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HomeMy WebLinkAbout12-27-2011 Regular MeetingPublic Meeting Notice Committee: Fairhope Financial Advisory Committee Date & Time: Tuesday, December 27, 2011 at 4:45 p.m . Place : Delchamps Room ,, 161 North Section Street Subject: See Attached Agenda Notice must be stamped, dated and initialed before posted on bulletin board. PO STED /g/19/11 SIGNATURE City of Fairhope Financial Advisory Committee Agenda -Tuesday, December 27, 2011 4:45 p.m. in the Delchamps Room City Hall -161 N. Section St., Fairhope, AL 1. Approval of Minutes for October 24 , 2011 Regular Meeting. 2. Vann Saltz and Erik Cortinas to present the Recreation Board's reque st for $75 ,000 to b e allocated from Impact Fee funds . A portion of the $75,00 0 would be used to level and reconfigure soccer fields 5, 6, & 7 at Founders Park. The remainder of the money would be u sed for s urveyin g and preliminary planning for development of the Manl ey Road Soccer Complex. 3. Discussion of Alabama Guaranteed Energy Savings Legislation , and the potential application at Fairhope for upgra ding energy-related infrastructure. (See addendum for relevant sections of the Alab_ama Code.) 4. Discussion of a Solid Waste RFQ . Schedule Of Future Meetings (Note: Regular meetings are on the 4 th Monday of each month at 4:45 p.m. in the Delchamps Room at City Hall, 161 N. Section St., Fairhope, AL.) • Next regular meeting: Monday, January 23 , 2012 City of Fairhope Financial Advisory Committee Agenda -Tuesday, December 27, 2011 4:45 p.m. in the Delchamps Room City Hall -161 N. Section St., Fairhope, AL 1. Approva l of Minutes for October 24, 2011 Regular Meeting. 2. Vann Saltz and Erik Cortinas to present the Recreation Board's request for $75 ,000 to be allocated from Impact Fee funds. A portion of the $75 ,000 wou ld be u se d to level and reconfigure soccer fields 5, 6, & 7 at Founders Park. The remainder of the money would be used for surveyin g and preliminary planning for de ve lopment of the Manley Road Soccer Comp lex. 3. Di sc u ss ion of Alabama Guaranteed Energy Savings Legislation , and the potential application at Fairhope for up gra din g energy-re lated infra structure. (See addendum for relevant sections of the Alabama Code.) Schedule Of Future Meetings (Note: Regular meetings are on the 4th Monday of each month at 4:45 p.m. in the Delchamps Room at City Hall, 161 . Section St., Fairhope, AL.) • Next regular meeting: Monday, January 23 , 2012 STATE OF ALABAMA COUNTY OF B ALDWIN )( )( The Financial Advisory Committee met at 4:45 p.m., City Hall , Delchamps Room, 161 orth Section Street , Fairhop e, A labama 36532 , on Tuesday, 27 D ecember 20 11. Present were: Chuck Zunk, Chairman Members: Stan Grubin , Marvin Wilder, John Brown , Bob Riggs , and Mayor Kant. Ex- Officio Members : D eb bie Quinn , Dan Stankoski, Lonnie Mixon, and Rick Kingrea. Mac McCawley and Mike Ford we re a bse nt. Chuck Zunk called the meetin g to order at 4:45 p.m. He a nnoun ced that th e first ite m is to approve th e minutes from the October 24, 2011 F inancial Advisory Comm ittee meeting. Marvin Wilder moved to approve the minute s from th e October 24, 20 11 Fi nancial Advisory Committee meeting as amended. Seconded b y Stan Grubin, motion passed unanimousl y b y v oice vote. Chainnan Zunk stated we nee d to amend our agenda b y adding the reques t to di sc uss a so lid waste RFQ . Lonnie Mi xon moved to add the request to di scuss a solid waste RFQ to the agenda. Seconded b y Marvin Wi ld er , motion p assed un a nim ousl y by voice vote. The ne xt it em on the agen d a was the presentatio n by Va nn Salt z and Erik Cortinas for the Recreation Board 's requ est for $7 5 ,000 to be allocated from Impact Fee funds . A portion of the $75,000 w ould be to leve l and reconfigure soccer fields 5, 6, and 7 at Founders Park. The remaind er of the money would be u sed for surveying an d preliminary planning for de ve lopment of the Manley Road Soccer Complex. Lonnie Mixon mentioned there may b e a probl em w ith th e upgrades to Founders P a rk and u s in g Impact Fee fund s, so City Attorney Wynne is researching if the funds ca n b e u sed . Stan Grub in , Chairman of the Budge t Committee for 20 12 , ex pressed his co ncern to the F inancial Advisory Committee and the City C ouncil regarding the deficit in th e Recreational Department and thi s request for $75,0 00 from the R ecreation Board for the Manley Road Project an d upgrades to Founders P ark. (See attached Statement). After further discu ss ion , Lonni e Mixon mo ved to recommend the $75 ,000 to the C it y Council ; $60 ,000 for the Man ley Road Proj ect and hold the remainder $15 ,000 until C it y Attorney Wynne gi v es us a lega l opinion on whether or not we can upgrade Fo und er Park. Seconded b y Rick K in grea , m o tion pass ed unanimously b y voice vote . Financial Advisory Committee Tuesday, 27 December 2011 Page-2- Rick Kingrea stated we need to plan for debt. Chairman Zunk commented this is a righteous request and he will vote to support this motion. However, the Library, School Committee, etc. are all requesting money. We have a Budget Committee who makes decisions of how funds are disbursed out and recommends these to the City Council. Robin Sanders and Kevin Brown discussed the next item on the agenda, Discussion of Alabama Guaranteed Energy Savings Legislation, and the potential application at Fairhope for upgrading energy-related infrastructure. Mr. Sanders briefly went over the presentation from Linc Energy and Building Solutions. If there is a shortfall, the Linc will make up the difference. This could be a $300,000 to $700,000 savings per year. Chairman Zunk said there were two features unique: 1) performance guaranteed contract and 2) ability on how you treat this on budget/can spread out over time making it budget neutral. We need to appoint a committee to study this who will address funding and accounting rules. Mayor Kant said you may want to go out on a RFQ for a company. Chairman Zunk appointed a Study Committee of five members to look at this agenda item: Marvin Wilder will be Chairman; John Brown, Chuck Zunk, Ken Eslava, and Scott Sligh will be the other members. The next item to be presented is the request to discuss a solid waste RFQ by Debbie Quinn. She stated there was a Public Works Study Committee who advised to go out on an RFQ for a consultant to decide whether or not Solid Waste would be outsourced or take an in-depth look at our own process. She requested to look at a consultant to look at the efficiencies. Debbie Quinn stated that she had spoken to several cities and a consultant. The RFQs have come back for the consultant, but have not been opened or evaluated. The cost would probably be between $12,000 to $15,000 and wants approval to go forward with the RFQ for the consultant. Lonnie Mixon replied that we just separated Public Works and need to do an internal study for Solid Waste. Mayor Kant said that we probably need help with recycling because it is the one costing the City money; and could possibly go to single source recycling. Mayor Kant suggested that he and Debbie Quinn meet regarding this issue and bring back to the Financial Advisory Committee. There being no further business to come before the Financial Advisory Committee, the meeting was duly adjourned at 5 :40 p.m. Chuck Zunk, Chai ADDE ND UM ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• A labama Code -Section 41-16-140: SHORT TITLE This article shall be kno w n as th e "Guaranteed Energy Cost Savings Act." A labama Code -S ection 41-16-141: D EFINI TIO NS For purposes of t hi s article , the follow ing tem1s shall have the fo ll owing meanings: (1) ENERGY C O ST SAVINGS MEASURE. A training program or new facility or existing faci lity a lteration des igned to re du ce energy consumption or operating costs , or water and other natural resources consumption , and may inc lude one or more of the following: a. Insul ation an d r edu ced air infi ltrat io n of th e building s tructure inc luding walls, ceilings, and roofs or systems with in the buil ding . b . Storm windows or doors , caul king or weather-stripping, multiglazed windows or doors, h eat a b sorbin g or heat re fl ective g lazed and coated wind ow or d oor systems, additional g laz ing, reductions in g lass area, or other wind ow and door system modifications that reduce energy consumption . c. Automated or computerized energy contro l systems , incl u d ing computer software and technical d ata li cen ses. d. Heating, ventil ating, or air conditioning system modifications or rep lacements . e. Replacem e nt o r m o d ificatio n of li g htin g fi xtures to increase th e en ergy efficiency of the lighting system without increasing the overall illumi n at ion of a