Building a Financially Sustainable School Meal Program
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1 Building a Financially Sustainable School Meal Program Gay Anderson, SNS Brandon Valley School District, SD Michael Rosenberger, MBA Irving Independent School District, TX Beth Wallace, MBA, SNS Cherry Creek School District, CO Copyright 2012 School Nutrition Association. All Rights Reserved.
2 Collective Purchasing Buying Group (whatever we want to call it ) Does It Make Sense For My School District? Copyright 2012 School Nutrition Association. All Rights Reserved.
3 Purpose of a buying group Multiple SFAs come together, purchasing as a group rather than individually Benefits: Increases buying power Lower pricing compared to purchasing on your own Proper procurement can ease time limitations for SFA s Copyright 2012 School Nutrition Association. All Rights Reserved.
4 What is determined Product Usage Requirements Input from all SFAs about specific products Product Evaluations Analyze the BID or RFP Volume in $$ s and cases Copyright 2012 School Nutrition Association. All Rights Reserved.
5 Who is or should be involved in group purchasing? Many SFAs already are involved in some form of a group purchasing agreement. These include Large SFAs, Midsize and some Small State Coops reach SFAs in some of these situations while other groups are the Group Purchasing Organizations (GPOs). Copyright 2012 School Nutrition Association. All Rights Reserved.
6 Who is or should be involved in group purchasing? Average size SFAs are the ones missing out Smaller & rural SFAs can benefit from the collaboration. Increase options with distribution for rural locations Product specifications are supported in a group setting $$$$$$$ MONEY $$$$$$$$ Copyright 2012 School Nutrition Association. All Rights Reserved.
7 Our Experience Process started with three SFAs Worked on Market Basket items with other school districts Volume Usage separately and combined Copyright 2012 School Nutrition Association. All Rights Reserved.
8 RFP Process Met with Distributors we knew would submit info to the RFP Mailed the RFP to the known distribution facilities allowing 4 weeks time to return proposals Score card made for determination of distributor for receiving and comparing proposals Copyright 2012 School Nutrition Association. All Rights Reserved.
9 Score Card Broken down to: Price Value Added Services Technology and ordering systems Past Experiences with Vendor Ability to meet the characteristics of each group member Copyright 2012 School Nutrition Association. All Rights Reserved.
10 Building a Financially Sustainable School Meal Program 43 rd Legislative Action Conference March 1-4, 2015 Michael Rosenberger Director, Food & Nutrition Services Irving Independent School District Texas
11 3 Ways to Rock your Finances! 1) Increase Your Customer s Average Daily Purchases 2) Know & Cut Your Costs 3) Price it Right!
12 +++ $$$ Marginal Costs and Revenues Marginal cost the change in cumulative cost that comes from producing one more item Marginal revenue the income associated with selling one more unit of production
13 +++ $$$ Revenue Meal Price Food Cost per Meal $ 3.00 $ 1.00 Food Cost Fixed Labor Overhead Expenses $ $ $ Fixed Costs $ 100 Costs Overhead $ 10 Equipment Revenues Labor $ 90 Utilities
14 +++ $$$ Revenue Meal Price Food Cost per Meal $ 3.00 $ 1.00 Food Cost Fixed Costs $ $ $ Fixed Costs $ 100 Expenses Revenues
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17 +++ $$$ Opportunity to Improve BK Lunch 2 0 Avg. Participation
18 +++ $$$ Add New Programs + Expand Current Programs Breakfast Lunch CACFP (snack and/or supper) After School Care (Snack) Program Summer Meals Ala Carte Catering Non-Program-Related Meals Sales CEP, Provision 2, etc.
19 +++ $$$ The Power of CEP Breakfast - Regular Reimbursement Breakfast CEP Reimbursement Free 80 X 1.93 = $ Free 100 X 1.93 = $ Reduced 5 X 1.63 = $8.15 Reduced 0 X 1.63 = $ - Paid 15 X 0.28 = $4.20 Paid 0 X 0.28 = $ - TOTAL $ TOTAL $ Lunch - Regular Reimbursement Lunch CEP Reimbursement Free 80 X 3.00 = $ Free 100 X 3.00 = $ Reduced 5 X 2.60 = $13.00 Reduced 0 X 2.60 = $ - Paid 15 X 0.30 = $4.50 Paid 0 X 0.30 = $ - TOTAL $ TOTAL $ GRAND TOTAL $ GRAND TOTAL $ DIFFERENCE $68.75
20 +++ $$$ Increase Ala Carte Add impulse items Merchandise/display near point of sale Appeal to the senses Action signs Buy one today! Try one now!
