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2512 George Mason Drive • P.O. Box 6038 Virginia Beach, Virginia 23456-0038   757.263.1000 • 757.263.1240 TDD

The Lowdown on Your School Dollars
FY 2012-2013
Budget Updates
Updated 5/16/12

A Community Update on the School Division's Budget Process for FY 2012-2013

School Board Approves $657.4 Million Operating Budget for FY 2012-13

On Tuesday, May 15, the School Board reconciled its budget to address a $4.3 million gap in funding, essentially bringing to close months of deliberation that began last February. At that time, the division faced a $39.3 million shortfall. That shortfall was reduced by additional state funding and City Council’s approval of a 6-cent real estate tax increase, 4 cents of which was allocated to schools. The new VBCPS operating budget for 2012-13 which will take effect July 1, stands at $657.4 million.

As part of the new budget, most employees will receive a net 2 percent compensation increase. Technically the increase is 3 percent of their base salaries; however, the additional 1 percent is to offset the General Assembly’s requirement that all state employees, (including teachers and other school employees) begin paying into the Virginia Retirement System (VRS). By school year 2016-17 all VRS –eligible VBCPS employees will have to pay 5 percent of their base salaries into VRS. The General Assembly gave localities the choice of implementing the requirement all at once or phasing it in over five years. However, lawmakers also mandated that a corresponding offset salary increase be provided. Since VBCPS has elected the phase-in option, the school division has to provide a 1 percent increase this year and an additional 1 percent every year after until the 5 percent phase-in is complete (school year 2016-17). In contrast, all employees hired after July 1 of this year must pay the 5 percent of their base salaries into VRS over the course of their first year.

As part of the budget reconciliation, the School Board also restored funding for the ropes course for next year. However, many previously recommended budget reduction strategies remain in effect. These include the elimination of elementary summer school, 2 percent reductions to individual department and school budgets, reduction of central office and custodial positions, and reductions to travel, permanent substitutes’ salaries, and tuition reimbursement.

There is still more work ahead for City Council and the School Board as they revisit Council’s earlier decision to eliminate the city-schools revenue-sharing formula. Many Board members have expressed concern that absent a dedicated revenue stream for schools, VBCPS could be facing another funding crisis in the future.

Prior to the conclusion of the School Board meeting, School Board Chairman Daniel D. Edwards and other individual Board members thanked staff and the community for their advocacy during this challenging budget season.

April 24, 2012, Joint School Board-City Council Meeting and School Board Resolution

Summary of School Board-City Council Joint Meeting

The Virginia Beach School Board and the City Council held a joint meeting on Tuesday, April 24 to discuss school funding for fiscal year 2012-13. As part of that meeting, School Board Chairman Daniel D. Edwards presented a brief overview of the funding challenges facing Virginia Beach City Public Schools (VBCPS). He reminded Council members that one-time funding the school division had received in the current fiscal year had left the school district with a $34.2 million funding cliff for 2012-13. Since Superintendent James Merrill’s presentation of the Superintendent’s Estimate of Needs the funding gap ($39.2 million) for the school system has been narrowed by additional monies provided through the approval of the state budget and the recommendation of the city manager to allocate $9 million from the city’s fund balances to the schools. In addition, the city manager’s budget recommends a 4-cent real estate tax increase of which 2 cents would be dedicated to schools. Despite these efforts, VBCPS remains $15.5 million short of the School Board’s budget request.

The chairman advised City Council that shortfalls seem to be here to stay. In fact, even after next year’s budget is finalized, a $22.2 million funding cliff is projected for FY 2013-14. Edwards noted that the funding losses that VBCPS has been experiencing are largely because the state has reduced its support for our K-12 education system. This happened because the state determined (using a complex formula known as the Local Composite Index - LCI) that the City of Virginia Beach has a greater ability to fund schools than it is currently doing. If the city were to fund schools following the LCI formula, the schools would receive approximately $30 million more in local funding annually. Edwards also noted that external influences are affecting the school system’s budgetary needs. In 2012-13, VBCPS will face increased costs related to the Virginia Retirement System (VRS) and VRS life insurance that together total $28.7 million. In addition, the division faces a $6.4 million increase in employee health care costs.

