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For Taxpayers, A Rain of Excuses From Deficit-Ridden Palm Harbor Golf Club Contractor

| October 8, 2013

It's been that kind of gray, soggy time for the Palm Harbor Golf Club. (c FlaglerLive)

It’s been that kind of gray, soggy time for the Palm Harbor Golf Club. (c FlaglerLive)

For the Palm Coast City Council and for Palm Coast Taxpayers, the Palm Harbor Golf Club the city has been running with a contractor since 2009 has been the course from hell.

It cost $4.5 million to build (money the city will never get back. Start-up costs rang up to an additional $1 million in 2009. Kemper Sports, the company contracted to run the place, was to generate enough profits to make back that money, which went straight out of taxpayers’ wallets. That was the council’s assumption at the time. Kemper has been running deficits instead, year after year, with an estimated $50,000 deficit expected this year. It could be deeper.

On Tuesday, Kemper Sports officials—Ricardo Catarino, Kemper’s regional operations director, and General Manager Rich Stanfield—appeared before the Palm Coast City Council to give them a state-of-the-club presentation designed to reassure council members that a turnaround is ahead. But there were more excuses than reassurances, with the best-case scenarios projecting a break-even status over the next five years, but no profits and no paying back of that $1 million, or those deficits since.

Kemper officials never used the word, but they portrayed themselves as victims—of circumstances, of trends, of the economy, of the weather, all of which have conspired to limit revenue. Why the same circumstances have not similarly affected private golf clubs isn’t clear.

Still, demographics are undeniable: More people are leaving the game than picking it up, and the loss is driven especially by the attrition among previous golf enthusiasts. Translated into actual numbers: the sport has lost 16 percent of its participants, or 4.8 million golfers. With the recession, there’s been less leisure time, more pressure to work, and of course a significant loss of disposable income. Looking at so-called “diehard” or core golfers—those who’ll play 12 times a year or more—their numbers peaked at 19.7 million in 2000, at the height of the Clinton-era boom years, and have since dwindled to 14.4 million (as of 2011). Their numbers are still falling.

“So we’re facing some challenges there because the attrition rate is coming from our core business,” Catarino said. “We’re not the only one seeing this. The industry as a whole has been seeing this for a couple of years.”

bill lewis palm coast city council member

Bill Lewis. (© FlaglerLive)

Council member Bill Lewis—who is approaching 80—put it more starkly when he asked Catarino point blank: aren’t golfers dying, “and that’s really the reason, not the economy”?

“I’m not going to disagree with you. That’s one of the factors,” Catarino said. “It’s an ageing population. Not only dying, which we have seen happen, particularly in older demographic parts, as an industry, but also slowing down the frequency of play.”

Time after time Catarino went back to weather, even though before this year the county had been more often in drought conditions than not, and had seen its yearly precipitation totals near or below historical averages. Kemper shows the 2012-13 rainfall total at 52 inches, almost 10 inches more than the historical average, resulting in 78 days impacted by bad weather. Afternoons have been particularly prone to rain, Stanfield said, though afternoon rains are a trademark of Florida weather. Locally and because of weather, there’s been a decrease of 11 percent in playable days in 2012-13, compared with 2011-12.

Other excuses: Hurricane Sandy forced visitors to shorten their stays. Competing local activities—which Palm Coast has done a great deal to cultivate, with good success—have drawn golfers away. Higher fees have had their effect too, in a very competitive field. Also, the customer base is old. Golfers play very slowly. That limits the number of rounds that can be squeezed in. It also creates frustrations for players inclined to play faster. Palm Harbor, Kemper officials said, is a “mature,” narrow golf course with a lot of undulations and small fairways which inherently slow down play.

“There’s not a single solution to this,” Catarino said. But he conceded toward the end of the meeting that in the end, the course must make money. “That was made very clear to us from the get-go, the end game was to make this self-sustaining,” Catarino said. “Was that assumption back in 2009 a fair assumption to make? I think it was.”