21 Cut your costs What You Don t Know Can Hurt You Assume you made a 2% profit last year. If one of your kitchens deposits $ per day, how much profit per day do they make? If staff in that kitchen burns a tray of pizza (20 slices at $.25 cost each), how much did that tray of burned pizza cost you? What impact did that tray of burned pizza have on your kitchen s daily profit?
22 Cut your costs Expense Everything! Breakfast - Early Childhood 2/12/15 COST Yogurt $.35 Dino Graham Crackers $.18 Fruit juice $.18 Milk $.25 TOTAL COST $.96 Breakfast - Early Childhood 2/13/15 COST French Toast Minis $.31 Fruit cup $.35 Milk $.25 TOTAL COST $.91
23 Cut your costs Super Stars & Losers
24 Cut your costs Keeping Score January-15 CLIFTON INCOME DEPOSITS ADULT MEALS/ALA CARTE PARENT ONLINE REIMBURSEMENT 25, TOTAL INCOME 25, FOOD COST PURCHASES 10, TRANSFER 0.00 BEGIN INVENTORY 5, ENDING INVENTORY 6, TOTAL FOOD COST 9, LABOR COST 10, MISC. COST 1, TOTAL COST 20, PROFIT/LOSS 4,286.00
25 Price It Right Ala Carte 3x food cost is a best practice 2.5x food cost can work rounding your selling price can help Baked Chips Food Cost 3X Possible Selling Price $.21 $.63 $.75 Cookie $.17 $.51 $.50 Side Salad $.32 $.96 $1.00
26 Price it Right Price High Example: you get an amazing bid price on bottled water on your bid just $.16 for a 12-ounce bottle. Nearby c-stores sell the same bottle for $1.00 each. What price might you first try and sell your bottled water for? a) $1.25 b) $1.00 c) $.75 d) $.50 You can always lower prices, if need be, but you can t easily raise them
27 Price it Right Permanent Special Pricing Two for $1.00 (or $.60 each) Half-price sale 50% Off Limited Time Only Save 75%
28 Building a Financially Sustainable School Meal Program 43 rd Legislative Action Conference March 1-4, 2015 Michael Rosenberger Director, Food & Nutrition Services Irving Independent School District Texas
29 Building a Financially Sustainable School Meal Program Beth Wallace, Director, Cherry Creek Schools SNA Legislative Action Conference Washington DC March 1, 2015
30 Back to the Basics Financial Reports Meals per Labor Hour Inventory Control Efficient use of USDA Foods
31 Financial Reports Available Revenue Menu Pre-costing Transparent monthly operating statements Menu Post-costing
32 Available Revenue to Average Pre-Cost Menu Current Breakfast Average Pre-Cost $ Current Lunch Average Pre-Cost $ Distribution of Revenue for Cherry Creek High Schools Breakfast Meals (7/13-6/14) Percent Distribution Federal Reimbursement District Meal Price Revenue USDA Food Revenue Total Revenue Distributed Revenue Revenue Available for Food Cost Per Meal Paid 13,359 10% $ 0.28 $ 1.75 $ 2.03 $ 0.20 Reduced 24,385 18% $ 1.32 $ 0.30 $ 1.62 $ 0.30 Reduced Severe 22,240 17% $ 1.63 $ 0.30 $ 1.93 $ 0.32 Free Regular 6,318 5% $ 1.62 $ - $ 1.62 $ 0.08 