The chairman pointed out that the School Board’s budget restores many programs and benefits that were cut in the Superintendent’s Estimate of Needs (SEON). The School Board’s budget proposal makes the following changes to the SEON:

  • Avoids a salary cut for employees (known as Employee Hold Harmless Funding) and provides for a half-percent increase to base salaries;
  • Delays converting all high school schedules to a 4x4 model;
  • Eliminates a planned class size increase;
  • Eliminates plans to abandon the middle school model in favor of a junior high school model;
  • Restores academy and gifted program transportation;
  • Restores middle school interscholastic athletics and junior varsity sports; and
  • Restores the summer school program at the middle and high school levels.

Edwards told City Council members that it is important to understand that the Board’s budget proposal does not restore all items that were recommended for elimination or reduction in the SEON.  Items not restored include cuts to departmental budgets, professional development, travel, tuition reimbursement and the pay rate of permanent substitutes. In addition, elimination of 20 positions (central office and custodial) and the ropes course is still planned. The chairman pointed to the fact that full-day kindergarten, a long-time goal, still cannot be funded.

On the subject of the proposed Capital Improvement Program (CIP) budget, Edwards shared that the funding for school construction and renovation has dropped dramatically from $676 million in 2009 to $451 million today. Only three school projects will be completed between 2014 and 2019.

Looking to the future, the chairman cited several concerns/needs: 1) restoration of funds to the operating budget for 2012-13 to avoid dramatic cuts the following year; 2) provision of ongoing revenue to address ongoing expenses (relying on one-time funding does not allow for adequate planning); 3) restoration of a revenue-sharing formula between the city and the schools to facilitate better planning and to improve relations between the Board and Council; 4) restoration of  lump sum funding to the school system, thereby providing school leadership the flexibility to manage revenues and expenditures; and 5) the recognition of public education as a top priority.

Following the chairman’s presentation, Board members and City Council members posed questions and made comments on school funding. You may view a video of the chairman’s PowerPoint presentation and video of the joint meeting.

Virginia Beach School Board Adopts Funding Resolution to Send to City Council

In its Tuesday, April 24 meeting the School Board adopted a resolution calling on City Council to identify monies to adequately address school funding, first from “existing resources,” and then, absent that ability, through an adjustment to the real estate property tax. At the heart of that resolution is the Board’s concern that the state has judged the City of Virginia Beach, through a formula known as the Local Composite Index, as having a greater ability to pay for public education services than what it is currently providing. The resolution is posted here.

This resolution has been delivered to City Council which will consider the request. Ultimately, Council will decide on the approach to fund the School Board’s operating budget. A video of the meeting is available.

April 3, 2012, School Board and City Council Host Joint Meeting to Discuss School Funding Issues

On Tuesday, April 3, the School Board and City Council held a joint meeting to discuss school funding for the next fiscal year. Each School Board and City Council member had the opportunity to express his/her opinions, concerns and ideas on the school system’s operating budget. As stakeholders may recall, in early March the School Board submitted a $661.7 million budget (which exceeded initial funding targets by $36.4 million) to City Council. A few weeks later, City Manager James K. Spore presented his recommended municipal budget – which includes funding for schools - to City Council. It provides about $17.6 million less than what the School Board had requested.

The Need for a Tax Increase Discussed

At the April 3 meeting, some City Council members expressed the opinion that the School Board should formally request that the city institute a tax increase to secure additional funding for schools. At the same time, other City Council members disputed the need for a tax increase all together. They suggested that city and school leadership should examine their respective budgets for savings opportunities and reprioritize projects that would require the need for additional revenue.

In response, some School Board members indicated that if City Council decides that a tax increase is needed to fully fund the schools’ current funding request; they will support the plan. They also stressed the need to reinstitute a permanent, ongoing revenue stream for schools to avoid this dire funding situation next year. (As a point of information, City Council did away with the city/schools revenue-sharing formula that had been in effect since 1997. School system leadership is concerned that there is no longer a predictable, minimum level of funding identified for schools.) Other School Board members maintained that taxing authority begins and ends with City Council and that asking Board members to request a tax increase is essentially asking the School Board to do City Council’s job.

