Improving Caltrans requires new revenue and reasonable reforms

The following is an editorial submitted to the Orange County Register by California State Transportation Agency Secretary Brian P. Kelly on June 30. To view the original post, click here.

Recently in these pages, some have had a lot to say about the state Department of Transportation.

But there is a lot that hasn’t been said that I believe your readers should know about the efforts that have been taken to improve Caltrans during this administration.

In May 2013, I commissioned the first comprehensive review of Caltrans in the last 20 years. The State Smart Transportation Initiative undertook a thorough assessment of the department and provided recommendations for improving performance – recommendations the department is implementing today.

In 2014, Caltrans and California State Transportation Agency executive teams crafted a new mission, vision and goals to modernize the department’s direction and emphasize performance and efficiency.

Last year, Caltrans adopted a five-year Strategic Management Plan that uses real performance measures for the department and provides for transparent reporting on how it is doing.

Already the department is being praised for the changes it is making. Caltrans is working more collaboratively with local governments on road design issues and with industry leaders on material specifications. The California Asphalt Pavement Association, in its 2016 industry newsletter, wrote that Caltrans is in the process of “making a genuine effort to get better.”

In August 2015, this administration put forth a comprehensive transportation funding package calling for both new revenue and reasonable reforms. Our proposal includes:

  • Streamlined environmental processes to deliver projects more efficiently;
  • Greater flexibility in staffing at Caltrans to meet new workload;
  • A more innovative procurement authority so Caltrans can execute projects more quickly and deliver results sooner;
  • Specific performance measures to hold the department accountable to the Legislature and the public;

Recent criticisms also took issue with Caltrans’ staffing numbers.

Here is what you weren’t told: Staffing is down at Caltrans. The staffing program to deliver projects, known as Capital Outlay Support, is at a 20-year low. Over the last eight years, the COS program has dropped approximately 3,400 positions. The program has been reduced each year of the Gov. Jerry Brown administration.

The Legislature has raised questions about Caltrans’ staffing methodology. Having worked in the Legislature for 17 years, I take those questions seriously.

That’s why, in January, I asked the California Transportation Commission to conduct a thorough review of staffing – with both parties from the Legislature, the Department of Finance and the Legislative Analyst’s Office included in that review.

Recently, the CTC acknowledged the progress Caltrans has made since 2013.

The CTC will continue this work to ensure department staffing is sufficient to deliver projects that benefit all Californians and that Caltrans is held accountable to the Legislature. Staff size should not be determined by ideology, but by analysis and actual workload.

Some would also have you believe that a few bad actors define the department. That is wrong.

Caltrans routinely takes disciplinary action, including termination, against employees who act in a manner inconsistent with the department’s values and expectations. With respect to the Bay Bridge, I remind you, it was this administration that replaced the two top managers on that 20-year-old project.

There is still work to do at Caltrans. That is why the Brown administration is seeking new funding in combination with meaningful reforms. To build the transportation system we need, however, the state must increase its investment, just as 22 other states have done since 2012.

Both Govs. Ronald Reagan and George Deukmejian understood the necessity of increasing reasonable user fees for transportation infrastructure. That’s why they took action to approve them.

We need that kind of leadership today if the state is going to have the world-class transportation system it needs and it deserves.



Governor Brown, Legislators announce sweeping reforms to California Public Utilities Commission

In case you missed it, Governor Edmund G. Brown Jr. today released the following:

SACRAMENTO – Governor Edmund G. Brown Jr., Assemblymember Mike Gatto (D-Glendale) and Senators Jerry Hill (D-San Mateo) and Mark Leno (D-San Francisco) today announced a sweeping package of reforms to bolster governance, accountability, transparency and oversight of the California Public Utilities Commission (CPUC).

“These reforms will change how this commission does business,” said Governor Brown. “Public access to meetings and records will be expanded, new safety and oversight positions will be created and ex parte communication rules will be strengthened.”

“These reforms mark a new beginning for the CPUC. The commission will become transparent and accountable to Californians and focused on the safety of our communities,” said Assemblymember Gatto, chair of the Assembly Utilities and Commerce Committee. “I want to thank my colleagues in the Legislature and Governor Brown for their support of these key reforms.”