Free Severe 67,251 50% $ 1.93 $ 1.93 $ 0.97 Total 133,553 $ 2.35 $ 1.87 $ 0.84 Lunch Paid 203,540 41% $ 0.34 $ 2.95 $ $ 3.57 $ 1.46 Reduced 75,975 15% $ 2.64 $ - $ $ 2.92 $ 0.45 Free 218,509 44% $ 3.04 $ - $ $ 3.32 $ 1.46 Total 498,024 $ 3.36 $ 1.51 Analysis Available Revenue Actual Pre- menu Cost Difference Average Meals Served, Daily Number of Serving Days, Annually Totals Breakfast $ 0.84 $ $ (0.154) 1, ($33,902.02) Lunch $ 1.51 $ $ (0.388) 4, ($318,429.30) Totals $ 2.35 $ $ (0.542) 6,015 ($352,331.32)
33 SAMPLE Secondary Breakfast Menu Costing Information Cycle 1 Main Dish Cost of Main Protein Grain Juice Fruit Milk Condiments Paper/Plastic Chemical Cinnamon Roll Fruit Pocket Biscuit & Gravy French Toast Sticks Cowboy Bread $0.472 $0.352 $0.090 $0.139 $0.155 $0.156 $0.156 $0.156 $0.156 $0.156 $0.260 $0.260 $0.260 $0.260 $0.230 $0.230 $0.230 $0.230 $0.230 $0.074 $0.065 $0.065 $0.065 $0.065 $0.065 $0.028 $0.028 $0.028 $0.028 $0.028 Total Cost Week Average Entrée Other $0.829 $0.951 $0.878 $1.165 $0.844 $0.933 $0.090 $0.472 $0.139 $0.352 $0.155 $0.242 Offered Daily Main Dish Cost of Main Protein Grain Juice Fruit Milk Condiments Paper/Plastic Chemical Cereal (top price) & Toast 2 Slices Toast Breakfast Pocket Bagel Oatmeal Breakfast Round Breakfast Burrito Banana Bread Waffle $0.197 $0.417 $0.000 $0.470 $0.000 $0.032 $0.064 $0.216 $0.250 $0.480 $0.440 $0.156 $0.156 $0.156 $0.156 $0.156 $0.156 $0.156 $0.156 $0.260 $0.260 $0.260 $0.260 $0.260 $0.260 $0.260 $0.260 $0.230 $0.230 $0.230 $0.230 $0.230 $0.230 $0.230 $0.230 $0.050 $0.080 $0.056 $0.056 $0.056 $0.065 $0.065 $0.065 $0.065 $0.065 $0.028 $0.028 $0.028 $0.028 $0.028 $0.028 $0.028 $0.028 Daily Total Week Average Entrée Other $0.959 $0.794 $1.147 $1.005 $0.989 $1.289 $1.219 $1.179 $1.057 $0.229 $0.064 $0.417 $0.216 $0.250 $0.470 $0.480 $0.440 $0.321 Average Meal Cost $0.995 Average Entrée $0.281
34 REVENUE GHS CTHS PMS LIB MIS PON TOTAL 40000Federal Reimb-Breakfast 2, , , , , , , Federal Reimb - Lunch 12, , , , , , , USDA Foods 1, , , , , , , Smart Start PK-5 Lunch , Breakfast Food Sales , Lunch Food Sales 12, , , , , , , Ala Carte Sales 13, , , , , , , Misc TOTAL REVENUE: $43, $41, $90, $49, $29, $42, $298, EXPENDITURES GHS CTHS PMS LIB MIS PON TOTAL SALARIES AND BENEFITS Total Salaries $10, $11, $16, $8, $5, $5, $56, Hourly Salaries 7, , , , , , , Manager Salaries 2, , , , , , Relief Workers Overtime PERA 1, , , , , Medicare Health Insurance Benefits 1, , CCSD FLEX , Life CATEGORY TOTAL: $14, $14, $20, $11, $7, $6, $73, SERVICES 94433Equipment Repair & Maintenance Pest Control Gas Electricity CATEGORY TOTAL: $63.75 $ $ $0.00 $72.00 $74.00 $ SUPPLIES Smallwares $25.60 $51.46 $ $ Food Cost 14, , , , , , , Non-Food Cost 1, , , , , , USDA Foods 1, , , , , , , CATEGORY TOTAL: $17, $17, $34, $18, $12, $16, $117, OTHER OPERATING EXPENSES Equipment Parts Indirect Charges 1, , , , , SNC Expenses 2, , , , , , , CATEGORY TOTAL: $3, $2, $8, $3, $2, $4, $26, TOTAL EXPENDITURES: $35, $34, $64, $33, $22, $27, $217, ENDING BALANCE $8, $7, $26, $16, $6, $15, $80,485.67
