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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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Department of Public Works
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DATE:
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May 16, 2007
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BOARD MEETING DATE:
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May 22, 2007
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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James C. Porter, Director of Public Works
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SUBJECT:
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Proposed 2007/2008 2008/2009 Garbage and Recyclables Collection Rate Increase and 2007/2008 Charges Report for County Service Area No. 8 (North Fair Oaks)
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RECOMMENDATION:
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Adopt a resolution:
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1.
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Setting July 10, 2007, 9:15 a.m., at your regularly scheduled Board meeting, as the time and place for a public hearing on the filing of the refuse “Garbage Collection Charges Report for Fiscal Year 2007/2008- County Service Area. 8 (North Fair Oaks)”.
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2.
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Adoption of the proposed garbage and recyclables collection rates in County Service Area No. 8 (North Fair Oaks). Directing the Director of Public Works to send a notice of the proposed collection rate increase to each property owner in the County Service Areas No. 8.
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VISION ALIGNMENT:
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Commitment: Responsive, effective and collaborative government.
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Goal 21: County employees understand, support and integrate the County vision and goals into their delivery of services.
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Adoption of the resolution contributes to this commitment and goal by continuing the public process for setting the 2007/2008 and 2008/2009 garbage and recycling collection rates.
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The 2007/2008 Garbage and Recyclables Collection Charges Report is the result of a collaborative effort between County staff and the North Fair Oaks Community.
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BACKGROUND:
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PREVIOUS BOARD ACTION
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Amended the franchise agreement with Allied Waste for garbage and recyclables collection services in CSA-8.
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Adopted an ordinance that requires a defined user category for garbage collection charges in CSA-8, County Ordinance Code, 4.04.180, Rates.
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(a)
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Residential (one to four dwelling units per parcel) - one unit of pick-up per dwelling unit,
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(b)
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Apartment House (more than four dwelling units), -3/4 units of pick-up per dwelling unit, (rounded up to the next whole number),
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(c)
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Mixed Residential/Commercial-Industrial - one unit of pick up per dwelling unit.
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Adopted an ordinance that garbage and recyclables collection charges be collected together with the property taxes per County Ordinance Code 4.04.300, Collection.
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Adopted the current garbage and recyclables collection user charge for CSA-8 on January 27, 2004. The current minimum user charge is set at $18.05 per month, per pick-up unit, per dwelling.
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Adopted the 2006/2007 Garbage and Collection Service Charges Report for County Service Area No. 8, North Fair Oaks Area, July 18, 2006
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HISTORY
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CSA-8 provides garbage and recyclables collection service in the North Fair Oaks area through a franchise agreement with Allied Waste (AW). The County generates the revenue to pay AW by charging each affected parcel that meets the criteria for County Ordinance Code 4.04.180 a minimum rate fee based upon pick-up units. These fees are adopted each fiscal year in the Garbage and Recyclables Collection Service Charges Report for County Service Area No. 8, and placed on the tax roll. All other commercial and industrial properties that are not placed on the County tax roll are billed directly by AW using the fee structure as recommended in Exhibit “A” and Exhibit “B”.
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The South Bayside Waste Management Authority (SBWMA) report “Review of Allied -San Mateo’s Refuse, Recyclable, and Plant Materials Collection Rate Application For 2007” identified a revenue shortfall for both the 2007/2008 and 2008/2009 fiscal year under the current rate structure. The report recommends a 9.1% increase in fees for the 2007/2008 fiscal year and a second rate increase of 6.3% for FY 2008/2009 to generate adequate revenue to meet projected expenses and cover the revenue shortfalls.
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SBWMA has also identified a capital improvement project for both the Recyclery and Transfer Station (Shoreway Recycling and Disposal Center). A staff report will be presented at a subsequent hearing to address possible additional revenue needs as a result of the capital improvement projects. Staff will make a recommendation on funding CSA-8’s share of the costs, once the scope of the work and cost estimates have been finalized by the SBWMA. A possible funding source for the future capital improvements projects could be from the fund balance reserve account for garbage in the CSA-8 area.
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The adoption of the 2007/2008 Garbage and Recyclables Collection Charges Report and its filing with the Clerk of the Board will allow the recommended user charges as stated in Exhibit “A” and Exhibit “B” to be placed on the tax roll for parcels that meet the requirements of County Ordinance Code, 4.04.180, Rates.
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DISCUSSION
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The South Bayside Waste Management Authority (SBWMA) retained a consultant to review and analyze Allied Waste’s annual rate application to ensure that rates reflect as closely as possible the cost of providing garbage and recyclables collection service in each of the twelve jurisdictions that are members of the SBWMA.
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For service charges to be collected on the tax roll per County Ordinance Code 4.04.300 Collection, it is necessary for the board to take the following actions by
July 31, 2007:
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1.
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Adopt the resolution of the proposed collection rates
(Exhibits “A” and “B”).
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2.
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Hold a public hearing and receive testimony on the proposed rates and charges report.
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3.
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Adopt a resolution adopting the FY 2007 /2008 Charges Report for County Service Area No. 8 (North Fair Oaks).