facility , unless an increase in illumin at ion is necessary to conform to the applicab le state or local building code for the lighting system after the proposed modifications are made . f. Indoor air q u a li ty improvemen ts. g . Energy recovery systems . h . E lectric sys t e m s improvements . i. Life safety measures that provide long-tem1 operating cost reductions . j. Bui ld ing operation programs th at red u ce o p eratin g costs. k. Other energy-conservation-related improvements or equipment, including improvements or equipment related to renewable energy. I. Water and other natural resources conservation. (2) GOVERNMENTAL UNIT. A state government agency, department, institution , college, uni versity, technical school , legislative body, or other establishment or official of the Executive, Judicial , or Legislative Branches of the state authorized by law to enter into contracts, includin g all local political subdivisions such as counties , municipalities , or public school districts. (3) GUARANTEED ENERGY COST SAVINGS CONTRACT. A contract for the implementation of one or more energy cost savings measures. (4) OPERATIONAL COST SAVINGS. Expenses eliminated and future replacement expenditures avoided as a result of new equipment installed or services performed. (5) QUALIFIED PROVIDER. A person or bu siness experie nc e d in the design , implementation, and installation of energy cost sav ings measures . (6) REQUEST FOR PROPOSALS . A negotiated procurement that is announced through a public notice from a governmental unit which will administer the guaranteed energy cost savings contract requesting innovative solutions and proposals for energy conservation measures. The request for proposal shall include the following: a. The name and address of the governmental unit. b . The name, address, title , and phone number of a contact person. c. The date , time, and place where proposals must be received. d. The evaluation criteria for assessing the proposa ls. e. Any other stipulation s and clarifications the governmental unit may require. Alabama Code -Section 41-16-142: ENERGY COST SAVINGS MEASURES AUTHORIZED (a) A governmental unit may enter into a guaranteed energy cost savings contract in order to reduce energy consumption or operating costs of government facilities in accordance with this article. (b) All energy cost savings measures shall comply with current lo cal, state, and federal construction and environmental codes and re gul ations. Notw ith stan din g anything to the contrary, a guaranteed energy cost sav in gs contract does not in c lud e impro vements or equipment that allow or cause water from any condensing, cooling, or industrial process or any system of non potable usage over which public water supply system officials do not have sanitary control , to be reh1rned to the potable water suppl y. Alabama Code -Section 41-16-143: REQUEST FOR PROPOSALS; MEETING; PUBLIC NOTICE; GUARANTEE REQUIRED; BOND; TYPE, DURATION, FUNDING, ETC., OF CONTRACT (a) Before entering into a guaranteed energy cost savings contract, a governmental unit shall submit a request for proposals. The governmental unit shall evaluate any proposal from a qualified provider and shall se lect the qualified provider that best meets the needs of the unit. After reviewing the propo sa ls, the governme ntal unit may enter into a guaranteed energy cost savings contract with a qualified provider if it finds that the amount it would spend on the energy cost savings measures recommended in the proposal would not exceed the amount of energy or operational cost savings, or both, withi n the lesser of a 20-year period or the average useful life of the energy cost savings measures from the date installation is complete and has been accepted by the governmental unit, if the recommendations in the proposal are followed. The governmental unit shall analyze the following: (1) The estimates of all costs of installation , modifi catio n s , or remodeling, including , without limitation, costs of a pre-installation energy audit or analysis, desi gn , engineering, installation , maintenance, repairs , debt service, and post-installation project monitoring, data collection, and reporting, as well as whether energy consumed or the operating costs, or both , will be reduced. (2) The qualifications of the provider. (b) The governmental unit sha ll provide public notice of the meeting