- Rising budget deficits: how it affects credit when rainy day funds are drying up
- Now that the Covid aid is gone, it is expected for state and local gov'ts to go to the bond market to support their debt/ratings
- Increasing role of local governments and non-profits in providing social services and infrastructure
- How non-profits and private capital can work together: can venture/private equity capital work with nonprofits to provide some of these services to take them off local and state government shoulders?
- San Francisco is the global epicenter for AI: what are the implications of AI on the workforce and cities?
Transcription:
Diane Quan (00:12):
So our panel here is in Conversation with Issuers. My name is Diane Quan. I'm a Partner in the LA Office of Hawkins Delafield & Wood. I'm going to have these ladies introduce themselves here.
Tatiana Starostina (00:24):
Hi everybody. I'm Tatiana Starostina. I'm the Chief Financial Officer of Los Angeles World Airports. That is probably more known as LAX.
Maria Oberg (00:34):
I don't know if this is on, but I am Maria Oberg. I am the Controller-Treasurer for the County of Santa Clara in the south part of San Francisco Bay.
Erin Roseman (00:43):
Hi, I'm Erin Roseman, The Director of Finance for the City of Oakland.
Diane Quan (00:48):
So as you see, our topic here is in conversation with issuers. So just to set a bit of ground rules here, we really are hoping to have a conversation here. So as we touch on these various topics here for the afternoon, as we discuss these topics and as they cause, as they prompt questions for you or as they suggest additional thoughts from you, we would love to actually have a conversation. So if that suggests a comment or a question, please either raise your hand or we can't really see out here. So maybe tap a mic so that we know there's a question or a comment. Then we can pause and have that question or comment so that we can really have a conversation, I think given the topic that would really aid in this discussion. So with that, you'll see that what we're discussing here is really post COVID and how that's really affecting the budgetary landscape and how that differs depending on the governmental entity, the sector, and the population base. So with that, maybe I can start with Tatiana and she can discuss how that's affected her entity.
Tatiana Starostina (02:16):
Thank you, Diane. So of course COVID hit the airports very significantly for just now memory's sake. April, 2020, we went down 95%, so we lost 95% of traffic. So that was really scary times and I'm so glad it's all in the past, right? But living through that, I remember that I just arrived actually to LAX. It was nerve wracking. Let me put it this way. I remember trying to do all the scenarios, what is it going to look like? And everybody did well, what about 50% reduction, maybe 65. I went to my financial consultants and I said, can you just model zero, so zero traffic for three months and see what it looks like. That helped because that put my blood pressure down.
(03:13):
We never got to zero, but we, as I said in April, got down pretty significantly. It's really good to now look back and just learn from it, but also reflect on how resilient the airport industry is. This is really the theme I think for us as CFOs as we meet now and especially now discussions with the rating agencies, lessons learned, and understanding that the airport industry and the airports themselves are part of the essential infrastructure I we are not usually looked at as same way as water and sewer get it. It's probably a little bit more essential, but let's face it, life without travel lacks some real meaning to all of us, and that's what we saw. When the traffic started to come back, it came back really, really fast and for us, it's still coming back. So we are now, what, three years after the worst of it, four years actually.
(04:28):
And we see a lot of airports actually now exceeding pre pandemic levels, not at LAX. So we're at about 87, 80 8% recovery. We're lagging the industry, which is honestly not surprising. So we knew that we would take longer than any other airport to recover. LAX is a very unique market in the very unique airport, and we have a lot of focus on the traffic. But what I focus on is the financials. And when I look at the revenue performance and expense performance, all I can say is that we're in better shape than we were pre pandemic. We definitely, we have exceeded pre pandemic record level revenues Last year in fiscal 2023, we were above pre pandemic. We are closing our books right now for fiscal 2024, but that's not much of our disclosure. We know that this will exceed the previous year revenue. So things are going really well and that really is for me, the focus of all the conversations.
