February 21, 2000
15 Adar, 5760
JerusalemTreasurer’s Report to the Jewish Agency Executive - February 21, 2000, 4.30 pm
I would like to welcome you to the first Board of Governors meetings of the new millennium and wish us all a few days of fruitful discussions. I am happy to have the opportunity to update you about the results of our 1999 budget and activities.
As I am sure you know, last year the Jewish Agency brought to Israel nearly 66,500 olim from the countries of the former Soviet Union, over 2,200 olim from Ethiopia and nearly 8,800 from other countries, a total of 77,500 new immigrants.
The Jewish Agency regular budget for 1999 that was approved at the Board of Governors meetings in October 1998 was based on our regular activities and had not planned for a growth in the number of immigrants from distressed countries.
However, in the course of 1999, and especially in the second half of the year, a special rescue operation for the aliya of Jews from the FSU, Ethiopia and Yugoslavia, proved necessary.
Funding for the rescue operation required raising some 20 million dollars over two years over and above the regular budget that had been approved for 1999.
With the help of the fundraising campaigns of UJC, Keren Hayesod and other voluntary bodies, the necessary additional funds were raised. The success of this campaign was another example that proved the successful, long-standing partnership between the fundraising operations around the world and the activities carried out by the Jewish Agency’s dedicated and experienced staff.
The actual expenditure of budget for 1999 was 317.8 million dollars against income of 317.4 million dollars from the regular budget - a slight deficit of 400,000 dollars.
This includes expenditure of 1.8 million dollars which are, in fact, open commitments for the 1999 budget that have still not been realized, especially for activities of the Israel Department in rural settlement and Partnership 2000.
If part of them are not realized, we will end with a slight surplus or with a balanced budget.
The rescue budget, spread over two years, 1999-2000, finished 1999 with 10.75 million dollars of expenditure and 9.8 million dollars of income, that is, a deficit of one million dollars. (The surplus income is due to the fact that there were fewer Ethiopian olim than we had anticipated.)
The 1999 activities budget for designated projects was 63 million dollars.
Over the past few days we have started to implement our strategic initiatives, that will cost about seven million dollars, 3.5 million of which is already budgeted. Over the next few days we will decide how to shift priorities in order to facilitate the implementation of these new initiatives which are part of our strategic plan.
Let me now turn to the realization of assets, which are not part of our operating budget.
According to the decisions of the Board of Governors, income from the realization of Jewish Agency assets goes towards the reduction of the organization’s debts.
The realization of some 60 million dollars was planned for the 1999 budgetary year. This was mainly from the sale of Amigour apartments, forecast at realizing 50 million dollars, with some 10 million dollars due to come from the realization of other assets.
Assets of 59 million dollars were in the end realized: 47 million dollars from the sale of 1,368 Amigour apartments, and twelve million dollars of income from the sale of other assets (including the sale of Zrifin, which realized 3.9 million dollars, a property in France, which realized 2.3 million dollars, Real Estates Participation, which realized 1.8 million dollars, and land in rural settlements, which realized 3.7 million dollars).
With the funds realized from the sale of these assets, the Jewish Agency paid back 14.3 million dollars it owed its banks, 11.2 million dollars it owed to suppliers, 10 million dollars of debts to its pension funds, 9.4 million dollars of UIA debts to their banks and it refunded to the Allocation Acceleration Program, of which 1.3 million dollars was refunded to UIA Canada and 12.7 million dollars to US communities.
Proper management of the Jewish Agency’s assets and liabilities will ensure the stability of the organization, its ability to continue existing and to meet its challenges and undertakings.
In recent months, the Government of Israel and the Knesset have been working intensely on the revised Public Housing Law. According to the proposed law, the rights of the Jewish Agency to realize the apartments it and the UIA owns are likely to suffer.
Assets realized from the sale of Amigour apartments is an extremely significant element in the Agency’s plans to cover its debts in the next few years. We are therefore negotiating with the government through all possible channels, including the various Knesset committees, and are examining other possible legal channels to prevent any possible damage to the Agency from the implementation of this new Public Housing Law.
Let me end by reporting to you a decision taken this morning to help strengthen rural settlements on the periphery of the country. The Jewish Agency has decided to exempt these settlements from any payment for expansion and is calling upon the Israeli government to do likewise.
Thank you for your attention.