Coastal Villages Region Fund
2003 Year in Review
TABLE OF CONTENTS Message From the Executive Director 2003 Board of Directors CVRF Member Communities Mission Statement Onshore / Near-Shore Infrastructure Development Onshore / Near-Shore Fisheries Support Offshore Investments Fisheries Development Programs Community Outreach 4-SITE 4-SITE Support Services 2003 Financial Overview 2003 Season Highliners 2003 Staff Members 2003 Board Of Directors
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MESSAGE FROM THE EXECUTIVE DIRECTOR 2003 was a year of change, growth and innovation! Coastal Villages Region Fund’s (CVRF) quest to provide innovative projects and programs for the region is succeeding. The level of benefits available to the residents and communities increased, as the word spread about the many opportunities that are made available through CVRF. In 2003, the company’s focus changed from primarily nurturing human resources to expanding employment and partnership opportunities with at-sea processors providing specialized training in support of on-shore seafood employment and working with communities to develop their own ideas and plans for the future. During the year, Coastal Villages worked to solidify our position in the Bering Sea for the long term. We shifted our efforts to pursue more challenging, long term goals over more easily obtained short-term goals in order to provide greater sustainable benefits to our communities far into the future. CVRF region residents and employees have worked hard to identify and develop economic opportunities that will bring positive results to the region. For example, by focusing on producing quality, high-end seafood products at Coastal Villages Seafoods’ (CVS) salmon and halibut plants, a greater demand for the products was created. The greater demand justified the development of new, more efficient halibut plants in Mekoryuk and Toksook Bay, our region’s top processors of halibut. In addition to the new halibut plants, participation in the local fisheries has warranted the development of infrastructure to support the maintenance of boats and engines. Late in the year, construction was completed on a new fisheries support center in Scammon Bay. Another is planned for the community of Eek. The new facilities will provide welding services, small engine repair, and a workshop where people can make their own repairs, all for a reasonable cost. The growing demand for CVS’s salmon products sparked unified support for the purchase of a tender boat. Planning and due diligence began in 2003, and resulted in the purchase of a 135-foot LCU in April of 2004. This is truly an exciting expansion for the local CVRF fisheries. Several innovative programs were introduced in 2003 in support of our existing 4-SITE programs. Among them are: the Marine Safety program, created to improve awareness of safe boating practices; the Commercial Fisheries Support program, which develops fisheries support programs and infrastructure projects for regional communities; the Project Management program, which assists villages that are applying for state and federal funding for projects such as the Quinhagak airport expansion or the community mapping project; the proposed Coastal Villages Angler expansion, which is seeking community support for the development of sport fishing camps in local villages; and the Ciunerkam Tanguarutii (CT) process, which works with CVRF residents to identify their own unique vision for the future. It is obvious that with the new programs and projects initiated during the year, the patience of the residents is paying off. Investment and harvesting activities have provided the requisite capital to move forward on local projects, thus completing the cycle of delivering tangible benefits to our communities. Despite the North Pacific Fishery Management Council’s unanimous approval of the concept of non-fisheries related economic development (NFRED) projects nearly two years ago, CVRF has chosen not to move forward on these types of projects until they are officially approved by all the governing bodies. This discipline illustrates our continuing, persevering patience that will lead to sustained benefits. We appreciate the patience shown by the CVRF communities. We want to remind you that this is just the beginning. By leveraging our experience in local seafood operations, we are able to pursue other ventures allowed under current CDQ regulations and look into still other projects not yet allowed, leading the way to even more change, growth and innovation for the people of Coastal Villages Region Fund. Very truly yours,
Morgen Crow, Executive Director Page 2
2003 BOARD OF DIRECTORS At Coastal Villages Region Fund, each village is represented by one board member that is a year-round resident of their community. These twenty board members provide guidance and direction to CVRF staff. The experience and unadulterated influence that our board members bring to the table enables the company to effectively maximize our resources for the sole purpose of benefiting our region and its residents.
2003 Coastal Villages Region Fund Board of Directors Pictured left from right: (Front Row) Howard Amos, John Pingayak, Frank Berezkin, Helen Kaganak, Oscar Evon, Johnny Hawk, Andy Charlie, Aloysius Aguchak, Sr. (Back Row) Wassilie Bavilla, Eric Olson, Sr., John Erik, Paul Tulik, Simeon John, Morgen Crow (CVRF Executive Director) David Bill, Gabriel Olick, Nicholas Paul, Peter John, Timothy Samson. (Not pictured: Jack Stewart, Ralph Kiunya, Henry Williams, Jonathan Lewis.)
