[Smithsonian Institution appropriations hearings]

DEPARTMENT OF THE INTERIOR AND REUTED

AGENCIES APPROPRIATIONS FOR 2003

HEAKINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES

JOE SKEEN, New Mexico, Chairman

RALPH REGULA,

Ohio

NORMAN

D. DICKS, Washington JIM

KOLBE,

Arizona

JOHN

P.

MURTHA,

Pennsylvania

CHARLES

H.

TAYLOR,

NorthCarohna

JAMES

P.

MORAN,

Virginia

GEORGE

R.

NETHERCUTT,

Jr., Washington

MAURICE

D.

HINCHEY, New

York

ZACH WAMP,

Tennessee

MARTIN OLAV

SABO, Minnesota

JACK KINGSTON,

Georgia

JOHN

E.

PETERSON,

Pennsylvania

NOTE:Under CommitteeRules,Mr.Young,asChairmanoftheFullCommittee,andMr. Obey, asRanking MinorityMemberoftheFullCommittee, are authorizedtositasMembersofallSubcommittees.

Deborah Weatherly, Loretta Beaumont, Joel Kaplan, andChristopher Topik.

Staff Assistants

PART 8

Page

Smithsonian Institution

¹

National Endowment for the Arts 91

National Endowment for the Humanities 167 Advisory Council on Historic Preservation 243

Commission of Fine Arts 249

IMLS— ^{Office of} Museum Services 279 National Capital Planning Commission 281

Holocaust Memorial Council 289

Printed for the use ofthe

Committee

on Appropriations

COMMITTEE ON APPROPRIATIONS

C.

W. BILL YOL"NG,

Florida,

Chairman RALPH REGULA,

Ohio

JERRY

LEWIS, California

HAROLD ROGERS,

Kentucky

JOE SKEEN. New

Mexico

FRANK

R.

WOLF,

Virginia

TOM

Delay, Texas JIM

KOLBE.

Arizona

SONNY CALLAHAN.

Alabama

JAMES

T.

WALSH, New

York

CHARLES

H.

TAYLOR.

North Carolina

DAVID

L.

HOBSON,

Ohio

ERNEST

J. ISTOOK. Jr., Oklahoma

HENRY

BONILLA. Texas

JOE KNOLLENBERG,

Michigan

DAN

MILLER, Florida

JACK KINGSTON,

Georgia

RODNEY

P.

FRELINCmjYSEN, New

Jersey

ROGER

F.

WICKER,

Mississippi

GEORGE

R.

NETHERCUTT,

Jr., Washington

RANDY "DUKE" CL'NNINGHAM,

California

TODD

TL^HRT, Kansas

ZACH WAMP,

Tennessee

TOM LATHAM,

Iowa

AN'NE M.

NORTHUP,

Kentucky

ROBERT

B.

ADERHOLT,

Alabama

JO AKS EMERSON,

Missouri

JOHN

E. SLT^LT^^

New

Hampshire

KAY GRANGER.

Texas

JOHN

E.

PETERSON,

Pennsylvania

JOHN

T. DOOLITTLE, California

RAY LaHOOD,

niinois

JOHN

E.

SWEENEY, New

York

DAMD

VITTER, Louisiana

DON SHERWOOD,

Pennsylvania

DAVID

R. OBEY, Wisconsin

JOHN

P. MLTiTHA. Pennsylvania

NORMAN

D. DICKS, Washington

MARTIN OLAV

SABO, Minnesota

STENY

H.

HOYER,

Maryland

ALAN

B.

MOLLOHAN,

WestVirginia

MARCY KAPTUR,

Ohio

NANCY

PELOSI. California

PETER

J. VISCLOSKY, Indiana

NITA

M.

LOWEY, New

York

JOSE

E.

SERRANO, New

York

ROSA

^L. DeLAL"RO. Connecticut

JAMES

P.

MORAN,

Virginia

JOHN

W.

OLVER,

Massachusetts

ED

PASTOR. Arizona

CARRIE

P.

MEEK,

Florida

DAVID

E. PRICE, North Carolina

CHET EDWARDS,

Texas

ROBERT

E. "BUD"

CRAMER,

Jr., Alabama

PATRICK

J.

KENNEDY,

Rhode Island

JAMES

E. CLYBLTIN. South Carolina

MALHICE

D.

HINCHEY, New

York

LUCILLE ROYBAL-ALLARD,

California

SAM

FARR,California

JESSE

L.

JACKSON,

Jr., Hlinois

CAROLYN

C. KILPATRICK. Michigan

ALLEN

BOYD, Flonda

CHAKA FATTAH.

Pennsylvania

STEVTN

R.

ROTHMAN, New

Jersey

VIRGIL H.

GOODE,

Jr., Virginia

JamesW. Dyer, Clerk andStaff Director

DEPARTMENT OF THE INTERIOR AND RE-

LATED AGENCIES APPROPRIATIONS FOR

2003

Wednesday, March

20,

2002.

