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– 76 – multi-year fund-raising campaign for the Museum of the American Indian. An additional $1.2 million has been added to the fiscal year 1991 base. This is the result of an increase in projected costs as well as an acceleration of campaign activity. The Institution is examining the possibility of recovering non-raising costs from donations. However, even if such a plan is feasible, it will probably not provide any significant recovery in fiscal year 1992. As a result of the above, fiscal year 1992 expenditures are $4.9 million over fiscal year 1991 projections. At the same time, income projections are down $6.9 million, the major elements of which are a significant drop in income for the Smithsonian magazine of $6.1 million and the Air and Space magazine of $1.0 million. Increased income projections ($3.7 million) in several areas offset part of this drop and compensate for $3.5 million in reserves used last year to balance the budget but which are unavailable this year. The combined impact of the downward adjustments to income and upward pressures on expense resulted initially in a deficit for the year of $11.8 million, which would have almost completely consumed general unrestricted fund balance. Since this level of deficit is unacceptable, the proposed budget includes a general plan for reducing this deficit. The specifics of our plan will be worked out before the start of the fiscal year. The basic elements of the plan include $2.0 million in revenue enhancement actions which may include increased emphasis on raising additional unrestricted funds and/or funds for programs or projects presently supported with unrestricted funds, implementation of an employee and/or public parking program, and new ventures or pricing structures for some of the business activities. In the area of expenditure reduction, the budgets under each assistant secretary had been cut the equivalent of 10 percent in personnel costs and 20 percent and other objects costs for a total reduction of $6.2 million. Prior to the beginning of next fiscal year, each assistant secretary will determine the specific areas and cost categories to cut. These actions result in a deficit for the year of $3.7 million or only 30 percent of the initial deficit. It is not deemed prudent to make further cuts at this time. However, should income level stay down, further cuts would be needed to balance next year's budget. The General Unrestricted Trust fund balance will drop to $10.1 million, approximately $4.1 million less then the goal of maintaining a fund balance equivalent to five percent of the total Trust fund operating budget. Since the Regents have supported the Institution's goal to remain within generally accepted operating margins by maintaining the fund balance at this level, high priority will be given to restoration of the fund balance should additional revenues become available during the year. The following motion is suggested: VOTED that the Board of Regents approves the proposed budget of the nonappropriated funds for fiscal year 1992 and authorizes expenditures by the Secretary in accordance therewith; any material changes in program plans incorporated in the revised budget or any changes of more than $250,000 in any general unrestricted Trust fund program or administrative
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