Today’s story is about the 21st largest school district in the state of Ohio and how district leaders are working to attain financial success while being under attack on multiple fronts.  I will not reveal the names of the district or the leadership until nearer the end of the story so as to try and avoid any bias.  Please read with an open mind.

The 21st largest district in Ohio provided services to just over 9,000 students in grades K-12 in 2009-2010.  Enrollment has increased 139% in the last five years, a rate slightly higher than the Olentangy Local Schools’ rate of 138%, a district frequently cited as experiencing “extreme” or “extraordinary” growth over that period.   The district has not provided transportation for students for at least the last 10 years and does not have a food service program.  As a result, the number of 633 overall employees is very low when compared to similarly-sized districts (e.g., Worthington City Schools has 1,412 employees).

The district has adopted an organizational structure that has a Chief Executive Officer in addition to a Superintendent, Assistant Superintendent, and the School Board.  The CEO often takes the lead in making significant final decisions about the program, and also represents the district in interacting with legislative issues that impact the district.

In addition to receiving $59,978,866 in state funding in 2010, the district will receive combined Federal Funds of $13,491,027 in 2010 and, as a participating member of the Race to the Top program, $2,890,813  from 2010-2014.

The superintendent has been working for the district since 2002, after he retired with 35 years experience as a principal.  As he collected his retirement pay, he received a salary of over $112,757 last year.  And the superintendent has done so over these past 9-10 years without ever having an Ohio Superintendent’s license or certificate despite the clear violation of Ohio Revised Code 3319.01 which states “No person shall be appointed to the office of superintendent of a city, or exempted village school district or a service center who does not hold a license designated for being a superintendent issued under section 3319.22 of the Revised Code.

The assistant superintendent, an elementary and special education teacher since 1978, allowed her superintendent certificate to expire in 2007, since it also apparently wasn’t necessary to receive her $135,000 salary from the district.

A glance down the list of administrators employed in the district will reveal the names of long-retired principals who are collecting their STRS benefits and a very nice salary from the district (the oft-criticized practice of double-dipping and targeted by Governor Kasich).

The district reports a wide disparity between average administrator pay and teacher pay.

  • 36 administrators = $79,443
  • 456 teachers = $34,455

The CEO for the district appears to technically work as a consultant, so his exact compensation is hidden.  “Per the management agreement with the district, the consultant’s company is entitled to 4% of all revenues received except federal funding, and is also entitled to .5% interest on any outstanding balance.  The management fee for the fiscal year ended 2010 was $2,392,656. As of June 30, 2010, all fees had been paid.” Therefore, we can be project the CEO’s salary as somewhere between $0 and $2,392,656.

The CEO apparently has an entrepreneurial spirit, however, and started up a web-based learning management system through a newly-created company that would be able to serve not just his district, but as a tool he could market to school districts around the country.  Not coincidentally, his district was an early adopter and last year they “contracted for the purchase of curriculum services for students.  The cost of services for fiscal year ended 2010 was $9,570,623.  As of June 30, 2010, $0 was outstanding and payable.”

So that now puts our CEO’s unknown salary at somewhere between $0 and $11,964,279.

Financial numbers aside, how is the district performing in student achievement?  Not so well, actually.  Below is a chart showing some of the mystery district’s numbers compare to the oft-vilified Cleveland Schools.

State Indicators Met District Cleveland
2007-08 1 out of 30 2 out of 30
2008-09 5 out of 30 3 out of 30
2009-10 4 out of 26 2 out of 26
Graduation Rate
2006-07 25.8% 61.9%
2007-08 33.3% 53.7%
2008-09 35.0% 54.3%
2007-08 92.4 90.9
2008-09 93.2 90.7
2009-10 90.4 91.7

And even worse, the district is in “School Improvement Year 8,” a status no other district has attained.  The State of Ohio Accountability Notebook only goes up to Year 5:

Status Consequences
School Improvement year 1 Develop improvement plan.
Offer school choice [Title I funded only].
School Improvement year 2 Offer supplemental services and school choice [Title I funded only].
School Improvement year 3 Continue to offer school choice and supplemental services [Title I funded only].
District takes one of the following steps: 

  • Institute new curriculum
  • Decrease school management authority
  • Appoint an outside expert
  • Extend school year or day
  • Replace the principal and/or other key staff
  • Reorganize the administrative structure of the building
School Improvement year 4 Continue to offer school choice and supplemental services [Title I funded only], and implement the steps initiated in Year 3 of School Improvement. Must develop a plan that includes at least one of the following. 

