Budget Frequently Asked Questions (FAQ)

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Fall Budget Adjustment

What have you done to limit the property tax increase?

To limit the tax increase, the City is proposing $8.5 million in ongoing savings during the fall budget adjustment. The reductions include a lot of small changes, like renegotiating the City’s phone contracts, which helped minimize the impact on services. It also includes service changes, like slowing down the Heritage Program. Another $10 million in one-time savings has been identified to help rebuild the Financial Stabilization Reserve, which will be needed in the challenging times ahead.

These savings are in addition to other savings exercises for the 2023-2026 budget cycle, as well as previous cycles.

What are the budget challenges the City is dealing with?

The City is managing 3 main budget challenges right now:

Inflationary pressures: We all experienced a long period of high inflation in recent years. Inflation has slowed, but that just means that price growth has slowed. Price levels are still high. It’s costing us much more to deliver the same services for Edmontonians.
Rapid population growth: Since 2001, our population has grown significantly. We’ve grown the most compared to other large Canadian cities, and in recent years, that rate of growth accelerated, reaching its highest level in 2023. It’s great that we have so many people moving here—we want to grow by a million more people in the coming decades—but we have to manage the budget impacts. We are experiencing a growing demand for our services and a growing need for new infrastructure. And while population growth adds to our revenues through property taxes, that growth doesn’t fully cover the City’s added costs.
Changing service needs: Edmontonians are using services like transit differently, and more support is required to respond to encampments and extreme weather. This is affecting both our costs and our revenues.

While we tracked and planned for these pressures, they’re much bigger than what we forecast when we developed the 4-year budget in 2022, and we need to respond. It will take time to manage these challenges, but our fall budget adjustment recommendations will help to make meaningful progress on these challenges.

Budget Process

What is a City budget?

The budget is the City’s plan for where it will get money (revenues) and how it will spend it (expenditures) in alignment with our long-term vision.

The City budgets in 4-year cycles. Building a 4-year budget makes it easier to plan stable programs and services, and move our plans forward to build and maintain things like the LRT, recreation centres and roads. The current budget is for 2023-2026.

The budget is reviewed and adjusted each year, as needed.

The budget has 4 parts: capital budget, operating budget, waste services utility budget and the Blatchford renewable energy utility budget.

The City is among the first in North America to have a carbon budget, which is presented alongside our financial plans to inform Council's decision-making and to track our progress against our energy transition goals.

What’s the process to build the City budget?

The City has 70 different services and over 200 construction projects. Each business area looks at what money they think they’ll need over the next 4 years in order to deliver on their programs and services, and move construction projects forward.

Next, the City looks at what it can afford, and prioritizes the needs of each business area based on what’s absolutely necessary and how it aligns with our strategic long-term vision. We call this priority-based budgeting.

There are a lot of other factors that go into decision-making about the budget. The City also looks at the economy, the state of our savings and investments, anticipated funding from other orders of government and our financial forecasts for the next 10 years.

City administration also listens to input from Council and Edmontonians. In June and July 2022, the City invited Edmontonians of diverse backgrounds and circumstances to provide input into what the City should consider for the 4-year budget. The results of this engagement period helped advise the budget process. Details on how we listened, who we heard from and what we learned can be found in the What We Heard Report.

For the 2023-2026 budget, all of these pieces came together in proposed budgets and plans. Administration presented these documents to Council, followed by public hearings and debates. Council made adjustments and approved the 4-year budget on December 16, 2022. Council makes further adjustments each year, in response to any significant changes that happened since the 4-year budget was set.

For more information, visit Budget Process and Financial Strategy.

Why have a multi-year budget?

The City budgets in 4-year cycles. This long view makes it easier to plan stable programs and services, and move our plans forward to build and maintain things like LRT, recreation centres and roads, all in alignment with our long-term strategic plans.

The 2023-2026 budget was approved on December 16, 2022.

Why do you adjust the budget?

The City budgets in 4-year cycles, but a lot can change over those 4 years. The City has set up regular opportunities to adjust the budget so we can respond to anything significant that has happened since the budget was set in December 2022.

This includes:

Changes in external factors or changes in legislation like budgets from other orders of government
Changes to economic forecasts such as changes in service demand volumes or changes to revenue forecasts
Adjustments to the City’s operating budget that are required when capital projects come into service or new assets are acquired
Council-directed priorities and service changes

These budget adjustments allow Council to make changes to the 2023-2026 budget without having to revisit everything.