The Impact of Decreasing State Funding

Several City Council and School Board members cited the lack of state funding as a key factor in the current education funding crisis and expressed a need for city and schools to cooperate next year to try to change that. (Since 2009, public education in the Commonwealth of Virginia has experienced a loss of funding totaling more than $1 billion.) However, both the School Board chairman and vice chairman pointed to the fact that a state formula known as the Local Composite Index or LCI has determined that Virginia Beach has a greater ability to fund its schools than it currently does. As a result, the state has cut funding to Virginia Beach schools by $30 million, shifting that funding responsibility to the local government. Chairman Edwards noted that the school division has made many sacrifices over recent years. For example, class sizes are larger and positions have been cut. In fact, the chairman reminded all present that later in the evening the Board would be forced to approve the non-renewal of contract for 245 first-year teachers. He concluded by noting a pressing need exists to identify a sustainable revenue source for public education if the quality of Virginia Beach City Public Schools is to be preserved.

This meeting was videotaped and is now archived on the city’s website, Look to the right hand side of the page under the category Select a Chapter. The Joint City Council School Board Workshop is the second item under that category.

March 26, 2012, Some Budget Dates You Will Want to Remember

Citizens and employees still have many opportunities to weigh in on budget priorities. As a reminder, the School Board's budget request, which stands at $36.3 million above the city-provided target, has been provided to City Council, which will begin deliberating soon. City manager Jim Spore presented his budget to City Council which includes the School Board's funding request. You may access the executive summary of the City Manager's Budget and entire budget document.

Below are dates to remember if you are following the budget process. Unless otherwise indicated, budget meetings and workshops are held in City Council Chambers, Municipal Building 1. City Council formal and informal meetings can be viewed live on Those who have questions or concerns about state and local funding for schools can contact members of the School Board, City Council and state officials directly. For the convenience of our stakeholders, contact information is provided here.

  • March 27: City Manager presents his operating and capital budget requests (including school operating and capital requests) to City Council - 6:00 p.m.
  • April 3: Budget Workshops
    • 1:00 p.m. City Council Budget Workshop
    • 4:00 p.m. Joint City and Schools Budget Workshop Municipal Center, Building 19
    • 5:00 p.m. City Council Budget Workshop
  • April 5: Budget Open House at the Convention Center, 1000 19th Street - 6:00 p.m.
  • April 10: Budget Workshop - Time TBD
  • April 17: Budget Workshop - Time TBD
  • April 18: Public Hearing at Cox High School, 2425 Shorehaven Drive - 6:00 p.m.
  • April 24: Budget Workshop & Public Hearing - 6:00 p.m.
  • May 1: Budget Reconciliation Workshop - 1:00 p.m.
  • May 8: City Council adopts a municipal budget (including a schools funding plan) - 6:00 p.m.

Update On State Budget: Important Note On VRS

At this writing, the General Assembly has not as of yet adopted a state budget. We do want to make you aware of pending legislation that will affect the Virginia Retirement System (VRS). Both the House and the Senate have approved bills that will require all state employees (including school employees) to begin paying into their retirement, the ultimate requirement being 5 percent of base salaries. However, the legislation as it stands now also includes a salary offset. So, for example, if the legislation passed and Virginia Beach City Public Schools had to require employees to pay 5 percent of their base salaries into VRS in the new fiscal year, the school system would also have to raise salaries by 5 percent to offset the cost of this new obligation. This legislation also allows school systems to phase in the new requirement over the next five years at 1 percent per year with a corresponding salary increase of 1 percent per year to offset the cost to employees. It is anticipated that the General Assembly will adopt a state budget by the end of next week.

March 6, 2012, School Board Meeting

School Board Approves a Budget That is $36.3 Million Above the City Target; City Council Deliberations on This Request to Begin Soon

The Virginia Beach School Board last night approved an operating budget request that at $661.6 million is $36.3 million above the city-provided funding target. As a result, many of the program eliminations and reductions proposed in the Superintendent's Estimate of Needs have been restored. The new budget includes the following recommendations:

  • Do away with the plan to convert all high school schedules to a 4x4 hybrid model.
  • Eliminate the plan to implement a three-day furlough for all staff.
  • Dispense with plans to eliminate the second planning period for middle school teachers.
  • Include a 2.5 percent “hold harmless” compensation adjustment to address the loss of bonus funds. The Board expressed concern that staff would actually be taking a salary cut next year if the one-time 2.5 percent bonus received this year did not become a reality once again next year. “Hold harmless” is an effort to ensure that the current year’s one-time 2.5 percent increase becomes a permanent part of employees’ base salaries.
  • Add into the budget an additional .5 percent increase for staff.
  • Eliminate the planned class size increases.
  • Maintain summer school for middle and high school.
  • Restore transportation for academy programs and Kemps Landing Magnet School, and Old Donation Center and Middle Years IB Program.
  • Restore middle school and junior varsity sports as well as middle school trainers and not reduce student activity coordinators to half time.
  • Restore 18 security assistant positions.
  • Restore funds for student field trips per pupil allocation to $1.50.
  • Eliminate the plan to reduce the calendars of assistant principals at the high school level, academy coordinators, guidance staff, and other school specialist positions.
  • Provide seed money to explore the establishment of a second International Baccalaureate Academy (proposed for Green Run High School).
  • Restore funding for college course payments for teachers.
  • Restore funding for the Teacher Production Center.

The School Board’s budget proposal does contain a number of budget reductions. These are:

  • Reduce all non-personnel budgets by two percent.
  • Lower pay of permanent substitutes to the regular substitute pay.
  • Eliminate four central office positions (assistant superintendent, director, coordinator and office associate)
  • Eliminate elementary summer school.
  • Eliminate 16 custodial positions.
  • Eliminate attendance incentives for custodians and bus drivers.
  • Reduce professional development funding.
  • Eliminate the online PD 360 program (professional development).
  • Eliminate the Ropes Course.

The School Board’s budget proposal will be submitted to City Council. City Council will then begin deliberating on this request, ultimately approving a municipal budget, which includes the school’s expenditure plan, by May 8. During the meeting several Board members recognized the community advocacy that has taken place to date, but cautioned that adoption of a School Board budget does not mean work is done on this front. Vice-Chairman William J. Brunke stated “Your work is just beginning,” pointing out that if this budget is not approved, the additional money requested in the operating budget “will go away.”

February 28, 2012, School Board Budget Workshop

School Board Moves Closer to Adopting a Budget of Needs

On Tuesday, February 28, the School Board held a budget workshop to continue deliberating on the proposed operating budget for next fiscal year. A video of the workshop is available for viewing.

Panel of Principals Addresses the Hybrid 4x4 High School Schedule

First on the agenda was a panel discussion of the advantages and challenges of a hybrid 4x4 schedule. As a reminder, the Superintendent's Estimate of Needs contains a recommendation to move high schools to this new schedule for both instructional and financial reasons. It has been estimated that moving to a hybrid 4x4 schedule would save the school division $8.2 million.

This discussion, facilitated by Jobynia Caldwell, assistant superintendent of high school education, explored the instructional reasons behind a proposed change. It involved the insight of four Virginia Beach principals three who are interested in implementation of a 4x4 hybrid block schedule for Virginia Beach and one who expressed a preference for the current AB schedule. Serving on the panel were Dr. Nancy Farrell, principal of First Colonial High School; James Miller, principal of Bayside High School; Evangeline Petrich, principal of Kempsville High School; and James Pohl, principal of Princess Anne High School (who voiced a preference for the AB schedule.)

The proponents cited the following facts to support their belief that the current AB schedule is not serving students as well as a hybrid 4x4 could. They noted that if the need to address the expense of the current schedule persists, this model would be favorable over an AB schedule that would require teachers to teach six classes.

  • With new graduation requirements implemented, the current schedule doesn't allow advanced studies diploma students to earn the required 26 credits for graduation without essentially forcing them to take seven or eight classes at one time to earn the required credits.
  • Students working on advanced studies diploma do not have room in their schedules for lunch.
  • The current schedule does not allow music students to continue music in high school if they plan to pursue the advanced studies diploma and other interests.
  • The current AB schedule does not allow VBCPS students the same college opportunities as students in a neighboring school division who are on a 4x4 because they can't take as many classes. It also does not provide as much opportunity to attend the Advanced Technology Center and and/or the Technical and Career Education Center.
  • On the AB schedule, students generally take six classes and are required to pass five classes to participate in athletics. A hybrid 4X4 generally means that students are taking four courses during each semester and thus would have to pass three courses to be eligible to participate in athletics.
  • If a student fails a semester class under a 4x4 schedule, he has the opportunity to take it again in the next semester. In essence, this schedule is more favorable to students who need to resort to credit recovery.

