Big Power in Small Numbers

Today is voting day.

And after every election there is always a discussion about low voter turnout in younger age groups, particularly those age 18-34.

Is this the case?

Based on Elections Alberta voter results for the most recent provincial election, voter turnout does most increase from 18-24 year olds all the way up to those 75+.  It ranges from 32% in 18-24 year old males to 73% in 75+ males and 65-74 year old females.

But this says nothing about the NUMBER of people voting in each group, as 18-24 year olds make up almost 10% of the total population in Alberta, whereas those 75 and older only make up around 4%.

When you actually tally up the number of voters (number of people in each age group X voter turnout percentage) you find the picture is much different.

As a percentage of total voters who turnout on voting day, the largest group is actually 45-54 year olds.  And if you lump together 18-34 year olds, they make up just as large a group.

Which is to say that no matter what age group of which you are a part, you’ve got clout.

And in local elections with smaller numbers of total voters, you have even more.

If you haven’t seen the 2010 Peace River municipal election results, here they are.

Most people voting will vote for a mayoral candidate, so the total voters was likely pretty close to 1729.  If Peace River’s demographics are similar to Alberta’s, that means we have roughly 5200 citizens of voting age, so voter turnout was around 33%.

Now here comes the power in small numbers.

The mayoral race was decided by 69 votes.

If every 12th person voting for the other mayoral candidate had brought ONE other supporter, the result would’ve been different.

Same with the council race.  The difference between being on council and not being on council was 41 votes.

If every 22nd person voting for Leslie Ayre-Jaschke had brought one other supporter, the result would’ve been different.

This is the big power in small numbers.

The odd person convinces one extra person to go vote and changes the course of the future.

So don’t let anyone convince you your vote doesn’t count.

That only happens when you don’t vote.

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Critics Immortalized in Stone

The Late Romantic Finnish composer, Jean Sibelius, was oft dismissed as irrelevant by music critics of his day.  He was not fond of that and is credited as saying “Pay no attention to what critics say. No statue has ever been put up to a critic.”

A similar statement was made at the council candidates forum.  A council candidate stated that whenever one does something, there is never a shortage of critics.  But in all his travels around the world, through museums and art galleries and the like, he has yet to see a statue of a critic.

The implication is that being critical leaves one unworthy of memorialization.  The statement then is a criticism of critics, making it self-contradictory.

Furthermore, the original context of this quote was regarding artistic critics, significantly different from someone critically evaluating political governance.

This aversion to criticism has permeated this election from the first day I started putting information out there and as the author, I have been labeled critic-in-chief.

As a consequence I have experienced accusations of character assassination, direct and indirect threats of legal action, told to ask God for forgiveness for my “slanderous” writing, and been accused of censorship and then subsequently threatened with a court injunction when I didn’t remove a critical post fast enough (an hour after I removed it).

This is the life of a critic.

Do I regret taking on this role?  Not even a little bit.  Why?

Because there were other critics out there, on all sides, and it gave them an opportunity to voice their opinions.

But what is a critic?  Is being critical a character defect?

There are many definitions of critic but my favourite comes from Merriam-Webster: one who expresses a reasoned opinion on any matter involving a judgment of its value, truth, righteousness, beauty, or technique.

The Greek origin, kritikos, means “to discern or judge”.

Based on that definition, it could be argued that criticism is key to a healthy democracy.

Without criticism, the status quo is never challenged which leads to permanent stagnation.

We teach our children to critically think.  It is the underpinning of our education system.  Of all they learn through their formative years in public education, if children take nothing away but the ability to critically think, they will be successful in the world.

Why then does this not apply to politics?  Is it a terrible thing to hope for critical thinking and political accountability?

And this finally brings us to the statues.

There are in fact statues of critics the world over.  And had these brave souls accepted the status quo, put their heads down and did what they’re told, accepted everything they saw and heard at face value, and kept quiet for fear of being labeled a critic, our world would be a very different place and, I would argue, not in a good way.

Abraham Lincoln:  A critic of slavery and key proponent of its abolition, he is immortalized in the Lincoln Memorial, a REALLY big statue.  Oh and there is a GIANT likeness of his face carved into the side of Mount Rushmore.