CVRF MEMBER COMMUNITIES
We are a membership organization consisting of twenty communities from Scammon Bay to Platinum. Our communities have over 8,500 residents year-round. CVRF negotiates royalty fees for the use of our quota by industry partners who then harvest our allocation. Royalty fees and returns from our strategic investments fund the many innovative economic infrastructure projects and human resource development initiatives that provide new opportunities for the people of our region.
COASTAL VILLAGES REGION FUND MISSION STATEMENT Purpose To maintain and expand our strategic position in the fishing industry so that CVRF can provide support for sustainable community and economic development in the CVRF region.
Core Values From our history to date and from the commitments that we all share now about the future, we have defined the values that should guide all of our activities and staff in the years to come. • • • • • •
Maximum return on capital Ethical, positive leadership Respect for and support all people Teamwork Protecting our way of life, language, culture and spirituality Wishes of the communities
Our Vision From our position as a key player in the North Pacific, we can build and expand our support for sustainable community and economic development of the local resources in the CVRF communities.
Strategic Initiatives • • • • • •
4-SITE and other Direct Programs Bering Sea Ownership Maximizing Returns from CDQ Allocations Community Development Projects Return on Invested Capital Resources for Strategic Performance
ONSHORE / NEAR-SHORE INFRASTRUCTURE DEVELOPMENT COASTAL VILLAGES SEAFOODS (CVS) During 2003, Coastal Villages Seafoods, LLC (CVS) continued along its steady path of improving fishery-related opportunities within our region. CVS employed over 300 residents from the CVRF region and surrounding areas. Our halibut plants, salmon operations and herring contracts provided opportunities for 329 fishermen from the CVRF region and surrounding areas. Without the support that CDQ royalties give to CVS operations, these facilities would not have been available. In 2003, CVS was the only buyer present in our halibut and salmon districts.
2003 CDQ HALIBUT For the first time, CVS purchased halibut in Hooper Bay and Kipnuk. Construction was also completed on new halibut facilities in Mekoryuk and Toksook Bay, our top two halibut producing communities. Processing capacity is now sufficient to process all available 4E halibut in-region, with CVS authorized to buy in Mekoryuk, Toksook Bay, Tununak, Hooper Bay, Kipnuk, Chefornak and Quinhagak. Local plant managers continued to develop experience in 2003, and hope to continue to gain efficiencies in 2004. Most managers plan to open up earlier in the spring of 2004, as halibut have been migrating through the region earlier than in years past. Harvesting capacity continued to be improved upon. New fishermen, provided with an opportunity to enter the fishery through loans from CVRF, were among the highliners in 2003. Marginal weather continues to limit opportunities to fish, given the size of the skiffs used by most local fishermen. Several ideas to use vessels specifically designed for the 4E halibut fishery were explored, and plans are underway for implementation in 2004. Increased capacity and continued strong markets are expected to lead to an increase in the number of fishing days next year.
CVS employed over 325 people with 91% of the employees coming from our region, including these processors in Toksook Bay.
Dock workers in Quinhagak take delivery of salmon. The Quinhagak plant processed 1.7 million pounds of salmon in 2003, an increase of 58% over 2002.
2003 SALMON The Kuskokwim Bay and River districts were able to gain benefits from a large salmon return for the first time in many years. A newly installed tunnel freezer at the Quinhagak plant, designed to reduce costs, increase capacity and provide flexibility to meet market demands, enabled CVS to purchase and process 1.7 million pounds of salmon, an increase of 58 percent over the previous year. For the first time, CVS instituted a mandatory bleed program to compliment our mandatory icing program. Kuskokwim Bay salmon, already known to be of high quality, enjoyed even higher demand as a result. Buyers responded to the increase in quality, and fishermen gained in the form of sustained prices throughout the summer, and an additional bonus at the end of the year. CVS looks forward to an even more productive season in 2004, as energy delivery to plant operations is improved with electrical upgrades, and transportation time to fresh markets is reduced with airport improvements.