There was one other major excuse. “We don’t have the amenities that a lot of our competitors do,” Stanfield said. “We don’t have a clubhouse. What we have is not considered a clubhouse by quote unquote golfers.”

Bill McGuire. (© FlaglerLive) palm coast city council

Bill McGuire. (© FlaglerLive)

“We want you guys to be successful,” McGuire said, noting that the problems described (non-existent clubhouse aside) are common to all golf courses, including all the courses Kemper and Palm Coast compete with locally. “Because they’re not publicly funded, if they don’t show a profit, they’re out of business. What are they doing that we’re not doing?”

He didn’t get a clear answer.

“It’s a tough market there for a lot of people, and basically it’s a question of when the money runs out,” Catarino said. As for how Palm Harbor compares: Kemper showed a slide listing 14 municipal courses across the state. All but two were operating in the red. But the slide did not specify what proportion of municipal golf courses across the state are operating in the red. It could have merely been listing those that do, with a couple of Kemper-run courses included—one of them in the red (Palm Coast) one of them not (Cypress Head, which has two decades’ head start on Palm Harbor).

McGuire was more curious about the actual experience of playing on other courses: how do those compare? Kemper conducts such evaluations regularly. “From where I’m sitting and having been in private industry, I’ve got to go take my competition’s business away from them, because I’m not going to get a large influx of people moving into golf aficionados,” McGuire said.

Still, Kemper projects breaking even next year.

“What makes you think it’s a realistic goal?” Netts asked. (Kemper had projected breaking even this year, too.)

Catarino said all things being equal, but with less rain, the course should break even.

“What you need to do is tell me how you’re going to control the weather next year,” Netts said.

They laughed about a $10.6 million project to build a dome. But the deficits have been no laughing matter to taxpayers.

Kemper had other ideas: the company hopes to generate more interest and revenue through a targeted email promotion (using a database of 100,000 emails) and to 8,200 golfers in the region. It’ll run promotions, develop a “loyalty program,” vary its pricing offers, and reach out to local hotels or short-term rental properties to explore tie-ins with golf vacations. Kemper also plans to hold tournament training seminars, network with local business and civic groups and organize high school booster club outings. There may also be discount plans, which worried Netts: he doesn’t want discount ventures to attract existing players, who are paying full fare, when the aim is to attract entirely new customers.

Mayor Jon Netts seized on the notion of a clubhouse and the total experience of going to a golf course. It’s not just about playing. Nor would a clubhouse be merely about golf: it could be a place for social events. Golfers like their amenities. Lewis seized on that notion, too.

“You need a clubhouse,” Lewis said emphatically. “And a clubhouse would do many things for you but you can’t do it because revenue doesn’t support it at the moment. But to me that’s an attraction. It’s not only golf, it’s a non-golf attraction also.”

Catarino, who lives in Broward County, described four or five golf courses that have made “a large reinvestment” in their facilities. “That clubhouse issues, there’s a few steps we have to go between now and then. Would it help? Absolutely.”

McGuire, who’s been a sustained critic of the golf course, would like to see presentations of today’s sort more than once a year. He was encouraged by Kemper looking for every possible way to achieve a turn-around. He had a proposal for a clubhouse: a joint venture with another concern that would assume the responsibility of a new clubhouse or similar improvements.

But he also cautioned Kemper. “I can tell you that it isn’t likely that the city is going to allocate any capital funds to that,” McGuire said. “As we put our budget together this year and we look at income and outgo, just to say it as it is, Kemper Sports is the only real negative on our balance sheet, and we’re trying to help you guys get where we all need to be. So any idea that enhances your ability to be successful enhances our ability, and especially my ability to go back and tell the people that I represent that the city is not putting money down a rat hole.”

Palm Coast Palm Harbor Golf: Kemper Presentation

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33 Responses for “For Taxpayers, A Rain of Excuses From Deficit-Ridden Palm Harbor Golf Club Contractor”

  1. Voice of Reason says:

    Two people are accountable for selling this to Palm Coast. Jim Landon and the management company. Pass a resolution stating that if the golf club does not turn a profit, they both need to be replaced. No more excuses.