Martin Luther King, Jr.: A critic of racial segregation and key figure in the advancement of American civil rights.  There is a statue of him.

The Famous Five: Five brave Canadian women who were so critical of an absence of women’s rights, they petitioned the Supreme Court to answer whether “persons” as per the British North America Act included female persons.  The case had important ramifications for women’s rights and women’s suffrage.  There are statues of them all over Canada.

Sir Thomas More: A harsh critic of the schism of the Catholic church initiated by his king, Henry VIII.  He was convicted of treason and beheaded.  Not only does he have statues commemorating his life, he is a Saint in the Catholic tradition.

Mahatma Gandhi: A critic of British rule over India.  Led a movement of non-violent civil disobedience leading India to independence and inspiring civil rights and freedom movements around the world.  More statues.

Nelson Mandela:  A vocal critic of apartheid and colonialism in South Africa.  For his criticism and activism he was imprisoned for 27 years.  He later served as president.  Although he still lives, he has already been immortalized in stone.

Whether you are critical of the current leadership, or critical of those who would replace them, you have an opportunity to voice that criticism on the ballot.

And that ballot will be a permanent monument to you.

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Where did it come from?

The current remuneration for the office of CAO in Peace River is a point of significant contention for many voters in town so warrants study.

It was also a question at the mayoral forum, in response to which justification was given by the current mayor.

Let’s examine that.

First off, what does that pay look like?  The contract states $250,000 annually with a yearly “general economic increase”, plus $11,184 as a vehicle allowance.  A performance bonus of up to 5% of the base rate may also be given.

Total annual remuneration=$261,184

With bonus=$273,684

Before considering whether this is justifiable locally, it needs some context.  How does this compare to the salaries for other complex leadership positions in Alberta?  

It is higher than:

1. Premier Alison Redford: $215000

2. The superintendents of 56 of the 64 school districts in Alberta.

3.  The CAO/city manager for all but 6 cities in Alberta (7 if you remove the bonus; Leduc jumps just over in that case).

But they are not in similar positions so only provide perspective. They can’t be used to determine an appropriate salary for a CAO of a mid-sized town.

To figure that out, you need to conduct a comparative analysis of what other towns are paying for this position and what factors seem to influence that pay.  If the position itself were the only determinant, there would be no variance between towns.  But there is.

So this becomes an important facet of compensation determination (see the links here also).  We can see if market metrics correlate with the differences in salaries between towns with 5000 to 10000 people.

After some number crunching, population, revenue, expenses, and equalized assessment are all shown to correlate strongly with CAO total remuneration.  These relationships are poignantly represented visually.

population

Revenue

Expenses

Equal Assess

Each dot represents the figures for one of the towns in the group.  The salary for Peace River (the black arrow) is well outside of the expected range.

From the data you can also use statistical methods to determine a reasonable salary based on the metrics specific to Peace River.  This produces a range of $178,000 to $183,000, which seems reasonable to me.  Of course, to this could be added a premium for individual candidate strength and experience.

But why $274,000?  What is the rationale?

Mayor Mann argued in the mayoral forum that as council hired a contractor, the salary needs to be higher to pay for the contractor’s employee benefits, taxation, and the like.

This changes the amount the contractor is able to take home.  And, it could be argued, changes the amount one would consider is reflective of the candidate’s experience and qualifications which could bring that figure into line in that regards.  Some have argued though that no matter the strength of the candidate, this level of compensation is not warranted for our town.

What it does NOT change is the total bill to the Town of Peace River and taxpayers.

Therefore, the total dollar figure under contention is still $261,184 without bonus, $273 ,684 with.

Furthermore, there is nothing mandating the hiring of a contractor instead of an employee.

Therefore, if it cost the town more money, why was it done this way?

Some suggest that no suitably qualified individuals expressed interest at a lower salary so this salary is what the market dictates.  Was this the case?  Were all suitably qualified individuals considered for the position?

These are all questions that should have been discussed prior to finalizing the contract.

But were they?  By ALL members of Council?  Did each Councillor voting on the motion to accept this contract have input into the salary and contract and were they given an opportunity to review the contract, in writing, prior to voting?