2003 HERRING Though the roe herring market remained difficult, CVS continued to support the fishery by contracting with NorQuest Seafoods to tender in the Goodnews Bay, Nelson Island, Nunivak Island, Cape Avinof, and Cape Romanzof districts. Fishermen responded by harvesting 1,324 tons (2.9 million pounds), an increase of 2 percent from the previous year. Gear improvements and improved techniques resulted in a higher roe recovery in 3 out of the 5 districts.
ONSHORE / NEAR-SHORE FISHERIES SUPPORT CVRF continuously works towards developing new and existing infrastructure to enhance local fisheries, and to develop facilities to support commercial fishermen. In 2003, CDQ royalties funded several projects that directly impacted CVRF communities and their resident fishermen, including: •
Completed construction of new/upgraded halibut processing facilities on Nunivak Island (Mekoryuk) and Nelson Island (Tununak and Toksook Bay).
Completed construction of plant upgrades to our salmon processing facilities in Quinhagak.
Expanded tender operations to serve resident fishermen near Eek Island.
Completed plans to build facilities to serve the region’s commercial fleet, and started construction of the first such facility in Scammon Bay.
Continued to participate in region-wide plans to construct a new regional port facility, and improve transportation infrastructure.
Funded the design and feasibility aspects of lengthening the runway in Quinhagak. CDQ participation helped to leverage state funding and secure federal approval. Upon completion, local fish products should enjoy significantly reduced travel time and shipping costs to markes.
Utilized CDQ resources to receive state/federal funds for the Lower Kuskokwim community mapping project. New maps will be incorporated into our community development plans in Eek, Goodnews Bay, Quinhagak, Kongiganak, Mekoryuk, Nightmute, Tuntutuliak and Tununak.
Supported local fisheries with equipment acquisition and replacement needs, including a new tractor for Toksook Bay’s small boat harbor.
The Fisheries Support Center nearing completion in Scammon Bay.
The community of Toksook Bay gathered to celebrate the completion of the new halibut plant. Toksook Bay is one of the top halibut producing communities in the CVRF region. Page 8
OFFSHORE INVESTMENTS CVRF continues to expand its involvement in the Bering Sea/Aleutian Islands (BSAI) fisheries. Since 1998, investment in the fishery has grown from 2 vessels to 23 vessels in 2003. These investments provide two opportunities for CVRF communities to directly benefit from offshore fisheries: 1) Cash dividends from profits fund local, in-region infrastructure projects; and 2) Village residents can earn cash wages through direct employment with CVRF partners. Coastal Villages Pollock, LLC (CVP) CVP, a wholly-owned subsidiary of CVRF, was established in 2000 as a holding company for investments in the BSAI pollock fishery. At the end of 2003, CVP owned 39 percent of American Seafoods Company (ASC). ASC owns and operates 7 catcher-processors in this fishery: Vessel Length (feet) Crew American Dynasty 272 120 American Triumph 285 130 Katie Ann 295 80 Northern Eagle 341 108 Northern Jaeger 336 112 Northern Hawk 341 108 Ocean Rover 256 140 ASC also owns 100 percent of Pacific Longline Company, owner of 3 freezer-longliners participating in the BSAI Pacific cod fishery: Vessel Length (feet) Crew Deep Pacific 123 20 Lilli Ann 141 22 North Cape 123 20 Coastal Villages Crab, LLC (CVC) CVC, a wholly-owned subsidiary of CVRF, was established in 1998 as a holding company for investments in the BSAI crab sectors. CVC owns 50 percent stakes in the following crab vessels: Vessel Length (feet) Crew Blue Aleutian 135 6 Karin Lynn 127 8 Silver Spray 116 6 Sultan 130 7 Tempest 112 7 Alaskan Enterprise 150 24 Blue Dutch 180 24 Coastal Villages Longline, LLC (CVL) CVL, a wholly-owned subsidiary of CVRF, was established in 1997 as a holding company for investments in the BSAI Pacific cod, black cod (sablefish) and turbot fisheries. CVL owns stakes in the following vessels participating in the Pacific cod and black cod fisheries: Ownership Vessel Length (feet) Crew 45% Ocean Harvester 72 7 20% Bering Prowler 124 19 20% Ocean Prowler 155 18 20% Prowler 124 19 Coastal Villages Groundfish, LLC (CVG) CVG, a wholly-owned subsidiary of CVRF, was established in 2001 as a holding company for investments in other groundfish sectors of the BSAI, including yellowfin sole, flathead sole, rock sole, Pacific Ocean perch and Atka mackerel. CVG owns a 20 percent stake in the 146â€™ F/V Cape Horn, a factory trawler that harvests and processes bottom fish.
