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HomeMy WebLinkAbout2007 08-28 SpecialMeridian Citv Council Special Meeting August 28, 2007 The Meridian City Council Special Meeting was called to order at 6:00 P.M. on Tuesday, August 28, 2007 by Mayor Tammy de Weerd. Members Present: Mayor Tammy de Weerd, Keith Bird, David Zaremba, Charlie Rountree and Joe Borton. Staff Present: Bill Nary, Stacy Kilchenmann, Anna Canning, Ron Anderson, Bob Stowe, Todd Lavoie, Reta Cunningham, Keith Watts and Will Berg. Item 1. Roll-call Attendance: Roll call. X David Zaremba X Charlie Rountree X X Joe Borton X Keith Bird Mayor Tammy de Weerd Item 2. Adoption of the Agenda: Bird: Madame Mayor. De Weerd: Mr. Bird. Bird: I move we adopt the agenda as published. Zaremba: Second. De Weerd: I have a motion and a second to adopt the agenda as published. All those in favor say aye. ALL AYES. MOTION CARRIED. Item 3. Public Hearing: 2007 / 2008 Fiscal Year Budget: Kilchenmann: Welcome, to the three public -- to the City of Meridian's FY08 budget hearing. Before I started I wanted to thank a couple of members of my staff. Even though they refused to sing and dance while I was talking for entertainment purposes, they did a lot of work on the budget. Todd who you have all met, kind of got baptized by fire and he has spent - we actually started this process in February, so from February until just last week or until Friday or until five minutes ago, Todd has been working on the budget and Reta, of course, has also worked on the budget. So it is kind of -these two are invaluable and without them I would just be slinging pancakes. Meridian City Council Special Meeting August 28, 2007 Page 2 of 13 De Weerd: Well, personally Todd, I go for the full emerging in the water. Fire does not work. That indicates baptism into another direction. Kilchenmann: This won't take an hour, which I am sure will not disappoint all of you greatly. We will soldier on. Our total request this year is just over $85 million, about $85.5 million. I always like to start with showing the four components of the budget, which are personnel, operating, new capital outlay and then the carry forward. I think a lot of times there is confusion when we say oh the budget is $85 million - a chunk of that is capital projects that we are carrying over from a prior year that have already been appropriated in the prior year and haven't been completed. The bulk of that, which is our big enterprise fund projects. So, I always like to make that clear whenever we talk about an $85 million budget. This is our total estimated revenue for the entire city. You can see that 35 percent is the use of enterprise fund balance; part of that comes from using fund balance for new capital projects and then the carry forward; property tax of the total city is 17 percent with the next biggest component which is our sewer, water usage fees. If anyone has any questions, just feel free to stop me and ask. This is more of what I think of as our budget. This is our personnel and operating (inaudible) budget request and that is again, for the total city $39 million with the biggest chunk of that being safety, fire and police followed by water and sewer operations. If we go kind of breaking things down further, this is our new capital outlay request. So, these are for projects that we are requesting for the first time. Then this is the carry forward or the breakdown of the carry forward -the City Hall did not get included in the carry forward so that is the first amendment that will (inaudible--) and it is to re-appropriate, unless we finish before the end of September. That was an oversight. De Weerd: We will let Petra know. Kilchenmann: The schedule has been sped up slightly. So you can see again the bulk of that is water, sewer and then parks. I am going to go through the discussion for fund by fund. We will start with the general fund. As you know, it is all of those services that have to be provided through some general funding source that can't necessarily be just provided by fees. The biggest part of the general fund is public safety, which is 79 percent of the general fund personnel operating budget. Then even when we are in the general fund, we are going to talk about restricted income and unrestricted income. So, unrestricted general fund income, 63 percent of that is property tax. I always want to clarify that we don't have the final property tax number from Ada County, so the number that we are using in our budget is not the final number. One of the big things we don't have is the annexations; so that is not finalized. Restrictive revenue sources - our impact fees, which are restricted by state statute and then development service revenue, which has actually been restricted by the City of Meridian's City Council. So if we look at just the total general fund, which includes impact fees and development services and so forth, this is what the breakdown looks like - with property tax still being 40 percent and followed by government revenue Meridian City Council Special Meeting August 28, 2007 Page 3 of 13 sharing, which is like sales tax revenue sharing and liquor franchise fees and so forth and then we have use of fund balance, where we budgeted the new money for the City Hall. We had to use some of our fund balance. Building permits - we have taken that projection down