THIS BUDGET REQUEST WILL ALLOW THE MINT TO PRODUCE

19.5 BILLION COINS. THIS PRODUCTION WILL SATISFY PROJECTED

DEMAND REQUIREMENTS OF 18.1 BILLION COINS AND ALLOW INVENTORIES,
WHICH HAD BEEN VERY LOW AT THE TIME THIS BUDGET WAS PREPARED, TO
INCREASE. HOWEVER, WE ARE CURRENTLY EXPERIENCING A SOFTENING IN
DEMAND. WE WILL BE TRACKING THIS TREND CLOSELY OVER THE NEXT FEW

MONTHS.

OUR CONTRIBUTION TO THE TREASURY FOR FY 1990 FROM
SEIGNIORAGE, AN OFF-BUDGET RECEIPT, IS NOW ESTIMATED TO BE
$572 MILLION. PROFITS ON NUMISMATIC AND BULLION PROGRAMS,
ON-BUDGET RECEIPT, IS ESTIMATED TO BE $90 MILLION.

AN

THE MINT'S FY 1990 BUDGET REQUEST HAS A NET INCREASE OF
INCREASES TOTALLING

APPROXIMATELY $3.7 MILLION OVER FY 1989.

$5.7 MILLION CONSIST OF: $1.5 MILLION TO INCREASE COIN PRODUCTION
FROM 18.0 TO 19.5 BILLION COINS; $400,000 FOR ASBESTOS REMOVAL;
$2.1 MILLION TO INCREASE EQUIPMENT PURCHASES AND BUILDING
IMPROVEMENTS; AND, $1.7 MILLION FOR MANDATORY COST OF LIVING
INCREASES. THE INCREASES ARE OFFSET BY REDUCTIONS TOTALLING
$2.0 MILLION FOR NON-RECURRING COSTS, PRODUCTIVITY SAVINGS, AND
SAVINGS RESULTING FROM A-76 STUDIES.

ASBESTOS REMOVAL

THE FY 1990 BUDGET REQUESTS $1.3 MILLION IN APPROPRIATED FUNDS FOR THE ASBESTOS ABATEMENT PROGRAM AT THE VARIOUS MINT FACILITIES. THE TOTAL ASBESTOS ABATEMENT EFFORT THROUGHOUT THE MINT, WHICH IS PROJECTED TO BE COMPLETED BY THE END OF FY 1993, IS ESTIMATED TO COST $7.1 MILLION. OF THIS AMOUNT, $5.2 MILLION WOULD BE FUNDED BY APPROPRIATIONS AND $1.9 MILLION WOULD BE FUNDED BY REIMBURSABLE FUNDS.

JUL 27 1989

RESEARCH AND DEVELOPMENT PROJECTS

THERE ARE NO NEW PROJECTS PLANNED IN FY 1990, THEREFORE THE
MINT IS NOT REQUESTING FUNDS THIS FISCAL YEAR. WORK CONTINUES ON
PROJECTS THAT HAVE BEEN DEVELOPED. THE COIN PRESS FEED SYSTEM
HAS PROGRESSED WITH THE INSTALLATION OF 10 UNITS AND A CONTRACT
FOR 50 UNITS COMPLETED. AN ADDITIONAL 50 UNITS ARE PLANNED FOR

PURCHASE NEXT YEAR. THE MINT WILL REALIZE YEARLY SAVINGS OF
19 FTES AND ABOUT $700,000. ALSO, WE COMPLETED THE CONTRACT FOR
AN ADDITIONAL ROBOTICS SYSTEM FOR COUNT, BAG AND STACK OPERATIONS
IN APRIL 1989. THE FIRST SYSTEM IS USED FOR PENNY OPERATIONS,

WHILE THE SECOND SYSTEM WILL HANDLE ALL DENOMINATIONS.