“It’s been a long road, and we still have much work to do if we are to build the CPUC that the state deserves,” said Senator Hill, whose district includes the City of San Bruno. “Today we take a strong step forward with principles that underscore our shared commitment to an organization that will better serve Californians, ensure their safety and merit their trust.”

“The principles are a blueprint for a CPUC that is focused, efficient, working in the public interest, and most notably, transparent and accountable,” said Senator Leno. “The changes agreed to by the Commission and the Governor in SB 215 apply enhanced ex parte communication rules targeting the abuses of the past and ensure independent prosecution and stiff penalties for those who would violate the public trust. I offer my thanks to Governor Brown, the Commission, my joint author Senator Hueso, all my legislative colleagues and The Utility Reform Network for their commitment to reforming our Public Utilities Commission.”

The Governor’s Office will work closely with the Legislature and impacted entities in the administration to move forward with these reforms in the months ahead. Complete details of the reform package are below.

Principles for Reform: Governance, Accountability, Transparency and Oversight of the California Public Utilities Commission

Increasing the CPUC’s focus and expertise by relocating responsibilities and making logistical changes that improve the commission’s ability to function.

–Transfer the implementation and enforcement of the following CPUC transportation responsibilities to departments within the California State Transportation Agency (e.g., California Department of Motor Vehicles primarily for licensing, registration, evidence of insurance and select investigations and the California Highway Patrol primarily for enforcement and select investigations) through the Governor’s Reorganization Plan process:
>Passenger Stage Corporations
>Charter-Party Carriers (including Transportation Network Companies)
>Household Goods Carriers
>Other carriers subject to CPUC registration requirements (for-hire vessel carriers, commercial air operators, private carriers of passengers and interstate carriers)

–Assess State Telecommunications governance by January 1, 2018.

–Establish cross-agency secondments (for example, with the Division of Oil, Gas, and Geothermal Resources, California Air Resources Board, etc.) to foster coordinated actions and exchange of information and facilitate cultural change.

–Work with state colleges and universities to develop and offer curricula specific to the regulation and oversight of utilities.

–Authorize the CPUC to hire and locate employees in San Francisco, Los Angeles and Sacramento.

–Require CPUC voting meetings to be held in various regions of the state.

–Provide statutory authority to consider outside reports from state, federal and academic sources.

–Allow a commissioner to issue an Alternate Proposed Decision (APD) at any time before the Commission votes (current law requires issuance of the APD simultaneous to the issuance of the Presiding Administrative Law Judges issuance of their Proposed Decision.).

Enacting reforms to make it easier for the public and watchdog groups to participate in CPUC proceedings.

–Prohibit former regulated utility executives from serving on the Commission for 2 years.

–Allow any California agency to participate in CPUC proceedings without official party status.

–Authorize the California Attorney General to bring an enforcement action in superior court against a decisionmaker or employee of the commission who violates the ex parte communication requirements.

Reforming the ex parte rules to establish a more ethical environment that is fair to all parties, while providing flexibility for entities to contact their appointed officials.

–Ex Parte:
>Adjudicatory proceedings: maintain the current prohibition on ex parte communications.
>Quasi-legislative proceedings: allow commissioners to meet freely, particularly with members of the public, to gain perspective and become more educated on the subject area.
>Ratesetting proceedings: require commissioners and interested persons to disclose and promptly log and post the content of ex parte communications online. Failure to timely report shall result in penalties enforced by either the CPUC or the California Attorney General.
>The CPUC may apply additional limits on ex parte communication in ratesetting or quasi-legislative proceedings as circumstances may warrant.

–Allow intervenor compensation for substantial contribution including when a party does not participate in a settlement.

–Subject the CPUC to the judicial review provisions of the California Public Records Act and revisions to improve the CPUC public records and confidentiality statute (§ 583) to retain confidentiality with a more timely release of public information.

–Require documents distributed to service lists be docketed.

–Require transcripts to be made publicly available promptly.

–Require representatives of organizations that lobby the CPUC to register, much like the rules followed in the Legislature.

–Allow commissioners to deliberate on ratesetting proceedings if no hearing has been held. Current law allows commissioners to meet and deliberate only when a hearing is required for resolution of the proceeding.

–Make administrative record more open in quasi-legislative proceeding by not applying the formal rules of evidence.

–Allow commissioners to discuss administrative and managerial issues in closed meetings.