FISHERIES DEVELOPMENT PROGRAMS TAX AND PERMIT ASSISTANCE The Tax and Permit Assistance program is a partnership between CVRF and the Alaska Business Development Center. The main goal of the program is to provide tax preparation assistance to fishermen in the region, so that permits and the right to fish are not lost due to actions taken by the Internal Revenue Service. The program is also designed to assist fishermen in obtaining information and assistance if there is a lien or claim against their permit. In 2003, nearly 1,200 CVRF region residents participated in the program, netting over $1 million in tax refunds.
COMMERCIAL GEAR LOANS Our revolving loan program provides an opportunity for local fishermen to obtain the equipment, gear, and permits necessary to participate in commercial fisheries. As of December 31, 2003, this program has provided over $700,000 in loans to CVRF region residents. Eligibility is limited to residents of the 20 CVRF member communities, and applications are reviewed biannually with closing dates of February 15 and October 15.
FUEL DELIVERY A combination of increased economic activity in the CVRF region and fuel tank farms designed for a subsistence-level economy has contributed to shortages of gasoline and other fuel necessary for commercial fishing. CVRF facilitates early spring fuel deliveries and/or reserves to ensure that local fishermen will have adequate fuel resources for the fishing season. CVRF loaned $211,000 to member communities in 2003.
MARINE SAFETY The Marine Safety program is designed to provide access to safety equipment and navigational devices for CVRF region fishermen, and to share information about safe boating practices between fishermen and rescue agencies. In developing the program, CVRF worked closely with member communities to determine their needs (e.g. channel markers, radios, flotation devices). Additionally, CVRF staff developed a marine safety training class tailored to local fisheries. Training sessions are coordinated with the US Coast Guard Marine Safety Office and the Alaska Marine Safety Education Association.
A resident of Goodnews Bay learns the proper donning techniques and experiences the protective qualities of an immersion suit during a marine safety training course. Page 10
COMMUNITY OUTREACH The CVRF Community Outreach project continues to use both formal and informal communication channels to connect with member communities. In 2003, periodic updates, announcements and reports of our CDQ activities were communicated to member villages through these various channels: •
CVRF board members and community leaders frequently interacted directly with local governing bodies. As part of their commitment to serving as a CVRF director, each representative reports back to their village about recent CDQ activities following CVRF board meetings.
Community liaisons and other CVRF employees in each member village promoted opportunities and CDQ activities through their local offices, periodic community discussion groups, presentations and potlatches, community bulletin boards and VHF radio announcements.
Newsletters detailing recent CDQ activities and upcoming opportunities were mailed to each box holder in the CVRF region.
Sponsorship agreements with local radio stations supported popular programming. Messages were crafted to announce current CVRF application deadlines, our website address and contact information.
Participation in region-wide events and gatherings (e.g. Camai festival, job fairs).
Local newspaper advertisements and announcements.
The Outreach project also facilitates community input throughout the course of the Community Development Plan (CDP). In 2003, village input was facilitated through: •
Direct interaction between CVRF board members and CVRF staff. In addition, open lines of communication between community leaders and CVRF project and program delivery staff in person or via telephone and e-mail ensure that community input is incorporated into every phase of a project or program.
100 percent community support for a project or program is required before start-up. Through the process of securing letters of support from each village entity involved or affected by a project, we ensure that the community is involved, informed and supportive of the plan.
Continuation of a service survey and village planning initiative that has secured and documented grass roots input from each member village since 1999. The initiative, “Ciunerkam Tangruarutii – Looking Towards the Future” identifies village projects that support CDQ program objectives and helps to determine CVRF service strengths and improvement areas.
