The New York Government Reorganization and Citizen Empowerment Act (the Empowerment Act) made it easier for New York State residents to initiate the dissolution or consolidation of village governments. On the latest episode of Policy Outsider, Rockefeller Institute Fellow and Daemen University Professor Lisa Parshall discusses her new book, In Local Hands, which examines the social, political, and narrative context surrounding municipal reorganization in the state, especially since the Empowerment Act went into effect in 2010. The conversation touches on questions explored in the book: why do village residents support or oppose dissolutions? How do residents initiate reorganizations? And how do dissolutions affect taxes and government services?
Transcript was generated using AI software and may contain errors.
Alexander Morse 00:03
Welcome to Policy Outsider presented by the Rockefeller Institute of Government. I’m Alex Morse. On today’s episode Rockefeller Institute fellow and Daemen University professor Dr. Lisa Parshall, returned to the podcast to discuss her new book, In Local Hands, published by SUNY Press, which explores the social, political and narrative context surrounding village incorporation and dissolution in New York State, with a particular focus on village dissolution efforts since the New New York Government Reorganization and Citizen Empowerment Act, the 2010 law that encouraged village dissolution in an attempt to make government more efficient amid growing fiscal uncertainty. Our conversation takes a deep dive into Lisa’s research approach and answers questions like why village residents might support or oppose those dissolution? How dissolution may affect taxes and government services, and how big a role community identity plays in the decision to dissolve or not hope you enjoy coming up next. Today, I’m joined by Lisa Parshall, fellow at the Rockefeller Institute of Government and professor at Daemen University in Western New York. Lisa, thanks for joining today.
Lisa Parshall 01:32
Thank you for having me, Alex.
Alexander Morse 01:34
So we’re here to talk about your new book, In Local Hands, which is published by SUNY Press, in which you examine contemporary village dissolution in New York State. You also authored several pieces for the Rockefeller Institute and previously joined the podcast. So welcome back. And you talked about New York’s Government Reorganization and Citizen Empowerment Act and its effect on village dissolution efforts in the state. So let’s start off with what village dissolution is and why we’re talking about this today.
Lisa Parshall 02:02
Just a little background villages are voluntary, municipal, and corporations. So under New York State village law article two residents of a territory that meet population and territorial requirements can incorporate as a village upon petition and a vote of the residents. So dissolution is the opposite of that. It’s just incorporation. It’s when the residents of an incorporated village decide that they’re going to vote to dissolve the village government in return administration of the services and government of the village over to the former surrounding town or towns.
Alexander Morse 02:30
Well, that’s a pretty clear definition of what a village dissolution is, why would a village want to dissolve? What are some of these social and political factors involved in these decisions?
Lisa Parshall 02:40
Right. So one thing I should point out is that villages when they do incorporate are part of a town so village residents, for example, pay town taxes for town wide services, they pay village taxes up for their village services, and they can vote in both elections. But sometimes, residents for a variety of reasons have a village may consider dissolving. So some do so because the village is maybe declining population over time it’s become dysfunctional, could be voter apathy, or just because the village is fiscally unsustainable, what I call sort of a dissolution and decline. Another reason is that some dissolve in order to rejoin the town, they believe that the town can more efficiently provide services, they could form one community, sometimes they’re up following governing issues to the town or towns in order to move the community forward to some perceived benefit. And this is what I call kind of progressive thinking dissolutions. And then the other reason and probably the most common contemporary reason is that residents are interested in dissolution as a way to lower their property taxes by eliminating a duplex have level of of government because villages and towns are both general service providers. So this will allow them to find efficiencies and also to take advantage of some of the state incentives. And this is what I call dissolution and taxes motivation.
Alexander Morse 03:54
All right. So theoretically, those in a village that vote to dissolve, it would eliminate duplicative services or potential duplicative services. It might save them taxpayer dollars, and would rely on the town government to provide those services.
Lisa Parshall 04:10
Correct. It’s essentially a reorganization of local government to kind of reconfigure the service delivery arrangements of that locality.
Alexander Morse 04:18
Sure. And so how would a village go about starting a dissolution conversation or process?
