UA-R-GC-1914-01-01-1986-11_Page-046

2 Trust. It was necessary to use Trust return gross for salaries, but to protect the real value of the Trust against the effects of inflation. The Administration was capitalizing similar amounts of revenue--i.e. comparable to the extra 8% being used from the Trust--from other sources. Mr. Snaith drew the attention of the Committee to other transfers between fund groups detailed on page 5 of his report on preliminary results for FY1985/86. 5. Revised 1986/87 Budget: Mr. Snaith advised the Committee that the 1986/87 budget showed a deficit. Income from grants and contracts has declined along with income from the AUC Press and some other auxiliary enterprises. Estimates for income from contributions have been revised downwards to a figure which is felt to be more realistic in view of current economic conditions and past performance. Dr. Pedersen noted that if AUC had not been able to draw down an additional LE I million from existiong US funds available to AUC the picture would look much worse. Mr. Snaith reported that drawdowns from the Trust Funds held in AUC's name by the U.S. Embassy and from other previously appropriated U.S. Government funds will again exceed 5% of the LE endowment fund monies, because of the necessity to use the Trust Funds for salary payments. This will be balanced by transfer of an equivalent amount--primarily from dollar contributions and endowment income--to quasi-endowment at the end of the year. The Committee noted the tighter financial conditions and agreed to recommend the revised budget to the Board of Trustees for approval. 6. Purchase of Sheikh Rihan Site: Dr. Pedersen briefed the Committee on the negotiations for the purchase of the Sheikh Rihan site. While a final decision on the uses of this space has not been made, the most likely use would be for classroom and office space, possibly for the Adult Education Program or the English Language Institute. The Finance Committee approved the use of up to $2.5 million from Plant Fund for the purchase and remodeling of this site. 7. Proposed 1987/88 Tuition: Dr. Pedersen informed the Committee that starting in 1987/88 the University would begin to use a single tuition fee to replace the local an~ foreign tuition rates now in use. Fo