(05:39):
Yes, the traffic is not there financially. We are in a very good shape and we're able to focus on capital improvements that are still much needed in LAX. We have a lot of change going on, and one of the changes that was really important for us to make is to recognize that our trend in traffic is lagging. What we were forecasting, well definitely pre pandemic, but even in the pace of the recovery, we were expecting to be recovered in about five years, and now we recognize we probably will not be back to 2019 levels in five years. And with that, there came some changes in our capital plan. So what is important for the organization of our sizes and complexity is that nimbleness and the ability to actually look at the reality of the situation and be able to react at it timely. So that is currently what we're focusing on, looking at what we need to really accomplish before the Olympics that are coming to LA in 2028, which as we know is going to be actually pretty quick pretty soon. That's in a nutshell, basically where we are still recovering from COVID in terms of traffic financially doing really, really well, focusing on completing the first phase of our OCIP that we started pre pandemic and getting going on the second phase. And in total we have 30 billion in capital investment plan underway. So it's a big hefty target to finish most of it before 2028
Maria Oberg (07:20):
For Santa Clara County, if you don't know. But we are one of the few counties in California that actually runs a hospital system. And so in 2019 we had purchased two hospitals out of bankruptcy and we have been counting our lucky stars ever since that could not have had better timing given COVID hitting just nine months after we had bought these hospitals. So we had an incredibly robust response to COVID. We are lucky also in another way that we are Silicon Valley. We have assessed values that keep setting records every year. I don't know when it's ever going to stop, but it has to stop sometime. But that really helped. So we had a very robust general fund, a lot of reserves, and we were able to use that to really fight the pandemic from all angles. We spent over 1.3 billion on the pandemic, most of that in the first two years, we vaccinated 2 million people and we have 1.8 million people in the county. So we've basically vaccinated half of the Bay Area. You're welcome.
(08:31):
For us, 1.3 billion is of course significant, but we got about 900 million from the federal government, from ARPA Funds CARES Act funds, provider relief funds, which are hospital related, and about $400 million came out of our general fund, and we are lucky we could withstand that. We have submitted most of that have submitted reimbursement claims from FEMA. FEMA is slow, FEMA is finicky. That F stands for a lot of things. It's not really friendly, but they have started to give us some money, so we're getting some of that back. But we were lucky that we could weather the storm, if you will, without having to issue trans. We have neighboring counties that were not quite as lucky, but again, it's not skill, it's luck. It's where we are. We're doing fine. We had a structural deficit last year that we closed. Pretty significant for us, 231 million I believe it was at the end.
(09:34):
But that was mainly due to inflation. Labor costs are increasing. When you run a hospital, you have a lot of healthcare inflation that's pretty much rampant, but we closed that gap. Most of it came out of looking at our fees and charges that hadn't been updated for close to eight years in some cases. So we closed that gap and we are still projecting a deficit this year, but it's only 40 million and out of a budget of 12.5 billion, that's not as dire as we thought it would be. So of course for us it's always the state. That's always the question mark. We won't know until January what the state's forecast is. And of course, as you all know, may when the governor's revised comes out, then we'll know, but we are looking pretty good right now, which is lucky thing.
Erin Roseman (10:28):
So for the city of Oakland, I onboarded during shelter in place. I've been with the city for almost four years now. Right before I came, there was this series of how do we cut back the emergency efforts and then you get the notice or the call from the federal government that the ARPA money is coming and all things are saved. And so Oakland received 188 million in ARPA dollars, but we had a different experience than the two of these agencies. We were the recipients of outflow from San Francisco, so we had companies leave San Francisco to come to Oakland, PG and E moved. We had a lot of residential turnover, so people left San Francisco and bought homes in Oakland. And so we got our ARPA money and we also had a historic year of real estate transfer tax. We had our property values went up, so we had this bump in the middle of COVID that not everyone experienced, which was kind of interesting.
(11:36):
We did use our rainy day funds, but then with ARPA and the property, the assessed value going up, the real estate transfer tax going up, we received a lot of cash. In the short term, we were somewhat concerned about meeting the revenue loss test to keep our ARPA dollars. As you know, those are one of the metrics in how much money you're going to get. We actually met the test though most of our revenues have come back since then. But during this bump in revenue and additional resources that we weren't intending, our council made decisions to spend this onetime money on ongoing costs. So our outcome has been that we're facing a structural deficit that was sort of masked with this onetime money, the bump in the change in real estate transfer tax, the change in assessed value coming into the city. And so right now we have a structural deficit that's a larger gap than the structural deficit that we had had previously. And so we're working to figure out how to align services with the revenue. Our revenue has essentially come back. There's a few categories that are lower than the pre pandemic, but our spending is outpacing our revenue growth.
