PROVOST’S REPORT
                                              November 2, 2006

There are several things that I want to cover in this report, based on system meetings that I have attended

First, Cornerstones. The Board of Trustees is undertaking, with CSU-wide governance, an effort to update
Cornerstone so that it focuses even more precisely on what capacity the campuses and system have to meet the
challenges of access to its universities, quality programs at its universities, and accountability to the public
about our efforts on both counts. The Board understands the symbiosis of access and quality, diversity and
mutual enrichment, the life of the mind in the university and the practices of the hand the heart both inside and
outside its palisades. In spring, trustees likely will come to CSUN to hear how our sense of mission and our
process of planning situate us in this CSU-wide context. Absent a functional master plan for higher education in
CA, this system-wide dialogue is necessary to plot a collective future that planners are too fractious to
accomplish. We will need to harvest thoughts from planning, themes from the incipient WASC process, and
results from assessment, and then use them as stimuli for a campus-wide set of dialogues to occur when the
trustees visit—we do not have a date.

Second, the Contract offer. After sitting through a day of explanation, I realized how little many of us actually
know about the CSU offer. I asked system representatives to contribute to an explanation of its components, for
instance: how it compares with previous CSU offers; how it actually stacks up against the CPEC gap and
comparisons with other peers; what happens when you actually look at the effects of the proposed GSIs, SSIs,
and incentives; why are there contingencies; and what are the implications of these contingencies. For example,
are many of us aware that the CSU offer on the table exceeds the Compact and thereby commits each campus to
make up the difference, even before one takes into consideration the additional 1% requested of the governor?
We will make this explanation available soon, I hope.

Third, we circulated to the academic technology committees and the executive committee—which, I think, in
turn, forwarded the document to the whole senate—a draft plan for ADA roll-out in Academic Affairs. The
system shortly will have a conference on this. But the executive committee argued powerfully that we need to
energize and call on campus trainers and users, rather than just rely on system to-down training. So, please pass
your input on the draft to you senate president or to me, so I can re-submit to the appropriate committees.

It is my understanding that ERC will carry then pass the ball on alternative scheduling. Their report, which I
first heard at senate exec a month ago, showed some surprising convergence between students’ wishes for
single-day classes on Friday and Saturday with flex scheduling. The report will be delivered to provost council,
as well to the senate shortly.

Unfortunately, I will be out of town for senate executive this week and, it seems, the next full senate. Since
there is much in this that my proxies cannot delve into, do work with my office for an alternative forum, where I
can be robed, if you so wish.

                                    November 2, 2006

This is long. So here is the reader’s guide:

       Interested in the basics of the CSU offer—GSI, SSI, Incentive/Equity? Read 1-3, 7-9
       Interested in why the offer is contingent and what the sources of funding are? Read 3-5
       Interested in how the offer exceeds previous offers since ’86? Read 5-6
       Interested in how the offer exceeds the CPEC gap? Read 5-6
       Interested in the history of salary compression/inversion? Read 8-9
       Interested in the hidden argument behind the CPEC data? Read 9-11

Bargaining between the CSU and the CFA for a new contract has reached impasse. The current salary offer by
CSU to CFA has sparked debate, in the meantime. Indeed, ten days ago the provosts understood, for the first
time, that because the CSU’s offer exceeds what was in the Compact with the Governor, the campuses are on
the hook for funding this difference.

Other discussions with faculty and administrators made me aware that the offer really is not understood well.
The numbers and terms can be confusing. So, the following describes the salary offer in a context that I began
to assemble at the provosts’ meeting last week. Since I am an administrator, this piece will reflect a CSU view. I
have tried to make the data clear so that, if you disagree with the general view, we can at least agree on what
facts and implications to dispute.

The Salary Offer

Table 1 below summarizes the components of the salary offer; it compares the two alternatives offered by the
CSU. The salary offer is structured into four payouts—but within three years. This itself is confusing—four in
three, a bargaining trinity. So, let’s ignore it. Let’s just stipulate, for most of this essay, that the offer covers four

Column B shows the percentage increases to be paid out in each installment, beginning with 2006/07 and
ending with 2009/10. The payout includes a 4% increase to the total compensation pool during 2006/07, a
6.53% increase during 2007/08, a 6.84% increase during 2008/09, and a 7.5% increase during 2009/10. A 1%
increase in system-wide faculty salaries represents about $13 million the first year and, of course, compounds in
value thereafter.