Lisa Parshall 04:23
Right. So New York has always had laws that basically allow residents to either cease operating as an incorporated village, and it’s had dissolution procedures on the books since the adoption of a general village law in 1847. And that can be done either by process of ballot petition or resolution of the village board to put it up to the residents to vote at a referenda. They did make some major substantive changes to the village law and dissolution procedures in 72. And then, most recently, in 2010, the state really overhauled dissolution procedures through the enactment of the New New York Citizens Empowerment and Reorganization Act or what I’ll call the Empowerment Act for short, and that lowered the petition threshold to put dissolution on the ballot from formerly 33% of registered voters to 10%. Once a petition is verified as valid, then a vote takes place. And if the village residents vote to dissolve, then the law requires that a dissolution plan be created. It does provide in citizen initiated processes. It provides a period for what is called the permissive referenda. So if after a dissolution plan is created, there’s a time window in which if you can get 25% of the village residents to sign a petition, you can force sort of a revote. But that’s not automatic. It requires another petition filed the verified by the town. The law also authorizes village boards to initiate dissolution by a resolution to develop a dissolution plan that once approved, the board develops the plan, and then puts that plan out for a public vote. So the main difference just to keep in mind between the citizen and board initiated plans is the order of things. And board initiated proceedings, a plan proceeds to vote and instead it’s an initiated proceedings, the vote precedes the plan.
Alexander Morse 06:01
Alright, so there’s two different avenues for pursuing a village dissolution?
Lisa Parshall 06:05
Correct. But both are subject to the final approval of the voters at the polls.
Alexander Morse 06:10
So I think that covers what village dissolution is, and some of the processes involved in that. How did you get started looking at village dissolution in the first place?
Lisa Parshall 06:20
Sure. So I became really interested in this topic in 2010, when several villages in Erie County where I live, held dissolution votes, all of which failed. First, I was interested, really in this wave of dissolutions that were taking place in the aftermath of the Empowerment Act’s passage. But as I got further into the topic, I became more interested in the historical development of municipal reorganization questions like why did villages incorporate in the first place? Why do they sometimes dissolve? And so the book really expanded to be more of a comprehensive statewide, and a historical look as well at the formation and durability of village governments.
Alexander Morse 06:54
Thanks for a little bit of that background, why don’t you walk us through how you approached this research? What was the methodology involved for this book?
Lisa Parshall 07:00
Right. So a lot of the research was archive old with grants from the New York State Archive partnership trust in the Howard Samuel Center. I reviewed state records on incorporation and dissolution went up to the archives and looked at all the incorporation and dissolution files that the state had. I did a deep dive into the legislative history and the evolution of village law, changes in constitutional Home Rule provisions, read a lot of hearings and committee reports, the state constitutional conventions, legislative committees, and then I did a lot of combing, too, through historical newspaper sources to collect information on dissolution efforts, both past and present. And then I also when I moved into the modern period, I looked at a lot of like OSC fiscal data from 2012 onward after the fiscal-
Alexander Morse 07:42
Sorry, that’s Office of State Comptroller?
Lisa Parshall 07:43
That’s the Office of the State Comptroller, yes. And they created in 2012, a fiscal stress monitoring system. And so I was able to look at the relationship between village dissolution and fiscal stress. And then for the most part of the book, I used a pretty intensive case study approach, where I focused primarily on those cases in which dissolution was voted on by residents, again, going all the way back to the 1790s. For the contemporary cases onward, I was able to go a lot deeper, Alex, on reviewing dissolution studies and reports and local board meetings, I tried to talk to a range of participants and actors that included state officials, municipal organization leaders, town village officials, residents in both the pro and anti dissolution coalition groups. And I visited a lot of villages where dissolution both succeeded, and also where it failed and in different parts of the state to try to develop some portraiture of the communities. And also really just to check my assumptions as I was researching and writing. And another big source, I just have to give a shout out to local news reporters, because a lot of the contemporary news coverage really was vital for tracking and catching the flavor of these debates.
Alexander Morse 08:49
That’s a really comprehensive approach, state archival records, local law, detail in the village incorporation dissolution, the grassroots approach by going into communities and talking to stakeholders who that are involved in these community decisions.