What are the operating and capital financial updates?

There are regular updates to Council on the City's performance against its budgets.

The City’s capital and operating budgets plan for investment in programs, services and infrastructure over 4 years. This means keeping the lights on, plowing snow, and building sidewalks and bridges.

Administration reports to Council and Edmontonians 3 times a year through the financial updates on how operating and capital project spending compares to those plans, including where the City will be at the end of the year.

The capital financial update also provides updates on major capital projects as well as on the City’s debt position. The operating financial update also provides an update on the City’s larger reserves and an update on the economy.

Knowing the current state of City spending against the capital and operating budgets can help Council make choices about where to stay the course in the previously approved 4-year budgets and what to change in the budget for the current year.

Read our quarterly financial update reports.

What is a capital budget?

The capital budget is for the things the City builds. It pays for building and maintaining infrastructure.

Examples are:

Attractions
Roads and pathways
Bridges
LRT expansion
Recreation centres
Parks
Fire halls
Neighbourhood and alley renewal

What is an operating budget?

The operating budget reflects the estimated cost for the City to provide programs and services, and how those costs will be paid for, including property taxes and user fees.

Examples of these programs and services are:

Maintaining the roads, paths, and public transit systems that move people
Police, bylaws and fire rescue services to keep people safe
Attractions, leisure activities, parks and social programs that make Edmonton a great place to live, work and visit

What is a utility budget?

The City has 2 budgets for public utilities: one for Waste Services and one for Blatchford Renewable Energy.

Monthly utility rates (and not property taxes) fund all residential waste services, including:

Waste collection
Eco Stations
Reuse Centre
Big Bin events
Waste education and outreach
Edmonton Waste Management Centre operations
Landfill and utility management

Blatchford Renewable Energy charges a customer rate as well, including a component to cover operating costs and infrastructure.

Blatchford Renewable Energy owns and operates the Blatchford community’s District Energy Sharing System (DESS). This system provides heating, cooling and hot water services to Blatchford residents and businesses through monthly utility rates.

What is the carbon budget?

Edmonton was one of the first cities in North America, and first in Canada, to present a carbon budget alongside our financial plans to Council.

The carbon budget is a tool that allows Council to weigh greenhouse gas emission impacts when making financial decisions. It also tracks our progress towards our energy transition goals— of being carbon neutral as a community by 2050 and as a corporation by 2040—so we can be transparent with Council and Edmontonians about how we’re collectively doing on reducing our greenhouse gas emissions.

Energy transition is a key part of our efforts to tackle climate change and limit the global average temperature warming to 1.5°C. The City has invested in reducing carbon emissions, including over $376 million in new funding approved in the 2023-2026 budget for services and construction projects. This includes $100 million for the Active Transportation Infrastructure Plan, $53 million for energy retrofits of City facilities, $34.5 million for development of district energy networks, $11 million for an emissions-neutral fleet and $6.5 million for natural areas acquisition. However, without further action, carbon budget forecasts show the city of Edmonton as a whole is on track to deplete its carbon budget of 176 megatonnes of carbon dioxide equivalents (CO2e) by 2036.

Climate change is a collective problem that requires collective action, and the budget shows that we are making positive strides but that much more collective action is needed. The City is actively working to reduce its emissions, but it will take a much larger collective effort, including collaboration and support from other orders of government, private investment and the actions of all Edmontonians, for Edmonton to be carbon neutral by 2050.

The City delivers an annual update to the carbon budget each fall.

See Carbon Budget.

What is a non-statutory hearing?

City Council held the non-statutory public hearing in November 2022. This hearing gave residents the chance to speak directly with Council about the 2023-2026 budget.

This isn’t the only way Edmontonians influence the budget. From electing a representative to Council, giving input through public engagement or reaching out to Council and Administration directly, Edmontonians speak up all year about what matters most to them and where tax dollars should go.

Edmontonians can also submit feedback on the budget through Council Correspondence.

How did the City conduct public engagement to help advise the 4-year budget?