SMITHSONIAN INSTITUTION

witnesses

lawrence m. small, secretary, smithsonian institution john dailey, director, national air and space museum lucy spelman, director, national zoological park

Opening Remarks of Chairman Skeen

Mr. Skeen. Welcome, Mr. Secretary. We are looking forward

to

hearing your testimony on your

fiscal

year 2003 budget.

I

would ask that you summarize your opening statement. Your complete statement

will

be made a part of the record.

Before you begin,

I will

defer

to

Mr. Dicks, the Ranking Member,

for

any opening remarks he may wish

to

make.

Opening Remarks of Mr. Dicks Mr. Dicks. Thank you, Mr. Chairman.

I

want

to

welcome Secretary Larry Small.

I

am anxious

to

hear Secretary Small's testimony

this

morning because there are so

many things happening with the Smithsonian

recently. I

had a chance

to

talk

briefly last

week with Mr. Small

in

my

office

and

I

look forward

to

hearing more

details

about the work being done at the Smithsonian.

Everyone here recognizes how valuable the Smithsonian

is to

our Nation but

I

think

it is critically

important

for

the Congress, spe-

cifically this

subcommittee,

to

look carefully

at

the budget and the planning

for

the

Institution.

The Administration

this

year has

re-

quested a modest increase

for

the Smithsonian but we

all

now are aware of the tremendous backlog of maintenance and repair needs

at its facilities

as estimated by Mr. Small and confirmed by the

NAPA study, at over $1

billion. I

haven't seen anything

in this

budget that genuinely addresses that need and

I

am disappointed.

There are

also

program transfers requested

in

the budget sub- mission.

I

have been skeptical of similar transfers

in

other areas of the budget and look forward

to

hearing more

detail

from Mr.

Small

this

morning.

The budget

also

contains a request of $8.8 million

for

security services and $11 million

for facilities security, in

addition

to

the

$21.7 million related

to

homeland security

costs

that we ^appro-

CD

priated

after

September

11. I

would

like to

hear more about how

these funds are being used and

if

we are meeting the needs.

Lastly, I

look forward

to

an update on two major

initiatives

of the Smithsonian, the Dulles

facility

and the National Zoo Renewal Plan. The subcommittee obviously has great interest

in

both

projects.

Thank you, Mr. Chairman, and we welcome Mr. Small and look forward

to his

testimony.

Mr. Skeen. Over the

last

several years, you have made some

sig- nificant

organizational changes, including downsizing. Can you

briefly

describe these actions and what

effect

they have had on your organization?

Opening Statement of Mr. Small

Mr. Small. Do you want me

to

make my opening statement

first

or get right

into

questions?

Mr. Skeen. We

^{will let}

you do

that.

Mr. S\L\LL.

I

want

to

thank

all of

you

for

your continued support and

for this

opportunity

to

provide the testimony on behalf of the Smithsonian.

I

have

five

or

six

minutes worth of remarks and then

we can go

directly to

your questions.

REVITALIZATION AND MODERNIZATION

It is

my continued and firm

belief

that

if

the Smithsonian deals with the challenges

it

has faces head on and we build on our suc- cesses

in

a thoughtful way, we can modernize one of America's greatest

institutions

and by the end of the decade, transform

it

into a truly 21st Century organization, one that

is

capable of touching the

lives

of Americans wherever they

live.

To do

that,

we are

in

the midst of a revitalization campaign that

is

absolutely unprecedented

in

the history of the entire museum

world, one that

will

transform the Smithsonian. We have four major and simultaneous projects — ^{the New} Air and Space Museum

at

Dulles Airport; the new National Museum of the American

In-

dian on the Mall; the renovation of the Patent

Office

Building that houses the National Portrait Gallery and the Smithsonian Amer-

ican Art Museum; and the complete renovation of the exhibitions

in

the Smithsonian's National Museum of American History.

The entire

cost

of these four major and simultaneous

efforts is

ten times larger than

all

of the

facilities

projects tackled by the Smithsonian

in

the previous decade. To put

^it

another way, what

is

going on

at

the Smithsonian right now

is

the equivalent of

rais-

ing the money

for

and building four major museums, each equiva-

lent in cost

and complexity

to

the U.S. Holocaust Memorial Mu-

seum,

all

being done

at

the same time.

In addition

to

these

efforts,

the Smithsonian

is

seeking

to

make

massive repairs and deal with public safety issues

at

the National Zoo and the National Museum of Natural History which are two of the most

visited

locations

in

the Capitol and these were

^{built in}

1890 and 1910

respectively.

When

I testified

before

this

committee two years ago,

I

said

much of the Smithsonian was looking shabby. Since that time, the

National Academy

of

Public Administration did a study which was

requested by committee, which the

would need $1.5 bilHon over the course of

this

decade

to

restore

its

buildings. In addition, we need

to

raise between $500 million and

$1

billion

from the private sector

to

renovate the hundreds of aging exhibits in our museums, half of which ^are over 15 years

old,

some

of which are more than 40 years

old.

