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Mr. Adams said the Smithsonian must be in a position to ensure that its properties are used to the extent possible for the research programs for which they were acquired. Mr. Lovejoy reported for Mr. Adams on the major new development initiatives and introduced his two Deputy Assistant Secretaries for External Affairs, Mrs. Burnette (also Coordinator for Institutional Advancement) and Mr. McCance (also Director of Membership and Development). Concluding his Report, the Secretary mentioned that the Smithsonian staff has been following with interest early efforts in the Congress to establish a national center for biodiversity; he expressed the hope that the Smithsonian would have an important role in this development because of Institution's significance in research in the natural sciences.

In response to a question, the Secretary and Mr. Anderson briefed the Regents on the status of the contract with Home Care, Inc., for the sale of the Capitol Hill properties of the National Museum of African Art. They observed that it had always been the Smithsonian's intention to respect the residential character of the neighborhood in arranging to sell these properties and that the purchaser intends to convert a majority of the nine homes for residential purposes.

[[underline]] FINANCIAL REPORT [[/underline]]

It was reported that, despite certain fluctuations, the Smithsonian's Trust funds should end the fiscal year with a balanced budget, though they will likely permit a lower contribution to unrestricted working capital funds than anticipated earlier. For fiscal year 1989 the unrestricted Trust fund budget will be balanced but extremely tight from the outset, and the fiscal year 1990 Trust budget will be predicated on the assumption that augmented Development activities and personnel will contribute one and a half million dollars toward a balanced budget.

It was noted that the reprogramming of excess resources in the new Federal Employees Retirement System has triggered substantial year-end procurement requests. Actions taken toward securing a Federal appropriation for fiscal year 1989 were described and appreciation was expressed for the support received from Congress and OMB for basic research, repair and renovation of buildings, and planning efforts.

Changes in the projected figures for the fiscal year 1988 Trust fund budget reflect results of the third quarter review. It is significant to note that total income has dropped more than $1 million from earlier projections because of lower interest rates during the year on lesser fund balances and an increase in support for the [[underline]] Air and Space [[/underline]] magazine. Restricted gift income is projected to drop by $2.5 million as bureau development efforts have not increased to the level previously anticipated. Offsetting this drop is an increase in the projected proceeds from the sale of deaccessioned works of art at the Hirshhorn Museum and Sculpture Garden of $1.3 million (to be transferred to the endowment established for future acquisitions). Government grant and contract income at the Smithsonian Astrophysical Observatory is projected to increase by $2.6 million.
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