The City did extensive engagement during the summer of 2022 to support the development of the 2023-2026 budget, as well as budget adjustment recommendations each year. Those insights have been shared with Council to support their decision-making on the budget. The City connected with over 32,000 Edmontonians of diverse backgrounds and circumstances.

The engagement highlighted that the budget must balance many competing needs, including delivering excellent services and construction projects, keeping taxes and fees manageable for Edmontonians, and supporting vulnerable populations.

More information can be found in the What We Heard Report or the October 31, 2022 Council Report.

This public engagement is one of many ways the City gathers insights from the community to support decision-making on the budget; these insights can be found in each Council report.

Funding Sources/Taxes

How does the City pay for its programs and services?

Alberta’s Municipal Government Act (MGA) defines municipal taxation powers, so the money to pay for the operating programs and services comes from:

Property taxes: Account for over half of our operating revenues.
User fees: These include recreation facility admissions, transit fares, building fees and other permits. They are designed to partially recover costs from people who directly use the service.
Franchise fees: ATCO Gas and EPCOR provide gas, power, water and wastewater services to Edmontonians. The City charges these operators franchise fees for related costs and land access.

For more, see Operating Budget Overview.

How does the City pay to build and maintain its infrastructure?

The City raises money for its capital projects (building and maintaining roads, bridges, building recreation centres, fire halls, police stations, LRT, libraries) through, but not limited to:

Grants: 43.8% of the City's approved capital budget is funded with grants from the provincial and federal governments.
Tax-supported debt: The City uses debt in order to take advantage of lower interest rates and move priority infrastructure projects forward.
Reserves: Some of the City's reserves are money set aside to pay for capital projects on a cash basis over the short term.
Investment income: Much of this income is transferred to the capital budget to pay for new infrastructure.

How does the City set property taxes?

The amount of property taxes the City collects each year is set when Council approves the annual operating budget. The operating budget is the amount of money the City needs to run our programs and services in a given year, including fire rescue services, parks, police, recreation centres, road operations and maintenance, and transit.

The City first considers its other revenue sources (fines and permits, user fees, franchise fees, grants, and other operating revenue sources) to cover the costs to run the program and services, and then looks to property tax to ensure revenues meet expenditures. In accordance with the Provincial Municipal Government Act, the City must have a balanced budget, and cannot use debt to balance the operating budget. The City has limited options to fund the balance of the cost to provide these services, so more than half of the operating budget is funded through property taxes. The City only collects the amount of property taxes required to balance the budget, no more and no less.

Once the operating budget is set, the City divides the tax levy (how much money we need to collect through property taxes) among Edmonton property owners. The assessed value of your property determines the share of the total tax levy that you will pay through your property tax bill.

For more information, visit: edmonton.ca/taxes.

What have property tax increases been in previous years?

Between 2015 and 2024, the average annual property tax increase was 3.5%.

The highest tax increase in the last 20 years was in 2008, at 11.9%.

During the pandemic, the City significantly reduced planned tax increases in response to the financial challenges Edmontonians were dealing with at the time. Planned annual tax increases of 2.6% were reduced to 1.3% in 2020, -0.3% in 2021 and 1.9% in 2022. These were some of the lowest tax increases among major Canadian municipalities at the time, and resulted in annual tax revenues of $97 million less than the initially approved 2019-2022 budget. This was necessary at the time, but it’s not sustainable in the long run. We have to catch up, especially given the high costs and rapid population growth we’re managing now.

Why does the City use debt?

The City only uses debt for capital projects, like building roads, facilities and other infrastructure, or doing major renewal when it’s needed. The City does not use debt for day-to-day operations, like fire rescue, parks, police, recreation centres, snow removal or transit. Debt-funded capital projects are paid for through debt financing over a long time (sometimes up to 35 years) so cancelling them wouldn't make a significant difference to the annual tax increase.

Building and maintaining the City’s infrastructure is expensive, costing billions of dollars. In order to fund these projects without the use of debt, the City would need to save up tax dollars for decades before starting project work, which would stall our capital plans and mean that we’d be taxing many Edmontonians who would never get to use the facility, road or LRT they paid for. Debt allows us to build now and spread the cost out more fairly, to all users over the life of that facility, road or LRT project.

As well, the City gets lower interest rates that it can lock in for up to 35 years. This means that even if interest rates fluctuate, the City's debt payments stay stable for the entire loan. This can save tax dollars over time.