Diane Quan (13:07):
So I wonder if you can talk about maybe current challenges for your entities and how you're going about funding them now that the COVID monies are no longer available and how that's affecting your financials and what that looks like with the post COVID bump.
Erin Roseman (13:35):
So there are no good choices in the city of Oakland right now. We've had a lot of crime and public safety is paramount. I think we all residents, the people, the staff who work for the city all want to fund more public safety, and it's coming at the same time where we don't have the resources to do that continually. So it's a reevaluation of the city's priorities. What are core services that the city is supposed to provide? What can we do within our means? And having those tough choices and conversations with our elected officials, with the residents, for it to all sort of shake out. We've used our rainy day funds and the COVID dollars are gone. So now it really comes to rolling up our sleeves and figuring out what is it that we value the most and how are we going to fund that?
Diane Quan (14:33):
Are you finding that there are so, what are the other challenges? Are there challenges that are overlapping? Which are the challenges that are overlapping that seem to conflict?
Erin Roseman (14:50):
We have homelessness and affordable housing is always a challenge along with public safety and certainly the overall political environment makes it challenging. During COVID, everyone wanted to do good, and we did do good with the money. We provide extended services, social services, we saved a lot of people, and those are services that people want to continue, but we just actually can't afford to continue all of them. So again, there's no good choice when you're choosing between affordable housing, getting people off the street, getting them the services that they need, providing police, providing fire safety. There's no real good choice there. And with having expanded some of those services and expanded labor contracts during the pandemic and as a result of the one-time money, it is just a really hard decision to make.
Diane Quan (15:52):
Okay. Maybe I'll come back this way then Maria. How about the county?
Maria Oberg (16:01):
Well, like I said before, we're Silicon Valley, so we're still going strong. For us, the transition has been we have become more of a hospital system perhaps than a county. We've always had a hospital, we've always had that enterprise fund. I mentioned earlier that we bought two hospitals in 2019, and because we're Santa Clara County collecting hospitals like other people collect hum figurines. So we are currently in negotiations to buy another hospital, HCA is downgrading services at one of the hospitals in East San Jose called Regional Medical Center for those of you in the Bay Area. And the county has now entered into a tentative agreement to buy that hospital. So for us, it's going to be adding on about another 1600 medical professionals with the costs that include another facility, which granted is in much better shape than any of our own. So that's a good thing.
(17:03):
But also figuring out how we have gone from being more of a public safety net. We still are a safety net, but now with a more hospital focused, we're not quite used to being that way, but the hospital now is about 60% of our employee count. So out of 23,000 people, most of 'em are working in the hospital. And budget wise, I think we're over half. So with healthcare being a relatively expensive industry to be in, it'll be very curious to see how that goes. But that's really where we're focusing right now, figuring out how do you work a public safety net hospital with serving everyone, including uninsured who have a lot of needs and still staying afloat and doing all the other mandated services we're doing.
Diane Quan (17:56):
Okay, great. So Tatiana, you mentioned that your revenues are up, so it doesn't sound like post COVID, there's a hole. Do you want to elaborate on that?
Tatiana Starostina (18:08):
Well, we can't have a whole, so this is the, I think everybody understands this is the difference in the business models, right? The airports and cities run differently. So we are cost recovery model that allows us to do a lot of things, and that allows us to do a 30 billion investment into LAX. While it sounds simple, it's really not that simple because there are a lot of complexities in that calculation, but ultimately that's really what underlies the situation. The airlines want to fly to LAX. Why because a lot of people live in the metropolitan LA area and because a lot of people want to visit and as long as they keep paying, we will be in good shape. Of course, even during COVID, when I spoke to the board and the board told me, Tatiana, we cannot have a budget deficit. I told them, yeah, we cannot have a budget deficit.
(19:08):
I have to produce a coverage of at least 1.25 on my senior bonds. So it's a different model in this sense. And yeah, I feel very fortunate. Obviously hearing a lot of challenges that our cities and counties have balancing things, the city of LA is also going through its own challenge. They completed the negotiations with the unions and after they were done, they concluded that they no longer can continue hiring. So they put a hiring freeze and the whole city and we continue hiring. And right now for us, actually, staffing is probably the number one priority. What happened during COVID is that we had to provide an incentive to some of our employees to retire. It wasn't early retirement. We have a lot of people who continue working, being fully eligible for retirement. So we just incentivized them to take the rest and we needed to bring down now our personnel costs at that time.