35 Yearly Operating Statement School Year Summary by Month GHS CTHS PMS LIB MIS PON TOTAL Ending Balance July Ending Balance August Ending Balance September Ending Balance October Ending Balance November Ending Balance December Ending Balance January Ending Balance February Ending Balance March Ending Balance April Ending Balance May Ending Balance June -$14, $13, $11, $7, $4, $5, $6, $8, $3, $4, $2, $1, $6, $8, $11, $8, $1, $4, $3, $6, $13, $10, $2, $7, $5, $11, $8, $6, $1, $4, $ $3, $10, $6, $ $5, $6, $6, $21, $11, $2, $11, $2, $13, $18, $9, $ $9, $30, $23, $40, $23, $10, $21, $2, $10, $16, $10, $2, $9, $ $5, $21, $13, $3, $11, $27, $29, $31, $16, $15, $15, $56, $11, $11, $22, $4, $17, $33, $20, $150, $25, $44, $136, Year to Date Total -$44, $93, $122, $80, $87.73 $62, $127, School Year Summary by Month GHS CTHS PMS LIB MIS PON TOTAL Ending Balance July Ending Balance August Ending Balance September Ending Balance October Ending Balance November Ending Balance December Ending Balance January -$22, $23, $14, $10, $6, $7, $4, $8, $7, $8, $1, $1, $12, $17, $19, $17, $6, $9, $10, $7, $2, $7, $1, $2, $2, $3, $3, $7, $1, $1, $5, $4, $6, $7, $2, $4, $8, $7, $26, $16, $6, $15, $86, $30, $84, $32, $20, $30, $80, Year to Date Total $22, $24, $51, $53, $13, $26, $192,877.30
36 Post-costing Reimbursement $754, Food Sales 918, USDA Foods 62, State Match 155, Other 3, Refunds (811.51) Labor & Benefit $616, Food & Non-food 650, USDA Foods 62, Other 132, Indirect Charges 47, Total Expenses $1,509, Total Revenue $1,892, Net Profit $383,259.58
37 Operating Day 19 Statistics Daily Expenses $79,440 Daily Revenue $99,612 Total Breakfast Meals 81,721 Total Lunch Meals 373,991 Food Costs per Breakfast & Lunch Meal $1.56 Labor Costs per Breakfast & Lunch Mea $1.35 Other Costs per Breakfast & Lunch Meal $0.40 Average Daily Participation Breakfast 4,301 Lunch 19,684 Total Cost per Meal $3.31 Total Revenue per Meal $4.15 9
38 Meal Per Labor Hour Determine a Standard Calculation Key Performance Indicators (KPI s)
39 MPLH: Meal Equivalent Calculation Lunch 1 Lunch = 1 Meal Equivalent Breakfast 3 Breakfast = 2 Meal Equivalent A La Carte Reimbursement Rate + Commodity Assistance SY = $ $0.2695= $ Total A La Carte / $ = X Meal Equivalents Total Meal Equivalents / Total Labor = MPLH 11
40 MPLH: CCSD s MPLH & Staffing Type of School Middle and High Meal Equivalents Served MPLH NA Elementary 300 or more Elementary Elementary Elementary 219 or less
41 MPLH: CCSD s KPI Individual School Goal Meet or exceed MPLH for 6 out of 9 months (7 of 12 YR) Resources Financial Review (P&Ls) Training Alternate Work Plans 13