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Article XIIC and XIID of the State Constitution (Proposition 218), requires notices be sent to property owners alerting them of the public hearing to consider any new or increased property related fees, and a mechanism for rejecting the fees via a majority protest at the public hearing. In adopting the FY 2007/2008 Charges Report for County Service Area No. 8 (North Fair Oaks), county ordinance code requires a public hearing. We are recommending that your Board direct us to notify each property owner of the proposed new minimum user charge by mail and notify the owners that they may submit protests in writing, with regard to the proposed rate adjustments and attend the Public Hearing on July 10, 2007 at 9:15 a.m.
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Staff’s public outreach plan to address Article X11C and X11D is summarized in the following steps: 1) Conduct two public presentations with the North Fair Oaks Community Council, 2) file a copy of the “Notice of Public Hearing” to be published in the Independent Newspaper Group, and 3) send a mailing to each Assessor’s Parcel in CSA-8.
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The recommended action adopting the resolution setting the public hearing on the user charge report, and adopting the proposed rate schedules (Exhibit “A” & “B”) is the procedural first step.
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A resolution has been approved as to form by County Counsel.
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FISCAL IMPACT
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There is no fiscal impact associated with the recommended action of setting a public hearing.
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Approving the proposed FY 2007 /2008 Charges Report for County Service Area No. 8 (North Fair Oaks) after a public hearing will result on the charges being levied against each affected property in CSA-8.
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The following is a summary of the expenses/revenue projections for CSA-8 for the next two fiscal years.
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Expense/Revenue Projections for CSA-8 (North Fair Oaks)
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2007/2008
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2008/2009
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Total Revenue
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$1,945,033
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$2,089,433
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Current Year Revenue Requirement:
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$2,065,374
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$2,147,989
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Current Year Shortfall
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($120,341)
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($58,556)
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Payment to Balancing Acct
(Ox Mtn repayment)
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$247,630
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$141,503
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Interest Expense Balancing Account
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$2,660
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$1,734
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Previous Year Balancing Account Shortfall
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($153,002)
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($23,053)
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Current Year End Balancing Account Shortfall / Surplus
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($23,053)
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$61,628
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Projected Shortfall (Expense less Revenue):
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($176,055)
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($38,575.00)
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Proposed Rate Increase
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9.1%
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6.3%
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Source: Hilton Farnkopf & Hobson, LLC Report: “Review of Allied -San Mateo’s Refuse, Recyclable, and Plant Materials Collection Rate Application For 2007”, January 17, 2007, revision 4/26/2007.
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The most common residential service in CSA-8 is a minimum service, two 32-gallon cans serviced at the curb, or one can serviced in the backyard. The County Ordinance Code, 4.04.180, Rates defines the minimum subscription levels required per pick-up unit per type of dwelling. The 2007/2008 SBWMA report is recommending an increase from $18.05 to $19.69 per month, per pick-up unit. The 2008/2009 revenue shortfalls result in a proposed rate increase from $19.69 to $20.93 per pick-up unit.
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Expense factors that have contributed to this revenue shortfall include: 1) increased operational costs and associated wages, 2) increased costs in labor benefits (a new union agreement that was executed in Q4 of 2004); 3) an increase in fuel cost of 15.1% and depreciation for fleet improvements, 4) a decrease in projected disposal tonnage, and 5) adjustments to the revenues for CSA-8 because the rates are being adjusted at mid-year (7/1/07) rather than January 1, 2007.
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However, as shown in the table below CSA-8 will continue to have the lowest cost for this service in the SBWMA service area based upon the 2007/2008 rates proposed.
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Proposed Residential Two-32 Gallon Can Rate by
SBWMA Jurisdictions
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Jurisdiction
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Current Rates Cost Per Month
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Proposed 2007 Rates Cost Per Month
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Percent Increase
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Burlingame
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25.84
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26.82
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3.8
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San Mateo
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24.36
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27.13
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11.4
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Hillsborough
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46.46
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59.90
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28.9
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Belmont
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41.58
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45.08
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8.4
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San Carlos
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32.07
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35.05
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9.3
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*Redwood City
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33.90
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38.45
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13.4
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Atherton
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47.36
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38.03
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-19.7
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Menlo Park
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22.71
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24.41
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7.5
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West Bay
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33.46
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47.00
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40.5
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*East Palo Alto
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50.26
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39.16
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-22.1
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Foster City
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23.64
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22.93
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-3.0
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North Fair Oaks
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18.05
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19.69
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9.1
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Note: *Rates shown are for two standard 32-gallon garbage cans, except for Redwood City where rates are shown for two 40-gallon cans and East Palo Alto where the standard can is a 95-gallon container.
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Source: Hilton Farnkopf & Hobson, LLC Report: “Review of Allied -San Mateo’s Refuse, Recyclable, and Plant Materials Collection Rate Application For 2007”, January 17, 2007.
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The complete proposed rate schedule is attached as Exhibit “A” and Exhibit “B” to the proposed resolution; For non-residential customers subscribing to can or bin services, their rates will be increasing by 9.1% in FY 2007/2008 and 6.3% in FY 2008/2009 as stated in Exhibit “A” and Exhibit “B”. Allied Waste will continue to bill all parcels not specified in the County Ordinance Code, 4.04.180, Rates, as well as the residential customers that subscribe to additional services above the minimum can service that is levied on their tax bill.
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There is no impact to the General Fund.
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