We have grandparents who

are

visiting

today with their children and grandchildren who are seeing exhibits they saw when they came as

kids.

That just

is

not appropriate and

is

unacceptable.

Modernizing the Smithsonian, making these monumental changes

is

expensive and can be controversial, as change often

is.

To my mind,

critics

of what we are doing have missed two impor- tant

points. First,

the modernization of the Smithsonian, which

is

the largest museum and research complex in the world, involves huge, expensive projects that are necessary

to

reverse a downward

trajectory of benign neglect that has gone on

for

years and years.

No museum organization in the world has ever required such a large revitalization program.

PRIVATE SECTOR DONATIONS

Second, the success of the Smithsonian over the past almost 156 years has been the result of funding from both the public and

pri-

vate

sectors.

From day one, when English

scientist

James Smithson

left

his fortune

to

the United States resulting in the

In- stitution

that his

will

said had

to

be named

after

him, there have been people who have been

critical

of private sector funding of an institution they think should be paid

for solely

with taxpayer

dol- lars.

But that has never, ever been the

case.

While there was con- troversy when the Smithsonian established the Hirshhorn Museum

with a private sector donation and private sector

collection,

when

the Smithsonian had the Sackler Gallery put in

place,

when Ralph Lauren gave money

to

restore the Star Spangled Banner and when

other large

gifts to

the Smithsonian were given, there was con- troversy, but

all

of these actions have ended up being

successful.

Given that there

is

over $1

^billion

^{that the} Smithsonian

still

needs

to

raise from the private

sector, it is

obvious there

will

be more of these large commitments and they too

will

be

successful.

The Smithsonian today

is

following exactly the same

policies for

private sector donations

^it

always has, they have worked well

in

the past and there

is

no reason

to

believe they won't continue

to

do

so.

RESEARCH

With respect

to

our research mission, the Smithsonian employs some of the brightest minds

in

the country and we

really

want that

to

continue but today fewer than 10 percent of the

scientists

funded by the Federal appropriations

to

the Smithsonian are under the age of

40.

We

can't

continue

to

excel

if

we don't have that pipeline that permits the attraction of top new

talent.

To help us better assess how

to

conduct science at the Smithso-

nian, we now have the assistance of three groups — ^{a Science} Com-

mission formed of eminent

scientists

from around the country and

two other

special

groups being established at the request of the Of-

fice

of Management and Budget with the help of the National

Academy of Sciences and the National Academy of Public Adminis-

tration.

We look forward

to

hearing from

all

three of these during the course of

this

year.

OUTREACH

As

to

our

efforts to

get the Smithsonian out of Washington and

all

throughout the United States

to

touch the

lives

of Americans

all

over the country, through our

Affiliations

Program, we are lend- ing some of our 142 million objects

in

the Smithsonian

to

museums

large and small across the Nation. We now have 97

affiliate

muse- ums

in

30 States and that

is

an increase in that number of over 400 percent

in

just two years' time.

Our Traveling Exhibition Service, the largest of

its

kind in the world, reached more than 5 million people across the country

last year.

We did 54 exhibitions

in

289

different locations.

We have over

1

million teachers and students who are using Smithsonian

re-

sources and more than 350,000 people took Smithsonian courses and

trips,

saw performances, study tours and regional events.

So getting

all this

done has involved making a

lot

of changes, particularly

in

the leadership team throughout the Smithsonian and

in

that area,

I

am really happy with the many ^talented

^indi-

viduals that we have brought on board. We

still

have years of work

in

front of us but we have made very

significant

progress. The Smithsonian certainly merits every ounce of energy and

effort

we

can muster.

Once again,

let

me say thank you

for

the support of

this

com- mittee.

It

has been

vital to this

institution

for

many, many years.

I

am open

to

any questions you may ^have.

Thank you, Mr. Chairman.

[The written statement of Mr. Small

follows:]

SmithsonianInstitution HouseInteriorAppropriationsSubcommittee

March20,2002

INTRODUCTION

-AN UNPRECEDENTED

REVITALIZATION

CAMPAIGN

Thank youforyour continued supportandfor thisopportunitytopresenttestimonyonbehalfof the SmithsonianInstitution.It'smycontinuedandfirmbelief that,iftheSmithsoniandealswith thechallenges itfaceshead on andwebuildonoursuccessesinathoughtfulway,wecanmodernize oneof America's greatest institutions,andby the end ofthisdecade, transformitinto a truly 21stcenturyorganization,one thatiscapable of touchingthelivesof aU Americans, wherever theymaylive.Todothat,veneedsufficient funding,newandrenovatedbuildings,andthebest p>eoplewecanfind.

