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HomeMy WebLinkAbout2013-0429 Study Session PACKET CITY OF ASHLAND CITY COUNCIL STUDY SESSION AGENDA Monday, April 29, 2013 Siskiyou Room, 51 Winburn Way 5:30 p.m. Study Session 1. Discussion with Donna Mickley of the Forest Service regarding Mount Ashland Association project and relationships between MAA, the Forest Service and the City of Ashland In compliance with the Americans with C isabilities Act, if you need special assistance to participate in this meeting, please contact the City Administrator's office at (541) 488-6002 (TTY phone number 1-800-735- 2900). Notification 72 hours prior to the meeting will enable the City to make reasonable array gements to ensure accessibility to the meeting (26 ( FR 35.102-35.104 ADA Title 1). COUNCIL \IEE"IINGS ARE BROADCAST LIVE. Oh CHANNEL 9 VISIT TFIE CITY OF ASHLAND'S WEB SITE AT WWW.ASI-ILAND.ORXS AGREEMENT WHEREAS, the City of Ashland, as lessor ("the City"), and the Mt. Ashland Association, as lessee ("the MAA"), on or about July 9, 1992, entered into the Mt. Ashland Ski Area Lease ("the Lease") a copy of which is attached hereto and marked as Exhibit "I"; WHEREAS, the City desires to surrender to the United States Department of Agriculture Forest Service Special Use Permit ("the Permit") as described in the Lease if a comparable permit is issued to MAA, and the MAA desires to have the Permit or a comparable permit issued to it; WHEREAS, the City is the owner of certain improvements in and on that certain real property located on Mt. Ashland in Jackson County, Oregon, which is described in and is subject to the Permit ("the Permit Property"); WHEREAS, the City is the owner of certain personal property, fixtures, furnishings, inventory and items of equipment used in connection with the operation of the Mt. Ashland Ski Area and/or located on the Permit Property including but not limited those items described in the Lease and identified in Exhibit "B" to the Lease (the "Equipment"); and WHEREAS, the City has determined that it would improve MAA's ability to provide winter recreation to the Rogue Valley, which is beneficial to the economy of the region if MAA became the holder of the Permit and the owner of the property; and WHEREAS, the City has further determined that it would reduce the potential legal and financial liability of the City to convey the Permit and property to MAA; and WHEREAS, the City has determined that conveying the Permit Property and Equipment to the MAA would further the public interest and the MAA desires to receive the Permit Property and the Equipment to use in the operation of the Mt. Ashland Ski Area; Based on the foregoing and the mutual promises and covenants contained herein, the City and the MAA shall as soon thereafter as practicable accomplish the following: I. The City will surrender the Permit to the Forest Service, and the MAA will apply for issuance of the Permit. The City agrees to assist reasonably the MAA in the process of issuing the Permit or a comparable permit to the MAA. 2. The City shall convey whatever interest it has, or by rights should have, in and to the Permit Property and the Equipment to the MAA by execution of a bill of sale for personal property and a statutory quitclaim deed for real property. 3. Upon issuance of the Permit or a comparable permit to the MAA, the provisions of the Lease shall have no further force or effect whatsoever, except that MAA will remain responsible for any amounts the City is required to pay pursuant to the Permit as a result of the City's surrender of the Permit. Page I of4 4. The parties further agree that: a) The City shall have the tight annually to appoint one person to serve as a non- voting liaison to the Board of Directors of the MAA. The City's liaison will be provided with all information provided to directors, except that the City's liaison will not participate in personnel or legal matters. b) MAA will provide the City with copies of all architectural, engineering, construction and logging plans, including without limitation any related environmental impact studies, relating to any improvements contemplated by MAA within the Permit Property, now or in the future. MAA will deliver such plans to the City no less than thirty (30) days prior to the commencement of any construction, earth movement or logging. Within 30 days of receiving the plans from the MAA, the City may but is not required to conduct a technical review of MAA's plans with respect to its impact on water quality, including without limitation erosion, sedimentation, stormwater, revegetation, watershed restoration, wetlands, and spill control. MAA agrees to confer with the City in good faith on any matters raised in a technical review relating to water quality. The City of Ashland may appoint a representative to provide daily on-site monitoring and inspection during any earth movement, logging or construction, and MAA