Ok, now bear with me. Columns C and D show the two alternatives that CFA can choose between. But before
you sally to the tally in the columns, note this. The salary offer has three components: General Salary Increase
(GSI), Service Salary Increase (SSI), and Incentive/Equity. The total compensation pool remains the same,
whichever option CFA chooses; but the allocations to GSIs, SSIs, and Incentive/Equity will vary. In a nutshell,
CFA has the option of converting SSIs into GSIs. Alright, let’s list what I just garbled:

    o The GSI (General Salary Increase) percentage is a general increase in salary – this goes to all faculty
      members as a percentage increase over their current salaries. There are two alternatives for GSIs, as
      offered by the CSU, as shown in Columns C and D. Should CFA accept the CSU salary offer, CFA may
      choose which alternative to implement.

        The alternative shown in Column C provides for the maximum GSI—a total of 21.87 % over four
        payouts (a 4% increase in 2006/07, a 5.53% increase in 2007/08, a 5.84% increase in 2008/09, and a
        6.5% increase in 2009/10). In this alternative, nearly 88% of the 24.87% (in the total compensation
        pool) would be allocated to GSIs.

   Because there are four payouts, the amount for GSIs is compounded. For example, under the alternative
   with the maximum GSI (Column C), a faculty member currently earning an AY salary of $60,000 would
   be raised as follows:
           Current salary (hypothetical) = $60,000
           $60,000 x 1.04 = $62,400 in 2006/07
           $62,400 x 1.0553 = $65,851 in 2007/08
           $65,851 x 1.0584 = $69,697 in 2008/09
           $69,697 x 1.065 = $74,227 in 2009/10

   What does compounding do? $74,227 is 23.7% more than $60,000, not 21.87% more. Keep this
   difference in the back of your mind. I will invoke it later, but will not calculate for the following
   examples. One illustration is enough.

   Under the alternative shown in Column D, the total amount added to the compensation pool for GSIs
   would be 17.87% (an increase of 3% in 2006/07, an increase of 4.53% in 2007/08, an increase of 4.84%
   in 2008/09, and an increase of 5.5% in 2009/10). This is because an increase of 1% per year added to
   the total compensation pool would be allocated to funding SSIs, as explained below. Thus, to use our
   example of a current AY salary of $60,000:
           Current Salary (hypothetical) = $60,000
           $60,000 x 1.03 = $61,800 in 2006/07
           $61,800 x 1.0453 = $64,600 in 2007/08
           $64,600 x 1.0484 = $67,727 in 2008/09
           $67,727 x 1.055 = $71,452 in 2009/10

o The optional SSI (Service Salary Increase) portion shown in Column D would fund an increase in
  salary for those faculty members who have not reached the service salary maximums for their ranks.
  Now, here is where it gets confusing. The SSI amount offered by the CSU represents an increase to the
  total compensation pool of 1% per year, for a total of 4%. But each SSI - eligible faculty member could
  receive an additional increase of 2.65% each year. Huh, you say? Well, a 1% per year increase to the
  compensation pool is spent as 2.65% per eligible person because the people who are SSI-eligible are a
  smaller number than the GSI-eligible faculty. So, CFA can choose to apply the 1% increase per year to
  fund the 2.65% SSI increases (see Column D). Alternatively, the 1% increase per year can maximize
  GSIs as shown in Column C.

o The Incentive/Equity portion corrects market inequity and recognizes distinctive levels of achievement
  by individual faculty members. Now, the last sixteen months we have spent nearly $300,000 of CSUN’s
  Academic Affair’s budget on similar issues. That is, we subtracted five to six positions from the hiring
  pool to fund these efforts. This clause in the offer would support that local expense. The CSU salary
  offer provides a 3% increase to the total compensation pool for Incentive/Equity pay, allocated at 1%
  per year over the three years, 2007/08, 2008/09, and 2009/10. Unlike the SSI portion, the CSU does not
  offer an option to increase the GSIs by opting against the Incentive/Equity portion.