    • tom jack says:

      Jim Landon sold this albatross to the council and people of Palm Coast. Let him pay the cost of the deficits out of HIS pocket.

  2. Random Citizen says:

    More proof government cannot manage businesses responsibly.

  3. Anon says:

    “It’s the economy, stupid.”

  4. palmcoastpioneers says:

    State of Floridas’ ‘ Historic Golf Trail ‘ :

    If the city applies for an official Heritage & Historic MARKER for the ‘ Palm Coast Golf Course’ a.k.a the Palm Harbor Golf Course perhaps it will be highlighted in the Official Publication.

  5. palmcoastpioneers says:

    Pls. note below what they asked us for …’ any historical information …’.
    We sumitted large amounts of what we are Stewards of – all that we had; perhaps now it is time for the City and Kemper to *network* them and for the City / Kemper to see what positive networking can be accomplished if any.

    Cc: Harkness, Joshua W.
    Sent: Monday, August 19, 2013 11:48 AM
    Subject: RE: Florida Historic Golf Trail Information

    Thank you George for your email. The Florida Historic Golf Trail celebrates Florida’s early golf heritage from the late 1890’s through World War II through a soon to be completed website and through a future “Florida Historic Golf Trail” publication. —-> If you have any interesting stories of a “historic nature” about any <—-of the golf course in Flagler county please contact Josh Harkness or myself at 850-245-6333.

    Thank you again for your inquiry,


    Scott Edwards

    Historic Preservationist | Bureau of Historic Preservation | Division of Historical Resources | Florida Department of State | 500 South Bronough Street | Tallahassee, Florida 32399 | 850.245.6333 | 1.800.847.7278 |


    Cc: Harkness, Joshua W.
    Sent: Tuesday, August 20, 2013 12:34 PM
    Subject: RE: Florida Historic Golf Trail Information

    Thank you George for the documentation… very interesting history to the Palm Coast development.


    Scott Edwards

  6. BeachResident says:

    Employ all the people that the new owners of Grand Haven (Escalante) chose not to keep. They are top notch! Consult the golf professionals, the clubhouse employees, the maintenance people who loved what they did and KNOW what golfers want! We are all unemployed with great reputations!

  7. Flofida native. says:

    Another white elephant and yet another reason to despise this city commission. The hits just keep on coming.

  8. bruce meyer says:

    I was there once,prices were too high and they enforce a dress code. this is a public course not pine lakes or grandhaven. they donnt want the general public golfing there, they want to be highclass….NOT

  9. m&m says:

    This is total B>S> This is one of the most challenging courses in the area and managed by an excellent crew.. Tax payers (non golfers) have been complaining about the losses in revenue at the golf course.. Look at all the walking trails and parks the city built and has to maintain. This cost the city a lot more money then the golf course and produces ZERO pay back.. It’s nice to have budget meetings etc. but start comparing apples with apples..

  10. m&m says:

    I have a problem letting this subject go.. How about the over $6 million the city spent to widen and glorify Old King south for Walmart.. How about the millions wasted in the Town Center project and the tax payers just let these issues go and and focus on the golf course who may loose $50,000.. Come on people you’re barking up the wrong tree. There are bigger money pits around to complain about..

  11. Carl says:

    If the city would remove the Red Light Cameras, more people would play golf at Palm Harbor. Most folks don’t want to travel through a gauntlet of Red Light Cameras just to play golf. So don’t blame the weather or the economy. Remove the gauntlet and let the citizens live their lives!

  12. The Truth says:

    Palm Harbor Golf Club and the Palm Coast Tennis Center, two facilities that are sucking taxpayer’s money each and every year with no return. These facilities have had plenty of time to turn a profit. If you can’t turn a profit in 5+ years, you never will.

  13. Gia says:

    As usual very bad gov. decision makers. DUMP the golf.