42 Inventory Control Determine a Schedule Review Schools for efficient Inventory Comparison/trends
43 Which do you prefer?
44
45 Efficient use of USDA Foods Take time to plan Use DOD Center of the Plate versus Fruits
46 Committed to Monthly Reports Transparency Operating Statements Meals Per Labor Hour Post-Meal Costing Inventory Tracking of USDA Foods
47 Building a Financially Sustainable School Meal Program
48 Available Revenue to Average Pre-Cost Menu Current Breakfast Average Pr Current Lunch Average Pre-C $ $ Distribution of Revenue for Cherry Creek High Schools Meals (7/13- Percent Federal Reimbursement District Meal Price USDA Food Total Distribute Revenue Available for Food Cost Per Breakfast 6/14) Distribution Revenue Revenue Revenue d Revenue Meal Paid 13,359 10% $ 0.28 $ 1.75 $ 2.03 $ 0.20 Reduced 24,385 18% $ 1.32 $ 0.30 $ 1.62 $ 0.30 Reduced Severe 22,240 17% $ 1.63 $ 0.30 $ 1.93 $ 0.32 Free Regular 6,318 5% $ 1.62 $ - $ 1.62 $ 0.08 Free Severe 67,251 50% $ 1.93 $ 1.93 $ 0.97 Total 133,553 $ 2.35 $ 1.87 $ 0.84 Lunch Paid 203,540 41% $ 0.34 $ 2.95 $ $ 3.57 $ 1.46 Reduced 75,975 15% $ 2.64 $ - $ $ 2.92 $ 0.45 Free 218,509 44% $ 3.04 $ - $ $ 3.32 $ 1.46 Total 498,024 $ 3.36 $ 1.51 Analysis Available Revenue Actual Premenu Cost Difference Average Meals Served, Daily Number of Serving Days, Totals Breakfast $ 0.84 $ $ (0.154) 1, ($33,902.02) Lunch $ 1.51 $ $ (0.388) 4, ($318,429.30) Totals $ 2.35 $ $ (0.542) 6,015 ($352,331.32)
49 SAMPLE Secondary Breakfast Menu Costing Information Cycle 1 French Toast Main Dish Cinnamon Roll Fruit Pocket Biscuit & Gravy Cowboy Bread Sticks Cost of Main $0.472 Protein $0.352 Grain $0.090 $0.139 $0.155 Juice $0.156 $0.156 $0.156 $0.156 $0.156 Fruit $0.260 $0.260 $0.260 $0.260 Milk $0.230 $0.230 $0.230 $0.230 $0.230 Condiments $0.074 Paper/Plastic $0.065 $0.065 $0.065 $0.065 $0.065 Chemical $0.028 $0.028 $0.028 $0.028 $0.028 Total Cost $0.829 $0.951 $0.878 $1.165 $0.844 Week Average $0.933 Cycle 2 Main Dish Cheese Toast Bagel Waffle Biscuit & Gravy Fruit Pocket Cost of Main $0.533 Protein $0.065 $0.216 Grain $0.032 $0.440 $0.139 Juice $0.156 $0.156 $0.156 $0.156 $0.156 Fruit $0.210 Milk $0.210 Condiments Paper/Plstic $0.065 Chemical $0.028 $0.028 $0.028 $0.028 $0.028 Other Daily Total $0.281 $0.400 $0.624 $0.808 $0.717 MMA GB Week Average $0.566 Entrée $0.090 $0.472 $0.139 $0.352 $0.155
50 Other $0.242 Offered Daily Cereal (top Oatmeal Breakfast Banana 2 Slices Toast Breakfast Pocket Bagel Main Dish price) & Toast Breakfast Burrito Bread Waffle Cost of Main $0.197 $0.417 $0.000 Protein $0.470 $0.000 Grain $0.032 $0.064 $0.216 $0.250 $0.480 $0.440 Juice $0.156 $0.156 $0.156 $0.156 $0.156 $0.156 $0.156 $0.156 Fruit $0.260 $0.260 $0.260 $0.260 $0.260 $0.260 $0.260 $0.260 Milk $0.230 $0.230 $0.230 $0.230 $0.230 $0.230 $0.230 $0.230 Condiments $0.050 $0.080 Paper/Plastic $0.056 $0.056 $0.056 $0.065 $0.065 $0.065 $0.065 $0.065 Chemical $0.028 $0.028 $0.028 $0.028 $0.028 $0.028 $0.028 $0.028 Daily Total $0.959 $0.794 $1.147 $1.005 $0.989 $1.289 $1.219 $1.179 Week Average $1.057 Entrée $0.229 $0.064 $0.417 $0.216 $0.250 $0.470 $0.480 $0.440 Other $0.321 Average Meal Cost $0.995 Average Entrée $0.281 Average Other $0.730