  • Replace staff
  • Reopen as a charter school
  • Contract with a nonprofit or for-profit entity to operate the building
  • Turn operations over to the Department of Education
School Improvement year 5 Continue actions taken and implement plan developed in Year 4 of School Improvement.
Continue to offer school choice and supplemental services [Title I funded only].


At this point, what should the state do with this district?  Or at least, what do you think the state’s plans are for the district?  Some ideas from the chart would be to replace the staff, reopen the building as a charter, turn over the building to a for-profit entity, or even turn it over to the Department of Education.

The easy answer might seem to be a state takeover as suggested in December by Kasich as a solution for the Cleveland Schools.

“Kasich has not drafted a specific proposal but said Wednesday that he favors putting a “special master” in control of school districts like Cleveland with chronically low graduation rates and test scores. He did not set a deadline for improvements but said he wouldn’t wait four years, the length of an Ohio governor’s term. “Look, I’ve been thinking about this for 30 years,” said Kasich, who will take office in early January. “You cannot let kids sit in an environment where they are failing, where the system is failing them.”


While that might all seem logical and understandable given the strong words our legislators have for failing schools these days, that would be a wrong guess.

Instead, the legislature has included some different ideas to help our district in the state budget (as explained by the LSC):

  • Requires ODE to pay [the district] for serving children with disabilities regardless of whether a child enrolls . . . after the federal reporting date of December 1.
  • Exempted from student immunization requirements for admission.
  • Permits the school’s governing authority to delegate any or all of its rights, duties, and responsibilities to the [CEO].
  • Specifies that funds paid to the [CEO] by the school are not considered public funds and no public entity, including the school, has an interest in assets or property purchased with those funds.
  • Exempts the [school district] from provisions of current law allowing a school to be suspended or put on probationary status for (1) failure to meet student performance requirements in the contract, (2) fiscal mismanagement, (3) a violation of law or the contract, or (4) other good cause.
  • Specifies that, for state funding purposes, [a district] student is considered automatically re-enrolled the following school year until the student’s enrollment is formally terminated.
  • Eliminates the requirement that [the district] spend per pupil on instruction at least as much as the per pupil statewide classroom teacher amount specified under the . . .  school funding model ($2,931 in FY 2009)

So what’s this district’s secret for avoiding punishment and actually gaining support through the GOP’s budget?  What model should the superintendents of other struggling districts follow?

Donate to your legislator.  A lot.  No, I mean a LOT.

As in $220,795.00 per year.

Let’s unravel this mystery district if you haven’t already figured it out.


William Lager is the founder of ECOT (Electronic Classroom of Tomorrow) online charter school, the 21st largest “district” in the state of Ohio with over 9,000 students.  Because ECOT is online, there are no school buildings, no transportation costs, no lunch needs and only 633 total employees.

A 2010 audit by the state of Ohio and auditor Mary Taylor (yes, now Lt. Governor Mary Taylor) included the following:

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Electronic Classroom of Tomorrow, Franklin County, Ohio, as of June 30, 2010.

Per the management agreement with ECOT, Altair is entitled to 4% of all revenues received except federal funding.  Altair is also entitled to .5% interest on any outstanding balance.  The management fee for the fiscal year ended 2010 was $2,392,656.  As of June 30, 2010, all fees had been paid to Altair.

ECOT contracts with IQ Innovations, LLC for the purchase of curriculum services for ECOT students.  The cost of services for fiscal year ended 2010 was $9,570,623.  As of June 30, 2010, $0 was outstanding and payable.  IQ Innovations, LLC and Altair Learning Management I, Inc. have the same principal owner.

To reiterate, William Lager is the CEO of both Altair Learning Management and IQ Innovations, LLC.  And auditor Mary Taylor found nothing wrong with him directing nearly $12,000,000 in taxpayer dollars straight from the Ohio Department of Education and into the accounts of private companies he owns and operates.