   Now, let’s explain the uses a little more. In the current proposal, junior faculty will be eligible for raises
   that respond to market inequities as well as unusual achievements. Senior faculty and lecturers would be
   eligible, too; but their eligibility would be cyclical—every three to five years, depending on the final
   agreement. Since junior professors are, almost by nature, on the market, a cyclical approach would not
   work. But both programs could combat compression and inversion. For example, the salaries of some
   faculty members would increase to bring them into line with the salaries of more recently hired faculty
   members in their departments, who received a much higher rate of pay upon appointment because of the
   bidding in the academic market. And senior faculty could see their salaries rise above an average that is
   encroached upon by the higher salaries that are granted to new hires at lower ranks.
Table 1: The Salary Offer as a Percentage (%) Increase to the Total Faculty-Unit Compensation Pool

        A             B           C             D
                   Total     Alternative   Alternative
                   Offer     with Most     with Least
                   (%)       GSI %         GSI %
  Payout #1 (2006/07)                                        *Note: Under the Column D
                                                             alternative, a 1% increase to the
 Subtotal           4.00%                                    total compensation pool would be
 SSI                                  0       1.00%          used to fund a 2.65% salary
 GSI                              4.00%        3.00%         increase to the base salaries of all
  Payout #2 (2007/08)                                        faculty members eligible for SSIs.
 Subtotal           6.53%                                    Eligible faculty members are
 SSI                                  0       1.00%
                                                     *       those who have not reached the
                                                             service salary maximum for their
 Incentive/Equity                 1.00%        1.00%
                                                             academic rank.
 GSI                              5.53%        4.53%
  Payout #3 (2008/09)
 Subtotal           6.84%
 SSI                                  0       1.00%
 Incentive/Equity                 1.00%        1.00%
 GSI                              5.84%        4.84%
  Payout #4 (2009/10)
 Subtotal           7.50%
 SSI                                  0       1.00%
 Incentive/Equity                 1.00%        1.00%
 GSI                              6.50%        5.50%
 under each
 Alternative                     21.87%       17.87%
 TOTAL OFFER       24.87%        24.87%       24.87%

Source of funding

The ability to fund the plan depends, in large part, on the CSU receiving from the state the amount that was
pledged in the Compact with the Governor. As shown in Table 2, this pledge provides an increased budget for
salaries of 3% in 2006/07, of 4% in 2007/08, of 4% in 2008/09, and of 5% in 2009/10, for a total of 16%. This
amount must still be approved by the Governor and the Legislature in the State budget bill. Since the Compact
is a pre-existing agreement, this would seem to be a result that we can rely on. Indeed, the offer assumes that the
state will and must meet these conditions.

However, the offer does have one contingency It depends on legislative approval of an additional 1% per in
each of the last three installments, to be requested by the CSU.

So, you might think, well, too bad. Each campus should just find the dollars. Ok, but consider this. The entire
plan already depends on each campus making up the difference between the CSU base offer and the amount
pledged under the Compact.

Look at Table 2. Focus only on the base offer—before the added 3% to be requested of the state. There is a
5.87% gap over four years between the amount of funding pledged under the Compact and the CSU’s base
offer. This amount will come from the campus base budget. The campus budget is the source of funding for
new hiring, salary increases associated with promotions, reassigned time and sabbatical leaves, and operating
expenses. On our campus, the 5.87% represents approximately $4,200,000—about the amount Academic
Affairs lost to the budget cuts in ’05-06, when we hired very few people.)
                  % Increase under     % Increase
                  CSU Base Offer       under Compact       Gap
 Payout #1
 2006/07           4.00%                3%                   1%
 Payout #2
 2007/08           5.53                 4                    1.53
 Payout #3
 2008/09           5.84                 4                    1.84
 Payout #4
 2009/10           6.50                 5                   1.50
 TOTAL             21.87%              16%                 5.87%

 Now let me talk pastrami for a minute. Someone will say, hell, the CSU will reach into its pocket to cover all
this! Well, if it does so, it will find a way to reduce the overall allocations to the campus to gather the funds for
this pool. I mention this for a reason: Without agreement by that state to fund the added 1% in each of three
years above the Compact, two turkeys (uh, no pun intended) will come home to roost: this 5.87% as well as the
additional 3% that the CSU would request. At CSUN, self-funding 8.87% in salary would be a gargantuan
challenge. Thus, the offer depends on the state’s willingness to pony up the additional 1% in each of three years.