quite a bit from prior years, they are only 9 percent. So, if we drop out that use of fund balance and we just look at new income sources, state property tax jumps up to be 51 percent and if we look at - as I said unrestricted general fund revenue, it drops up to be 63 percent. Since we are talking about property tax, I wanted to kind of emphasize how important new construction is in our property tax, so this graph -the black line is total property tax, so it is on two axis; so if you look at the left axis, the amount of the property tax and you see how our property tax has steadily increased, but, if you look at the redline that is the portion and the right axis that is a portion of our property tax increase that is due to new construction. So, you can see how from 2005 to 2007 and what a big jump we have from new construction. However, despite of us being able to add that credit for new construction -- the increases in taxable value just in Meridian in general, which is shown on the bottom graph have resulted in our levy rate decreasing, which is shown in the top graph. So you can see how over that same time period, where we show the increase in the new construction credit from '05 estimated on to '08 how dramatically our levy rate has dropped. Then I want to talk about (inaudible--) discussion of impact fees in here and the reason being that we haven't had police and fire impact fees before. So I kind of wanted to show you and talk to you about what has gone on since we adopted those fees. I broke them apart and we are tracking; we track them separately. So for police, their impact fees are fairly low because we didn't have - we (inaudible--) at the station. We weren't allowed to use vehicles. So they really don't have a lot of items that are eligible. But, since we started the fee in December, through July we have collected $88,000 and we are estimating that for the remainder of the year, we will collect about $25,000. So we will end up with about $113,000. Of that we have actually budgeted items to spend in '08 of $120,000. So we think we will get to the end of next year with about $230,000. That is using the same growth rate of about $1,100 building permits that we have used throughout this budget forecast. So I am not going to really go into this because you can look at this on your own, but it shows you what projects were eligible and what we budgeted for those projects, like the mobile command trailer; they are sharing that with fire and 31 percent of that was considered to be growth related and they could be budgeted with impact fees and then each of these will have an estimated fund balance at the end of next year at the end of '08. Fire has, of course, a higher impact fee. They have a lot more eligible projects, so we are saying that from the inception of the fee in December and through the end of '08, we should collect almost a million dollars; about $945,000 and their impact fee eligible project list is, of course, much bigger. So if we said that we were going to fund every one of those projects with impact fee eligible dollars, we would reach the end of next year in a negative $1.1 million. Obviously, we can't do that, so we are not funding all of those projects. So, we have chosen the ones that are in bold and we actually will be able to pay those with impact fees. Parks, which you are familiar with because we have had Parks' Meridian City Council Special Meeting August 28, 2007 Page 4 of 13 impact fees for quite a while, so we should end the year at about $2.2 million. Since we actually are spending these dollars, the schedule just shows what we had budgeted in '07, what we have spent, what we are planning to spend next year and our estimated balance. You can see our balance will drop substantially from what we are used to in the Parks impact fee, down to around $500,000 and that is if those four projects under the '08 budget line come in with what they are budgeted for. So again, if you want to look at this at another time, have questions about anything, let me know. So moving from the revenue to the personnel and operating budget, it is $20 million. You can see almost half is Police and followed by Fire; just reiterating those statistics. The Police budget request total and that includes everything is $9.9 million; with Fire it is $6.4 million. The Police Department new requests is just for '08 additional program enhancements -- $1.2 million and just a quick summary of what you approved when we had the initial workshop; we are adding 5'/2 FTE's and that is a list of a narcotics officer, a couple community service position, code enforcement, school resource and a part time animal adoption coordinator. Then their operating request -- one of the larger ones was digital radios, but we were able to offset a good portion of that with grant revenue. You set aside some money for a fire arms range and of course we have vehicles for the new positions and then the mobile command trailer that will be shared with fire and then just various smaller pieces of equipment. The Fire Department's new request is $1.9 million and we had fire station, fire personnel and operating, which we will be reimbursed by Rural Fire for the first year and then we will pick that up in '09. The fire engine, which will be impact fees; three additional firefighters to increase staffing and reduce