By all means, we may look back in nine years time and conclude that this was an eminently justifiable decision.  And based on two meetings I’ve attended with him, I believe the current CAO will do everything he can to earn his keep and focus on achievement and excellence.

But with consternation around this issue so persistently pervasive it appears the rationale put forth thus far for this salary was not satisfactory to the electorate.  

Maybe it never will be.  

But understanding the reasons behind a decision is very different from agreeing with them.

We can hope for agreement.

As voters though, we expect understanding.

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Due process?

As mentioned in the previous post, Council moved to accept the contract between Avant-Garde Inc. and the Town of Peace River at the January 14, 2013 meeting.

Let me first be clear.  None of these posts are meant to imply any contention with the individual hired.  I have been in two meetings with Mr. Bunn to date and have found him to be professional, courteous, and intelligent.  And there is no doubt in my mind that he will strive for excellence in everything he does.

But that does not mean as voters we don’t have a right to understand the hiring process.

I will direct you to the minutes of the aforementioned meeting but in case you’re short on time, here is the low down.

This is the agenda councillors received prior to this meeting.  The blacked out line items in the in-camera section are not regarding personnel.  Nothing in the in-camera section, nothing in the unfinished business section.

I refer you now to the Peace River Procedural Bylaw, a bylaw to “provide rules governing the proceedings and the regular business of council and council committees”.  Two points are of interest here.

5.1 (2): The conduct of all Town business is controlled by the general will of the Council and committee members–the right of the majority to decide, accompanied by the right of the minority to require the majority to decide only after a full and fair deliberation, in a constructive and democratic manner, of the issues involved. (Emphasis added)

5.4 (3): Only business listed in the agenda shall be undertaken at a meeting, unless a resolution to change it is unanimously passed. (Emphasis added)

In the minutes you do see additions were made to the agenda.  But they were capital budget timeline, gravel truck, and museum.  Nothing about CAO or personnel.  The motion was carried to adopt agenda as amended.

Now go to page 3 in the minutes.  Suddenly under unfinished business you see “1. CAO-Item to be brought forward during In Camera discussions.”  Wasn’t on the agenda.  And wasn’t voted on to be added to the agenda.  What gives?

Then saunter down to the bottom of page 8.

They’ve recently come out of camera, during which, as the minutes report, a personnel discussion took place.  Despite that not being on the agenda or added to the agenda at the beginning of the meeting.

Here’s how it went once out of camera.

1.  Deputy Mayor Darling makes a motion that “the contract between Avant-Garde Inc. and the Town of Peace River for the term of Feb 4, 2013 to April 30, 2022 be approved and that the Mayor execute the contract on behalf of the Town.”

2. Before this is voted on, Councillor Milligan makes a motion to “have another legal opinion look at the obligations placed upon future councils pertaining to the cost and structure of the agreement”.  This motion goes to a vote and is defeated 4-3.  Milligan, Tarpey, and Needham for, Mann, Darling, Lafontaine, and George against.  This arrangement will persist when I state 4-3 so I need not repeat it.

3.  Darling’s motion brought back to the floor.  Carried 4-3.

4.  Darling then moves that the “contractor’s employee be appointed the Chief Administrative Officer”.  Carried 4-3.

5.  Darling moves that appointment of current acting CAO be rescinded.  Councillor Milligan moves that this be tabled, presumably to attempt again to give all councillors due time to assess the contract.  Motion defeated 4-3.  Darling’s motion then brought back to the floor and carried.  You know the score.

6.  Darling then moves to allow the contractor’s employee to approach the “current acting CAO for administrative information prior to” the start of his term, subject to execution of the contract and signing of a confidentiality agreement.  Motion carried. 4-3.

This is what the publicly accessible record shows.  If it is wrong, then it stands to be corrected.

Even assuming there was prior knowledge among ALL councillors of this contract being presented at the meeting, is it all that much to ask for an opportunity to review it?

The town had been without a permanent CAO for EIGHT months.

The next Council meeting was in TWO WEEKS.

How could council be expected to vote responsibly on a motion that would tie the town to a $2,350,656 contract (not including inflation increases or performance bonuses) without being able to examine a physical copy for a reasonable amount of time?