We

arecurrentlyinthemidst ofarevitalizationcampaignabsolutelyunprecedentedinthehistoryof the entiremuseumworld,onethatwiD transformtheSmithsonian.

Ourfourmajor—andsimultaneous—projects are:theNational AirandSpaceMuseum's newStevenF.

Udvar-HazyCenter,adjacenttoDullesAirport;thenewNationalMuseumofthe.American Indianonthe Mall;therenovation of the PatentOfficeBuLding,whichhouses the NationalPortraitGalleryandthe SmitlisonianAmericanArtMuseum;andthecomplete renovation oftheNationalMuseumofAmerican History. The combinedcostofthese initiativesis10timeslargerthan thefacihtiesprojectstackledbythe Smithsonianthroughout thelastdecade.It'sthe equivalent ofraisingthemoneyforandbuilding fourmajor museimis, each equivalentincostandcomplexitytotheU.S.HolocaustMemorialMuseum,atthesame time!

Inadditiontotheseefforts,theSmithsonianisseekingthenecessarysupporttomakemassiverepairsand dealwithsignificantpubhcsafety issues atthe NationalZooandthe NationalMuseumof NaturalHistory, twoofthe capital'smostvisited locations,whichwerebuilt in1890and1910, respectively.

WhenItestifiedbeforethiscommitteetwoyearsago,1saidmuchof the Smithsonianwaslooking "shabby."

Sincethat time, theNationalAcademyof Public Administration didastudy,requested bythisSubcommittee, whichsaid theSmithsonianwouldneed$1.5 billion dollarsover thecourse oftillsdecadetorestoreallofits

buildingsundercurrentplans.I'lldiscuss thismorelater.Inaddition,wewillneedtoraisebetween$500 million to $1 billionfromtheprivate sector torenovatehundredsof agingexhibitions inourmuseums,half ofwhichare15-25 yearsold,someofwhicharemorethan 40 yearsold. Visitingustoday withtheir kidsand grandkidsaresomegrandparentswhoareseeingexhibitstheythemselvessawwhenthey werechildren.

That's totallyunacceptable.

Fortheresearchitdoes, the Smithsonianemployssomeofthebrightestmindsinthe country.

We

wantthat tocontinue,butin certain areas, especially science, that's aconcernduetobudgetpressures.Today, fewer than10%of thescientistsfunded byfederalappropriationstotheSmithsonianareundertheage of40.

We

can'tcontinueto excel ifwecan't attract the top,youngtalent.Tohelpusassesshowbest toconductscience attheSmithsonian,we nowhave theassistanceof three groups:asciencecommission formedofeminent scientistsfrom aroundthe country,and twootherspecialgroups being estabhshedattherequestofthe Office ofManagementandBudgetbytheNationalAcademyof SciencesandtheNationalAcademyof Public Administration. V/e look forwardtohearingfiomallthreeduring the courseofthisyear.

THE

AFTERMATH

OF SEPTEMBER1

Obviously, thewholecountrywasaffectedbythetragedyofSeptember11'°,

particularlyNewYorkCityand the nation's capital. TheSmithsonianhadasignificantdropinvisitors,andwe wantto getthemback,so public safety willbeamoreofaconcern thanever before.

VisitstoSmithsonianmuseumsinWashington,comparedtothesamemonthlastyear,droppedby38%in September,44%inOctober,46%inNovember,only15%inDecemberthankstoagoodChristmastoNew

Yearsweek,and29%inJanuary.Asaresult,revenuefromourmuseumstores,restaurantsandtheaters, as well asSmithsonianmagazine,whichdepends^heavilyontravel-related advertising,havealldeclined.

Thisfall,duringavisitbysomeofournation'sGovernors,whenthey heardthatwe'vehadadrop-offin

visitorsandsomecancellationsofschoolfieldtripsduetoparental concerns,MississippiGovernorMusgrove commented, "Thegreaterdangertoour schoolchildrenisthattheywillnotcometoWashington,D.C.,and understandtheirnational heritage." We'redoingallthatwecantobringbackvisitorsofallages.

Certainly,public concerns aboutsafety willcontinue,andthatmeansincreasedcosts. Partof our constructionrequest,$2million,isfordesign ofanewextension, or pod,^atthe Institution'sMuseum

Support CenterinSuitland,Maryland. Thisnew podwillprovidecode-compliant,state-of-theartsecure storage fortheextensive collectionspreservedinalcoholoftheNationalMuseumof NaturalHistory.

In spiteofthese challenges,thankstomuchhardwork byour resourcefulanddedicatedstaff,the Smithsonianhadasuccessful year.Muchprogresswasmadeinmeeting ourdual mission,unchangedsince thefounding oftheSmithsonianin1846, "the increaseanddiffusionofknowledge."Tofulfillourmission,we

arepursuing fourmajorgoals: (1) substantiallyincreasedpubhc engagement,(2)morefocusedscientific research, (3)enhancedmanagementexcellenceand(4) greater financial strength.