–Enter public comments into the record and develop an e-comment system to make commenting more accessible.

–Establish thresholds for the reasonable and timely resolution of proceedings with enhanced CPUC authority to conclude proceedings in cases exceeding those thresholds.

–Ensure the CPUC appoints all senior executive staff who report directly to the CPUC, including the Executive Director, the General Counsel, the Internal Auditor and the Chief Administrative Law Judge.

Oversight and Safety
Enacting sweeping ethics reforms, which have been elusive or are completely unprecedented.

–Create an Ethics Ombudsperson who any CPUC employee or member of the public can contact at any time with any concern and who is responsible for enhanced ethics training for all CPUC staff and commissioners, on everything from gift and travel ethics to ex parte compliance.

–Codify the creation of the Deputy Director for Safety with plenipotentiary power to “red tag” any unsafe facility, process or activity.

–Require the CPUC to work with the Nuclear Regulatory Commission to expedite relocation of spent fuel currently stored at the San Onofre Nuclear Generation Station to an independent spent fuel storage installation.

–Increase oversight of excavation and improve enforcement of dig-in safety laws.

For the original post, visit


Governor Brown is Funding ‘Active Transportation’

The Sacramento Bee published the following piece by California State Transportation Agency Secretary Brian Kelly. It is included in full below:

The Brown administration created the nation’s largest Active Transportation Program in 2013, dedicated to providing about $120 million each year to develop safe bicycle and pedestrian facilities in communities throughout California. The program was designed to move such investment from the periphery of the state’s transportation funding strategy toward the center, assuring that the state is meeting mobility, health, safety and environmental objectives.

That’s why it’s so puzzling that Daniel Weintraub (“Brown’s roads budget is bad for environment and heath,” Viewpoints, Jan. 19) says that Gov. Jerry Brown “proposes almost nothing to promote ‘active transportation’ – human-powered movement through neighborhoods and cities on bikes and on foot that are better not only for the environment, but also for our health.”

This assertion bears no resemblance to the reality of the Brown administration’s transportation strategy.

Our program has been a major success. Since its inception, the California Transportation Commission has approved funding for 472 bicycle and pedestrian projects throughout the state, including the 19th Street BART to Lake Merritt Urban Greenway project in Oakland, the Willowbrook/Rosa Parks Pedestrian and Bicycle Mobility Hub in Los Angeles and the Edinger Protected Bike Lanes project in Santa Ana.

In addition, the Brown administration continues to invest hundreds of millions in cap-and-trade dollars in public transit and sustainable community development projects that include transit and pedestrian safety.

California is leading the nation in bicycle and pedestrian facility investment. The governor’s proposed budget for active transportation projects brings the total programmed since 2013 to about $720 million. Moreover, the Governor’s Office of Planning and Research just issued proposed changes to CEQA guidelines designed to make bicycle and pedestrian projects easier to permit and construct.

Contrary to Weintraub’s suggestion, a hallmark of the governor’s transportation investment strategy is good environmental stewardship and smart climate change policy. Since 2012, the administration’s investment priorities have been in clean vehicles, public transit, high-speed rail, bicycle and pedestrian facilities and “Fix-it-First” projects to repair existing streets, roads and bridges.

These investments are not antithetical to smart climate change policy, but are necessary to implement it.

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Governor Brown Delivers 2016 State of the State Address

Sacramento—Today, Governor Edmund G. Brown, Jr. delivered his State of the State Address and reminded all of us just how important it is to protect our transportation infrastructure for future generations:

We have no choice but to maintain our transportation infrastructure. Yet, doing so without an expanded and permanent revenue source is impossible. That means at some point, sooner rather than later, we have to bite the bullet and enact new fees and taxes for this purpose. Ideology and politics stand in the way, but one way or another the roads must be fixed.

You can read about the Governor’s transportation funding proposal in this year’s proposed budget here.

You can read the entirety of the Governor’s State of the State remarks as prepared for delivery on the Governor’s website and below:

Edmund G. Brown Jr.
State of the State Address
Remarks as Prepared
January 21, 2016

It was 41 years ago that I first spoke in this chamber. At that time, my father was rather surprised to see me make it to the governorship at such a young age. Now I’m kind of surprised that I am still here – and three more years to go.