Some have argued that CSU, if it were serious about firming up such a contingency, would have sought
additional funding, above the Compact, previously. But we cannot ignore that the last two governors, when each
had discretionary funds, chose to reduce fees for students before giving more funds to the system. Why?
Students outnumber CSU employees 10:1. Votes follow. But, possibly, just possibly, a united front can reverse
this trend since the Governor and others will make a decision after, not right before, an election.

The offer stretches us.

Key Issue: Compare for Me the Money!

CFA has said that the CSU salary offer is too low. This is, however, the highest salary increase offered to the
CSU faculty in two decades over an equal period of time—three to four years. The data that follow appear on
the CPEC web in various ways.

Table 3 compares the current CSU salary offer with the CPEC (California Postsecondary Education
Commission) salary gap (which the CFA and CSU both cite) and with previous salary increases in the CSU.

The percentage shown on the far left of Table 3 is the projected gap between CSU faculty salaries and average
salaries of the CPEC-designated peers—18%. Actually, if one reads the CPEC methodology, you see that the
projected gap presumes no increase in ’06-07 to CSU faculty salaries. Let’s not make too much of that point (a
difference of 3 – 4% depending on the option selected by CFA – See Table 1); but wherever you see 18%
below, briefly flicker you lids and flash on 14 or 15%.

The next percentage is the current CSU salary offer total—24.87%. This amount is greater than the current
CPEC gap. Also, since it is to be paid over a period of four years, with each successive percentage increase
applied to all previous increases, the compounded value is closer to 27%.

Table 3: Salary Comparisons




                    CPEC Gap CSU Offer Max GSI   Least GSI   Average 4 Highest
                      18%     24.87%   21.87%     17.87%       4-year Increases
                                                             Increase 24.3%

The CPEC projected gap likely will widen by about 3.5% annually—a common average salary increase for
faculty nationwide. This would bring the CPEC gap to 28.5% within the next three years if CSU salaries remain
the same. This is more than the 24.87% offer. The current CSU salary offer would, within three years, bring
CSU faculty salaries to an average that is within about 4% of the CPEC average.

Please read that again. And this time flicker. What do you see? With a settlement this year, the CPEC
assumption about no salary increase this year would be wrong. Are you strobing on that 3-4%? It closes the
gap. With one if—if the state pumps that added 1% per year into this effort! Finally, remember compounding?
Well, the total offers in each column—as in the comparable CPEC column—are larger by several percent than
these figures show.

Is the offer low ball?

The average CSU faculty salary increase since 1986 has been 3.96% per year. Yes, there were a few whopper
years before that. But twenty years . . . that is a pattern. As shown in Table 3, in the second column from the
right, this is an average four year increase of 13.96%, considerably below the 24.87% current CSU salary offer
over a four year period. As shown in the far right column, the four highest increases since 1986 represent a
total of 24.3%, also slightly below the 24.87% offer.

However, this approach understates the relative size of the CSU offer, in other ways that I have not detailed.
Remember, the offer would be delivered over three years. These other CSU increases were over four years. And
can we compare this new offer with increases to average salaries? Included in that latter figure are not just
negotiated increases, but also promotions, equity, market matches, and new hires. In fact, go the Academic
Salaries subsection of the CSU’s HR page. GSIs themselves have averaged below 3% annually since ’95-96.

The column labeled “Least GSI” shows that, even with SSIs and Incentive/Equity pay removed, the GSIs in the
current offer exceed the average CSU increase since 1986 (17.87% versus 13.96%); the delta is even greater if
you compare GSIs with GSIs, as I did in the last paragraph. If the CFA chooses the alternative under which SSI
funding is exchanged for GSIs (see Table 1), the GSIs will be 21.87% (shown by the “Max GSI” column). This
percentage, 21.87%, is almost 57% higher than the average four year period increase (13.96%) since 1986.

Other Things of Note

Other questions have arisen:

1. Why does the CSU salary offer include an alternative of using 4% of the total to provide
four 2.65% step increases? Why not simply offer GSIs?

This alternative probably is strategic. If accepted, it would put money in the hands of faculty members who
have not topped out the salary ranges for their ranks.

Probationary faculty members in the CSU could benefit the most from this alternative, provided that they were
not at the SSI maximum for rank. They would benefit more than senior faculty members already at the top of
their service salary range, and, in most cases, benefit more than part-time faculty members who must
accumulate twenty-four weighted teaching units before becoming eligible for an SSI.