INCREASEDPUBLIC

ENGAGEMENT

TheInstitutionenjoyedmorethan 42 millionvisitslastyeartoourmanymuseums,researchcenters,the NationalZoo,andtraveling exhibitions. Visitorssawseveralmajornewexhibitions,themostpopular of whichfeatureourtwonewgiantpandas,whohavewelcomed morethan2.8millionvisitorssincethey arrived inDecember2000.TheAmericanPresidency:AGloriousBurden, hashadmorethan800,000visitors sinceitopenedinNovember2000. And,sincetheopeningoftheStar-SpangledBannerconservationlaband exhibition inMayof 1999,morethan7millionpeople havecometo see the flag that inspiredthenational anthem. Othervcr)'wellreceivedexhibitionsincludeWithin TheseWalls;Brain;GameFace; In thePresence of Spirits;Triceratops;Explorethe Universe,andmanymore.

InconjunctionvrithThe AmericanPresirfencyexhibitionattheNationalMuseumofAmerican^History, Behring Center, theMuseumissponsoringayear-longseriesof eventsbasedontheshow, includingfilms, lectures,interviews, panels, living historyprogramsandschooltours, tonamejust a few. Thankstothe generous support ofthisSubcommittee andyour Senatecolleagues, in2002theInstitutionlauncheda travelingversion ofTlieAmericanPresidencyexhibitionwithmoreartifactsandmaterialsfromourvast collections,which openedinChicagoinFebruaryandwill visiteightmoresitesacrossthe country.

Becauseitmaybedifficuh fornewaudiencestocomegreatdistancesto us,wearebringing the Smith.sonian tothemthrough ourAffiliationsProgram, whichlendsartifactsfrom ourvast collectionof 142millionitems

DistrictofColumbia,PanamaandPuertoRico,anincreaseofcloseto400%injusttwoyears.

We'rebolstering theSmithsonian'sprogramoftravelingexhibitions. Infiscalyear2001, theSmithsonian InstitutionTraveling ExhibitionService(SITES),the largest inthe world,circulated54 exhibitionsto283 locationsreachingmorethan5million people.SITESiscelebrating50yearsofservice to theAmerican publicthisyear.

We

are particularlyproudofSITES'MuseumonMainStreet(MoMS)program,whichsent threeexhibitionsto 41 ruraltowns. Thankstoyour support,in2002wewillincrease

MOMS'

coverageto84 towns,andwe'readdinganewexhibition.KeyIngredients, toenable ustovisitmorelocations. And300,000 peopletookpart inThe SmithsonianAssociates'numerouslectures,seminars,courses,studytours, performancesandregionalevents.

Thisyear, forthefirsttime, we've undertaken anextensiveannual education survey ofallourfacilities.We're

stillcompiling thedata,butpreliminary estimatesindicate,and^{these are}conservativeestimates, that 21

million pre-Kthrough^12"*grade studentsbenefittedfroma varietyofSmithsonianeducationprograms.

This includeswebvisitsandactualvisitstoprogramsandmuseumshereinD.C.andacross thecountry.

We

know^that1.4millionteacherscametous forprofessional training;theythenwentoutandtrainedan additional846,000teachers, for a totalof2.2million teacherstrained.

MORE

FOCUSEDSCIENTIFICRESEARCH

TheSmithsonian conductssomeof thenation'smostimportantscientificresearchactivities.Highlightsof currentscientificresearchprojectsinclude: Scientists attheSmithsonianAstrophysicalObservatory have discoveredtwonew moonsofJupiter(18^arenowknown) andfournew moonsof Saturn(for a totalof 22 knownsatellites).The Smithsonian EnvironmentalResearchCenterandtheUniversityofMaryland'sCenter forMarineBiotechnologyaredeveloping techniquestoenhancethe fisheryandbiologicalunderstanding of thecommerciallyimportant bluecrab. TheCenteralsoworks onthetransferofinvasive speciesthrough ballast water.Scientistsfromthe Smithsonian TropicalResearchInstituteandtheNationalMuseumof NaturalHistory havepublishedastudyonhow muchandhowlongagohumansfirstcaused dramatic changesinthe world'scoastalmarineecosystems. As mentioned,welookforwardtothereportsfromthe various sciencecommissions.

ENHANCED MANAGEMENT

EXCELLENCE

AND

GREATERFINANCIALSTRENGTH

Thereare five initiativessupportingthese goals: (1)buildingasuperiormanagementteam andintroducing performancemeasures,(2)deployinganewfinancialsystem,(3)strengtheningfundraising, (4)

strengtheningourbusinessactivities,and(5)implementing recommendationsof therecent externalstudyof ourfacilitiesoperations.

People: Duringfiscalyear2001,webroughton boardanewChief FinancialOfficer, anewDirectorof FacilitiesEngineeringandOperations,anewChiefTechnologyOfficer,andanewPublisherandEditorfor Smithsonian magazine.

