Board of Regents' authorization to expend the FY 1981 appropriation, and Board of Regents' approval of the nonappropriated trust fund portion of the FY 1981 budget.

FY 1981 estimates reflect the consolidated budget assembled for approval by the Board of Regents at its September 22, 1980 meeting.  The estimates have been submitted to the Office of Management and Budget.  The FY 1982 figures resulted from the Institution's Planning and budget reviews which took place during the spring and summer months of 1980.