overtime and increased staffing flexibility and then there is just various pieces of operating equipment that I didn't detail. The Parks Department is 9 percent of the base budget and its new enhancement request is $1.9 million and the Parks Department requests include maintenance and park development and then of course the recreation site which (inaudible--) like two departments. So in view of what you approved was purchase of Park (inaudible) impact fees of $300,000; various individual park development completion of projects of land that we already have for $644,000 of impact fees and then almost (inaudible--) out of the general fund to go to park development; five new positions, three in maintenance and two recreations and then various pieces of equipment, ball field groomers, etc., and some operating increase for recreation which that is offset by revenue. Then finally to end the general fund is some city administration - financial management, Human Resources and IT are split with enterprise fund and the City Clerk is split with the Planning Department. Their operating request is 12 percent of the base budget with the budget enhancement request of $6.5 million, which sounds large, but $6 million (inaudible) City Hall. So you approved 3 '/2 positions -Accounting Specialist, IT Help Desk Technician, a part time attorney and then all of the funds are sharing the building maintenance position for the new City Hall. So, again the $6 million for City Hall - we had some IT software; we had community activities; put some seed money toward a detox center; then we had City Hall telephone, copy machine lease; we also had some - that telephone is throughout all of the different funds, all of the people that will Meridian City Council Special Meeting August 28, 2007 Page 5 of 13 be in the City Hall. Again, this is something to just - I am sure you will take this and look at this before you go to bed, but this is again something that I like to use to make sure that we separate that carry forward concept, so we break out what is actually new revenue and what are we going back in and re-appropriating? So each of the funds has a summary like this -- it shows new revenue, new personnel, new operating, new and capital outlay -- if we had to take anything from fund balance or if we added anything to fund balance and then the amount of the carry forward. Borton: Madame Mayor. De Weerd: Yes, Joe. Borton: Stacy when you go through these do you use the phrase revenue and income interchangeable? Compare numbers of new income figures verses new revenue - is that the same thing? Kilchenmann: If I said -yes. Did I say income? Borton: Well, I am looking on -let me look here - it is like an (inaudible) slide and talks about total new income of $29,144? Kilchenmann: Yes, I am using them interchangeably. Borton: That shows $28,743. Kilchenmann: Which one are you looking at? Borton: Well, I might be reading it wrong. I am looking at the new income here - a new revenue of $28,743. Kilchenmann: It is $23,000. Bird: $23,130 is new income. Kilchenmann: Yeah and the rest is - Bird: The appropriated fund balance is the $5.6. Borton: That is confusing. I am confusing myself because I am looking at the general fund -total new income it says $29,144,159. It is like the ninth slide. Kilchenmann: Oh, you know why? Because this includes impact fees and development services. De Weerd: That is $100 off. Meridian City Council Special Meeting August 28, 2007 Page 6 of 13 Kilchenmann: It might be $100 off. There is some income -capital services has interests of $100,000 and that is technically restricted and so sometimes we show it with total general funds and sometimes we take it out. We will see it. It will be in here. The separate funds will be in here. I know it is confusing because really general fund is Building Department and impact fees and Planning and Zoning and when we do the audit, we roll them all together. The auditors don't make any distinction, but when we do the budget because the City Council has formally set those apart, we appropriate separately because we want accounting to be confusing. So, here is the Capital Improvement Fund -and there is the new revenue, which is just the interest revenue and then we had to re-appropriate $100,000 because we are carrying forward $200,000 for the lights at Heritage that didn't get done (inaudible). Then here is the same thing for impact fees -that is all the impact fees, Parks, Fire and Police added together - employees, they are going to add to fund balance, they are not going to spend all of their money. Then going into development services fund; again those general fund functions related to serving development, funded by development fees, which we include the Building Department, the Planning Department and Economic Development and any excess in that fund we transfer to the capital improvement fund. For FY08 - in FY07, FY06 and I think FY05 we had street lights and Code Enforcement were also in the development services fund and in order to balance for '08 we moved those two back to the general funds. So, as you know this fund is very development dependent, so this just shows development service's revenue history and you are all familiar with tracking building permit sales. This shows the revenue to base budget on the top. So, this is for the whole fund - or not for the