4-SITE CVRFâ€™s 4-SITE program integrates our human resources project elements, Scholarship, Internship, Training and Employment, with our economic successes. Developing our human resources to facilitate entry into all levels of opportunity in a fisheries-related economy will create positive and successful citizens and have long-term positive impacts on our member communities. Scholarship The Louis Bunyan Memorial Scholarship fund provides assistance for region residents to pursue education opportunities in vocational schools, community colleges and universities. In 2003, 77 applicants received $140,000 in education assistance. Internship Internships provide residents with the opportunity to receive hands-on experience with our fishing industry partners, or in various aspects of the CDQ program. This year, two region residents successfully completed internships with CVRF.
Region residents practice silver soldering techniques during a recent Refrigeration Training course. Training Training opportunities are available for CVRF region residents to learn a variety of mechanical and technical skills required for employment in the fishing industry. Successful trainees enjoy increased job and advancement opportunities in comparison to other untrained applicants. In 2003, this program expanded to provide training to new entrants in the 4E halibut fishery with CVS, as interested fishermen learned longlining techniques from experienced Nelson Island area participants. Employment CVRF staff continually advertises opportunities for both our Bering Sea fisheries partners and CVS onshore facilities, and recruits applicants by providing applications to all interested applicants. The jarring transition from village life to working on a fishing boat in the middle of the Bering Sea is made easier with our Orientation for Success process. This program targets first-time Bering Sea crew applicants, and teaches them what to expect at their new job, how to succeed on the job and how to manage homesickness. Follow up visits to those who complete contracts are made to provide advice on how to climb the ladder and get promoted in various fishing industries.
This year, CVRF placed 53 region residents with our Bering Sea fishing industry partners and 291 with our local halibut and salmon plants. Local residents earned more than $1.5 million in wages during 2003.
A group of 59 youths from the CVRF region attended the Alaska Federation of Natives Elders and Youth Convention.
4-SITE SUPPORT SERVICES To enhance and sustain community development efforts, CVRF is involved in programs that develop positive efforts and accomplishments, and help prepare region residents for future participation in 4-SITE opportunities.
COASTAL VILLAGES YOUTH LEADERSHIP PROGRAM (CVYLP) CVRF believes that the most effective way to bring about lasting and positive change is to prepare youth to become informed, participating members of their villages and surrounding communities. The core of CVYLP is our sponsorship of village youth councils. Youth councils are local groups of village residents between the ages of 15 and 24 who come together for a common purpose. In 2003, fifty-nine participants attended the statewide Alaska Federation of Natives Elders and Youth conference where they shared their ideas and opinions on current local issues with other young Alaska leaders.
RURAL EDUCATION ADULT DEVELOPMENT (READ) The READ program encourages individuals who have not completed high school to raise their education level by offering them the opportunity to achieve a General Education Diploma (GED). Scholarships are available year-round for this effort.
JUNIOR ACHIEVEMENT (JA) This program is aimed at teaching children how economic opportunities and growth affect their families and communities.
Community Liaison Greg Slats, Jr. engages Chevak elementary students during a Junior Achievement class.
2003 FINANCIAL OVERVIEW 2003 Total Net Equity (Net Worth) $40
CVRF continued to invest in Bering Sea fishing operations. In 2003, CVRF increased its position in the crab sector by acquiring 50 percent stakes in 6 boats (4 catcher vessels and 2 catcher/processors). The strategy for 2004 is to continue to look for opportunities to expand our positions in Bering Sea/ Aleutian Islands harvesting and processing operations to continue to build a strong company for future generations.
2003 was another successful year financially for CVRF. With a total revenue of $14.5 million and expenses of $13.2 million, net assets, a measure of a companyâ€™s net worth, equaled $37.6 million at the end of 2003, an increase of 4 percent over the prior year.
In- Region 71% $11.2 M
Percentage of Financial Benefits by Location In 2003, CVRF CDQ projects were directly responsible for $15.7 million of economic activity. Of this, $15.2 million was injected into Alaska, with $11.2 million going directly into the CVRF region. As we continue to develop new infrastructure projects and expand existing programs, we expect to make even larger impacts in the future.