51 Break-out by Campus SAMPLE January REVENUE GHS CTHS PMS LIB MIS PON TOTAL Federal Reimb-Breakfast 2, , , , , , , Federal Reimb - Lunch 12, , , , , , , USDA Foods 1, , , , , , , Smart Start PK-5 Lunch , Breakfast Food Sales , Lunch Food Sales 12, , , , , , , Ala Carte Sales 13, , , , , , , Misc TOTAL REVENUE: $43, $41, $90, $49, $29, $42, $298, EXPENDITURES GHS CTHS PMS LIB MIS PON TOTAL SALARIES AND BENEFITS Total Salaries $10, $11, $16, $8, $5, $5, $56, Hourly Salaries 7, , , , , , , Manager Salaries 2, , , , , , Relief Workers Overtime PERA 1, , , , , Medicare Health Insurance Benefits 1, , CCSD FLEX , Life CATEGORY TOTAL: $14, $14, $20, $11, $7, $6, $73, SERVICES Equipment Repair & Maintenance Pest Control Gas Electricity CATEGORY TOTAL: $63.75 $ $ $0.00 $72.00 $74.00 $ SUPPLIES Smallwares $25.60 $51.46 $ $ Food Cost 14, , , , , , , Non-Food Cost 1, , , , , , USDA Foods 1, , , , , , , CATEGORY TOTAL: $17, $17, $34, $18, $12, $16, $117, OTHER OPERATING EXPENSES Equipment Parts Indirect Charges 1, , , , , SNC Expenses 2, , , , , , , CATEGORY TOTAL: $3, $2, $8, $3, $2, $4, $26, TOTAL EXPENDITURES: $35, $34, $64, $33, $22, $27, $217, ENDING BALANCE $8, $7, $26, $16, $6, $15, $80,485.67
52 Yearly Operating Statement School Year Summary by Month GHS CTHS PMS LIB MIS PON TOTAL Ending Balance July -$14, $13, $11, $7, $4, $5, $56, Ending Balance August -$6, $8, $3, $4, $2, $1, $11, Ending Balance September -$6, $8, $11, $8, $1, $4, $11, Ending Balance October -$3, $6, $13, $10, $2, $7, $22, Ending Balance November -$5, $11, $8, $6, $1, $4, $4, Ending Balance December -$ $3, $10, $6, $ $5, $17, Ending Balance January -$6, $6, $21, $11, $2, $11, $33, Ending Balance February -$2, $13, $18, $9, $ $9, $20, Ending Balance March $30, $23, $40, $23, $10, $21, $150, Ending Balance April -$2, $10, $16, $10, $2, $9, $25, Ending Balance May $ $5, $21, $13, $3, $11, $44, Ending Balance June -$27, $29, $31, $16, $15, $15, $136, Year to Date Total -$44, $93, $122, $80, $87.73 $62, $127, School Year Summary by Month GHS CTHS PMS LIB MIS PON TOTAL Ending Balance July -$22, $23, $14, $10, $6, $7, $86, Ending Balance August $4, $8, $7, $8, $1, $1, $30, Ending Balance September $12, $17, $19, $17, $6, $9, $84, Ending Balance October $10, $7, $2, $7, $1, $2, $32, Ending Balance November $2, $3, $3, $7, $1, $1, $20, Ending Balance December $5, $4, $6, $7, $2, $4, $30, Ending Balance January $8, $7, $26, $16, $6, $15, $80, Year to Date Total $22, $24, $51, $53, $13, $26, $192,877.30
53 Food and Nutrition Services Department Food Service Fund Summary Overview (Sales) January-15 (1) Reimbursements $754, (2) Food Sales 918, (3) USDA Foods 62, (4) Other Local $3, (5) Central Office $155, (6) Refunds (811.51) Total Revenue $1,892, (1) Labor & Benefits 41% $616, (2) Food & Non-Food 43% $650, (3) USDA Foods 4% $62, (4) Other Cost 9% $132, (5) Indirect Charges 3% $47, Total Expenses $1,509, Net Profit (Loss) $383, Statistics: Operating Days (Average) 19 Daily Expenses $79,440 Daily Revenue $99,612 Total Student Breakfast Meals 81,721 Total Student Lunch Meals 373,991 (1) Food Costs Per Breakfast & Lunch $1.56 (2) Labor Costs Per Breakfast & Lunch $1.35 (3) Other Costs Per Breakfast & Lunch $0.40 Average Daily Participation Student Breakfast 4,301 Student Lunch 19,684 Total Cost Per Meal $3.31 Total Revenue Per Meal $4.15
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