  14. Carl says:

    I want you to kill every gopher on the course!

    Check me if I’m wrong Sandy, but if I kill all the golfers, they’re gonna lock me up and throw away the key…

    Gophers, ya great git! The gophers! The little brown furry rodents!

    We can do that; we don’t even have to have a reason.

  15. confidential says:

    Having the head of our Palm Harbor Kemper Management commuting from Broward County shows that “he is handsomely paid” to afford that long commute. If the revenue was so bad then someone local should be hired instead for the management for less pay rate.. This Golf Course is not properly maintained at least when it comes to the mowing and greenery of the turf and that shows miss management. Under ITT ICDC looked much better. I see too many employees “just cruising” on their maintenance carts alongside neglected areas of the green and also too much chatting other than work. Where is the manager then commuting from Broward instead of on site, monitoring his workers? I don’t believe for a second that the other sports events organized by the city for the community take away from golf fans. Not at all, as I know personally that cyclist, 5 K runners, tennis players, La Crosse, mud rockers and other sports aficionados Do Not Play Golf. I thought the reason Kemper “was given” Palm Harbor Gold Course was as good management to promote and bring in golf events thru their connections in that sport and bring in outside of our area players. So far have only shown the need for public funds year after year. Something wrong with this picture.
    I love to have this golf amenity here in Palm Coast, but city council needs to put a stop to this public funding year after year with failing promises and maybe create a committee of local knowledgeable golf enthusiast to oversee and put in the green this failing operation. What also about they (committee) learn to run this golf course at least on a break even to start with or positive revenue operation.

  16. Dennis McDonald says:

    Is there any difference in the bottom line for 2013 closeout and 2012 ? If there is it’s only the size of the NEGATIVE number for the operating loss. This showcases Netts/Landon [City Manager of the Year] ability to operate our City at a loss. The list of these failures is as long as my leg and GROWING.

    Last night at the Town Hall meeting Jason was honest when he was asked will we [PC Taxpayers] ever get our $5.6 Million back that Netts/Landon invested in this golf course…NO was his answer. Thank you Jason for being straight up with the answer.

    The redo of this course was a scam played on the Taxpayers so that 154 Golf Villas [presently not constructed but approved] could be approved on the present driving range and present dirt parking areas for the Developer who owned it previously. All was done under Netts/Landon “leadership.” But then compare to Nett’s question for Kemper at workshop Tuesday ” What makes you think this is a realistic goal?” This Mayor is clueless ! Guess that’s what happens when a retired biology teacher/police commissioner from New Jersey is driving the City with a professional city planner [dreamer] turned City Manager from Texas.

    The Gang of Six are all probably happy, as their leader, former Mayor Canfield, once stated that the only problem Palm Coast had was..affordable golf ! Next stop on this “stupid train” for them is a new City Hall.

    Vote Lewis and Ferguson OUT. Vote in people who will allow Charter Revision to a Working Mayor answering to the Taxpayers at the Voting Booth and sending the $250,000 plus City Manager/planner somewhere else to waste taxpayer $$$.

    Opinions from the New Palm Coast.
    Dennis McDonald

  17. rhweir says:

    We tried to make a tee time last Saturday and the online tee sheet was full. That seems to happen a lot, full tee sheet. When we do get a tee time, we wait. This is one slow pace of play course. The only one slower I can think of is River Bend. Limiting walking to after 4, which effectively eliminates it, is one solution to hurry up the pace and get more players on the course and coming back to play again. There is really no excuse except mismanagement not to make a profit with this course.

    • A.S.F. says:

      I have to agree with rhwier on this one. Slow pace of play is a revenue killer. Not only does it back up the course, limiting the number of people who can play a normal round in normal sequence, it alienates experienced golfers who might otherwise use the course on a more regular basis. As formerly private clubs open up play to the public, public courses have to be able to compete with them. A dedicated golfer will pay the higher fees to play that course if the alternative is to wait on every hole. The Rangers should be doing a better job of monitoring the pace of play at Palm Harbor…Not everyone is retired and has all the time in the world.