And in the year 2010, William Lager, Ohio charter school operator with an undisclosed salary, managed to donate $220,795 to a variety of election campaigns, most notably:

$11,000.00 Speaker of the House Speaker William Batchelder
$5,000.00 House Speaker Pro Tempore Louis Blessing
$11,000.00 House Majority Floor Leader Matt Huffman
$10,000.00 House Asst Majority Floor Leader and Finance & Appropriations member Barbara Sears
$5,000.00 House Majority Whip and Commerce & Labor member John Adams
$500.00 House Asst Majority Whip and Finance & Appropriations member Cheryl Grossman
$10,000.00 House Finance & Appropriations chair Ron Amstutz
$5,000.00 House Finance & Appropriations member Mike Duffey
$5,000.00 House Finance & Appropriations member Bob Peterson
$5,000.00 House Finance & Appropriations member Gerald Stebelton
$5,000.00 House Finance & Appropriations member Troy Balderson
$5,000.00 House Commerce & Labor (SB5) member Todd McKenney
$5,000.00 House Commerce & Labor (SB5) member Lynn Wachtmann
$5,000.00 Representative Terry Johnson
$3,000.00 Senate Insurance, Commerce and Labor (SB5) Chair Kevin Bacon
$3,000.00 Senate Finance Committee Chair Chris Widener
$11,395.00 State Auditor David Yost (Successor to Mary Taylor)

To clearly spell out that donor list for those superintendents wishing to follow this strategy: donate a total of $42,500 to the majority leadership in the House and an additional $30,000 to members of the committee that will be hearing the budget bill (make sure you remember to give double to the committee chair).

$220,795 in donations to Ohio legislators in 2010.  What percentage of your income do you donate to political candidates?  Is ten percent too high?  How about five percent?  If William Lager donated a generous five percent of his 2010 income to Ohio politicians, then that would place his 2010 salary at an eye-popping $4,415,900.  In January, the Westerville School district made news when it was claimed the school board “went ‘overboard’ in its negotiations” with Superintendent Dan Good in granting him a raise to $189,000.  Perhaps he should have held out for more, considering his district is considerably larger than Lager’s.

Oh, and there’s that small fact that ECOT actually has a team of administrators, albeit unlicensed, that supposedly run the organization.  So what does Lager actually do?  Well, despite the fact that the entire organization is taxpayer funded, we have no idea.


So let’s try to summarize this hot mess.  The 21st largest school district in the state has had flat or declining test scores for a nine year period; graduation rates of below 35% over that entire time are consistently 20 points lower than Cleveland Schools’ scores, a district that is being discussed for state takeover.  Attendance rates are consistently below the state average, while student achievement scores are significantly below state averages.  And instead of intervening in year 3 or 4 according to State regulations, the state allowed enrollment to increase at one of the highest rates in the state, allowing a net growth of nearly 2,600 students in the last five years.  And instead of taking a financial penalty, the district received 36% more in per pupil funding than the state average.  All of this while being run by an unlicensed superintendent and unlicensed assistant superintendent who are each being paid over $100,000 per year (above statewide averages) and teachers are paid an average salary of $34,450, well below the state average of %55,812.  And in spite of the existence of these administrative roles, the district is actually managed and operated by CEO William Lager of Altair Learning Management, whose fee for 2010 was $2,392,656.  And William Lager, the CEO who is running the district, created a new company, IQ Innovations, who then created a software solution for the district, who then paid IQ Innovations $9,570,623, also for 2010.  And again, instead of intervening, instead of conducting inquiries in search of anything from ethics violations to criminal activities, our legislators, aided by $220,795 worth of elbow nudges, are instead using the budget bill to modify state laws in order to help William Lager better expand the scheme of laundering state tax dollars.

That’s right, $12,000,000 per year in Ohio taxpayer dollars funneled directly to William Lager is apparently not enough, so the Governor and GOP-controlled House are going to make it even easier and less transparent for him.

I’d like to recommend that you scan through this post again, now that you know that I am referring to an online community school.  I think you may find some of the facts even more shocking through that lens.


I would like to close with a reading from the Book of John (Kasich): Reforms; Page 3, Line 1

“Budgets are about more than money. Budgets express an administration‘s priorities.”

Never has he spoken truer words.

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  • Anonymous

    Wait, I think you missed the most important change in the budget for Mr. Lager and ECOT – the House amended the governor’s budget to extend a moratorium on new e-schools in Ohio until 2013, preventing any new competition from coming online.