Is the City running a deficit?

Challenges like inflationary pressures, a rapidly growing population and changing service needs of Edmontonians contributed to the City’s deficit in 2023 and continue to impact the City in 2024. We’re projecting a $34 million deficit for 2024 as of June 30. We’ll report back again in December and will confirm any deficit in early 2025, once we analyze our 2024 financial results.

The City’s finances are stable and tools like the Financial Stabilization Reserve help to manage one-time pressures like deficits. We’re working to keep the actual deficit as low as possible for 2024, but we also need to address the root causes to prevent future deficits and maintain the City’s financial stability. The fall budget adjustment recommendations will help to deal with the root causes.

What is the Financial Stabilization Reserve?

The Financial Stabilization Reserve (FSR) is set up to manage one-time budget pressures that can come up, like deficits. The City usually manages within its operating budget and runs a small surplus. These surpluses are added to the FSR for when the City needs it.

In the last 15 years, the City has had a tax-supported deficit 3 times, usually because of external factors like volatile investment markets and heavy snowfall. When that happens, we use the FSR to cover the deficit and allow services to continue uninterrupted.

We needed to use the FSR to handle unexpected, one-time costs during the pandemic, and it’s now below its minimum balance after being used to fund the 2023 deficit. We need to replenish the FSR so we’re prepared to handle these one-time pressures in the years ahead. We are recommending an added 1% tax increase in both 2025 and 2026 to bring this critical reserve back up to its minimum balance in accordance with City policy.

Can you cancel some construction projects to reduce the tax increase?

Some capital projects have big price tags, so it can seem like an easy fix to cancel a large project and use that money to fund services and reduce the amount of money we need to collect in property taxes.

The short answer is: You might be able to on some projects, but it wouldn’t have a meaningful impact on the tax increase and it would create other problems for you when it comes to the City’s infrastructure needs.

The longer answer is: There are several reasons why moving money from the capital budget is not a best practice. This includes:

It is not a good idea to use one-time money to fund ongoing costs. One of the key principles of good budgeting is to use ongoing revenues to fund ongoing costs, and one-time revenues to fund one-time costs. Planning and building a construction project is a one-time cost, whereas delivering services (including operating those construction projects once they’re complete) are ongoing costs that we have to plan for every year. If we cancel a construction project, it might free up one-time funding, which could be used to fund services in a given year. However, that funding is then spent and can’t be used to fund services in the following years. You’ve found a temporary fix to an ongoing problem but will have the same problem the following year. You may have also created a new problem down the road. Cancelling or putting off capital projects does not reduce the infrastructure needs in Edmonton, especially given recent population growth, and can create a backlog that would likely cost more to address in the future.
Not all money in the capital budget is easily available for several reasons:
- Most of the projects in the City’s capital budget have already begun. This means that contractors have been hired, contracts have been signed and the City is actively planning or building many of the projects that are in the 2023-2026 budget. Much of this money is spent or spoken for. A lot of this money wouldn’t be recoverable if we cancelled these projects now.
- Most of the funding in the capital budget is constrained, which means it can only be used for specific projects. This includes funding from other orders of government, which is often given to cities for specific types of projects (like public transit) and must be spent within a certain period of time. If the City cancels a project, any funding from other orders of government for that project must be returned.
We are only paying for a fraction of the cost of capital construction projects in a given year because a lot of the unconstrained funding is from borrowing. Debt-funded capital projects like bike lanes, infrastructure rehabilitation, LRT and recreation centres affect taxpayers largely through the tax-supported debt we take on to deliver them, as well as the tax-supported costs to operate any new construction projects once they’re in service. These projects are paid for through debt financing over a long time (sometimes up to 35 years) so cancelling them wouldn't make a significant difference to the tax increase. For example, the $100 million for the Active Transportation Implementation Acceleration project (which includes bike lanes) breaks down to $3.0 million in debt servicing and $1.3 million for maintenance costs in 2025, which totals $4.3 million and is 0.1% of the $3.8 billion annual operating budget.

Why does it feel like my taxes are always going up?

Budget pressures are multifaceted, but inflation plays an important role. Inflation describes an increase in price levels for goods and services and impacts costs for Edmontonians, businesses, and even the City of Edmonton, though in different ways. The impact on costs depends on the good or service that is being purchased, and by how much prices have risen.