EQUIPMENT ACQUISITION

OUR EQUIPMENT ACQUISITION PLAN INCLUDES FUNDS FOR THE REPLACEMENT OF WORN-OUT, OBSOLETE EQUIPMENT. OUR REQUEST OF $3.4 MILLION WILL ENABLE US TO PURCHASE ITEMS SUCH AS COIN PRESSES, A BLANKING PRESS, COUNTING MACHINES AND INDUSTRIAL TRUCKS.

PERSONNEL

OUR BUDGET REQUEST FOR FY 1990 IS 2,145 FTEs: 888 FOR APPROPRIATED ACTIVITIES; AND 1,257 FOR REIMBURSABLE ACTIVITIES. THIS IS A REDUCTION OF 13 APPROPRIATED FTES AND 43 REIMBURSABLE FTES FROM OUR FY 1989 LEVELS. OUR REQUEST FOR FTES INCLUDES PROPOSED REDUCTIONS IN THE POLICE FORCE FOLLOWING AN A-76 STUDY WHICH MAY IDENTIFY WAYS OF MAKING THE FORCE MORE EFFICIENT OR MAY

INDICATE THAT IT SHOULD BE REPLACED BY PRIVATE SECURITY GUARDS

THROUGH CONTRACTING OUT PROCEDURES.

RECURRING REIMBURSABLE PROGRAMS

THE MINT'S RECURRING REIMBURSABLE PROGRAMS FOR FY 1990 WILL BE THE ANNUAL PROOF COIN SETS, ANNUAL UNCIRCULATED COIN SETS, CONGRESSIONALLY AUTHORIZED MEDALS, AND THE AMERICAN EAGLE GOLD AND SILVER BULLION PROGRAMS.

EXISTING COMMEMORATIVE AND NEWLY LEGISLATED COIN PROGRAMS

THE BICENTENNIAL OF THE CONGRESS PROGRAM BEGAN IN JUNE 1989

AND ENDS IN JUNE 1990. THE EISENHOWER COMMEMORATIVE COIN PROGRAM

BEGINS IN FY 1990.

PUBLIC ENTERPRISE FUND

LEGISLATION IS BEING PROPOSED FOR A PUBLIC ENTERPRISE FUND

TO FINANCE NUMISMATIC AND BULLION COIN OPERATIONS FOR THE UNITED STATES MINT BEGINNING WITH FY 1990.

THE MINT WOULD RETAIN PROFITS FROM FY 1989 REIMBURSABLE

PROGRAMS TO SUPPORT START-UP OPERATIONS. DURING FY 1990 AND

THEREAFTER, SALES PROCEEDS WOULD BE DEPOSITED INTO THE REVOLVING

FUND. OPERATING AND CAPITAL EXPENDITURES WOULD BE CHARGED

AGAINST THE FUND. AT YEAR END, THE NET PROFITS RESULTING FROM ALL NUMISMATIC AND BULLION PROGRAMS WOULD BE DEPOSITED INTO THE

GENERAL FUND OF THE TREASURY, WITH THE EXCEPTION OF THE NECESSARY FUNDING TO BE RETAINED TO FINANCE NECESSARY CAPITAL ACQUISITIONS AND START-UP OPERATIONS FOR THE SUBSEQUENT FISCAL YEAR. THE MINT WOULD BE REQUIRED TO SUBMIT BUSINESS-LIKE STATEMENTS TO THE CONGRESS IN SUPPORT OF THE PUBLIC ENTERPRISE FUND. FULL IMPLEMENTATION OF THE PUBLIC ENTERPRISE CONCEPT WOULD ENABLE THE MINT

TO BE MORE RESPONSIVE TO CHANGES IN THE PUBLIC'S DEMAND FOR

NUMISMATIC AND BULLION COINS AND WOULD PÈRMIT THE MINT TO OPERATE
REIMBURSABLE PROGRAMS IN A MORE BUSINESS-LIKE FASHION AND HELP

THE MINT TO COMPETE WITH OTHER MAJOR MARKETS OF THE WORLD.

SUMMARY

THIS CONCLUDES MY PREPARED REMARKS. I WILL BE HAPPY TO

ANSWER ANY QUESTIONS YOU MAY HAVE.

JUL 27 1989