(20:13):
And that resulted in a significant reduction in staffing, about 10% of how employees took that incentive. And of course with that, we lost a huge amount of institutional knowledge and we're still recovering from it. Honestly, one lesson for me for the rest of my career is these kind of staffing initiatives have very long-term implications, right? We put them in place because we need to produce savings right away. It looks obviously good for the stakeholders, the airlines, we're happy to see that we're doing everything we could. Now we are in somewhat of a long-term situation where we have to staff up, but also we have to get folks to the same level of expertise that we lost because people who left are people who have 30 years of experience, plus that's a challenge. And I know Citi has a similar challenge, but unfortunately they cannot even afford to hire right now.
(21:20):
And we can not only actually have to because we are preparing for hopefully the opening of our train, the train that a lot of people I think are looking forward to having for LAX because it will change the whole experience of how all of us as travelers experience LAX. It's an incredible airport, but that traffic jam is horrible. So we hope that the train will be completed by the end of next year, hopefully in operation for the public early 2026, while we need to staff up for that as well. And that's a completely new business for us. We will have our private operator operated. We have A-D-B-F-Y-M agreement with links who's currently constructing it, and then we'll switch to the maintenance and operation. But there's still a lot of work that actually LAO employees will be doing, and public safety is one of them. As we know, trains are a big challenge to keep safe, and this is a number one priority for us. We want to ensure that obviously people riding that train feel absolutely comfortable taking that train because otherwise the whole idea is a failure.
(22:46):
How to get this accomplished is a big question because hiring officers takes probably at least three years if you think about it, just to find the police officer who will then go into the academy and go through the academy and then join the ranks. That's a very, very lengthy process. Just to give you an idea, we opened hiring back just for police in 2021. We were still deep in the pandemic. We opened 15 positions, and I think it took us three years to hire them. Just to put things into perspective. Our new mayor put a lot of good work into the MOUs, we increased people's salaries, we put some incentive programs, so we hope things will change, but that's definitely a focus. So we have the money, but there is a structural problem overall with public safety and security and then air service development. We do want to recover from COVID and we want to obviously see LAX thrive.
(23:55):
So we never had to do air service development, probably not surprising. We never had space for people wanted to come and we couldn't accommodate them. And now we are in a different situation where we actually are building the air service development function. We have the new CEO who is very well versed in this area, and that's definitely another priority for us. And then how another big priority for the board, for the mayor, for the whole city is how to make sure that the money that we are putting to work at LAX actually benefits local communities, both in terms of jobs and what we do it and how we do this. So the focus is on how we procure services, making sure that a bigger percentage of our contracts get allocated to local businesses, minority owned businesses, and that we are considered a good community partner for all of our communities. As you know, we are surrounded by communities pretty much on all of our sides except the way we have the ocean. And people, while they love traveling, they obviously don't love living next to the airport that continue, continue construction and growth. So that's definitely another big focus for us.
Diane Quan (25:23):
Great. And Tatiana, for those who don't know, can you describe some of your current revenue sources and contemplated sources of funding for these projects that you're describing, whether it's in the form of debt grants, federal state funding, where is this money coming from?
Tatiana Starostina (25:49):
So for the capital program, for the first phase, we had a very diverse funding plan because we had a combination. The majority was coming from debt, and it's obviously revenue bonds that we rely on heavily, but we also had a pretty significant contribution from a few other sources. We have what is called the passenger facility charge revenues. That's the fee that all people who buy a ticket, when you look at your ticket, you pay four 50 at PFCs. That's the money that goes towards the development of the airport. We also collect CFCs, which are customer facility charges that we can use on the development for the consolidated rental car facility, which is part of the first phase that we're finishing up. And then of course, grants, the biggest grant source for us is the FAIP program, which is airport improvement program.
(26:51):
Now that the first phase is almost fully funded, we finished the debt funding. We fully obligated PFCs, fully obligated CFCs got all the grants. Now we're just paying cash. So that first phase is now in the self-funding phase. The second phase will not have the same robust revenue sources because we completely tapped out on PFCs. So please work with us on trying to work with the airlines. We're trying to increase the PFC rate, and this is a saga that's been going on for years. It's not moving anywhere. We obligated with our, we have the authority to collect the PFCs and these PFCs are obligated through 20 55, 20 55 everything that we're constructing. So for us to get another PFC, we have to wait 2055 before that revenue can come into the funding plan. So hence it's not in the funding plan. CFCs obviously is all spent on the consolidated rental car facility.