Back then, California was amazingly dynamic and it still is. We, who live here, love and know this land as a unique place which draws people from every part of the world because of the tolerance, the creativity and the sheer openness. There is much to be thankful for.

And yet we live today in a world that is profoundly uncertain. What happens far away can touch us very directly. A slowdown in China or turmoil in Iraq or Syria or virtually anywhere can send the stock market reeling and put California jobs and state revenues in jeopardy. And the battles far away sometimes come right here to our soil, as the unprovoked and brutal attack in San Bernardino so clearly showed us. What occurs daily in so many different parts of the world could occur here. That is why we have to be prepared and vigilant. I wish it were not the case but it is.

Here at the state Capitol we often think we have more control over things than we actually do. But the truth is that global events, markets and policies set the pace and shape the world we live in.

The challenge is to solve today’s problems without making those of tomorrow even worse. We face a future that is partly determined and yet in many ways unknown. Our job is to clearly face the facts we do know and prepare for the many unknowns as best we can.

In that spirit, you are not going to hear me talk today about new programs. Rather, I am going to focus on how we pay for the commitments we have already made.


Let’s start with the budget. What we do know is that since the Second World War, we have experienced 10 recessions, none of them expected or accurately predicted. Economists are unable to pinpoint when a recession will begin or how long it will last. Historically, California budgets have been built around forecasts that assume uninterrupted growth. Just looking at the last two recessions, we notice that ongoing state spending accelerated right into the downturn.

That is why if you add up the deficits and surpluses between 2000 and 2016, you find that the total deficits were seven times as large as the surpluses, resulting in painful and unplanned-for cuts. Schools, child care, courts, social services and other vital state programs were deeply affected. So too were our universities which had to reduce classes and double tuition.

I don’t want to make those mistakes again.

According to economists at the Department of Finance, the next recession, even if it were only of average intensity, would cut our revenues by $55 billion over three years. That is why it is imperative to build up the Rainy Day Fund – which was recently overwhelmingly approved by the voters – and invest our temporary surpluses in badly needed infrastructure or in other ways that will not lock in future spending.

We must also be realistic about our current tax system. California has a very progressive but volatile income tax that provides 70 percent of General Fund revenues. If we are to minimize the zigzag of spend-cut-spend that this tax system inevitably produces, we must build a very large reserve.


We also know that inequality has risen sharply in recent decades. We have seen the disappearance of many middle class jobs and the growing share of income taken by the top 1 percent and even more so by the top .01 percent. In fact, the proportion of income earned by the 1 percent has almost tripled. This contrasts sharply with the virtual stagnation in the wages of so many ordinary Americans. And CEO pay has risen from 22 times the average worker pay to 352 times.

Such inequality is reinforced by national regulatory and tax policies and driven by globalization and the relentless influx of cheaper goods and outsourcing of higher-paying jobs. Technological change also plays its part through sophisticated software, robotics and global communication. Of course this creates jobs, keeps inflation low and makes available phenomenal amounts of information and undreamed of conveniences. But it also makes for higher pay at the top and a huge number of low-paying service jobs below.

In the face of this growing inequality, California has not been passive. We have enacted or expanded many programs to counteract these powerful trends:

  • We raised the minimum wage;
  • We now have our first Earned Income Tax Credit;
  • We strengthened our already strong prevailing wage laws;
  • We made sure that 6.5 million workers will now get paid sick leave;
  • And with respect to helping low-income students, we provide over $2 billion in Cal Grants and we pay the enrollment fees for 65 percent of community college students;
  • We have added back hundreds of millions of dollars to our CalWORKs, foster care and child care programs; and
  • In May, we will start providing full health care coverage to the children of undocumented workers.

 Health Care

Most importantly – and this is truly monumental – we have wholeheartedly embraced the Affordable Care Act. As a result, we are now enrolling 13.5 million Californians in Medi-Cal and another 1.5 million in Covered California. This is an historic achievement. It will provide health security to so many who could not otherwise afford it.

Another area where we are leading the nation is how we provide health services to people in their own homes and, in the process, give jobs to their providers. Over the past two years, we have expanded this In-Home Supportive Services program by serving more recipients, giving current recipients more hours of care and by giving – for the first time – overtime pay to those workers who provide the services.