This is a trade-off. Implementing SSIs will exacerbate salary compression for those who have topped out the
range for their rank. However, implementing SSIs will ameliorate the problem of inversion felt by more
recently hired junior faculty members, for example those hired three to six years ago at a given salary, and
whose salaries are now less than the salaries offered new hires based on current market rates.

2. Why include an incentive/equity program?

The incentive/equity portion can address a need that GSIs do not, namely salary inequity due to changing
“market” and recognition of high achievement. The incentive/equity component will provide, over three years, a
yearly increase of 1% of the total compensation pool. This is a yearly amount equal to the yearly amount for

As I sketched before, whether applied to junior faculty in an annual process for market and equity adjustment or
to senior faculty and lecturers in a cyclical process—say, every three to five years—the money could address at
least four things: competitive offers, inversion of already hired faculty by higher salaries to new employees,
compression on senior salaries by highly salaried new personnel, and distinctive achievements. General salary
increase move everyone up by a common spent. Incentive/equity concentrates resources on particular problems.

3. Why does not the CSU fund SSIs and market equity adjustments entirely out of salary
savings when people retire?

a. SSIs

Salary savings from retirements have, by necessity, been put to a wide range of uses. In the short term, funds
are used to hire lecturers to cover classes no longer taught by retiring faculty members. In the longer term,
much of the money saved from retirements has been used for these and other like purposes:
     to hire permanent new faculty members,
     to make up for the gap between the funds that the state allocates for new hires and the actual cost of
        those hires
     to fund faculty promotions,
     to fund market equity salary increases,
     to fund sabbaticals, reassigned time, and professional development especially for new hires.
     to deal with budget cuts. And the difference between the Compact and the CSU base offer, as I have
        explained, suggests that this reserve will be tapped to make this offer work.

Also campus budgets do not increase automatically to match the rate of inflation for utilities and fuel, risk
management and insurance, library resources, technology, supplies, and other operating costs. So, here is the
point. We already cannibalize ourselves to support ourselves. Good cannibals know, however, that you only can
eat yourself once.

b. Market equity adjustments

A similar question arises on behalf of requests for market equity adjustments. The same answer applies—retired
funds already are repurposed. However, the current CSU salary offer provides for an increase of 1% in each of
three years (2007/08, 2008/09, and 2009/10) to the total compensation pool to fund incentive/equity increases.
For CSUN, this yearly amount would represent more than two and a half times the $280,000 that was spent out
of growth funds last year for market equity adjustments.

4. What about the problem of salary inversion/compression and that endless salary gap?

Some believe that salary inversion/compression is only a recent phenomenon. And because it is recent, it
should be fixed entirely now. Please, bear with me here. I’d like to solve it, too. But below I try to show in the
response to 5 that it has a history. History—to be righted—will take money for salaries gained through political
work with policy-makers and, yes more to the point, with our own brothers and sisters in the academy. For, we
are a house divided. No, don’t think CFA vs. CSU. Think your graduate alma mater vs. your place of work

Tables 4, 5, and 6 (where “N” means new hires) show that inversion/compression is actually not new in the
CSU. At the very least, it can be traced back to the late 1990s. This is true across all tenure track ranks.

In other words, for quite some time, the CSU has hired new faculty members at salaries above the average
salary for rank. The differences between new and established salaries are highest at the full professor rank.
However, there have been few new hires at that rank.

It is true, though, that the tendency has accelerated. Salaries offered new hires have increased by approximately
3.5% annually since 1998, while the salaries within ranks have gone up since 1985 by an annualized average of
about 3.3%. The CSU did not begin collecting system-wide data regarding new hires’ salaries until 1998.
However, we can infer that, unless new hires’ salaries grew exponentially right before 1998, the likelihood is
that they matched and exceeded the averages within ranks in prior years.

Both CSU salary offer alternatives address inversion/compression somewhat by providing GSIs for existing
faculty members. The CSU salary offer alternative that includes SSIs would more rapidly address the problem
of inversion/compression for those faculty members who have not reached the service salary maximums within
their ranks.