When the City's costs increase due to inflation, so does the pressure to increase its tax-supported operating budget (without considering any changes to its service levels, and without considering the financial costs of transformational change, including investments to address climate change, and to support economic growth and diversification). If the amount of property taxes collected stays the same or increases at a rate below the rate of inflation experienced by the City of Edmonton, that means that there are fewer dollars available for existing City services and programs, and reduced financial capacity to invest in our city. This approach is not sustainable over the long term if the City is expected to maintain service and program levels, while also seeing through to its commitments to transformational change.

It’s important to note that the overall tax increase (the percentage increase to the City’s tax-supported operating budget) is different from the change that most individual Edmonton property owners will experience on their property tax bills. The year-to-year change in a property’s assessment value, compared to the change in the overall market, will determine whether your individual tax increase is more or less than the overall tax increase.

For more information see Property Taxes.

2023-2026 Capital Budget

What capital projects is the City building in 2023-2026?

The capital budget is about what the City builds and includes funding for new infrastructure as well as maintenance of existing infrastructure Edmontonians use every day. The approved $10.8 billion capital budget includes projects like:

$2.6 billion for the Valley Line West LRT Extension
$1.3 billion for the Capital Line South LRT Extension
$518 million for the Yellowhead Trail Freeway Conversion
$311 million for the Lewis Farms Facility and Park Project
$200 million for the High Level Bridge Rehabilitation
$171 million for Housing Accelerator Fund Projects
$127 million for the William Hawrelak Park Rehabilitation
$100 million to fund the Active Transportation Network Expansion

What are you doing to maintain all the infrastructure you’ve already got?

The 2023-2026 capital budget includes over $2 billion in renewal projects - these are projects that are focused on maintaining the infrastructure we already have including:

We are working to balance the need for new infrastructure as we grow as a city with the need to maintain what we've already got. This is one of the challenges rapidly growing cities like ours face. The City has millions of assets, with a total replacement value of $34.7 billion. That’s a lot to maintain! Our ideal renewal investment needs over the 2023-2026 capital budget would cost about $3.6 billion.

Like many Edmontonians, we are making the most of our available resources and prioritizing the most important renewal projects. While this is necessary, it isn’t sustainable in the long term. At some point, we will have to invest more to maintain our existing infrastructure. We will also likely need to make some tough choices about some of our older infrastructure, especially ones that may be nearing the end of their lifespans.

2023-2026 Operating Budget

What is being funded in the operating budget?

The operating budget is about the programs and services the City will deliver to Edmontonians from now through 2026. The tax-supported operating budget will increase from $3.4 billion in 2023 to $3.9 billion in 2026. Council also added to our operations in the 2023-2026 budget. By 2026, the operating budget will include $173.7 million in new funding for programs and services such as increased affordable housing funding, increased transit service, energy transition and climate adaptation initiatives. The majority of the operating budget goes towards maintaining existing services in the face of rising costs, but Council has made some additions to the budget too. Over the 4-year budget cycle, there is $572.8 million in additional funding for programs and services like increased affordable housing funding, increased transit service, energy transition and climate adaptation initiatives.

How will the operating budget impact me as a homeowner?

The operating budget delivers 70 services to Edmontonians, including maintaining the roads and public transit that move people; police, bylaw and fire rescue services to keep people safe; and attractions, leisure activities, parks and social programs that make Edmonton a great place to live, work and visit.

The recommended tax increase would mean that Edmonton households would pay about $828 dollars for every $100,000 of their assessed home value in 2025. This means that the average household in Edmonton would pay about $62 more than in 2024. This is an early estimate that will be refined as the City moves through the budget, assessment and taxation process. The property tax increase will affect individual property owners differently, depending on how their property’s assessed value compares to the market.

What is the annual property tax increase?

If Council approves the proposed budget this fall, the annual property tax increases will be 8.1% in 2025 and 7.3% in 2026. The budget is reviewed and adjusted each year in response to significant changes.

During the pandemic, the City worked to keep taxes low to help provide support to Edmontonians and businesses. Property tax increases were 2.6% (2019), 1.3% (2020), 0% (2021) and 1.9% (2022), which brings property tax increases, on average, below consumer inflation.

Low or no increases aren’t sustainable in the long-term without adjusting services.