whole fund, just for the Building Department and you can see their revenues had some substantial margins and their base, you know, they have had a pretty good margin. The Building Department by themselves, we have a very fortunate arrangement because we have contractors, so if our revenue goes down our expense goes down. Then the bottom graph is the Planning Department and then some of the other functions that are in development services; so with the green line being the revenue and the Planning base being the black line -- they don't have very many FY08 enhancement requests. Of course, the furniture and the telephone, then just $5,000 for Economic Development for their GIS project or their GIS Planning initiative and a $10,200 increase to the Economic Development contract. Here is their fund - so when we do the audit and you look at the audit financial statements, all of these funds that I have been talking about will all be rolled up together. Then the enterprise fund, we - I will talk about the enterprise fund in two components. We have the operation side, which is the cost of getting the water through the pipes and to your house that is paid for with what we call usage revenue or usage sales and the construction side, the cost with the capital infrastructure, sewer, Wastewater Treatment Plant, etc., and so we always - again when you see the audit that is all added together - in financial statement counting that they don't make a distinction between that and we don't make an appropriation distinction between it, but we always try to look at those two separate so we can match our fees to the service that they provide. So, here is Meridian City Council Special Meeting August 28, 2007 Page 7 of 13 their estimated revenue -the use of fund balance at 62 percent and here is their new revenue if we throw out that use of fund balance and that pie has shifted because on prior years when building was strong, you know utility connection piece of the pie, our assessment fee revenue it is called was bigger and it has kind of shrunk. So again, here is just looking at the operating side. So that is the base budget for the operating and the operating revenue. Another kind of interesting fact is from June 2006 to June 2007 accounts only increased 5 percent; after the prior time period they increased 15 percent. This is looking at the construction side - so we look at the capital projects budget, which we have to remember that just because a project is budgeted one year that money would never be spent in that one year, but that is a little misleading and then we look at that assessment fee revenue and how it dropped off. So here is their proposed budget and you can see almost half of their budget they are carrying forward prior year projects. This is just looking at the budget by department and the big bulk of the construction is in wastewater. So here is a review of what you have tentatively approved for them - it started with Public Works, an Engineering Technician, then they are paying part of the building maintenance technician, which the building maintenance technician will actually report to the Public Works Department. Water only asked for 1 '/2 staff. They want to finish their water building, they always have well water line construction; the (inaudible) fitted the meters and then ground reservoir and some consulting and then just various other small pieces of equipment or projects. Wastewater - I am not even going to try and pronounce that -there you go. Did you hear that? Tertiary filters, plant optimization, which I believe Len is the study to look at - (Inaudible discussion) Kilchenmann: So that is a good thing. Addition to the south area trunk, $1.9 million; Black Cat phase 4 will (inaudible) million and they just had a couple of staff, the REES program and then various pieces of equipment, line extensions, repairs, etc. So here is their square. So that is it for the FY08 budget. Are there any questions on that before we do the amendment? De Weerd: Council any questions for staff at this time? Bird: I have none. De Weerd: This is a public hearing. Is there any member of our public who would like to ask questions? Yes? Frank if you will step up to this microphone over there. Kilchenmann: Oh, I didn't realize it was - De Weerd: It is a public hearing. Meridian City Council Special Meeting August 28, 2007 Page 8 of 13 Thomason: For the record, I am Frank Thomason. I own a business in downtown Meridian. I was just curious with the leveling off of the building permits what the percentage of growth is from, if there is one, from last year's budget and then also secondly I had a suggestion for a budget enhancement (inaudible) maybe next year. Meridian might consider placing the Council meetings available on Public Television on the local channel. That would certainly enhance the outreach of these very important meetings, including meetings like this to all of the people might access it on television. Just a thought. Thank you. De Weerd: Thank you Frank. I will ask Stacy to answer your first question. Kilchenmann: First of all, I have to get a new job if it is going to be on television. The first part you wanted to know --? Thomason: -- percentage of increase if any from last year -overall? Kilchenmann: For the entire budget? Thomason: Yeah. Kilchenmann: Actually our budget is flat. We haven't