Nonetheless there is an issue here that might be embedded in capitalism. No, I’m not joking. The market bids up
salary faster than public institutions are funded to pay. Why? The market is driven by different dynamics
(supply and demand) than the state (general fund, fees, and bonds). And, possibly, the state—in its economic
unconscious—attributes a compounding but un-monetarized value to a position that someone holds; it is a kind
of property that become more assured—more valuable— the longer one fills it.

Table 4: Salaries for New Hires versus Existing at Assistant Rank


                    98      2000           2003            2005
    ASST-N 45191            48763         55676          58453
    ASST           44475    49181         55310          58239

Table 5: Salaries for New Hires versus Existing at Associate Rank


                     98      2000         2003          2005
    ASSOC-N 57246           63913         69007        69429
    ASOC            55284   60717         67621        68513

Table 6: Salaries for New Hires versus Existing at Full Professor Rank



                    98      2000           2003            2005
    PROF-N 71474            79848         91928         96219
    PROF           68313    75950         83516         86107

5. Comparison Institutions

Table 7 lists the CSU’s CPEC-designated peer schools. As mentioned earlier, an 18% gap is projected between
the average faculty salaries in the CSU and the CPEC-designated peers.

Welcome to the house divided. Watch closely

When we compare the CSU with these institutions in the aggregate, we overlook a political and cultural artifact.
The salary gap is based, in part, on how Americans—all of us—categorize institutions, hierarchically. There are
doctoral institutions; then there are MA-granting institutions.

Look at the institutions listed in Table 7. Only two of these schools, Bucknell University and Reed College, are
institutions “like” most of the CSU where the Masters Degree is the highest degree granted. The others are
PhD-granting institutions. Thus, the 18% CPEC salary gap largely reveals differences between Masters-
granting and PhD-granting institutions. Indeed, the gap between Masters- and PhD-granting institutions is
wide—nearly 29% when one sums all ranks.
Table 7: CPEC “Peer” Institutions

Northeast Region                            North Central Region
Bucknell University                         Cleveland State University
Rutgers, the State University               Illinois State University
of New Jersey, Newark                       Loyola University, Chicago
State University of New York, Albany        Wayne State University
Tufts University                            University of Wisconsin, Milwaukee
University of Connecticut

Southern Region                             Western Region
Georgia State University                    Arizona State University
George Mason University                     Reed College
North Carolina State University             University of Colorado, Denver
University of Maryland, Baltimore County    University of Nevada, Reno
                                            University of Southern California
                                            University of Texas, Arlington

Now, compare CSU with Masters Degree-granting institutions, i.e., those where the Masters Degree is the
highest degree granted. Table 8 shows the CSU to have higher average salaries across all ranks as of 2005. The
gap has closed to a point of near equivalence in the last two years—I wager. But my point does not change
According to national views, these are peers.
Table 8: Salary Comparison – The CSU and Masters Degree-Granting Peer Institutions

       2005            Full
                       Professor       Associate     Assistant
       Peers           ~$76,000        ~$61,000      ~$51,000
       CSU             ~$85,000        ~$67,000      ~$57,000
       % Difference    11%             9%            10%

We know that the CSU in on the cutting edge in educating our citizens and contributing to the economic and
social progress of the state. And, yes, this CPEC gap should be addressed. But to do so, we must recognize that
the chasm is caused not just by CSU practice but by a national habit of mind—and a habit of (under-)funding.
The efforts by the CSU and the CFA to close the gap are an important step forward. Until there is a significant
culture change, we will not see permanent closure of the gap between PhD-granting and Masters Degree-
Granting institutions. Where are the national organizations on this, AAUP, NASCLGU, AASCU, etc? I’ve read
nothing by them on it.

The data show that the gap captures the difference between the haves—the R1s—and the have nots—the

Now, look back at the current CSU offer. Perhaps you still see it as chicken feed. But perhaps you now see it
differently, as an effort to do more than has been done in twenty years. And as a first step in mending that larger

Sooner or later, we all will need to close ranks. We will need to educate those in policy, in NSF, in government,
and in our own universities about who profits from a higher education house so divided. The tragedy is that, as
long as we are divided CFA vs. CSU in our own house, we cannot take this wider view. If we differ on facts or
on contexts for the facts, then so be it.

But vituperation and castigation of those who hold different views—on either side—distract us from the case at
hand; it reduces argument to character assassination, and obscures others’ intentions with malign fictions.

Excuse the length and the opinions.


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