(27:50):
They cannot be spent on anything else. So the majority of our funding sources funding will come from debt. And I've talked to my colleagues because obviously LAX has the largest capital improvement program. My colleagues at other airports and said, this is where the industry is heading because most of them still have some CFCs, PFCs to spend, but they will come to the point where the majority of our needs will have to be debt funded, and that's what we see it's about. We still are in the feasibility phase, but in the prior feasibility, when we looked at the second phase of the 15 billion investment, about 75, 77% of that funding was coming from debt.
Diane Quan (28:39):
Okay, great. So Maria, Erin, we also talked a little bit about debt, and I recall there being some hesitancy in that regard. Do you want to speak a little bit to that at you go first?
Erin Roseman (28:54):
Sure, I'll go first. So yes, I have had a little bit of hesitancy on issuing debt. We have two measures, measure KK and Measure U that have given the city hundreds of millions of dollars in authorization. But when your general fund is sort of distressed and you have to make hard decisions, sometimes there's a pause on do you want to issue debt? And so this year with our structural deficit and some of the things that are tied to our current fiscal year budget, we issued a voluntary disclosure about the issues that we're having with our general fund. And there's a little bit of debt that's supported by just general fund revenues where all 97% of our debt is supported by the secured av. So there's this small little piece, but when your general fund isn't healthy and when you're in a precarious situation, you don't want to get too far out there. You don't want to go to the market until you know that you can provide investor confidence. And so I've been a little hesitant, a little skittish on getting out there for now.
Maria Oberg (30:10):
And for Santa Clara County, it's this kind of a mix between the two. We're buying a hospital potentially in the first quarter of 2025, and we will not surprisingly go out for any type of lease revenue bonds. We are planning on using our FEMA reimbursement monies because they are a one-time source of revenues for us. The money was already spent, we've moved on. So whatever we get in is a one-time revenue stream for us. It also has the benefit of not being budgeted at this time because with FEMA, you can't really know when that money is coming in. And as a government entity, we have to know within 60 days that these funds are coming and then we can recognize them. So it also has the additional benefit of keeping that money away from our elected officials before they go spend it on programs that get us into problems.
(31:04):
So our plan is to use the FEMA monies. We have been obligated FEMA speak for, we have been promised 200 million so far out of the 400. It sounds really bad, but it's actually really good for FEMA, especially given the nationwide impact of COVID. We've received about 140 million of that through the close set process with Cal OS and the state controller's office. So we will be using that money to buy the hospital, and then we'll figure something out for the ongoing, the working capital. But we are, as a whole, fairly conservative when it comes to issuing debt. I only have a portfolio of $2.7 billion, which isn't much when you consider, I have an investment portfolio of 14 billion in a budget of 12. So we are relatively restrictive. We've done a lot pay go or we've paid down very quickly. Our most recent affordable housing geo bonds. We paid the two first tranches down within three years of issuance for both of them. We just issued the third and final, and that one we're going to let go for 30 years. But of course, with the ballot measure at this election about lowering the geo bond approval rates, we are eyeing that if it goes down to 55%, I have a slew of deferred maintenance projects that I would love, love, love to issue bonds for and get that going, especially seismic upgrades at our jail facility and our hospitals. So,
Diane Quan (32:39):
Great. So we've also been tasked with speaking on AI, but that's a bit of a big left turn. So I'm going to ask if there are any questions on this part of the discussion before we turn to AI folks. Okay. I'm seeing none. I'm hoping I'm just blinded. Okay. Okay. So let's turn to AI now, and I'm going to turn to Maria first because she has some very interesting stories. You want to start us off?
Maria Oberg (33:23):
Well, we wrote a song. I'm not going to sing it for you, but if you're invited to our executive holiday luncheon, it will be performed. No, we are very cautiously approaching AI so much for being Silicon Valley, but we are very concerned obviously about data security and privacy, especially running social services agencies, jail facilities, hospitals. We are very cautiously approaching and developing a policy, but we have a couple of cool pilot programs that we have tested. The first one was actually in the news just a couple of weeks ago where our office of the clerk recorder partnered with Stanford to develop a program. So there's this, I am going to get the AB number wrong, but assembly bill 1466, I think. Don't quote me on that.