Lisa Parshall 09:03
And while I talk to a lot of people, I want to just point out that the research was really conducted from an outsider observer perspective, and part just to keep a little bit of an analytical distance between the subject matter, but also to afford those willing to speak freely and retain their anonymity. And I wanted to really respect that while I might be studying this from a more analytical perspective, the debate over dissolution isn’t just an academic one to the to the communities that are considering this. The dissolution question is often very contentious, and people on either side can and do feel strongly about these issues. So it mentioned earlier that it’s kind of about local service delivery options, but it’s more than that it can be very personal and especially for village personnel. The other thing I should point out is a lot of these incorporation dissolution cases I look at can also touch on questions of race or class, particularly in the Hudson Valley area. They involve some of the ultra orthodox communities. So one of the challenges and researching writing a book on this public debate was trying to really fairly represent the multiplicity of views and to capture an understanding, while appreciating that I’m not really of these communities, I’m looking on us as an outsider. For an analyst, I think, you know, dissolution incorporation is really just basically, again, service provision arrangements and forms of boundary change. But for the people living in these communities, these questions impact their daily quality of life, their community identity, their sense of themselves, of what community they belong to. So for them, it is personal. And it has practical consequences for things that they care deeply about.
Alexander Morse 10:35
That sense of identity and community and the psychological factor you do touch on in your book. And I want to get to that. But before we do, I want to focus a little bit more on maybe some of the fiscal questions surrounding village dissolution. So there are a lot of political and social questions that villagers and townspeople, i.e. the stakeholders, in this discussion with regard to fiscal questions, how does dissolution or lack thereof affects revenue streams for villages and their accompanying towns?
Lisa Parshall 11:03
Right, so specifically on the fiscal questions, a lot of the study of dissolution in the preparation of dissolution, planning and studying in advance of a vote, wrangles over the potential cost and the potential savings. And that includes what the cost and the savings are going to be, after you again, differently reconfigure your service provisions. So when you think about dissolution, it almost always presents an opportunity to find savings, because in effect, that’s what the voters are telling their elected leaders: formulate a dissolution plan that keeps a similar level or acceptable quality of services, but does it more efficiently. So where the savings comes from first, when the village dissolves the tax base the properties and the businesses of the former village, now they become part of the town’s tax base. And then there are state incentives, including an increase in an enhancement of aim that was in the form of something called the Citizens Empowerment Tax Credit that passed shortly after the Empowerment Act. And so that is new revenues to the town, it’s an increase in AIM that is 15% of the combined levy of the communities up to a million dollars, there is a stipulation that at least 70% of that must be used for tax relief. So there’s the new state revenues. In addition to that, there’s the money that can be saved in wages and benefits and the legacy costs to employees of the former village. But that, of course, is going to be offset by some personnel of the former village that’s going to be need to be retained or perhaps hired by the town, because they still need to provide services to that area. But that’s some savings there in wages and benefits. There’s also something I know you know a lot about right efficiencies and savings that come from the larger economies of scales. By eliminating duplicative services, effectively, a dissolution is forcing shared services certainly right. And so you can get savings there again, offset, of course, by some transition in transfer cost. And then there’s the reduced operational cost not having to pay for example, for a separate and town and village facility, I’m not having to have duplicative equipment, again, with some offsets as the town takes on the services for the former village.
Alexander Morse 13:15
So from the villagers perspective, it sounds like it is a win in tax savings, because they’re not going to be taxed for providing village services. But on the flip side of that coin, that means the town is not enough to provide those services. So for people that are in the town areas that are not in the village boundaries, are their taxes going to be affected by this?
Lisa Parshall 13:34
So one thing is that you really have to look at every new case to see how dissolution will impact both services and taxes. And that is because it depends in part on what existed before. That is what services were provided by the village or may have already been shared or contracted from the town. Right. And then you have to look at the various options for continuing to provide services to residents of the former villages. The services that most people are worried about is emergency services. So when a village dissolves, for example, the municipal police department or municipal fire department are also dissolved. That doesn’t mean police and fire services are not going to be provided. But it does mean that they will be differently structured. So again, it’s hard to make universal declarations because each dissolution depends on an analysis of what is using assumptions of what will be are likely to be when the town takes over. But what I can say is this and most dissolution studies that are conducted either by citizens community groups or contracted out to organizations that specialize in doing these types of studies for municipal entities, they show that dissolution provides opportunities for savings. And a majority of these dissolution plans do project some post dissolution savings for residents of the former village. And that is often, not always, but often accompanied, sometimes by a small increase for town outside of village residents. But again, I just want to point out dissolution plans always depend on the assumptions about how the services will be provided under this new arrangement. And when we do look at savings and projected savings, it’s often questioned by residents of the village prior to voting, because there is always a fear of uncertainty that just because the plan was developed by the village, doesn’t mean that that’s what’s going to be implemented by the town. And so towns are not bound to the plan, unless, of course, they signed some MOU or a contract. But there are often concerns that whatever the plan savings are, that they could dissipate over time, they might turn out to be a little less than projected, or they could be reduced if the town subsequently implements dissolution in a way differently than anticipated by the planners.