increased it. A lot of that is the fluctuation and the carry forward, but those entities that are right now that we have that are development, totally development supported has probably actually decreased because we moved those two function street lights and Code Enforcement out and then we really didn't ask for much -they didn't ask for much in the way of budget enhancements. But, we can give you an exact - we will get you the exact percentage. De Weerd: I guess Frank I would answer the television aspect. We did consider that a year or two ago and this City Hall is just not wired for that. So the New City Hall is considering those kinds of capabilities. Zaremba: Madame Mayor. De Weerd: Yes, Mr. Zaremba. Zaremba: I do have, I guess, a similar question to Franks. Maybe the same thing phrased differently, but just in the impact fees and the user fees and stuff are the flexible portion of the budget and I guess my question is an overall instinct question. Meridian has a reputation for running very frugally and I think it deserves that reputation and that is a good reputation to have. But, I just want to make sure that we feel secure about next year. We talk about what the income is and what we expect, you know revenues and expenses and stuff to be and it all looks like it balances. But, can you tell me that we feel reasonably secure that we can run through next year and have the important things covered, even if the flexible thing - or if building permits stopped would we still be okay? Meridian City Council Special Meeting August 28, 2007 Page 9 of 13 Kilchenmann: If building permits stopped - Zaremba: That will never happen of course, but Kilchenmann: Well if we take out, of course the general fund itself, those key portions, I think we are probably conservative because the property tax will probably be somewhat higher. Our state revenue sharing would probably be somewhat higher; so the general fund between fund balance and being conservative could probably absorb a good part of those Building and Planning Department functions, but if building permits just stopped, we would have to make some decisions because we would be moving probably $5 million. We would have to make a decision about what we would do with $5 million, plus some permanent staff in the Building Department, about moving them back to the general fund. We actually -even though - I estimated at 1,100 residential building permits for the year and this year, you know building was still a little stronger, so our estimates were higher and it looks like that fund will still probably be able to add half a million to $700,000, have an excess, but it is something that we have to watch every month and we do. We forecast every month and we have in your monthly packet, you know, is that forecast? It would really hurt the enterprise fund too because their assessment revenue would drop off. But, one thing that happened this year is we estimate really low for commercial building permits because they are so hard to predict. So, I estimated $400,000 and right now they are $1.1 million so that helps. Zaremba: That is a very pleasant surprise. Kilchenmann: That is a good surprise. De Weerd: Well and there have been planned submittals for building permits that will be in next year's budget so indicators are you are not going to get zero. Zaremba: Well and I am one of those that believes that when an area is growing the way we are there may be temporary hiccoughs, but you take off and run again even faster than you were before. So that really was the most pessimistic question that I could think of to ask. Kilchenmann: I don't know if I answered it. De Weerd: Well and you asked it to the most pessimistic, too. We are very proud of that. That is a compliment. You know I guess they have been consistent at underestimating revenues and I appreciate that approach because then we do have that confidence and assurances that if we are not making our targets, you know we can sustain. Meridian City Council Special Meeting August 28, 2007 Page 10 of 13 Kilchenmann: We would know. We watch for that so if we had to start holding vacant positions opened and that kind of thing -those are temporary things that you can do. Zaremba: They would surprise us at the last minute because they are thinking ahead. Great. Kilchenmann: I mean if next month no building permits were sold it would surprise me, I have to admit. Bird: Madame Mayor. De Weerd: Yes, Mr. Bird. Bird: While I don't expect to ever have zero building permits, we are -our building permits in July was down to the '91, '92 era and all I can say is that in my experience in construction I have seen things shut down. I can tell there has been more than one year that Meridian has not had a commercial permit go through, so I am thankful for Stacy, Reta and Todd because they do keep a deal on it. On the same token, Council, we need to keep our eyes on it and when our revenue starts coming down and you have seen the revenue down big time in hookups and stuff like that from the enterprise system that is when you have to start tightening your belt. We have to do it in the private, there is no reason the public shouldn't. Kilchenmann: On the good side the general fund is doing very well. De Weerd: Well and I think that in enterprise we are drilling down and taking a real in-depth look and that is greatly appreciated. We