at which it proposes to award a guaranteed energy cost sav in gs contract, of the nam es of the parties to the proposed contract, and of the purpose of the contract. The public notice shall be made at least 10 days prior to the meeting . ( c) The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that either the energy or operational cost savings, or both, will meet or exceed the costs of the energy cost savings measures within the lesser of 20 years or the average useful life of the energy cost savings measures. The qualified pro vider shall reimburse the governmental unit for any shortfall of guaranteed energy cost savi ngs on an annual basis. The guaranteed energy cost savings contract may provide for payments over a period oftime, not to exceed the lesser of 20 years or the average useful life of the energy cost savings measures . (d) Notwithstanding any law to the contrary, before entering into a guaranteed energy cost savings contract, the governmental unit may require the qualified provider to file with the governmental unit a payment and performance bond relating to the installation of energy cost savings measures that is in an amount the governmental unit finds reasonable and necessary to protect its interests and that ma y a lso cover the value of the guaranteed savings on the contract and is conditioned on the faithful execution of the terms of the contract. (e) A governmental unit, or several governmental units together, may enter into an insta llment payment contract or lease purchase agreement with a qualified provider or a third party financi ng company designated by the qualified provider, or both , for the purchase and installation of energy cost sav in gs measures with a term not to exceed the lesser of 20 years or th e average useful life of the energy cost savings measures from the date the energy cost savings measures have been comp leted and accepted by the governmental unit. (f) Guaranteed energy cost savings contracts, including installment payment contracts and lease purchase agreements financing the contracts , may extend beyond the fiscal year in which they become effective. The governmental unit may include in its annual budget and appropriations measures for each subsequent fiscal year any amounts payable under guaranteed energy savings contracts, including installment payment contracts and lease purchase agreements financing the contracts, during that fiscal year. (g) A governmental unit may use a combination of funds designated for operating, capital expenditures, or other specially designated funds for any guaranteed energy cost savings contract including purchases using installment payment contracts or lease purchase agreements. (h) State aid and other amounts appropriated for distribution to , or reimbursement to, a governmental unit may not be reduced as a result of energy cost savings realized from a guaranteed energy cost savings contract or a lease purchase agreement for the purchase and installation of energy cost savings measures. Alabama Code -Section 41-16-144: CONSTRUCTION OF ARTICLE The provisions of this article shall not be construed to alter or circumvent present la w which requires education support personnel to work under the direct supervision , employment, and/or control of local boards of education. Statement to FAC Committee about Agenda Item 2 Recreation Board's request for additional$ 75,000 to 2012 budget. As Budget Chairman for 2012, I expressed concern to the FAC and Council that the planned amount of Recreational deficit for this year {$838,266) was not sufficiently explained. I felt that this large amount of money (EXP=Sl,229,970 -INC=391, 704 =$838,266) needed further explanation. For example : What is the ongoing financial condition of the Rec Center? The pool? How much of the deficit applies to Soccer or Baseball? In other words: how does that $838k break down? At today's meeting Council is asked to add another $75,000 for a grand total of $913,266 as the planned deficit. I am well aware that our FAC is strictly an advisory group to the Council. And, I am certainly aware that Council in its wisdom has every right to underwrite worthy recreational programs for our citizenry, especially the precious youth in our community. However, I also strongly believe that for the Council to make enlightened spending decisions, which are easily explainable to our city taxpayer's, the investment