agrees to provide access to the City's representative. MAA and the City will confer with the USDA Forest Service and any affected regulatory agencies if issues are identified during construction as ones that will affect water quality, erosion, sedimentation, and spill control. C) MAA agrees to comply with any obligations imposed with respect to sedimentation in Reeder Reservoir in the July 2007 Total Daily Maximum Load (TMDL) document prepared by the Oregon Department of Environmental Quality to meet the requirements of Section 303(d) of the 1972 Federal Clean Water Act. d) The Permit or a comparable permit will require MAA to maintain a "Restoration Amount," which shall mean and refer to the maintenance of available funds or assets by the MAA to cover area restoration in the unlikely event of the ski area closure. MAA agrees to increase the amount it maintains as the Restoration Amount on July 15 of every year by a percentage equal to the percentage increase of the US Department of Labor: Consumer Price Index, All Urban Consumers (CPI-U), U.S. City Average, CPI -All Items ("standard reference base period" 1982-84 = 100) in the previous twelve (12) calendar months. MAA further agrees that it shall at all times maintain the Restoration Amount (as increased pursuant to this paragraph) in unencumbered funds or assets, i.e., readily transferable assets subject to no lien. MAA shall ensure that any security interest in its assets that it has granted or may in the future grant excludes the funds maintained for the Restoration Amount. C) The MAA agrees that it will not proceed with any logging, earth movement, or construction activities related to the portion of the expansion identified as Phase 1 until MAA has received a combination of cash contributions, binding financial commitments, and performance bonding necessary to cover the entire cost of the Phase I improvements. The final details of the projects included in Phase I will be defined by permits issued by the USDA Forest Service, but Phase 1 can generally be described as the Ski Run Settlement Sale, a chairlift with new lower intermediate and novice runs, a warming ditional parking spaces, the widening of several existing runs, and 23 watershed restoration projects. J4 LAI- 10-aq "1t Page 2 of 4 f) The MAA agrees not to amend its articles of incorporation, without the express written consent of the City, in any way that would impair its current provision that, in the event the MAA dissolves, all of its assets which remain after MAA's creditor claims and other obligations are satisfied shall be distributed to the City. g) The MAA agrees that in the event it dissolves, that none of its assets shall be distributed to a director, officer or other private person or private entity. h) MAA agrees that it will not, without the express written consent of the City, which consent shall not be unreasonably withheld: (1) transfer or convey to another person or entity the Permit or the comparable permit issued to MAA as contemplated in this Agreement; or (2) enter into an agreement with any other person or entity whereby the rights and obligations under the Permit or the comparable permit issued to MAA as contemplated in this Agreement would be assumed by any other person or entity. i) MAA will reimburse the City for the City's reasonable attorney fees and any other out-of-pocket expenses up to $7,500 incurred in connection with the negotiation and performance of this Agreement through the date the Forest Service issues the Permit or a comparable permit to MAA as contemplated in this Agreement or declines to issue such a permit. The City will provide MAA with a complete accounting.of its attorney fees and out-of-pocket expenses within thirty (30) days after the Forest Service issues the Permit or a comparable permit to MAA as contemplated in this Agreement or declines to issue such a permit. MAA will pay the amount owed under this paragraph within ten (10) business days after the City delivers its accounting of those fees and expenses. 5. This Agreement is conditioned on the Forest Service issuing to MAA the Permit or a comparable permit and, with the exception of Paragraphs 3 and 4(i), shall be of no force or effect if that condition is not met on or before December 31, 2012. 