We

havealsorecentlyhirednewdirectors fortheHirshhornMuseum,the National PostalMuseum,andthe FreerandSackler Galleries. Whenoneconsidersthat infiscalyear2000weputin placenewdirectors attheNationalZoo,Cooper-HewittNationalDesignMuseum,theNational Airand SpaceMuseum,andtheNationalPortrait Gallery,andthatwecurrentlyhaveaformal searchinprogressfor theNationaliMuseumofAmericanHistory,itisclearthemanagementteamattheSmithsonianis

undergoingsignificant,rapidchange.

We

areconfident the long-termeffectofthis willbe exceedingly positive.

We

are alsomakinggreatprogressininstitutingperformance measuresforeachmuseumandunit

Strategic Plan.

Systems: We'reinstalling anew, information technology-basedfinancialsystem. OurEnterpriseResource Planning(ERP)projectisunderway, thankstoyour support.Workinggroups havebeen meetingregularly to designtheimplementation oftheGeneral Ledger,AccountsPayableandPurchasingmodules. ThePeopleSoft softwareisinstalledandisbeingtested. Thefirstphase of theproject willbefinishedby October1,2002.

Fundraising:ContributionstoSmithsonianmuseumsfromindividuals,foundarionsandcorporations reached $178.8 millioninfiscalyear 2001. For thefirstquarter of 2002, givingisdown,butweare nonethelessontracksuchthatby^theendofthefi.scalyear, totalgi\ing forfiscalyears 2000. 2001,and2002 willexceed thetotalamountraisedbytheSmithsonianforthe entireprevious decade.Thevast preponderance ofthe2001giftsare restrictedbythedonorstospecified projectsandprograms.

ExtraordinarygiftsofSIO million ormoreinclude$30 millionfromtheDonaldW.ReynoldsFoundationfor thepurchase of thefamousGilbert StuartLansdowiieportraitofGeorge Washington,S14.6millionfromthe Jerome and Dorothy Lemelson FoundationfortheNationalMuseumofAmericanHistory,SIO millionfrom theMoheganIndian Tribe of Connecticutfortheconstruction oftheNationalMuseumof theAmerican Indian,and$10millionfromtheLuceFoundationfortheSmithsonianAmerican

An

Museum.

Contributionssuchasthese are asupplementto,notareplacementfor,ourfederalappropriations. WTiile thesefundsareimportanttoourprogrammaticneeds,theydonot support operations,collections management,^facilitiesmanagement,security,and maintenanceofourbuildings, forwhichwearedependent onfederalappropriations.

Business: TheSmithsonianInstitution receivesrevenuefromseveralbusinessactivities,managedby Smithsonian Business Ventures (SBV). Smithsonian magazine,oneofthe largest general-interest cultural magazinesintheindustry^--withmorethantwomillionsubscribersandnearlyeightmillionmonthlyreaders --generatesmorethanhalfof Business Ventures'totalrevenue. Theotherhalfcomes fromthemuseum

stores,restaurantsandtheaters,the mailordergiftcatalog,andproductdevelopment andlicensing.

RevenuesfromBusiness Venturesarediscretionaryfunds usedtosupport general administrationthroughout the Institution, as well as research, collectionsmanagement,educationalactivities,andpublicprograms.

SBV'smanagement teamhasbeenstrengthenedvriththeappointmentofanewchief operatingofficeranda marketingandsalespromotionmanagerformuseumretailoperations.Amongtheiraccomplishmentsisthe planfor thenewWri^^r Place foodfacility,tobemanaged by McDonald's, whichwillopenatthe National AirandSpaceMuseumin.May 2002.

Asmentioned, fewervisitorshasmeantlessrevenue. Nevertheless,Smithsonian Business Ventures' provided a netcontribution of S26.2milhontothe Institution forfiscalyear2001fromallbusinessactivities.However, projections forSBVrevenuesforfiscalyear2002 have beenscaledback dramaticallyin lightofthe decline in tourismandmuseumvisitation.Asaconsequence,SBVlaidoff59employeeslastfall.

Facilities: Regardinglastyear'sNationalAcademyof Public Administration(NAPA)report,wehaveeither implementedorareintheprocessofimplementingtheirrecommendations. Thesestepsinclude,among

others:I)revalidatingthetotalbacklog ofrequirementsinourRepair, Restoration,andAlterationof Facilities(RR8cA) account,2) institutingprocedurestoimprove ourresponsestorequestsfor financial informationfromCongressandtheAdministration,3JimplementingaReliabilityCenteredMaintenance program,4)adopting industry-widedefinitions formaintenanceandrepair, 5) reorganizing,strengthening andcentralizingfacilitiesmanagementfunctions, 6) assessingthefeasibilityof contractingoutfacilities operationsandmaintenance,7)strengtheningthe roleofourinternalmajorprojectcoordinatingcommittee, theCapitalPlanning Board,8) revisingtheannualbudgetjustification toprovideprioryearprogram

4

asweproceedtoimplementNAPA'srecommendations andtry torecoverfrommanyyearsoferosion.