Outside Alaska 3% $0.5 M
In Alaska 26% $4.0 M
Community Development Quota (CDQ) Royalties The largest source of revenue for CVRF is CDQ royalties. In 2003, 87 percent of CDQ royalties came from Bering Crab Sea pollock, while 13 percent was from Pacific cod, 7% Bristol Bay Red King crab, Tanner (Opilio) crab and other species. Pacific Cod 5%
Pollock 87% Page 14
Percentage of Quota Caught by Fishery
CVRF continues to explore methods to maximize the value of its CDQ allocations. In 2003, we enjoyed tremendous success as our industry partners harvested 99.9 percent of our allocations. Harvesting partners in 2003 were:
CDQ Allocation Pollock Crab Pacific cod
Harvesting Partner American Seafoods Company Sanko Fisheries Pacific Longline Company
2003 SEASON HIGHLINERS Local fishermen are the lifeblood of the CDQ program. In 2003 highliners delivering to our local halibut and salmon operations were:
Pacific cod Opilio crab Bristol Bay Red King crab
Halibut Kenneth Davis David Bill, Sr. Carl R. Kiunya Phillip James Matthew J. Panruk Harvey Hill
Mekoryuk Toksook Bay Kipnuk Tununak Chefornak Hooper Bay
Salmon Helena James Esther Fox Dennis Brown
Quinhagak Goodnews Bay Eek Island Area
Rudy Tsukada (CVS Chief Operating Officer) awards Kenneth Davis a CVS jacket for achieving 2003 halibut highliner status.
CVRF directors with American Seafoods officials after a recent inspection of CVRF investments.
2003 STAFF MEMBERS Corporate Offices Executive Offices Executive Director CDP Coordinator Administrative Assistant Fiscal Services Director Finance Director Assist. to the Finance Director Controller Staff Accountant Payroll Clerk Accounts Payable Clerk Accounting Clerk Accounting Clerk Development Director CDP Administrator Quota Manager Employment Coordinator Development Specialist Development Specialist Development Specialist Information Coordinator Development Coordinator Expediter
Morgen Crow Patty Murphy Tillie Carr
Matthew Tisher Haidee Canete Jenny Koenig Nellie Kiunya Catherine Jumbo Cheryl Dahl Sandra Guest Christy Slater
Robert Williams Ronalda Olivera Joe Hall Verla Mojin Rudy Tsukada Neil Rodriguez Ted Wittenberger Camille Sorensen Larson Hunter William Rude
Satellite Offices Chefornak Halibut Plant Manager Assistant Plant Manager Chevak Community Program Manager Eek Community Liaison Goodnews Bay Herring Coordinator Hooper Bay Halibut Plant Manager Assistant Plant Manager Community Liaison Kipnuk Halibut Plant Manager Assistant Plant Manager Kongiganak Community Liaison Kwigillingok Executive Coordinator Mekoryuk Halibut Plant Manager Community Liaison Napakiak Community Liaison Newtok Community Liaison Nightmute Community Liaison Oscarville Community Liaison Platinum Community Liaison Quinhagak Salmon Operations Manager Scammon Bay Community Program Manager Community Liaison Toksook Bay Halibut Plant Manager Assistant Plant Manager Community Liaison Tuntutuliak Community Liaison Tununak Halibut Plant Manager Assistant Plant Manager Community Liaison
Dora Mathew Gregory Tom Greg Slats, Jr. Stella Alexie Helen Lupie Lester Wilde Gerald Hunt Mamie Tinker Albert John John Hinz vacant Fred Phillip Marlene Kiokun Mona David Lloyd Black David Albert vacant Jimmy Larson vacant Kelly Welch Byron Ulak John Utteryuk, Nick Chanar Billy Lincoln, Jr. Vanessa Lincoln Nick David, Jr. Robert Angaiak Gregory Angaiak Theodore Angaiak
2003 BOARD OF DIRECTORS Executive Committee President Vice President Secretary Treasurer Member Member Member
Howard T. Amos Simeon John Oscar Evon Timothy Samson Jonathan Lewis Wassilie Bavilla Johnny Hawk
Mekoryuk Toksook Bay Kwigillingok Kipnuk Chefornak Quinhagak Eek
John Pingayak Jack Stewart Eric Olson, Sr. Ralph Kiunya Nicholas Paul Helen Kaganak Peter John Paul Tulik Frank Berezkin, Sr. Henry Williams George Smith Gabriel Olick Andy Charlie, Sr.
Chevak Goodnews Bay Hooper Bay Kongiganak Napakiak Napaskiak Newtok Nightmute Oscarville Platinum Scammon Bay Tuntutuliak Tununak
Board of Directors
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