Alexander Morse 15:41
And does your book track some of those outcomes?
Lisa Parshall 15:44
Yes, it is, though, I will say that is kind of the bingo question. And one that the state doesn’t provide incentives or funding for communities to study. And that is the question of what is the fiscal situation for villages that dissolve five years? 10 years? 15 years out? Right.
Alexander Morse 16:02
Lisa Parshall 16:03
Yeah, that becomes more difficult to study, in part, because once the village is dissolved, for example, in the Office of the State Comptroller, and all of its data collection, it gets reabsorbed back into the town. And so it requires a pretty fine tooth comb to go through and separate out what properties belong to the, to the prior village. And then you know, the it totally reconfigures what was before so it’s a little, you know, looking at apples and oranges.
Alexander Morse 16:27
Sure. Okay, that’s interesting. So Lisa, what resources would you need to go ahead and drag some of that stuff?
Lisa Parshall 16:35
Some deep quantitative resources and to be able to track property tax values over time to be able to map that with a GIS systems. And then I think also to sort of delve into the specific budgets of a town after it has taken on administration of the village. I mean, you will often get, and this is sort of Wilson’s law of public policy, right? When you ask people post dissolution, the commonality is that people who supported dissolution in the voting stage will tell you this dissolution has been successful. And they’ll point to the successes. People who were opposed to it will bend your ear about everything that is wrong with the dissolution. So it is hard sometimes to get an objective view of how well dissolution has been implemented, and what happens afterwards, you’re also you know, really have to get that information now from the town because the village officials in the village is no longer.
Alexander Morse 17:32
I think that’s pretty fascinating. Best of luck, I know, you’re going to continue to research all of this. So hopefully, all of that quantitative data, the budgets and the contacts that you’ve been forging, over the last several years continue to exist so that you can further supplement your research. So I want to return we talked about there’s a psychological component to village dissolution, many citizens tend to form an identity associated with their village, sort of like a community pride, how does identity play a role in dissolution efforts?
Lisa Parshall 18:03
It’s absolutely huge. So when I first started this, I was a kind of approaching this in terms of cost benefit analysis and looking more at the financials and effect on property taxes. And what I found is that I really think that the psychological attachment that residents form for their villages, I think it is as or even more important than any fiscal or tax savings in these debates. So there are multiple cases where dissolution studies demonstrate that there can be a financial savings and sometimes even a pretty significant one. And yet, the solution is roundly rejected by the voters. In almost all cases, dissolution moves, the debate moves very quickly from taxes and services, even if that was the motivating reason for citizens, for example, petitioning to put the solution on the ballot, when you actually get to the debate should we dissolve or not. It often moves beyond those kinds of tax impact and service issues into these kind of what I call intangible factors, where people start talking about their community history, their identity, or civic pride. And so at this point, really, these debates become more emotional and visceral than really just a cost benefit analysis. And so when I visited places that also really helped to shape the research, because what I started to realize when you go into these communities, is you see why there is such an emotional attachment to local government, municipal places, place names, signage, the boosterism the identity of the municipality is really part of the community’s fabric. And I also think there’s a little bit of a hidden narrative at work, right? Where we, collectively individually people kind of identify municipal longevity with municipal health, and to the contrary, they see dissolving as a form of municipal retrograde or decline or even its acquainted with municipal death. And so dissolution to many people feels like an erasure or capitulation or admission of failure that their community is defunct
Alexander Morse 20:00
Wow, really? You know, I guess I can see why they might feel that way. But at the same time, if on the assumption that government services would improve through economies of scale, you think people would be better service that there would be cheaper water or emergency management services, waste management, etc.