FY2003

BUDGET

REQUEST

TheSmithsonian'sbudgetrequestforfiscalyear2003foraU operatingandcapitalaccountsis$528million, anincreaseof$32millionabovethefiscalyear2002 appropriation. (Thiscomparisondoes not include the

$21.7 million providedinthefiscalyear 2002emergencysupplemental appropriationsbill.)Ofthisamount,

$93.3 millionisforourcapitalprogram^--specifically$81.3milhonforRepair,RestorationandAlterationof Facilities,and$12milhonforConstruction. TheSalariesandExpenses request of $454millionincludes$19.7 mUUonrelated totheAdministration's proposalforfullfunding ofCivil Ser\'iceRetirementandFederal EmployeeHealthBenefits costs, forwhichfundswere addedtoourrequestby0MB,whichisnot includedin thetotal. In addition,weproposetouseanadditional$14 millionfromfundsprovidedinprior years.

SalariesandExpenses:Therequestedincrease intheSalariesandExpenses accountwillfundmandatorycosts forgovernment-wide payraisesandincreasedutilitycosts,andpriorityprograms. Mandatorycostsinclude

$8.8million tofund the 235newsecurity positions tobe hiredinfiscalyear 2002 withemergency supplemental funds. Forfiscalyear2003,ourprogramprioritiesrepresentanincreaseof $33.3millionanda net increaseof60positions. Includedisworkrelated totheNationalMuseumoftheAmericanIndian, the National AirandSpaceMuseumUdvar-HaryCenter,securityimprovements,facihtiesprogramstaffing,and informationtechnologyinitiatives.

FortheNationalMuseumof theAmericanIndian,theFY 2003request includesanincreaseof$5.2million and36newpositionsfortheopeningof the MallMuseum,scheduledfor2004.These resourcesarerequested toreadythenewMuseumforoccupancy andpubhcvisits,andforessentialoutreachtoNativeAmerican communities andfacilitiesandprogramsupport.Asof theendoflastSeptember, 229,900artifactsoutofa totalof 773,183 havebeenmovedfromourstoragefacilityintheBronxinpreparationfortheopening, thoughinterms ofvolume andtime themoveisactuallymuchfurtheralong.

For theUdvar-HazyCenter,therequest includesanincreaseof$3.3millionand1 1newpositions tocontinue toprepareexhibits forthenewsitein Virginia,andtoplan educational, publicandinformation technology programsfortheCenter. Fundsare alsorequestedforfacilitiesoperationsandsecurity,whichweintendto contractfor,giventhedistancefrom ourMall operationsandcadrestaff.

TheInstitution'srequest includesanincreaseof$5.8 millionand12positionstobeginnewphases ofour EnterpriseResource Planning system,whichwillgreatlyimprove ourfinancialandhumanresource managementcapability. Atotalof$12 millionisproposedfortheERPinfiscalyear 2003,whichwillenable managerstorunthecontemporarySmithsonian withthe essentialinformation technology-basedfinancial control systemsthatareappropriateforsuchalargeandcomplexorganization.

Therequestalsoincludesanincreaseof$3.4miUionand2positionstocontinueestablishing astandards- based information technologyinfrastructure,includinganetworkoperatingcenter,extendedHelpDesk services,directoryserviceauditsoftware,continuednetworkserverconsolidation,andinitialapplication serverconsolidation. Therequestalsoincludesanincreaseof $500,000in theinformation resources managementpooltoassistindividualmuseumsandofficeswiththeirtechnology needs.

TheInstitutionisrequestinga$3.0millionincrease toreinforceandmodernizefacilitiesoperations.

Additionalstaffisessential tocarryoutthe Institution'sprogrammanagementrole in linewiththeNAPA

report'srecommendations,includingcostandschedule containment,safety,andqualityofthework.

Atotalincreaseof$12.1millionisrequestedforthenon-personnelsecurityneeds of theInstitution.This includes $1.1 million tocomplete replacement of the outdated SmithsonianInstitutionProprietarySecurity System (SIPSS)andmaintainandupgradethemodernizedsystemcomponents. Thebalance of therequest ofSI1millionisforadditionalsecurityimprovementsfor theNationalZooandontheMall,including installingpermanentbarriers,strengthening doorsand windows,andhardeningofficerbooths.

TheSalariesandExp>enseprogram wouldhave required an additional$14.1millioninnewappropriations haditnotbeenfor arescissionandreappropriationofprioryearfunds proposedin thisbudget. Theseprior yearfundsare available for rescissionbecausewehave determinedthatourplanstomodifyexistingstorage facilitiesto store collectionspreservedinalcoholarenotviable. TheSalariesandExpensesprogramoutlined above exceedsthefunding proposedby$12.8million.

