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~umber TOBACCO INSTITUTE TESTING LABORATORY Proposed 1980 Budget 1979 Descri?tion = 3900 4000 4300 4400 4600 4700 4800 4900 = 5000 5100 5200 5300 5400 5500 6600 6700 6900 7100 7300 7400 STAFF COMPENSATION $I44,510 FRINGE BENEFITS 42,330 Travel 4,300 Conferences ~ Meetings --- Rent - Space 48,000 Rent ~ Equipment ~ Furniture --. Other Occupancy Expense --- Furniture, Fixtures ~ Equipment 29p500 BOOks and 5~bscriptions 750 Equipment ~epairs ~ Maintenance 6,000 Office Supplies 13,000 P03tage ~ Delivery 550 Repredu¢~ion 2,~00 Telephone ~ Telecopy 1,800 Other Office Expense --. Membership and Staf£ Yraining 400 B~$i~e$$ Taxes --- Cigarette Purchases - TITL 3S,000 Employee Recruitment ~ Relocation Expense --- Insurance - General 8,100 Professional Fees 14,000 Purchased Admini~tratlve 5ervices --- TOTAL 1979 Budget Budge~ Increase Account ~4700" 28 500 TOTALS $378~840 Percentage increase (decrease> over Z979 Budget Percentage increase ~ecrease~ over 1979 Estimated F~penditure$ *$28,500 budget increase £or purchase 0£ gas chromatographic equipment approved in ~larch Z7, 1979 letter from P. H. Leake to ~, L, Steele **See Account #4?00 on a~tached Explanatory Notes for detail of possible budget increase should further analyses proposed by FTC become necessary. Da=e Prepared 10/15/79 1979 Estimated 1980 Enpenditures $141,744 $157,000 I~ 3S,400 46,B00 ~" 2,700 3,200 1,600 1,900 51,000 56,500 i~400 i~800 500 I~600 I 58,000 10,000""~~ 700 800 24,200 27,000 ~ 15,000 14,500 # ~00 400 2,200 2~300 ,! 1,BOO 2,000 lO0 200 1,600 2,500 ~ 3,700 4,000 25,500 BS,000 ~ 2,800 1,000 ~2~ ~ 1,500 2,000 3~200 4,200 ~ --- 300 $~44 $4~00 < 1.6%> 12.1~ O O

TOBACCO INSTITUTE TESTING LABORATORY Proposed 1980 Budget Explan~t0ry Note~ STAFF COMPENSATION The salary increase of 511,$90 is based on adjust- ~e~ts Complying w£th the Federal ~a~e and Price Guidelines in addition ~a ~n allowance for replacement hirlng at a higher rate. FRINGE BENEFITS The 54,470 in~rease i~ employee bene~ics repr~sent~ rise £n u~employment and health £nsuraRce rates a~ well as higher s~l~ries on which most benefits calculations are bRsed. Consideration is being given to a possible in~rease in pension ¢overR~e, #4300 . RENT - SPACE The 58t50~ increase in office r~nt reflects rental escal~ion ~nd the TITL tenant's $har~ of estimated inoTease$ iD operating Co~t~ a~d real ~state taxeB, No additional spa~e will b~ acquired. 1979 5144,310 42,330 48,000 #4700 FUR~ITURE~ FIXTURES ~ EQUIPMENT 29,500 9R K~ The 1979 initiBl ~pprove~ b~dget to upgrade existing furniture, fixtures an~ equipment,was 529,500, The Board approved an additional 528,S00 specificslly to purchase g~ chro~tographlc equ£~ent. In 1980, TITL @$~ima~$ & r~q~i~em~nt of 510~000 ~o i~prov~ ¢~r~ent operations and mBinta~ facilities, If TITL is required to perform Further analyses as proposed by the FTC, the following additional equip~ ment e~pense$ ~re anti¢£pa~ed: -Smoking ~achiRe 520,000 °Infrared Dete=tors 6,600 -Compucer [nt~rfa¢ing * HaT,ware ~nd Software 6,50~ Computer Up~rade 14~000 -O~=side Co~sul~ing S,008 -~iscellaneous ~,000 -Sales Tax aad Inflat£on ~,900 5SS 000 (The secoRd smoking machine would require an additional 552,000,) 1980 Proposed 5157,0~0 46,800 56,500 i0,000 1980 ~udget IncT~as~ <Decrease> 512,690 4,470 8,500 <lg*SoO> 8

TOBACCO INSTITUTE TESTING LABORATORY Explanatory Notes Page 2 #4900 - EQUIPMENT REPAIRS f MAINTENANCE The 1979 budget ~or equipment repairs and m~inten- ance was split between two Categories with $5,000 io this account and $13,000 in professional fees. The 19B0 proposed increase of $8,000 reflect5 primarily ~he escalating frequency and co~t of repairs as well as increases in service con~raGts. a6700 - CIGARETTE PURCFL%SES The budget increase Of $S0.000 for cigarette purchases reflects late billing and payment i~ I980 for the second Sample ~cquired and tested in 1979. It also contains an anticipated increase in ~he Cost of Ciga- rettes Eor the two $ampIes ~o b~ aGqulred~ tested and paid £or in 19~0. 1979 $ 6.000 35,000 1980 Proposed $ Z7,O00 8S,000 1980 Budget I~crease <Decrease> $ 8,000 50.000 0 0 0 0 ~q 2 ~J