don't want to get far into this and not be able to anticipate and fortunately we have a proactive staff that is looking at that and seeing it before we are down the road so far it is hard to make that ground up. Rountree: Madame Mayor I was just going to make that point that we are proactive in our planning and in our anticipation of our needs. I think our financial staff does a great job of providing us and the rest of the departments in the city a sustainable budget so we can plan and can get things accomplished and not always be running around trying to figure out how we can get things done. We know what we will be able to do. If in fact there is a major crisis, we positioned ourselves so we can not fill positions or possibly even furlough positions if it got that bad, but I think the city is the philosophy that has guided the city for a long time, as long as I can remember and just position yourself to be able to absorb those kinds of things, if in fact they happen. I think we have done a great job in doing that and we have been fiscally responsible in the budget process today verses what it was ten years ago is unbelievably different and so much better in Meridian City Council Special Meeting August 28, 2007 Page 11 of 13 terms of predictability and (inaudible) ease for staff and departments to utilize. So thank you all. Good job. De Weerd: Yes, kudos to you all. Any other questions? Ralph you don't have anything? Council? Bird: Madame Mayor. De Weerd: Yes, Mr. Bird. Bird: If we don't have any more discussion I would move to close the public hearing. Rountree: Second. De Weerd: I have a motion and a second to close the public hearing on Item No. 3. All those in favor say aye. ALL AYES. MOTION CARRIED. De Weerd: Okay, Mr. Bird now I would like a motion. Bird: I move that we approve the Fiscal 2008 year budget for the City of Meridian for $85,450,320. Rountree: Second. De Weerd: I have a motion and a second to approve the amounts as stated, any discussion? Berg: Yes, Madame Mayor. De Weerd: Mr. Berg. Berg: There should be a direction for the City Attorney to prepare an appropriation ordinance for next meeting to be approved. Bird: That would be part of the motion. Nary: He stole my thunder yet again. De Weerd: Yes and so directed Mr. Berg. Would you please call roll. Roll Call Vote: Bird, aye; Rountree, aye; Zaremba, aye; Borton, aye. ALL AYES. MOTION CARRIED. Meridian City Council Special Meeting August 28, 2007 Page 12 of 13 Item 4. Presentation of the Proposed Amendments for 2006 / 2007 Fiscal Year Budget: Kilchenmann: As I let you know in the email, I am not going to read through every budget amendment that you approved. I have given everybody a schedule that summarize them by fund, but it is very complicated trying to read that hearing notice and figure out what was the net affect of what happened. Todd worked extensively on that so if there are any questions he would be glad to come forward and answer them. What I did is I tried to summarize it so you could see the net affect of all the individual items we did. So for the general fund, we increased revenue by $880,000 basically; we increased personnel expense by $53,000; we increase operating expenses by $310,000, but we decreased the operating expenses by $718,000 and the big bulk of that is the Locust Grove Overpass money that we didn't spend that we re-appropriated. We increased capital outlay by $630,000 so we ended up with a net change, a positive change to the fund balance of $611,000. So the impact fee -this is what the impact fee budget amendment was we increased capital outlay and we decreased the fund balance. Development services - we had some revenue and we just got revenue and we spent it. So we had zero impact. In enterprise we had a $5 million decrease to fund balance; so we had some operating in capital outlay increases principally. The operating increase is the sewer line reimbursement. So are there any questions about the detail in those amendments? De Weerd: Council any questions? Nope? Okay. Any further questions regarding this item? Mr. Berg will you please speak into the microphone? Berg: Thank you Madame Mayor I was just asking when the public hearing for the budget amendment was coming up front and maybe I will ask President Borton to look on the draft agenda, since I don't have those in front of me. De Weerd: I guess it was probably anticipated that this would be it. Kilchenmann: I thought this was it. Berg: Madame Mayor you will be hearing this public hearing on September 18~'. It was noticed for the amendments for this current fiscal year. Kilchenmann: It will be very similar to this presentation Rountree: Let's hope it doesn't change. Kilchenmann: No changes. Meridian City Council Special Meeting August 28, 2007 Page 13 of 13 De Weerd: We are glad you have this practiced opportunity. Council if there is no further items on or questions on Item No. 4, is there any further business? If not, I would entertain a motion to close. Rountree: So moved. Bird: Second. De Weerd: All those in favor say aye. ALL AYES. MOTION CARRIED. De Weerd: We will reconvene at 7:00. MEETING ADJOURNED AT 6:47 P.M. (TAPE ON FILE OF THESE PROCEEDINGS) APPROVED: .~ -G~~ ~ ~~ ~ D ~ TAMMY EERD, MAYOR DATE APPROVED r- ~' ,~•~ O ATTESTED: `ark., - WILLIAM G. BERG, JR., Y R ~ "~~, ~~• ~, ~, ~ r( /~~~~~~~~~~'IrJNT ~~~~~~~``\