(34:14):
It says basically we have to correct records that had restrictive covenants on properties throughout California. So obviously the county has over 500,000 parcels. So doing that, finding those properties and figuring out how they were restricted and then correcting those would've taken a lot of staff time. So Stanford grad students helped us develop this program where the program will identify the properties. Then all our staff have to do is go through them and slap the corrected statement on. They got it done. We've identified over 10,000 properties that had these horrific covenants on them, and they have been corrected and rerecorded. So that's one. Then our district attorney's office, this is also new legislation that I think goes into effect in 2025 where police reports have to be completely devoid of any racial identifiers. Of course, that's hard to do as a person to go through and correct those, but they have a program now through AI that they can run the police reports in.
(35:24):
And so that when an investigator in the DA's office gets the case, it has no name, no area or anything that's not relevant to the merits of the case. Obviously there's some exclusions there. If you need police cameras, you're going to see what you see, but at least at the first cut, they will be able to really review a case on its merits and see whether or not it warrants further work rather than having preconceived ideas of, oh, this person must be guilty, or, no, this person cannot be guilty. So those are two of the examples we're doing.
Diane Quan (36:03):
Okay. Okay. Tatiana?
Tatiana Starostina (36:07):
Well, obviously AI is big in the world of airports and there are multiple different potential applications and pilots that are going on. One of the things that we have going on right now, so I partnered with our chief digital transformation officer, who since then changed the title since we have now a new CEO. But we started it about a year and a half ago looking at how we can capture the operations on our common use gates. So those are the gates that are owned and operated by the airport versus the airlines lease them and operate themselves. We bill for them, and it's been really hard for us to get, the data is always in finance. We're at the end of all the work and we actually need to bring the money for it, and it's a very manual process. And then it turns out, obviously operations is also very interested in how to capture everything that's going on on the apron on common news gates.
(37:11):
So we are working on what is called an intelligent apron pilot where we're using our ACAMS to capture all the activity and then AI translates it into data. And it's not only financial data that obviously I'm very interested in, meaning operations that will generate financial revenues, but it's also things like safety. So you can capture somebody not wearing a safety vest, for example, which is a violation of the rules and regs, and then issue a citation. So a lot of interesting uses that can come out of it. It's in a pilot form, but we just recently approved to move into the full implementation and all common use gates, and that is really big, has a big potential. Again, I will remain cautiously optimistic. The pilot, I think got to a 98% accuracy, which is pretty good and obviously continues self-improving, right? Because it has this ability to learn as it continues gathering data. And then what I will be also looking at is how we can use AI in finance. We just kicked off in the ERP implementation replacement project. We just got out of COVID. And what else can CFO do but get another crazy thing going?
(38:41):
So yes, exactly. It's because I'm so nervous, that's why I'm laughing about it. But it is actually also at the same time an incredible opportunity to change things. Our ERP current, currently A-I-P-E-R-P is SAP that was implemented in 2000. So you can imagine how my staff is actually, everybody's on board. So it's a perfect opportunity to bring in a new system. And with that, the new functionalities, and of course we are is when we were selecting the tool, we were asking them about AI capabilities reporting. So more to come. This is the learning. This is still a potential, but I think there's some real good improvements that are coming for us.
Diane Quan (39:30):
Okay, great. So Erin, tell us what the city's doing.
Erin Roseman (39:36):
So we've taken the approach of moving slow, wanting to set up the structure, the guiding principles, how and when to use it, as opposed to just sort of jumping in there. We might have a few younger staff members that might be using ChatGPT, but not authorized. But we have a working group made up across most of the city departments to come up with the guiding principles to decide how the city of Oakland wants to utilize it. We have a lot of policies already about privacy being a sanctuary city, we don't participate in E-Verify so that we don't share information with immigration. And there's a lots of things like that that we feel like AI could sort of supersede our values in wanting to have these protections. So we're taking a slower approach about using AI and how to implement it and being thoughtful in our approach.
Diane Quan (40:48):
Great. Thank you. Okay, great. I think those were the end of our prepared remarks. Does anyone have any questions? I am seeing none. Okay. Well thank you very much.