We

intendtoworkwith Congressandthe Administrationtocompleteour plannedoffsetsfromexistingandnewprogramstoaddressour planned expenditures.

Repair.RestorationandAlterationofFacilities: Tohonoritscommitmenttostewardship ofartifactsand

facilities,we musthave anaggressiveandsustai.iedprogramfortherenewal of ourbuildings. TheInstitution has developedsuchaprogram,whichemphasizesrestoringsomeofourmostmonumentalbuildings overthe next decade while sustainingaconstantfundingleveltocontinuerenewaland codecomplianceinother facilities,someofv/hichwere constructedinthe^19"'Century. As^theCommittee recommended,weasked the NationalAcademyof Public Administration(NAPA)toreviewandevaluateourfacilityneeds.NAPA

confirmed ourbeliefsandindicated thataboutJl.5 billion in additionalbucget wouldbeneededoverthe nexttenyears for theSmithsoniantosustainitsfacilities. Because such massivefundingincreaseswillnotbe possibleundercunentbudgetconstraints, theSmithsonianwill setprioritieswithinthe Institution for repair andrestoration.

Withinthe$81.3millionrequestedin thisbudgetforRepair,RestorationandAlterationofFacilities,the Institutionwillcontinuetoaddressourmostcrucialrenovationand maintenanceneedsinsomeofouroldest facilities. ThefundswillbeallocatedamongthePatentOfficeBuilding ($25million).NationalZoo(S16.7 million).NationalMuseumof Natural History ($10million),androutinemaintenance($2.1 million), as well asto the repair, restoration,andalterationof otherfacilities. Twonewpositions arerequested,toimprove theconstruction contract supervisionforRR&Aprojects.

Thetotalcostof renovatingthePatentOfficeBuildingisestimatedtobeSI66million. TheSmithsonian requests$25million infiscalyear2003forcontinued renovation.Throughfiscalyear 2002,theCongress has appropriated $48.6 millionfor theprojea. Whiletheadditional$25 millionisastepforward,the total appropriatedforthe projectisnotyetevenhalf therequiredamount.Todate,contractshcvebeenawarded todesignthephysicalplantrenewalproject,toremoveantiquatedsystemsandhazardousmaterials in the building,andfor the exteriorstoneandwindowrenovation portion of theproject. Additionally,acontract forthepacking,crating,andrelocatingof theMuseum'scollectionswasrecentlyawarded. The$25million beingsoughtwillbegincourtyard excavationandelevator installation,andcontinuetherenewaland restorationofthe building's systems. Theplanned renovationswillreplaceoutdatedandinadequate performance spacebyprovidinganewauditoriumforpublic presentationsandprogrammingbeneaththe courtyard.Inadditiontorenovating thebuildi.ig'sinfrastructure, theSmithsonianiscommittedtoraising morethan $50million in additional privatefundstomakefurtherenhancementstothePatentOffice Buildingsuchasaddingan information kioskandan enclosed courtyardforadditionalpublic use.Ofthis

amount,morethan$20 million has already beenraised. TheInstitutionwillseekCongressional approvalfor theseefforts. Additionalprivatefundswillberaised tosupportenhancedpublicprogramsatthetwo museums.

Construction: Ourrequestof$12 millionforconstruction includesSiOmillion toallowus tocompletethe buildingoftheNationalMuseumoftheAmericanIndianfacilityontheMall. Thesitepreparationcontract was avvardedafterthegroundbreakingceremonyinSeptember1999,andpreparator)'work, includingsite fencing,utUity relocation,sheetingandshoring,and^fullexcavation ofthesite,wascompletedinJanuary 2001. Thecurrent constructioncontractwillbe executedinphases,beginning withthefoundationand structure,followedbythecompletion of thebuilding's exteriorskinandrooffor totalweatherproofing of the structure,whichwillbe paidforinpartwith funds previously providedbythisSubcommittee.Thebasebid andstone portionsof thefirsttwophases wereawardedinJune 2001. The$10 million requestedinFY2003 willbeused forwork ontheinteriorofthe building.

Asmentioned, the balance of the constructionrequest,$2million,isfordesign of anewextension,orpod,at the Institution'sMuseumSupport Centerin Suitland,Maryland,towhichthealcohol-basedcollectionsinthe NationalMuseumof Natural HLstoryontheMallwillbemoved.TheConstructionrequest alsoincludesa requestforfivenewpositions toimproveconstructionprojectmanagementof

NMAI

byhiringemployees insteadof contractorsforconstructionmanagement.

CONCLUSION

TheSmithsonian hasa special responsibility totheAmericanpublic, topreserveournation's great treasures andenrich our^liveswith infonnation abouthistory,art,andscience.

We

areallcommittedtoimprovingour execution ofthat responsibility,throughqualitypublicprogramming,importantscientificresearch, managementexcellence,andfinancialstrength.Thank youforyourtimeandforyour support.