in recreation must be better accounted for along functional lines. In conclusion, I have made a personal goal to better understand the inter-workings and value of services delivered by the Recreation Department. To do this, I have mostly interviewed several parents and students who have or are participating in City recreationa l programs. The conclusions that I draw from all this is that the Recreation Board, the staff and many generous volunteers have every reason to be very proud of the effect they are having. ~~ 12/z1/4 Stan Grubin FAC Member ' . energy & building solutions ~~::::===~SM Funding Solutions for City of Fairhope State of Public Budgets Linc's Financial Services Project Development Timeline Questions and Next Steps • Declining Revenues • Unfunded Mandates • Bond Issues & New Funding Difficult • Capital dollars needed for new construction and infrastructure improvements • Existing Facilities needs cannot wait for the economy to change! • Do not want to reduce services • Bundled Energy Solutions (BES} is Linc's program that includes performance contracting (PC}. PC is a vehicle that enables public entities to realize energy and operational savings through capital replacements utilizing the savings to pay for the replacement over multiple years. • Savings are guaranteed so risk is mitigated. • Typical projects including upgraded lighting, controls, new heating and air conditioning, renewable projects, water conservation and utility upgrades such as reduction in non-revenue water and new utility plant upgrades to name a few. • Projects have local economic im act • Optimized energy and operational budget created through efficient Sm a rt Bui Id in gs/Fa c i Ii ties. • New infrastructure funded through energy and operational savings -Not funded totally from capital dollars • Dedicated energy professionals "on staff" at your facilities • Behavioral program that educates and trains staff, citizens and students on energy conservation. Help Fairhope as well as individual homes. The national average for energy usage in municipal environments and convention facilities is $2.00/sq ft. With utilities, $3 .00 . • Energy represents 3 to 5 % of total operating budget • Biggest energy users include lighting, utility management, air conditioning, water heating, traffic lights and pumping. These areas represent approximately 80% of total usage • Areas of cost include consumption for electricity, natural gas and water and demand for electricity. Sewer is a multiple of the water cost. Figure t: Diagram of a hypothetical daily load shape 0 l======= ii ~======== :la£ • • • a rfiope's utility spend is $1,468,000 for electricity, natural gas and for water/sewer charges . With 400,000 square feet of space, Fairhope spends $3.75/sq ft If Linc can get Fairhope to National Average levels, the total utility bill would drop to approx $1,200,000 or a savings of approx $300,000 annually. This is a savings of 20%. If Linc can get Fairhope to Energy Star levels, the total utility bill would drop to approx $700,000 or a savings of approx $768,000 annually. This is a savings of 50% Program will also affect operational spend by reducing maintenance and repair issues 4 3.5 3 2.5 2 1.5 1 0.5 0 I $/Sq Ft ■ $/Sq Ft • A 15 year program saving $300,000 annually and approximately $20,000 annually in maintenance will self fund $4M+ in infrastructure improvements without the need to issue bonds or raise taxes. Numbers based on 3.0% interest rate. • Program will help reduce utility costs by a minimum of 20%. Savings will be reallocated to pay for upgrades • Environmental impact will be large with Greenhouse Gas reduction being significant and possible solutions include using Landfill Gas and Wastewater Sludge • Lighting ( Indoor and Out) • Water Conservation • Controls • Tuning of Building Systems • HVAC Replacements • Water and Wastewater Plant Upgrades • · New Generators and Maintenance • Anything that pays for itself over 15 year period of time ' Removing the barriers to funding CRITICAL facility needs Current Operating Budget $$ Unfunded Capital Needs Capital Generation Without Increased Taxpayer Burden · , _,.,; · r ")'.;r~'•p!f-<'~ ,.