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expenses are projected to increase over fiscal year 1987 levels of $28 million to about $37 million.  This income will continue to be used to support a wide variety of operating activities such as the Collection Acquisition, Scholarly Studies, Educational Outreach, Special Exhibition Programs, the Fellowship Programs, and various administrative functions, as well as additions to the unrestricted endowment principal.

The [[underlined]]Prospectus[[/underlined]] chapter on facilities construction, renovation and restoration continues to emphasize the major construction priorities of the Institution, but use of the President's budget/planning targets eliminates appropriations and phasing for such projects as the General Post Office, Whipple Observatory base camp, Tropical Research Institute, Cooper-Hewitt, NASM/Dulles, and Administrative Service Center projects.  Until a more favorable funding climate materializes, about the most the Institution can project for years beyond fiscal year 1987 is to follow the $3.5 million fiscal year 1987 request for the Tropical Research Institute's terrestrial laboratory (if granted by Congress) with a request of about the same magnitude for a science facility project yet to be selected.

The Institution's renovation and restoration account was approved by OMB for fiscal year 1987 at $12.8 million, and the President's budget/planning projections call for stable funding beyond that year of $15.1 million plus small increases to cover inflationary trends (in contrast with earlier Smithsonian projections calling for increasing annual renovation and restoration funds to about $36 million by fiscal year 1991).  The construction, renovation, and restoration account of the Zoological Park is projected at about $5 million throughout fiscal years 1987-91.  Scheduling of projects is also under review at the Zoological Park to reflect reduced levels of funding over the period, which in the earlier September [[underlined]] Prospectus [[/underlined]] were estimated as ranging from about $5 million to $17 million in order to accommodate and complete major projects such as the Aquatic Habitats exhibit and new parking facilities at Rock Creek Park.

The outlook for Institutional support from federal grants and contracts, declining somewhat from fiscal year levels of $16.4 million to $14.6 million by fiscal year 1991, has not changed from September.  As the future year level of support for external granting agencies in astrophysics and other research areas remains uncertain, it is difficult to predict potential grant and contract support the Astrophysical Observatory and other bureaus may receive over the planning period.

[[underlined]]Museum Restaurant Facilities and Operations[[/underlined]]

At its meeting in January 1986, the Board of Regents reconfirmed that the Smithsonian should proceed to issue new Requests for Proposals in connection with food service operations at the Institution.  Accordingly, on March 20, the Institution's Office of Supply Services mailed to 40 prospective vendors the Request for Proposal covering the South Group.  Responses are due by May 7.  Requests for Proposals pertaining to the North Group and to Vending will be issued on April 7 and 17 respectively, with responses due in late May.  Evaluation teams have been selected form among Smithsonian staff to review proposals.  It