6. Miscellaneous: a) There are no oral agreements or representations between the parties hereto which affect this Agreement, and this Agreement supersedes and cancels any and all previous negotiations, arrangements, warranties, representations and understandings, if any, between the parties. b) The paragraph headings set forth in this Agreement are set forth for convenience purposes only, and do not in any way define, limit or construe the contents of this Agreement. C) If any provision of this Agreement shall be determined to be void by any court of competent jurisdiction, then that determination shall not affect any other provisions of this Agreement, and all such other provisions shall remain in full force and effect. d) It is the intention of the parties that if any provision of this Agreement is capable of two constructions, only one of which would render the provision valid, then the provision shall have the meaning which renders it valid. Page 3 of 4 e) if suit or action is instituted in connection with any controversy arising out of this Agreement, the prevailing party in that suit or action or any appeal there from shall be entitled to recover, in addition to any other relief, the sum which the court may judge to be reasonable attorney fees. f) Any notice required or permitted under this Agreement shall be deemed to have been given and delivered when personally delivered or when deposited in the United States mail, as certified mail, postage prepaid, and addressed to the last-known address of the party being provided with the notice. g) The MAA may not assign its interest in this Agreement to any third party without the express written consent of the City. This agreement shall inure to the benefit of and shall be binding upon the City and any permitted successors and assigns of MAA. h) This Agreement is being executed in two counterparts, each of which shall be an original, and both of which shall constitute a single instrument, when signed by both of the parties. i) Waiver by either party of strict performance of any of the provisions of this Agreement shall not be a waiver of, and shall not prejudice the party's right to subsequently require strict performance of, the same provision or any other provision. j) The consent or approval of either parry to any act by the other party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary the consent to or approval of any subsequent similar act. k) This Agreement shall be governed and performed in accordance with the laws of the state of Oregon. 1) In the event of a dispute pertaining to this Agreement, the parties agree to attempt to negotiate in good faith an acceptable resolution prior to commencing litigation. If a resolution cannot be negotiated, then the parties agree to submit the dispute to voluntary non-binding mediation before commencing litigation. Each of the parties hereby irrevocably submits to the jurisdiction of the courts of Jackson County, Oregon, and agrees that any legal proceedings with respect to this Agreement shall be filed and he4 in the appropriate court in Jackson County, Oregon. Date: 0 CL2 ya Date: MT. ASHLAND ASSOCIATION - LESSEE CITY OF ASHLAND, OREGON - LESSOR By: n v Title: / CL VL~1., e nPage 4 of 4 EXCERPT FROM MINUTES OF OCTOBER 4,2011 MEETING OF ASHLAND CITY COUNCIL RE PARAGRAPH 4(e) OF AGREEMENT BETWEEN CITY AND MT. ASHLAND ASSOCIATION Amendment 4, new paragraph 4.e prohibiting MAA to log until they have sufficient funds for Phase I development. MAA suggested replacing the proposed language with the following: "...until sufficient funds, as determined by the USFS are raised for the approved Phase I project." Councilor Morris originally proposed the amendment because he did not want MAA to start the expansion without funds to continue. The issue was that no one knew what Phase I entailed or actual cost. He was more concerned all the restoration projects remained in Phase I. Councilor Chapman/Lemhouse m/s to amend Section 4(e) removing language in brackets and replace with "as determined by U.S. Forest Service." DISCUSSION: Councilor Chapman did not think the section should be itemized until the U.S. Forest Service defined Phase I. Mayor Stromberg questioned how the motion would protect the City if the U.S. Forest Service could determine initial logging was sufficient for Phase I. He also questioned how cash and commitments would work regarding pledges. Councilor Chapman reiterated that according to U.S. Forest Service Phase I had to generate revenue. Councilor Slattery commented that logging was revenue. Councilor Morris doubted MAA would start construction to make money on trees due to the expense of helicopter logging. Mayor Stromberg suggested adding language: "...a revised version of a complete Phase I as specified by the U.S. Forest Service," to the amendment. Councilor Lemhouse supported the motion and transferring the SUP. Having the agreement would give the City legal recourse. Councilor. Voisin would not support the motion based on the lack of information on how the U.S. Forest Service would define Phase I. Attorney Bob Stringer explained the agreement did not bind MAA to complete improvements or restoration projects in Phase I. Ms. Bennett added Council could specify projects and add a consultation paragraph stating the City and MAA would agree on the amount needed prior to construction once the U.S. Forest Service defined Phase I. She clarified the project will be defined as it was in the Record of Decision (ROD). Councilor Voisin was against the expansion. Just cutting trees would disturb the equilibrium of the eco-system. She