  • proud publicservant

    Power to the people. No, that’s not right. “Power the rich” is is new politics

    What the hell has happened to this county. We thought we had it right after the 60’s. May it is time for a new revolution.

  • luv2teach

    Not my idea but wanted to pass it on. This needs to be sent to every news outlet in the state. NOW!

  • Beca117

    Wow…….Although, I do want to know what the Governor’s new budget on education does to the Race to the Top funds…..How does the reduced funding effect the goals that Strickland said we were going to do?

  • Guest

    Selling school kids out at the speed of business is the one of the mottos of the radical R’s. This is what happens when voters vote for the radical R’s who don’t believe in the public sector.

  • Littleguy

    When I worked in a government office, one of the ECOT employees spouses would schedule a meeting room in a government office – free or charge – to give their tests. Wish I had know about this at the time…I would have blown the whistle on that. I have printed a copy of this to send to my state representatives and state senator demanding an explanation. Everyone should do the same.

  • Gmild

    Nine straight years that the school has been “failing” according to state measures. No other school has such a despicable track record. Do you see them throwing money at Cleveland and Columbus with no strings attached? I don’t. I see them closing schools, removing principals and teachers, and bringing in outside management companies.

  • gmild

    Really? Insinuate? I actually provided the ORC number so that readers could look up the entire wording if desired while pulling out the relevant part of the language — there was no insinuation. What part of the extended language in ORC 3319.01 that I omitted do you think contradicts my use?

    Explain to me how those omitted words change the fact that Jeffrey Forster has never held an Ohio Superintendent’s license?

  • gmild


    You can look up every school’s results through ODE at

    You’ll get access to much more information than I could post here.

  • gmild


    You can look up every school’s results through ODE at

    You’ll get access to much more information than I could post here.

  • Guest

    Two points:
    1.  The cost of enrolling these students in traditional public schools would be at least double.
    2.  Anyone who believes that graduation rate is a direct result of quality of education does not understand, or refuses to acknowledge the socioeconomic caste system that is America.

  • uh… what?

    You’re disputing our analysis of the data with bullet points? Do you have any facts to support your claims?

  • Which government office?   I’d like to do a records request for that information.

  • Getworking

    The ODE can be a wealth of information.
    Greg, you forgot some data. Allow me to fill in some gaps
    Electronic Classroom Of Tomorrow
    Local Revenue – $63,188 or $7 per pupil
    State Revenue – $55,872,214 or $6,036 per pupil
    Federal Revenue – $7,704,742 or $832 per pupil
    Revenue Total – $63,640,143 or $6,875 per pupil
    Note this – *the State gives ECOT $6,036 per pupil and ECOT returns unsatisfactory results.
    Also note that **ECOT has been in operation since the 2000-2001 school year.
    Now let’s look at the CMSD. Since you have compared ECOT with the CMSD, I feel that this additional data is needed for a more accurate picture
    Cleveland Municipal City
    Local Revenue – $165,303,902 or $3,541 per pupil
    State Revenue – $372,196,562 or $7,974 per pupil
    Federal Revenue – $134,630,384 or $2,884 per pupil
    Revenue Total – $672,130,848 or $14,400 per pupil
    The CMSD like ECOT has been unsatisfactory in its results. But the amount of tax dollars given to the CMSD is over double per student than what ECOT gets.
    In fact the State give the CMSD an additional $1,938 over ECOT.
    Now Greg, should we demand that ECOT be shut down by the Gov? Yes. It has had 11 years to become satisfactory.
    But what about the CMSD? It has been failing kids since the ODE started their grading system back in the late 90’s. In fact the CMSD has been failing kids and wasting tax dollars for many years prior to the ODE grading system.
    The CMSD gets over twice as much tax dollars as ECOT and still holds a graduation rate of 54%.  In fact, the CMSD has not had a graduation rate of 70% for decades!
    Now for some accountability – Charter schools can be shut down by the State for poor performance. And some already have. But municipal school districts like the CMSD are allowed to operate in a failed state perpetually with no accountability or fear of being shut down. Failing municipal school districts can continue to get taxpayer funding from a system ruled unconstitutional multiple times.
    I am all for the shutting down of failing schools and school districts that waste my tax dollars. But the consequences must be equal for all types including municipal, non-profit and for profit charters.