Has the City looked for internal savings before suggesting an increase in property taxes?

Before Administration sets a tax increase, we look at efficiencies and savings internally. Since 2015, we’ve found an accumulated $1.9 billion in savings without significantly impacting the 70 services Edmontonians rely on every day.

This budget cycle, a Council savings exercise known as OP-12 removed $15 million a year from the 2023-2026 operating budget.

This fall’s recommendations include $18.5 million in savings:

$8.5 million in ongoing savings to limit the tax increase
$10 million in one-time savings to help replenish a key reserve, the Financial Stabilization Reserve

Costs have risen much higher and faster than we forecast when we made our 4-year budget in 2022. It is costing much more to deliver the same services now and we need to respond. Our recommendations respond to the high costs to maintain services, as well as rapid population growth and the changing service needs of Edmontonians.

2023-2026 Carbon Budget

What does the carbon budget do?

The carbon budget informs our transition to a low-carbon city. The City is one of the first cities in North America to present a carbon budget alongside our financial plans.

Unlike the proposed capital, operating, and utility budgets, the Council does not deliberate or approve the carbon budget this fall. The carbon budget is a tool that shows the greenhouse gas (GHG) impacts of budget requests. This allows the Council to weigh climate change impacts when making financial decisions.

It also allows the City to measure and track progress against Edmonton’s emission targets, so we know how we’re doing and what we need to change.

The 2023-2026 budget includes more than $376 million dollars in services and construction that support our transition goals.

What are the City of Edmonton’s emissions goals?

The City established community and corporate carbon budgets as part of the Community Energy Transition Strategy, which was approved by Council in April 2021. The strategy sets out our goals of being carbon neutral as a corporation by 2040 and as a community by 2050.

The carbon budget treats 2021 as the starting point for measuring our progress moving forward, and makes it clear just how much needs to be done to meet Edmonton’s emission targets:

Without further action, forecasts show Edmonton will deplete its carbon budget of 176 megatonnes by 2036
Instead of being carbon neutral by 2050, Edmonton would have a carbon deficit of 12.88 million tonnes a year

How does the carbon budget impact the capital, operating and utility budgets?

The carbon budget gives Council greenhouse gas emission impacts to consider alongside the financial impacts of the capital, operating and utilities budgets. The carbon budget evaluates the emissions impacts of around 200 items in the approved budgets.

The 2023-2026 budget includes recommended funding for projects that will reduce GHG emissions by 180,000 tonnes carbon dioxide equivalents (CO2e) over the 4-year period for the City.

The majority of the climate initiatives funded in the 2023-2026 budget cycle remain in the carbon budget and aren’t significantly impacted by the 2024 fall budget adjustments.

Are we on track to achieve Edmonton’s emissions goals?

The carbon budget makes it clear just how much needs to be done to meet Edmonton’s emission targets. Without further action, forecasts show Edmonton will deplete its carbon budget of 176 megatonnes by 2036.

The carbon budget highlights that climate change is a collective problem that will take collective action. The City is actively working to reduce emissions (including investing more than $376 million in services and construction projects in the 2023-2026 budget that will support these efforts), but to be carbon neutral by 2050, it will take a much larger collective effort, including collaboration and support from other orders of government, private investment and the actions of all Edmontonians.

What has the City already done to reduce carbon emissions?

The 2023-2026 budget includes over $376 million in new funding for services and construction projects that will support the City’s energy transition efforts. This includes $100 million for the Active Transportation Infrastructure Plan, $53 million for energy retrofits of City facilities, $34.5 million for the development of district energy networks, $11 million for an emissions-neutral fleet and $6.5 million for natural areas acquisition.

The Community Energy Transition Strategy sets out Edmonton’s goal of being carbon neutral by 2050. Edmonton is making positive strides. Our annual greenhouse gas emissions reduction target is 7% until 2025, followed by 3% per year from 2026 to 2030.

We’re also integrating carbon into our budgeting process, so the Council can weigh both the carbon and financial impacts of financial decisions. We’re one of the first cities in North America to do a carbon budget like this. The Carbon Budget makes it clear that further action is needed to achieve community and corporate carbon emissions targets.

Learn More About Your Budget

Budget Process and Financial Strategy

Vision and Plans

Financial Reports

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