\ 10 Owning & Operating Costs Capital .Avoidance In-House Staff Energy .Administration 11 , , , , :( :t·r• ~ " • Financing can be facilitated by ESCO. Linc, for instance, makes no money from financing and has no preference on type of financial instrument used or who provides. • Typical financing includes: -Tax Free Municipal Lease -Operational Lease -Third Party Agreement with local bank --Public Private Partnership -Private Placement Bond • Instrument usually depends on amount borrowed and owner preference • Refinancing, Debt Wraps also can contribute to project viability ; ,, . .,..: J-:1.-'. •• 12 6 Average: 5.30 Current: 4.09 Minimum: 3.82 3.50 ._ __________________________________________________ _, ,JI,'~ ~~~~ ... ~~1,t),~~":, ._',1.~.._'(f,'IJ.~11'~",p'~'fl>..,rJ.,1tl> ~~\(1,4"~,,~ ~ ... ~~,fP?)..._~'-l\,~~1'fl1,"P'~":,,(Y,~":lefl,~r:;. ,~o'>,P-'>>f:l'> 1''...,1'11,'?>~1 '!,\~~:,,~,o.~,'-l~.,E>\'() '.>\~,..., • '~ ' "..c . -. ,',i .~~, a~', .... ,.~r.;. .. ~f,M~~-- 13 • Typical Savings would deliver 20%-50% energy savings to the city while upgrading infrastructure. Conservative savings {20%} would be $300,000 annually. • Other infrastructure projects could be rolled into program such as energy saving measures at plant, operational improvements, etc. • Financial opportunities such as debt wraps, refinance and PPP nc FISCAL POTENTIAL WORKSHEET Investment Amount $4,058,180 Proforma Cash Flow Funding Sources Program Costs Term Ullllty Reallocation Op1Slvlnp Total Annual Funding Annual Payment Maintenance Annual M&V Services Annual Program Com Comprehenlive Production Services Annual Cash Flow 0 $ 15,000 $ 15,000 $15 ,000 1 $ 300,000 $ 20,000 $ 320,000 $ 295 ,000 $ 25 ,000 $ -$ 320 ,000 $0 2 $ 309,000 $ 20,600 $ 329,600 $ 303 ,850 "$ 25 ,750 $ - $ 329 ,600 $0 3 $ 318,270 $ 21,218 $ 339,488 $ 292 ,966 "$ 26,523 $ 20 ,000 $ 339 ,488 $0 4 $ 327,818 $ 21,855 $ 349,673 $ 301,754 "$ 27 ,318 "$ 20,600 $ 349 ,673 $0 5 $ 337,653 $ 22,510 $ 360,163 $ 310,807 "$ 28 ,138 "$ 21,218 $ 360 ,163 $0 6 $ 347,782 $ 23,185 $ 370,968 $ 320 ,131 "$ 28,982 "$ 21 ,855 $ 370 ,968 $0 7 $ 358,216 $ 23,881 $ 382,097 $ 329 ,735 "$ 29 ,851 "$ 22 ,510 $ 382,097 $0 8 $ 368,962 $ 24,597 $ 393,560 $ 339 ,627 "$ 30 ,747 "$ 23 ,185 $ 393 ,560 $0 9 $ 380,031 $ 25,335 $ 405,366 $ 349 ,816 "$ 31 ,669 "$ 23,881 $ 405 ,366 $0 10 $ 391,432 $ 26,095 $ 417,527 $ 360,311 "$ 32 ,619 "$ 24 ,597 $ 417 ,527 $0 11 $ 403,175 $ 26,878 $ 430,053 $ 371 ,120 "$ 33 ,598 "$ 25 ,335 $ 430 ,053 $0 12 $ 415,270 $ 27,685 $ 442,955 $ 382,254 "$ 34,606 "$ 26,095 $ 442,955 $0 13 $ 427,728 $ 28,515 $ 456,243 $ 393 ,721 "$ 35 ,644 "$ 26 ,878 $ 456 ,243 $0 14 $ 440,560 $ 29,371 $ 469,931 $ 405 ,533 "$ 36 ,713 "$ 27 ,685 $ 469 ,931 $0 15 $ 453,777 $ 30,252 $ 484,029 $ 417 ,699 "$ 37 ,815 "$ 28,515 $ 484,029 $0 Totals $ 5,594,674 $371,978 $ 5,966,652 $ 5,174,324 $ 464,973 $ 312,356 $ 5,951,652 $ 16,000 15 • ' 1:."<: '--~ ',1"",ff~.~ {'t'"'•;;; • Present to Board • RFQ • Detailed Investment Grade Audit • Signed Contract • Implementation • Monitoring and Maintenance • MAINTENANCE •Mobile maintenance technicians •Industrial equipment maintenance engineers •Union employee management •Building engineers electricians. plumbers , carpenters , HVAC PARKING •Valet and shuttle Services •Paid parking management •Parking enforcement •Fully automated (cash ier-less) parking •Parking utilization analysis •Stack parking programs •Pre-construction design and layout consulting •"Green" fleet management •Electronic vehicle charging stations JANITORIAL •General cleaning / green cleaning -Carpet and hard surface floor care •Restroom cleaning and supplies •Public space maintenance •Window and blind cleaning •Emergency response •Supply management LANDSCAPING ENERGY •Turf management •Snow removal •Irrigation controls •Tree trimming •Parking areas •Low voltage lighting systems •LEED certification documentation I Energy Star benchmarking •Facility Funding Plans •Infrastructure analysis •Detailed engineering calculations and design •Planning / construction dentification of utility rebates and EPA tax incentive •Processing of utility rebates SECURITY •Access control and background investigations •Concierge services •Crowd control and special event services •Fire watch coverage •Life safety monitoring •Patrol & alarm response •Security consulting & surveys •Security system design •Ushers & ticket takers SUPPLIER MANAGEMENT •Vendor retention •Contract administration •Supplier consolidation •FM MRO consolidation •Buying SME's for most spend areas including cafeteria , mail elevator, pest , waste, mail , snow , HVAC, utilities management 17 .s ' lo.,~-~' ,tJ':,.-f;~~~"-"