    Getworking (GW)

  • Getworking

    Ah, the cmsd is not closing schools just because of performance, they are closing schools because the school population has fallen significantly. It takes a lot of money to heat schools that are half full. Plus currently, there are enough teachers for cmsd students to have a 13 to 1 student to teacher ratio.

    So where do you think those students from the closed schools are going to go? Why to another cmsd school where they can bring that school’s rating down.  And no teachers have really lost their jobs. The majority have been transferred to other cmsd schools.

    Sure there have been some teacher layoffs. But again it was because of the deficit the cmsd is in. They were not released due to poor performance.

    The point is that the State has never shut down a cmsd school due to poor performance ever.

  • Anonymous

    Since I’m not in Cleveland personally, I can’t speak to their ups and downs over the years (state takeover didn’t work out so well, is jury still out on the voucher program?).

    One thing about ODE data, you have to be able to read it properly.  Your calculation of the state funding for CMSD is based on the number that includes community school and voucher funding.  For 2010-2011, this number is approximately $7,000 per pupil.  However, when you remove the 14,310 children and pay out $106 million to charters and another $11 million to EdChoice, the remaining amount that CMSD receives in state funding drops to roughly $6750, the community school funding averages out to $7427, and ECOT received $4.7 million for the 750 CMSD students who opted to enroll in the online school, an average of $6295 per pupil.

    CMSD was a great choice for numbers, too, since they are the extreme in terms of funding based on poverty. Even with these highest numbers amounts in Ohio, their state funding is less than their local charters.

    And I want to try and make a point here — local and federal funding should not be dictated by the State budget. We both know that state funding is a mess, but I hope we could agree that the state should play a limited role in determining the school funding choices that local taxpayers make.

    Related to your other response, it is incorrect to state that the schools have not been closed as a result of scores, but only as a result of falling enrollment. This is a bit of a fine point, but know that when closing a school and redistricting, school performance is usually one of the key factors in determining which school in a given area closes. Realistically, the two factors go hand-in-hand.

    I want to ask you a question that is really at the crux of the post:

    Are you holding CMSD up as a model for other schools to follow? Are you promoting their practices over the last decade as a rationale for expanding their educational model?

    ECOT and other failing charters are being held up as a reform model for education in Ohio, so based on the fact that their overall district performance is better, shouldn’t we be hailing CMSD as a reform model for student performance, too?

    You already made it clear that wasn’t your point, but you must know that their are many elected officials who actually think expanding charters with these results is a good idea. The proliferation of these ideas is fracturing the reform effort, not unifying it.  Why aren’t we empowering teachers to be professional educators? Look up some of the latest curriculum and you’ll find scripted lessons that teachers are supposed to recite for maximum student growth. Teachers then have to sneak in good lessons for their students when no one is looking. When we hear the Governor complain about the excessive costs of having too many districts in Ohio, why don’t we hear him complain about the excessive cost of having too many charters? Each school essentially operates as an independent school district (yes, there are some that collaborate), and incurs treasurer and other management costs that public district school condense.

    Finally, while CMSD is on the extreme end for funding, on average, a charter school receives 250% of the STATE funding that their local district receives (we posted about this; information is also from ODE). Conceptually, if we converted all public schools to the charter model, wouldn’t the state budget ALSO have to increase 2.5 times to match this funding model? Doesn’t that seem a bit off?

  • Anonymous

    See my other post.  You are likely correct that the state has never shut down a CMSD school.  The district bears the responsibility for taking that action.

    Look, the whole ECOT situation is appalling to me.  It’s a good idea gone bad and it needs cleaned up.

  • Getworking

    And the CMSD situation is appalling to me. And it has needed cleaning up for far longer than ECOT. Your State and Federal tax dollars are being wasted on a failed school system that continues to receive funding to continue operations in its failed state.
    You stated:
    “Nine straight years that the school has been “failing” according to state measures. No other school has such a despicable track record.”
    This is incorrect. There are CMSD schools that have been rated Academic Emergency since the ODE started grading schools in the late 90’s and have never achieved a satisfactory grade. That’s a bit longer than 9 straight years. Funny thing though is that some show 9 years of continuous improvement. Unfortunately raising an F grade to a better(?) F grade is still failure. But as politics go, a blind eye is also turned towards these failing municipal schools and they have been allowed to continue their failed operations indefinitely.
    “The district bears the responsibility for taking that action.”
    And so does the State. The State has the authority to talk over a failing school district. But the State has shirked its responsibility and instead has turned a blind eye to the failing CMSD while continuing to support it with State funding.