Can we expect them to make a responsible and conscientious decision on the basis of this review? The minutes show they were in camera for one hour. Were all councillors given a physical copy? Were they read the contract instead?

Why was it such a big hurry?

Two weeks.  That’s all they were asking.

Two weeks to give some thought and consideration to a multi-million dollar contract that would last for NINE YEARS.

Is that too much to ask?

Is this what open, honest, and transparent governance looks like?

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Three years of CAOs

During the mayoral forum a very valid question was asked.

From where did the salary figure for our current CAO come?

Mayoral candidate Lorne Mann answered the question, in the process making some statements I will address both here and in a second post regarding the CAO hiring process.

He stated that our average cost for CAO salaries over the last 3 years was $148000 per year.

This only serves to highlight how current council was unable to replace the departing CAO with a suitable candidate in 2011 and work with them for an appreciable amount of time.

Let’s review the timeline of CAOs for the current council.  I’d encourage you to read the linked articles. They are well done and enlightening.

a.  October 2010: Last election.  Current council formed.

b.  November 29, 2010: Former CAO Norma MacQuarrie “resigns” following an in-camera meeting.  Renate Bensch appointed as interim CAO.

c.  2010 financial statement shows “amount included in salary for CAO includes accrual for payment of severance package”.  2010 amount $339,657.  2009 amount $146,680.  Difference=$192,977

d.  May 1, 2011, Hendrik Slegtenhorst takes position of CAO.  Five months with interim CAO prior to this.

e.  October 28, 2011: Hendrik Slegtenhorst let go with “no cause”.  Renate Bensch again acting CAO.  Slegtenhorst spent roughly 6 months as CAO.

f.  2011 financial statement shows $122,983 for CAO total salary.

g.  March 27, 2012: Greg Varricchio appointed CAO in a 4-3 split vote.  Here is a Record Gazette article on the process, or lack thereof, used for this hiring.  Then three editorials back and forth between Deputy Mayor North Darling and Erin Steele, editor of The Record Gazette (1, 2, and 3).  There were five months before that with interim CAO.

h.  Early May 2012.  Council accepts resignation of Mr. Varricchio.  In office a little over a month.  Paresh Dhariya appointed as interim CAO.

i.  January 14, 2013: Council moves to hire Avant-Garde Inc. as contractor and to allow it to provide an employee to act as CAO, in this case Kelly Bunn.

Prior to this council was without a permanent CAO for roughly 8 months.

Take some time and review the history.

Then come back in a few hours at which point I will outline how the aforementioned contract was accepted by Council.

You should have a fairly good idea by the end what open and transparent governance looks like under the current leadership.

 

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Borrowing for the Future

Debt, much like tax, is a necessary evil in government.  Without taxes we have insufficient revenue and without debt we cannot fund growth.  Which is to say that debt has its place.

Interest rates are at historical lows right now, meaning debt is cheap.  Thus, there has nary been a time better to finance projects to stimulate future growth.  And municipalities in Alberta are doing just that, Peace River being no exception.

This does not free us from looking to the future, so money borrowed now must be serviceable in the future and the projects financed with debt should be projects that will provide benefits for years to come.

There are myriad ways to measure the prudence of borrowing.  I’ve chosen just a few that I’ve seen in other venues, namely the link above and here.

The government does consider whether the amount of debt a municipality carries is appropriate, that target currently sitting at less than 80% of the legislated debt limit.

Here is what Peace River’s total debt and debt as a percentage of debt limit has looked like since 2006.

Debt and Debt Limit

Currently at roughly 20% of debt limit, there is obviously lots of wiggle room left.

On what are we spending this money?  Town bylaws show how much money was borrowed for what project.  In 2012 and 2013 that has mainly been paving, water infrastructure improvements, and road base improvements.  And $750000 for purchasing and installing the chairlift.

With the exception of one of these, the trend leans toward upgrading of infrastructure and, as far as I’m concerned, that is a worthy way to spend money borrowed at incredibly low interest rates.