also wanted to have specifics included in Phase I. Councilor Silbiger suggested modifying the language for Phase I using "reasonably described" knowing it would not be exact. Mayor Stromberg asked whether Council would accept a pledge as a commitment. The majority of Council preferred cash but would support pledges. Mr. Stringer noted Council could firm up the financial commitments by referring to them as binding and add the performance bonding as part of what was needed to be secure. Councilor Chapman withdrew his motion with Councilor Lemhouse's consent. Councilor Chapman/Lemhouse to amend Section 4(e) to read as follows: "The MAA agrees that it will not proceed with any logging, earth movement, or construction activities related to the portion of the expansion identified as Phase I until MAA has received a combination of cash contributions, binding financial commitments and performance bonding necessary to cover the entire cost of the Phase I improvements." And to add sentence as follows: "The final details of Phase I will be determined by permits issued by the US Forest Service but can be generally described as Ski Run Settlement Sale, a C-6 chairlift with new lower intermediate and novice runs, a warming hut, additional parking spaces, the widening of several existing runs, and 23 watershed restoration projects." Roll Call Vote: Councilor Silbiger, Slattery, Chapman, Morris and Lemhouse, YES; Councilor Voisin, NO. Motion passed 5-1. EXCERPT OF MINUTES FROM 10/18/11 CITY COUNCIL MEETING UNFINISHED BUSINESS-continued 2. Will the Council clarify its direction on the conditions of the Reserve Amount of $700,000 in the agreement that was approved by the City Council on October 4 related to relinquishing the SUP and conveying assets for the Mount Ashland Ski Area? City Attorney Dave Lohman removed himself from the meeting due to a conflict of interest and Attorney Bob Steringer from Harrang, Long, Gary, Rudnick P.C. joined the meeting in his place via telephone. City Administrator Martha Bennett explained the Mt. Ashland Association (MAA) had questions regarding the reserve amount Council set at the October 4, 2011 City Council meeting. Did the $700,000 intend to include or exclude the amount the U.S. Forest Service would set for restorations in the Special Use Permit (SUP)? If it was $700,000 for the City in addition-to the restoration sum required by the U.S. Forest Service, it would tie up more than $1,000,000 of MAA's $1,600,000 assets and they would be unable to bond the expansion project. Councilor Silbiger explained his original intent was that $700,000 was a minimum reserve. The actual restoration removal of equipment would far exceed the $700,000. Councilor Silbiger/Chapman m/s that the intention of the City Council was to include the amount t6i U.S. Forest Service will require in the S,UP as partof the $700,000 reserve amount and this is ;w not a cumulative,amount and direct staff toldraft the paragraph; as written in paragraph I DISCUSSION: Councilor Slattery thought if was important for Ashland to transfer the SUP and did not understand why Council would notaccepttne number the U.S. Forest Service would determine. Councilor Silbiger responded the primary reason was the U.S. Forest Service set an incorrect figure the first time. They provided documentation in 1991 that stated the removal of the equipment would cost $750,000. Having that amount unencumbered was proper stewardship and getting the right value for City assets. Councilor Slattery was uncertain having $700,000 of unencumbered assets when the amount from the U.S. Forest Service would grow with the Consumer Price Index (CPI). Another concern was if the $700,000 would eventually devalue. Councilor Silbiger thought it was a separate dollar amount from whatever the U.S. Forest Service set. Councilor Chapman/Slattery m/s to suspend Council rules. Voice Vote: Councilor Slattery, Morris, Lemhouse, and Chapman, YES; Councilor Voisin and Silbiger, NO. Motion passed 4-2. MAA President and Board of Directors Chair Tom Mayer researched other ski resorts and no other ski resort on public land was required to have the reserve amount the City was requesting. The amount also exceeded what the U.S. Forest Service determined for MAA. Councilor Chapman shared his understanding that MAA had the assets on the mountain worth $700,000 that MAA would not use for anything else. That amount would cover the reserve and require no additional money from MAA. Mr. Mayer replied it would tie up assets MAA could use as collateral for loans. In addition, the original $700,000 was for dismantling the ski area and restoration was separate. U.S. Forest Service District Ranger Donna Mickley explained the SUP required a Reclamation Bond and to'her knowledge, Mt. Ashland Ski Resort was the only ski area permit in the nation with'such a clause. Reclamation Bonds occur when a ski area is going under and will need to removethe lifts