While the benefits of these programs are enormous, so too are the costs – both now and into the future. In four years, total Medi-Cal costs have grown by $23 billion. As the state begins to pay for its share of the millions of new enrollees, the cost to the General Fund will also rise. In 2012, the General Fund paid $15 billion for Medi-Cal, but by 2019, that number is expected to be $25 billion, an increase of two-thirds. For In-Home Supportive Services, in just two years, total spending will jump by $2 billion – to $9.2 billion – a 28 percent increase.

As the economic recovery reaches its end point and turns downward, it is crucial that we honestly face and plan for these increased costs. In this regard, I ask you – Republicans and Democrats alike – to seriously consider the newly revised MCO financing reform. Other states have taken advantage of this federal program and California should not shortchange itself. This is not a tax increase, no matter what anyone tells you. The arithmetic is simple: California comes out a clear winner.


With respect to education, the strong economic recovery and the passage of Proposition 30 has allowed us to increase spending on public schools and community colleges from a low of $47.3 billion in 2011, to $71.6 billion this budget year. That is a 51 percent increase in overall spending, with significant sums allocated under the Local Control Formula to provide for the unique challenges that face low-income students, English learners and those in foster care.

This pattern of educational spending reverses the historic practice of assuming that all students encounter similar circumstances. They do not. The Local Control Formula, now in its fourth year, recognizes this fact with extra funding to enable educators to overcome the barriers that confront non-English speaking families and those with low and very modest incomes.

I am proud of how California has led the country in the way it is returning control to local school districts. For the last two decades, there has been a national movement to micromanage teachers from afar, through increasingly minute and prescriptive state and federal regulations. California successfully fought that movement and has now changed its overly intrusive, test-heavy state control to a true system of local accountability.

Other Commitments

We also know that the state has made other commitments – ones that we have yet to fully pay for. Our retirement liabilities – for pensions and lifelong health benefits for state and university workers – total $220 billion. Each year, the budget must allocate billions to slowly chip away at these obligations. Since 2012, we have taken steps to reduce the future costs of these pensions and put the teachers’ system back on solid fiscal footing. Still, we have more work to do. To date, we have set aside only a token amount to pay for $72 billion in future retiree health benefits.

These liabilities are so massive that it is tempting to ignore them. We can’t possibly pay them off in a year or two or even 10. And there is little satisfaction in the notion of chipping away at an obligation for three decades to pay for something that has already been promised. Yet, it is our moral obligation to do so – particularly before we make new commitments. We have promised our workers these benefits in exchange for careers spent serving the public. If we fail to acknowledge and pay for these obligations, we will unfairly burden future generations of Californians with these debts.


Another long-term obligation we have to face is our deteriorating infrastructure. From state office buildings here in Sacramento to levees and facilities in our parks, universities, prisons and state hospitals – serious deficiencies abound. In this year’s budget, I am proposing that we use $2 billion of our temporary surplus on one-time investments to repair and replace aging structures. Neglecting what we have built over many years and letting it further deteriorate makes no sense and will just pile up costs in the long run.

But that is not all. Our overall state deferred maintenance is staggering, estimated to total $77 billion. Most of that is in our roads, highways and bridges. Here is our challenge: We have no choice but to maintain our transportation infrastructure. Yet, doing so without an expanded and permanent revenue source is impossible. That means at some point, sooner rather than later, we have to bite the bullet and enact new fees and taxes for this purpose. Ideology and politics stand in the way, but one way or another the roads must be fixed.


One of the bright spots in our contentious politics is the joining together of both parties and the people themselves to secure passage of Proposition 1, the Water Bond. That, together with our California Water Action Plan, establishes a solid program to deal with the drought and the longer-term challenge of using our water wisely. Our goal must be to preserve California’s natural beauty and ensure a vibrant economy – on our farms, in our cities and for all the people who live here. There is no magic bullet but a series of actions must be taken. We have to recharge our aquifers, manage the groundwater, recycle, capture stormwater, build storage and reliable conveyance, improve efficiency everywhere, invest in new technologies – including desalination – and all the while recognize that there are some limits.

Achieving balance between all the conflicting interests is not easy but I pledge to you that I will listen and work patiently to achieve results that will stand the test of time. Water goes to the heart of what California is and what it has been over centuries. Pitting fish against farmer misses the point and grossly distorts reality. Every one of us and every creature that dwells here form a complex system which must be understood and respected.