How do we compare with our cohorts?  Since I’ve been informed on multiple occasions that assessment is of paramount importance when considering growth, I compare equalized assessment on a per capita basis against debt per capita.  If a town has way more debt on board then their assessment level, over time that debt is going to catch up to them.  Furthermore, if assessment is a harbinger of growth, if there are abnormally high levels of debt but low assessment, then debt is not producing growth.

Screen Shot 2013-10-12 at 10.40.29 PM

The arrow signifies Peace River.  Not too much debt, not extraordinary assessment values.  Just nice and cozy right in the middle.

(The dot way up high is Banff.  Its assessment level is incredible, but I think that stands to reason.  The one all alone on the right is Slave Lake.  It has astronomical amounts of debt, I can only assume because of the fire.  One cannot begrudge them for borrowing to rebuild their town.)

Conclusion?  This may surprise some people but my conclusion is that Peace River is doing A-OK as far as debt is concerned.  Yes, it has gone up quite a bit in the last 3 years, but it still seems to be at sustainable levels. Since interest rates are at all time lows, it makes logical sense to me that we would borrow some cash to fix our infrastructure.

(To read more on borrowing for growth, go here.  If you want to see a visual of growth in action over the years, check out Google’s TimeLapse project.  Check out Peace River.  Also look at Blackfalds, the leader in population growth in this cohort over the last 20 years.  Taber and Bonnyville are about middle of the pack.)

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Where are the PeaceFest posts?

I’ve been thinking about this for awhile.  And I hope I’ve made the right decision.

It was suggested early on that I was moderating the forum based on my own biases.  That was untrue.  There has not yet been one person (aside from the spammer who started offering everyone loans at great interest rates) I have not accepted into the group.  I have also not edited or deleted a single post or comment.

However, I have removed the PeaceFest posts.

Below are NOT the reasons I removed the posts.

1.  They were focusing on a person and not an issue.

Although it is preferable to discuss issues, the fact of the matter is we are electing people, not issues.  I am not saying this is the case here, because I have no idea of all of the intricacies involved with the PeaceFest issue.  But sometimes discussing who will be holding a political office is legitimate discussion.

2.  There is no basis to the claims made in the posts.

I don’t know.  I wasn’t on the PeaceFest board.  I have heard various bits and pieces from various members of the board, but I don’t have the whole story.  Maybe there is something to it, maybe there isn’t.  Regardless, it is not reason enough to remove it.

Here is the reason I DID remove them.

PeaceFest is a wonderful cultural event unique to Peace River.  It rose from adversity and is an annual testament to what we can do in this town if we are all willing to respect one another’s differences and allow each to contribute according to their strengths, bringing ideas forward from their unique viewpoint.  It is undeniably positive for the town.

I don’t want the reputation of PeaceFest to suffer because of the conflict on the board.

There are avenues through which conflicts like this can be settled.

This group isn’t one of them.

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Growth through Growth?

Have revenue growth and prudent borrowing funded growth over the last three years?  A virtuous cycle of growth leading to growth?

I will look at revenue and debt changes in the town financial statements.  However, much of this will be up for interpretation.  My aim is to present the information as it stands and then ask questions to stimulate discussion.

1.  Revenue

It would appear from a cursory glance that revenues have skyrocketed since the 2010 fiscal year, going from $16.9m in 2010 to $39.1m in 2012, a remarkable 132% increase.  But if we are funding growth with revenue growth, it is important to also isolate taxation.

In absolute terms tax revenue rose 0.80% in that time, and in real terms they decreased by 3.4%.

$13.5 m in revenue in 2012 came from what I would consider (ie. my opinion) long-term own-source revenue.  This includes things like tax, user fees, investment income, penalties, development levies, and the like.  This total was $12.1 m in 2010.

Where is the other $21 m?

There was a change in accounting procedure that added revenue from the Peace Regional Waste Management Company to the Town books.  That is appropriate but for apples to apples, you can’t use it.  This amounts to $3m.  There was also $6.4m in what appear to be one time revenues (please correct me if I’m wrong) under Gain on Disposal of Tangible Capital Assets and Contributed Assets.

That still leaves $11 million, roughly by how much government transfers increased in that time ($11.3m).