In contrast, Mr. Pohl made the following points supporting the AB schedule:

  • Achievement data supports that the schedule has served his students well. (Princess Anne High School was the only Virginia Beach high school to make Adequate Yearly Progress under NCLB.)
  • All students at the school have a 20-minute lunch period because the schedule accommodates lunch at one time for everyone. A modified AB block could be developed that supports lunch for every student.
  • If all schools in Virginia Beach switched to a hybrid 4x4, it could be challenging for students transferring into the division especially if their previous schools had adhered to an AB schedule.
  • The compressed time frame of a 4x4 makes it difficult for students and teachers to accomplish what is possible in classes on AB schedule. For example, currently students in an English class may read five to seven novels. It would be difficult to accomplish this in a class that is compressed into a semester.
  • Courses/activities such as band and music need to be approached on a year-long basis since district and state competition is scheduled in that manner. This also holds true for NJROTC as leadership opportunities for students in that program are offered year-long.

Briefing on House and Senate Budget Bills to Date

Chief Financial Officer Farrell Hanzaker briefed the Board on the status of the House and Senate budget bills. At this writing, the House's proposed budget would provide VBCPS $5.3 million more than the Governor's current proposal while the Senate would provide $2.78 million more. A reconciliation budget will be developed between those two legislative bodies in the near future, most likely on or around March 8.

A Rising Local Composite Index: Key Evidence that the City of Virginia Beach is Underfunding Schools

In Virginia, the state provides local school districts with funding on the basis of a complicated formula known as the Local Composite Index (LCI). When a city's LCI goes up that means the state has judged that city as having the capacity to pay more towards its education services. As a result the state reduces its financial support to the locality, thereby shifting more responsibility for paying for schools to the city. Mr. Hanzaker told the Board that the school system's LCI began rising significantly in the 2006-07 fiscal year and has continued to do so. Unfortunately, the City of Virginia Beach has not stepped forward to assume the financial responsibility for schools that the Commonwealth of Virginia says it can bear. Mr. Hanzaker said that if the city abided by the LCI, then the schools would have received additional local money in the neighborhood of $28 million annually.

School Board Signals Willingness to Submit a Budget of Needs to City Council

Mr. Hanzaker and his budget staff led the School Board through a discussion designed to identify changes to the Superintendent's Estimate of Needs that should be reflected in the Board's budget. In summary, the Board, through a series of straw poll votes, recommended that the following changes be reflected in its budget proposal:

  • Do away with the plan to convert all high school schedules to a 4x4 hybrid model. The Board indicated that the compressed time frame made it difficult to give this strategy due consideration and expressed a willingness to examine this more fully in the future.
  • Eliminate the plan to implement a three-day furlough for all staff. This means all staff would not be required to take three days without pay. It would also restore a 183-day calendar since the three days off would have been implemented on instructional days.
  • Dispense with plans to eliminate the second planning period for middle school teachers.
  • Include a 2.5 percent “hold harmless” compensation adjustment to address the loss of bonus funds. The Board expressed concern that staff would actually be taking a salary cut next year if the one-time 2.5 percent bonus received this year did not become a reality once again next year. “Hold harmless” is an effort to ensure that the current year’s one-time 2.5 percent increase becomes a permanent part of employees’ base salaries.
  • Add into the budget an additional .5 percent increase for staff.
  • Maintain summer school for middle and high school, but proceed with eliminating elementary summer school.
  • Eliminate the planned class size increase.
  • Restore academy transportation.
  • Restore middle school and junior varsity sports.
  • Restore 18 security assistant positions.
  • Restore funds for student field trips.
  • Restore the Teacher Production Center (at least temporarily as the Board asked that administrative staff examine the possibility of staffing this center part-time and report back with its findings.)
  • Restore college course payments for teachers.

(Cuts that would remain in the Board’s proposal include the elimination of four central office positions – an assistant superintendent, director, coordinator and office associate; a 2 percent reduction to all non-personnel expenses; the adjustment of specialists, academy coordinators and some secondary assistant principals’ calendars; the elimination of the ropes course, 16 custodial positions, and the attendance incentive for bus drivers and custodians; and the reduction of travel, tuition reimbursement and professional development funds)

Proposed changes to the Superintendent’s Estimate of Needs would increase the Board’s operating budget proposal to City Council from $620.8 million to $660.8 million. However, as a word of caution, these proposals are just that – proposals. When the Board reconvenes on March 6, further adaptations could be made that could alter these proposals. A budget is scheduled for adoption on that date. From there, it would be submitted to City Council which has until May to adopt a final municipal budget, including a funding plan for the schools.