and that happened in 1991. It was a standard clause in all.permits. The U.S. Forest maintains the bond and would determine a new amount if they reissued the SUP. Currently the U.S'. Forest Service couldiprovide realistic estimates to dismantle a ski area and Ms.' Mickley did not think it would cost $700,000. Ms. Bennett explained the original proposal identified as Option 3, would take the number the U.S. Forest Service determined in the SUP and then apply the CPI to.it Councilor Chapman/Silbiger to resume the Council Rules. Roll Call Vote: Councilor Slattery, Morris, Lemhouse, Voisin, Silbiger, and Chapman, YES. Motion passed. Continued discussion on main motion: Councilor Voisin agreed with Councilor Silbiger on having at least $700,000 for a reserve and that it should be more. The 1991 document stated it would cost $700,000 for removal in the event the ski area went bankrupt and the 2007 document had an appraisal of $1,300,000. Councilor Lemhouse thought it was important to move forward with an agreement that put the City in a better position than it presently was. He preferred the option that would accept the U.S. Forest Service's numbers because it would strengthen the City's position. Councilor Morris understood both sides and was doubtful the 5700,000 and S1,300,000 figures quoted in the earlier documents were still valid. Councilor Slattery thought the City was in a better position without the SUP. It would give the City a seat on the board and add quality control teams. Councilor Voisin reiterated 5700,000 was the amount the City would need should MAA go bankrupt. If not, the taxpayers would pay the restoration costs. Councilor Chapman wanted an agreement and suggested MAA have $700,000 in reserves until the U.S. Forest Service set the amount in the SUP. Councilor Morris noted the risk staying at the $200,000 and restated the $700,000 and $1,300,000 were most likely no longer valid. Councilor Silbiger clarified the $750,000 in the 1991 document was for the removal of everything, burning down the building, removing the lifts. He doubted that figure had decreased over time and clarified there was a restoration amount and a removal amount. Roll Call Vote: Councilor Silbiger, and Voisin, YES; Councilor Chapman, Slattery, Lemhouse, and Morris, NO. Motion failed 24. Councilor Slattery/Lemhouse m/s to accept staff Option 3, the original paragraph taking the U.S, Forest Service number plus CPI. DISCUSSION: Council Voisin thought it put citizens at risk for paying for the removal. It was irresponsible not to have adequate funds in reserve as security. Additionally, MAA should not borrow on the assets the City gave to them for nothing in return. Councilor Silbiger agreed Ashland would have to pay for the removal but if the City gave MAA the assets, they were no longer the City's responsibility to remove. In addition, requesting an amount greater than 5700,000 would have better protected the public. However, Option 3 even without that reserve afforded many protections for the City and would allow Council and the City to speak out. He referenced an earlier statement by MAA General Manager Kim Clark that MAA would not borrow against the assets that Mr. Mayer contradicted during _this meeting. Losing the restriction on speaking out was enough for him to support the motion. Councilor Voisin added if MAA went bankrupt, the City received the assets, and the U.S. Forest Service decided to decommission the mountain as a ski area, the City would be fully responsible for cleaning up the ski area. Roll Call Vote: Councilor Chapman, Silbiger, Slattery, Lemhouse, and Morris, YES; Councilor Voisin, NO. Motion passed Sl. MINUTES FOR THE REGULAR MEETING ASHLAND CITY COUNCIL March 19, 2013 Council Chambers 1175 E. Main Street CALL TO ORDER Mayor Stromberg called the meeting to order at 7:00 p.m. in the Civic Center Council Chambers. ROLL CALL Councilor Marsh, Voisin, Morris, Lemhouse, Slattery, and Rosenthal were present. MAYOR'S ANNOUNCEMENTS Mayor Stromberg announced the City was in the process of reviewing applications for the Annual Appointments to the various Commissions and Committees. APPROVAL OF MINUTES The minutes of the Study Session of March 4, 2013, Executive Session of March 4, 200 and Business Meeting of March 5, 2013 were approved as presented. SPECIAL PRESENTATIONS & AWARDS 1. A report from the Mount Ashland Association on Summer Work Plan/ Expansion-Related Activities Kim Clark, the general manager for the Mount Ashland Association (MAA) provided the approval history and upcoming inspections from the US Forest Service (USES) that would allow MAA to proceed with three projects under Phase 1. Project I would widen existing runs through tree harvesting starting April 24, 2013. Project 2 would add 101 parking spaces starting late August 2013. Project 3 consisted of re- contouring the Sonnet ski run and possibly the Blossom ski run. The projects totaled S250,000 and MAA had the