As far as I can tell, the Municipal Sustainability Initiative has been available to municipalities in Alberta since 2007.  Since then government transfers as a percentage of revenue have risen from 26% to 41%, while taxation as a percentage of revenue has dropped from 38% to 19%.

Don’t get me wrong.  Grants should be used when they’re available.  But even Municipal Affairs agrees there should be a limit.  Their Municipal Sustainability Strategy has as one of its key measures of financial sustainability the percentage of total revenue made up of government transfers.  If a municipality goes over 50%, it may trigger a review by Municipal Affairs.

In 2012, that number was 41% in Peace River.  In the 2013 budget, if my calculations are correct, that number is 49%.  In 2010 it was 28%.

Is this the current practice or council specific?  The most similar municipality I could find is Bonnyville.  They have a very similar population, are in the north, exist in an area with substantial oil and gas activity, and had an almost identical population growth between the 2006 and 2011 federal censuses.

Their total revenue increased 50% from 2010 to 2012.  Tax revenue rose 11%, long-term own-source revenue rose 22%, and government transfers dropped 1.13%.

Here’s my read of all this.  We should absolutely be taking advantage of these grant funds while they are still here, as my understanding is they end in 2016.

But here are my questions.

1.  Considering the above, are we truly funding growth with revenue growth?

2.  If so, is the current strategy sustainable?

3.  Is the expenditure of these funds going into projects that will sustain themselves or trigger further growth?

Tomorrow, we look at debt.

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Quick update

I mentioned in Building the Case…Continued that I would post the business license approvals by year once I received them from the town.  The wonderful staff at the Town got them to me today, despite how busy they are.  Thank you to them.  The town tells me the numbers are generated by an invoice being created, so they do not account for changes or deletions.

2008: 552

2009: 555

2010: 559

2011: 575

2012: 574

2013 to date: 565

Pretty consistent over time.  Not too much to interpret.  Growth was around 4.0% from 2008-2012 with inflation at 5.36% and consumer price index change 6.7%.

Make of it what you will.

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On Dissension

Yesterday I was asked what the purpose of my blog posts is.  Here is the text of the first comment I received.

“Question though: In one or two sentences, could you please explain here what exactly is the case you’re trying to build? Are you trying to make the current major [sic] out to be a liar for what he wrote in his guest columns? I have enjoyed reading the major’s [sic] ‘Musings’. The meaning of musings is ‘contemplations/reflections/thoughts’; not ‘hard stats and facts’.”

Fair question.  I was working though so could not respond immediately.  Then I read this.

“I don’t know what the intend [sic] of the blogger is. To be honest this ‘building a case’ is starting to smell like character assassination to me. As was pointed out above, the current major [sic] is a lawyer.”

The commenter has since edited the comment to remove the last sentence.

First, my purpose.

From day one, I have stated my purpose in the About page on this blog, there for all to see.  I openly admit I have a concrete position, that I will present it as such, and that this does not mean it is the correct position.  There is no correct position in democracy.

Why Mayor’s Musings?

The Mayor was given a platform in the newspaper to present his positions, a right he shares with me.  Until now an opposing interpretation had no public venue for presentation.

That was my purpose.  Balance out the discourse.

Why hone in on specific statements?  Aren’t they just musings, contemplations, and thoughts?

Musings and opinions would be stating that Peace River is the most beautiful place in the world and the best place to live, an opinion I share with Mr. Mann.

A statement of presumed fact would be stating that MoneySense magazine chose Peace River as the best place to live in Canada.

The latter suggests verifiability and is thus open to scrutiny.

And why choose the issues I did?  Largely because they are the issues I’m interested in.  Was the chairlift purchase a wise use of town funds?  Did the transfer agreement with the town benefit taxpayers?  Are we capitalizing on growth in the area or leaving some on the table?  Are we doing everything we can to attract business development and building projects, or are we merely riding the tide of regional patterns?  Are we funding growth with revenue growth or debt?

Mr. Mann presented one position on these issues, I present an opposing one.

Politicians work for the people.  And as such, they are accountable to the people.  Just as much as Mayor Mann had the right to author his column, I too have the right to question it and form an opinion on it.

It is not character assassination.  It is dissension.

If the Premier or Prime Minister made statements in the press and I questioned them, would it be character assassination?

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