Lisa Parshall 20:19
Yeah, that’s true. But again, once you start to get to that decision where voters are really contemplating, okay, this village may be no more, they do start to think about the other ramifications of that. And so when you think about what the rationale here and what’s going on, you can see all sorts of, again, emotional arguments, but also arguments about how protective and reflective having a dedicated village government is for their self interest. So for example, in wealthy affluent communities, they’re willing to tolerate the higher taxes because they equate it with a higher level of services. Many people equate living in a village, if you think about some of the suburban counties of Nassau and Suffolk County, where there was a proliferation of villages in the 1930s and 40s. The creation of villages was done really to create a character of those communities where you have lower population and housing density, kind of a more rural character, because along with village government comes more localized planning and land use development control as well. And so what people fear is really that this is going to fundamentally reshape the character of the community. And as I was saying, this can become contentious, particularly, for example, if you have a large village and a surrounding town that the rural residents of the village will say, Can the town adequately fulfill our service needs, right. And sometimes you’ll have differences between the village and the surrounding town or townships that are kind of different communities, maybe demographically, or in terms of economics. And so that can create barriers and concerns too, because the creation of a village and the maintenance of those boundaries, they kind of set the boundaries of obligation they define and us versus them, where my tax dollars go to benefit. And so you’ll often see in these debates, a lot of hard feelings between town of outside of village voters and village residents about who’s subsidizing whom in that area. So these things touch on and again, in a way that becomes much more emotional, personalized, and because it affects what people perceive to be their kind of daily quality of life, that kind of washes out some of that just focus on you can save so many cents per 1000 on your property taxes.
Alexander Morse 22:40
That makes sense. I know in my own experience, I’m not always the most rational economic person in the world. So I can see how that can translate and generalize across communities. Diving into your findings across New York state since 2010, since the Citizen Empowerment Act, how many villages have initiated the dissolution process versus how many have successfully dissolved?
Lisa Parshall 23:03
I actually took it all the way back, you know, pre 1900, where sometimes the villages dissolved simply by just letting their charter lapse or expire. And that was kind of fun research to do, because the state didn’t start tracking this until 1900. So but pre 1900, there were around 16 villages that I found that had been incorporated, and then went away, usually through dissolution, or through abandonment. From 1900 to 2009, pre Empowerment Act, there are around 42. And I put some notes of caution in my appendices and so forth, because the state records are sometimes not completely accurate. And they count annexations as dissolution from the few places are double counted because of different names, spellings and, and so forth. From 2010. To the end of my study, there were 18 and one more Fort Johnson dissolve shortly after the book went to print. And so in New York State under the Empowerment Act, a total of 47 villages have voted on dissolution. 18 of those have been successful and 29 were defeated at referenda. And you do need to be a little careful when you look at dissolutions in the post 2010 period. Because the numbers actually a little higher than that. But some of those were actually dissolutions that took place that had been initiated under the prior proceedings. And so there’s a little bit of an overlap between the old law and the new law as dissolutions move through. So I had to kind of untangle that in the book to just focus on those that took place under the Empowerment Act provisions.
Alexander Morse 24:33
Right. And so since the Empowerment Act, the process has been made easier to initiate a village dissolution, but the rate of dissolution is lower than what it was prior to 2010. Do I have that right?
Lisa Parshall 24:46
Yes, you have that right. It’s a little confusing at first, but to kind of judge the impact of the Empowerment Act again, the separated out the cases that went through under the older provisions. It’s called article 19 provisions that were in place from 1930 Add to 2009. And then the cases under the Empowerment Act post 2010 that were Empowerment Act provisions. And what I found is that the empowerment act definitely has spurred an uptick in the number of villages voting on dissolution. So where’s there used to be less than one village voting per year, under the old provisions after the Empowerment Act, an average of 4.6 villages are voting on this in a year. So the Empowerment Act worked in getting dissolution on the ballot, just as you said, because it eased the pathway by lowering the citizen initiated petition threshold, there’s been a big uptick then and in dissolutions post 2010, 18 is quite a few. And when I charted out dissolutions by decade, you can see the Empowerment Act that is, you know, going into effect, but the rate of success has gone down. So whereas there was a 60% success rate before the Empowerment Act’s success rate is a 60% failure roughly. But again, because more are voting translates to an upward trend and actual dissolutions.
Alexander Morse 26:01
And you’ll be monitoring that through the course of your research.