  • Getworking

    “Since I’m not in Cleveland personally, I can’t speak to their ups and downs over the years (state takeover didn’t work out so well, is jury still out on the voucher program?).”
    Ah, but I am in Cleveland. I know it well. If you want to use Cleveland for your arguments, I will help you fill in the details you miss.
    The state tax money follows the student. If a student goes to a charter school, the cmsd no longer gets that funding. Why should they? Those former cmsd students are no longer receiving their education from the cmsd. I am amused by the rhetoric I hear from cmsd teachers and administrators who say charter schools take money away from the cmsd. But that is a fallacy. When a student goes to a charter school the cmsd has one less student to teach. The cmsd is not losing money.
    “…their state funding is less than their local charters.”
    I disagree with you on this. Additionally, the cmsd gets local and federal funding which gives them twice as much funding as the charter schools get.  If you want to use cmsd for your example, you should first understand how bad the cmsd is. The charter schools within the cmsd outperform the cmsd and do it with half of the funding. Charter schools have given a choice for parents so they do not have to send their kids to a failed school system which has been allowed to continue operations in its failed state with no accountability or any fear of consequences such as being shut down. Charter schools have been shut down by the State for poor performance; the cmsd is allowed operate with poor performance.
    “Related to your other response, it is incorrect to state that the schools have not been closed as a result of scores, but only as a result of falling enrollment. This is a bit of a fine point, but know that when closing a school and redistricting, school performance is usually one of the key factors in determining which school in a given area closes. Realistically, the two factors go hand-in-hand.”
    You would be incorrect. The cmsd has closed schools because of the district’s fiscal woes. Plenty of news stories here over the past few years concerning the money woes of the cmsd and why administrators closed the schools they did. Apparently you have not read them.
    Here is some more ODE data:
    Back during the 1999-2000 school year, the cmsd had 78,190 students, a 16 to 1 student to teacher ratio and the district received $8,136 per student. Back then the cmsd had a 36% graduation rate. Today there is less than 47,000 students and the district has a 13 to student to teacher ratio and a 54% graduation rate. The cmsd can no longer afford to keep operating all their schools for so few students. It is only now that the cmsd is shutting down schools. The city of Cleveland has laid off in every department over the past year because of fiscal woes. The cmsd is still one of the higher funded school systems in the State. The cmsd has considerable more fiscal resources than most other school districts, yet they are allowed by the State to fail.
    The cmsd has closed schools in neighborhoods where the student population has declined the most. You can disagree all you want, but that’s what has happened in c-town. If you lived here you would have a clearer picture.
    It is the urban school districts in Ohio where education is failing. And charter schools generally operate within the boundaries of those failed school districts. Charter schools offer parents a choice. There are good charter schools out there that offer parents a choice where the municipal districts have let them down. I have chose to send my kids to a charter school rated effective rather than the cmsd school nearby rated academic watch.
    The real crux of the situation is that nobody in the political arena or the teacher unions is willing to address the truth of irresponsible parents and students who do not give a damn. These are the main reasons why education fails in urban areas. And since the municipal school teacher unions have failed to take a stand against the dysfunctional behavior of their urban students, they have opened the door for being blamed and the charter schools have found an opportunity to form.
    And as for politicians, lobbyists and the like, it is far easier to blame on teachers than to address the problems of urban culture. But until the teachers stand up and publicly state that the main reasons for education failure is the parents and the students themselves instead of themselves, teachers will continue to be targeted for blame.
    The Cleveland urban area is dysfunctional. Cleveland has some of the finest dressed, well fed and entertained poor people as evidenced by the satellite dishes that can be openly observed on any county housing project. They are enabled to live this way. Nobody is held accountable. And this dysfunction spills over into education.
    Tax dollars are being wasted in both charter schools and municipal schools and urban education will continue to fail as long as the ills of urban culture are addressed openly.

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