February 27, 2012, Future Focus Presentation

Superintendent James G. Merrill Presents on the Strengths and Challenges of Virginia Beach City Public Schools and Asks Citizens to "Step Into the Gap" to Advocate for Public Education

On Monday, February 27 the Virginia Beach Education Foundation hosted a presentation made by Superintendent James Merrill at Landstown High. Open to the Virginia Beach community, this event – Future Focus – provided Dr. Merrill with the opportunity to address the strengths of the school division as well as the challenges ahead, particularly budgetary ones. He also advised the 400-plus attending how they could “step into the gap” for public education. The entire text of his remarks and a video of his presentation are available.

February 21, 2012, School Board Workshop

School Board Continues Deliberations on Proposed Operating Budget

In a workshop held Tuesday, February 21 the School Board continued its deliberations on the Superintendent’s Estimate of Needs (SEON) for FY 2012-13. Chief Financial Officer Farrell Hanzaker reviewed administrative responses to questions Board members had posed earlier about the proposed operating budget. These questions ranged from logistical inquiries about the 4x4 high school block schedule proposal to how many employees are eligible for retirement. Following this part of the workshop, Chief Information Officer Ramesh Kapoor provided an overview of the costs and impacts associated with the possibility of discontinuing the Quality Connection Program (instruction implemented using two-way videoconferencing using distance learning labs located in each middle and high school). In addition, Assistant Superintendent for Educational Leadership and Assessment Don Robertson gave an overview on the possibility of eliminating the PD 360 program, a PD360 is a professional development web-based program available to all teachers.

As part of the workshop, Assistant Superintendent for Human Resources John Mirra shared that the school division would have to move ahead with planning for a reduced instructional staffing level for 2012-13 to address the current budgetary shortfall projected for next year. As a result, on March 7 those probationary teachers (255) who are serving the first year in the probationary cycle (P1) will be sent notification letters regarding the recommendation of non-renewal of their contacts.

Mr. Mirra noted that once a final budget is approved by City Council and funding amounts are made clear, it is possible that the division will be able to hire/rehire teachers based on division needs. A memo outlining the process for the School Board is available.

Following the first workshop the School Board commenced with its formal meeting which included a public hearing on the operating budget. Twenty-nine speakers spoke during the hearing, almost all of whom requested that the Board adopt a budget that includes additional funding to avoid the cuts proposed on the Superintendent Estimate of Needs.

After the formal meeting concluded, the School Board discussed the input received. Individual members then expressed their opinions on what should/should not be restored to the operating budget. The School Board, as a whole, seems poised to submit a budget that exceeds the funding target set by City Council.

The actual workshops and presentations are available for viewing:

  • Workshop #1 – Chief Financial Officer Farrell Hanzaker’s responds to School Board questions on the proposed
    operating budget and recommended cuts.
    – Chief Information Officer Ramesh Kapoor provides overview of elimination of the Quality
    Connection Program
    – Assistant Superintendent for Educational Leadership and Assessment Don Robertson’s
    overview on the possibility of eliminating the PD 360 Program.
    – Assistant Superintendent for Human Resources John Mirra discusses reduced instructional
    staffing level for FY 2012-2013.
  • School Board Meeting
  • Workshop #2 – School deliberations on the Superintendent’s Estimate of Needs Budget (SEON).

February 14, 2012, School Board Special Workshop

During the February 14 School Board special workshop, Superintendent James Merrill and key staff provided an overview of several of the programs/services that have been recommended as cuts in the Superintendent’s Estimate of Needs (SEON) budget. Keep in mind, these programs/services are proposals at this time. No decisions have been made to implement any of these items. These items are recommendations to bridge the budget shortfall of $39.3 million in the school division’s FY 2012-2013 proposed budget. Presentations were made in order provide Board members with detailed information on the recommended budget cuts and the impact these could have on the school division.

The actual workshop and presentations are available for viewing and review. The February 14 workshop presentations follow:


Last Modified on Thursday, February 9, 2017