funds to proceed. Council expressed concern that the agreement stated MAA would have $2,200,000 in cash or binding pledges prior to starting Phase 1 and MAA did not have that amount. Mr. Clark clarified the three projects were considered Phase I and MAA was not ready to start the projects in the watershed at this time. The ski area had $1,670,000 worth of unencumbered assets for restoration. Fill on the new ski slope would be monitored through.the Monitoring Mitigation Plan and considered Phase 2 or Phase 3 projects. The USES would not allow MAA to cut new runs until they had set up the lift and defined Phase I projects. City Attorney Dave Lohman explained the agreement defined Phase 1 through permits issued by the USFS and gave MAA the discretion to determine what to apply for with the US Forest Service deciding the projects by issuing the permits needed. MAA thought they would accomplish the remaining projects on the list during the next Phase. MAA went on to confirm they did not have the money for the full expansion but would when they came before Council for the rest of Phase 1. Mr. Lohman further explained the agreement only referred to Phase 1 and did not pertain to any of the projects that would follow. The USES also required MAA to have sufficient funds to pay for projects proposed in any phase of the expansion. Nancy Nelson/149 Clear Creek/Explained MAA plans were from 2004 and there were recent studies on ecological impacts, water rights, and climate change that needed consideratibn regarding the expansion. Angie Thusius/897 Beach Street/Read Section E of the MAA-City of Ashland agreement requiring MAA to have the funds prior to starting the project and noted that amount was $2,200,000 and MAA had only $250,000. She urged Council to adhere to the contract. Julie Norman/596 Helman/Expressed disappointment some of the wording in the agreement was vague. She wanted Council to address how the public could read MAA documents so they remained current on what was happening. Andrew Kubik/1251 Munson Drive/Read from a document he submitted a statement.into the record. Eric Navickas/2060 Mill Creek Drive/Clarified the Sierra Club had a pending agreement with MAA and did not support the projects, noted the EPA (Environmental Protection Agency) criticism of the US Forest Service statement on impact to Cottonwood Creek, and MAA's questionable performance on previous projects. Daniel Lehner/Wellsprings/Read two poems he had written. Ron Roth/6950 Old Highway 99 South/Supported the projects in Phase 1 and explained they would have little environmental impact. He commented on the prior Council's actions that resulted in the City losing a lawsuit, and suggested current legal counsel clear up any vagueness in the recent agreement. Charlie Delgado/1354 Quincy/Did not think MAA had complied with the agreement under Section 4E, and Section 3-B and Council needed to ensure MAA complied with all terms before moving forward on the project. Council appreciated MAA providing status on the expansion, thought the projects were reasonable and affordable improvements but not Phase 1 projects, and expected MAA to have to the full amount required to complete Phase 1 when they returned. City Administrator Dave Kanner suggested Council direct staff to work with MAA on an amendment to the agreement to clarify the terms of Section 4-E applied to all phases of the work and not just Phase I. Councilor Lemhouse/Rosenthal ruts to direct staff to work with Mount Ashland Association to create an amendment to the agreement to clarify the terms of Section 4-E applied to all phases of work and not just Phase 1. DISCUSSION: Councilor Lemhouse thought the motion clarified what MAA had stated earlier and made the agreement clearer. Councilor Voisin thought Phase l had already started and even with an amendment MAA was obligated to have the $2,200,000 for the entire expansion. Roll Call Vote: Councilor Marsh, Rosenthal, Slattery, Morris, and Lemhouse, YES; Councilor Voisin, NO. Motion passed 5-1. City Recorder Barbara Christensen explained there was a Mt. Ashland Documents folder in the archived city documents on the city website under City Documents, then Documents by Subject. Staff would research the interpretation of the performance bond in the agreement and provide results to Council. Motions by Park Commissioners regarding Resolution on Parks Funding "Landt moved / Shaw seconded approval of the resolution on Parks funding issues that's before us." Vote: All yes' "Landt moved / Gardiner seconded approval to rescind the Parks budget approved by the Parks Commission at their March 25, 2013, regular meeting." Vote: All yes (Lewis abstained) "Landt moved / Gardiner seconded approval of the funding level for Parks operations for the FY 13-15 biennium as proposed by staff, with approval for the changes in Parks ending fund balance, as proposed by the mayor and City Budget Officer, not approved." Vote: All yes