Climate Change

Besides the immediacy of the drought, there is the overarching threat of a warming climate. Incredibly – though last year was the hottest on record – there are still those, particularly in Washington, who are in denial. But even the deniers can’t deny the carbon pollution that exists all over the world. It is causing serious injury and respiratory disease to people of all ages, but especially the young and very old.

Thankfully the rest of the world has heard the message: Humankind must change its ways and radically decarbonize the economy.

The Paris climate agreement was a breakthrough and California was there leading the way. Over 100 states, provinces and regions have now signed on to our Under 2 MOU. The goal is to bring per capita greenhouse gases down to two tons per person. This will take decades and vast innovation. But with SB 350, we’re on our way.

Finally, we know that in life, disasters happen. Fires, floods, earthquakes – they will occur and we must be prepared to respond. That too – by the way – requires that we save and maintain a solid reserve.


This morning I have talked a lot about the difficulties that lie ahead, but let’s not forget how far we have come.

In 2011, the state deficit was $27 billion, our credit rating was the worst in the nation and unemployment was 12 percent.


  • The budget is in surplus;
  • Standard and Poor’s has raised our credit rating three times;
  • We have paid down accumulated debt – $26 billion worth;
  • We created a solid Rainy Day Fund to offset the next economic downturn;
  • We have increased funding for schools 51 percent;
  • We are covering, under Medi-Cal, 13.5 million people, a 74 percent increase;
  • We enacted – for the first time – an Earned Income Tax Credit;
  • We raised our minimum wage, to $10 an hour, and that’s 38 percent higher than the federal minimum; and
  • Two million new jobs have been created and unemployment has dropped in half.

Yes, it is clear that California is still The Great Exception. We dare to do what others only dream of.

Difficulties remain, as they always will. That is the human condition. And finding the right path forward is formidable. But find it we will, as we have in the past and as we will again – with courage and confidence.

Thank you.

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State Agencies Collaborate to Improve Freight’s Economic and Environmental Performance

Integrated plan to improve trade infrastructure and reduce emissions

SACRAMENTO— Tuesday, leaders from state government will join the California Freight Advisory Committee at their July meeting, where they will take the first steps towards implementing Governor Brown’s Executive Order B-32-15, which calls for a single, unified Sustainable Freight Strategy for the state.

“Addressing trade’s economic and environmental impacts is key to California’s long term growth,” said California State Transportation Agency Secretary Brian Kelly. “If we want to effectively protect the environment and simultaneously make the movement by people and of goods easier, while expanding economic competitiveness, we must have one integrated freight strategy. The hard work of developing that plan begins today.”

This new freight strategy will prove essential to meeting California’s air quality and climate goals by evolving the state’s freight system into a more efficient, competitive, and sustainable program.

California’s freight-dependent industries account for more than $700 billion in revenue and more than five million jobs in 2013. Unfortunately, our current freight system also creates a high portion of local toxics and criteria pollutants associated with poor air quality and an increasing contribution of greenhouse gas emissions, all of which impact the health and well-being of Californians and deplete natural resources.

“Freight transportation contributes significantly to poor air quality in California and is a particular burden to disadvantaged communities,” said Secretary for Environmental Protection Matthew Rodriquez. “Developing a sustainable freight strategy that transitions to zero-emission technologies is a key element of our efforts both to improve public health and reduce the carbon pollution that causes climate change.”

“California must find ways to cut the pollution generated by our network of rail, ports, highways, and airports. The Governor’s executive order will lead to clear efficiency targets and cleaner vehicles and fuels,” said Natural Resources Agency Secretary John Laird. “The Natural Resources Agency is responsible for guiding California’s adaptation to climate change, and lessening greenhouse gas emissions helps to lessen the threats of increasingly volatile storms, sea-level rise, coastal flooding, and warmer average temperatures.”

The Governor’s Executive Order directs California’s Transportation Agency, Environmental Protection Agency and Natural Resources Agency, and their departments, to work together to create “an integrated action plan by July 2016 that establishes clear targets to improve freight efficiency, transition to zero-emission technologies, and increase competitiveness of California’s freight system.”

The meeting is open to the public starting at 10am at Cal/EPA headquarters, and webcast here:

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