Lisa Parshall 26:04
Alexander Morse 26:05
Well, we’ll have to have you back on to get a look back at the Empowerment Act. What do you say? Couple years from now?
Lisa Parshall 26:12
Yes, absolutely. Thank you, Alex.
Alexander Morse 26:15
So what are other states doing in pursuing village dissolution? Are other states trying to encourage government reorganization or restructuring?
Lisa Parshall 26:24
Yeah, interested in village dissolution is not just a New York phenomenon. It’s not just in New York State curiosity by any means. But we are ahead of the pack of states that have seen a number of states have seen a growing interest in this not to the same level as in New York, in part because I think because Governor Cuomo had made this a signature issue, and invested a lot of resources of the state post 2010 into trying to incentivize communities into considering reorganization. But other states, particularly those that have large numbers of municipal units that are facing kind of high property tax burdens, and have some fiscally stressed smaller localities, like Ohio, Illinois, New Jersey, you see, dissolution is an issue there too. Now, New York’s approach, the Empowerment Act and the incentives that were built around that, again, particularly the increase in AIM funding, the Citizens Empowerment Tax Credit, And then the other program that the governor put in place was the Citizens Reorganization Empowerment Grant that funds the study and implementation of dissolution. And then there was a whole other packages of shared services and efficiency grants and award programs. These are all to provide incentives for communities to consider becoming more efficient, whether that’s through shared services or all the way up to to reorganization, dissolution and consolidation. That was accompanied by other policies of the states that truthfully put a little pressure on communities, right. So the most notable is the property tax cap that was passed in 2011, and made permanent in 2019. And that limits localities to raising their annual growth of their levy to 2% or the rate of inflation, which is ever less. And so that kind of puts a cap on local revenue growth, and it sort of forces then communities to have to try to do more with the same amount of money. And so when you put all these factors together, you can say New York, uses kind of a combination of a carrot approach, with some fiscal pressures, to try to incentivize and get communities to move towards reorganization. Some other states go the more of the stick route, and even maybe mandate local government reform, whether it’s through automatic reclassification of municipalities based on population size, for example, or a few of them have mechanisms, at least on the books to try to basically have a state takeover of stressed municipalities. In New York, again, and what the research says in the consolidation says some combination and having local officials involved is best in kind of overcoming local resistance to state mandated change. So in New York, again, the approach has been to empower residents to make it easier for them to put this on the ballot to consider it, but it still at the end of the day leaves the decision to local hands.
Alexander Morse 29:09
Well, that’s a great plug for your book, Lisa, In Local Hands, published by SUNY Press. Final question for you. Where can listeners learn more about your book and purchase?
Lisa Parshall 29:19
on SUNYPress.com. That the SUNY Press has all the details of the book and ordering and so forth. It’s also on Amazon and others, but I encourage people to go to SUNY Press’s website, lots of other good research there, too.
Alexander Morse 29:29
Lisa Parshall, fellow at the Rockefeller Institute of Government and Professor at Daemen University. Thank you so much for taking the time to speak with us on government restructuring today.
Lisa Parshall 29:38
Thank you for having me.
Alexander Morse 29:41
Thanks again to Dr. Lisa Parshall, fellow at the Rockefeller Institute and professor at Daemen University, for joining us to discuss her new book, In Local Hands, published by SUNY Press. If you’re interested in learning more, you can visit SUNYPress.com where you’ll have the opportunity to purchase Lisa’s book. You can also learn more about village dissolution efforts in New York by visiting our website where we have links to Lisa’s previous research in the description of this episode. If you liked this episode, please rate subscribe and share. It will help others find the podcast and help us deliver the latest in public policy research. All of our episodes are available for free wherever you stream your podcasts and transcripts are available on our website. Special thanks to Rockefeller Institute staff Joel Tirado, Heather Trela, and Laura Schultz for their contributions to this episode. Thanks for listening. I’m Alex Morse. Until next time. Policy Outsider is presented by the Rockefeller Institute of Government, the public policy research arm of the State University of New York. The Institute conducts cutting edge nonpartisan public policy research and analysis to inform lasting solutions to the challenges facing New York state and the nation. Learn more at Rock institute.org or by following at Rockefeller inst. That’s Rockefeller i n s t on social media. Have a question comment or idea? Email us at [email protected]
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