  18. Buylocal says:

    I do not believe the private courses did as well as PH. Give them some time. At the worst, local golf couses enhance the city of Palm Coast. I’m sure other amenities like parks and walking trails cost the taxpayers, but they are all nice to have in our community.

  19. palmcoastpioneers says:

    @dennis mcdonald: The ‘Palm Coast Golf Course’ a.k.a. ‘The Palm Harbor Golf Course’ was part of the United States Federal Trade Commissions’ REDRESS compensation ‘Consent Agreement’ for us/me.
    How can there be approved 154 Golf Villas on acreage encumbered by F.T.C. Docket C-2854?
    Even the United States Federally ordered ’15 year Compliance Report’ with Exhibits A and Exhibits B is quite clear on this REDRESS of Public Recreation Acreage ; so how can private Golf Villa Condos be approved for that Public Recreation acreage?
    Thank You.

  20. Bullseye Pete says:

    We need a City Gun Range…Not another golf cemetery !!!!

    • A.S.F. says:

      @Bullseye Pete says–If the people playing golf at Palm Harbor now start going to a City Gun Range instead, I shudder for the safety of the public at large!

  21. Educated on the Subject says:

    Great idea… close the course and have another eye-sore in the city, like Matanzas. A golf course graveyard always raises the value of your house! Or better yet, fire everyone and put another 50 people out of work in a county of 17% unemployed. Don’t be ignorant and say “I’m not a golfer, I don’t want my tax dollars paying for it” when there’s millions spent on walkways, trails, & benches with a guaranteed NO return on investment. You get what you pay for, and if you don’t want to pay the cities taxes, go somewhere else where the crack houses are plentiful!

  22. m&m says:

    Educated, you nailed it. Well said..

  23. palmcoastpioneers says:

    @ Educated on the Subject: The Matanzas Golf Course is also part of / encumbered by Federally ordered REDRESS .

  24. Dennis McDonald says:


    They are on the books and ready for permits. The resident golfers need to know Netts/landon sold them out because the driving range will be converted to 80 golf villas and 70 more units will appear on the street across and along side the sub par clubhouse. The how part is because Netts/Landon made it happen.

    That list of failures keeps GROWING !

    Opinions from the New Palm Coast.
    Dennis McDonald

  25. Yosh says:

    let’s face it. the average “worker-bee” is still making $8.50 an hour in Flagler county. Charge $20 a round w/cart. No walking it’s too slow, you can walk on the best beach in the state for free. after a 4 hour round, or at the turn stand, i’ll be happy to purchase a sandwich & a beer. Everyone will be happy just like when we moved here 22 years ago

  26. Ohmy says:

    The real issue is simple:

    Folks don’t know the real costs of maintaining a golf course.
    Why:? Many have been playing “municipal” courses most of their life and the costs have been covered.

    Those willing to pay for a decent golf course, are not going to tolerate 5 1/2 hour rounds.

    The decline of golf in the country will change–folks used to marry and have children in their 20’s. Lots of time in their 40’s. Now, no marriage until 30’s, so still raising kids into 50’s.

    The golf course will add value to Palm Coast as time goes by–walking trails? How profitable are they?

    Anybody that thinks you can cover the cost of a golf course for $20/round which includes a cart is simply deluded.
    The number of rounds that would have to be played is not doable! The Grand Club was losing money–LPGA was losing $2M/year. Some of that was the management companies “raking” too much off the top and part because there are too many course vs. our population. That will change.

  27. palmcoastpioneers says:

    @ Dennis McDonald – Thank you for your reply; it is much appreciated. ….BUT…how can that be possible for Private Golf Villas allowed to be built on ‘ Encumbered ‘ lands, which are Public Recreation lands, per the United States Federal Trade Commissions – F.T.C. ‘Consent Agreement’ Docket C-2854, which comprise the ‘ The Palm Coast Golf Club’?
    RE: The Palm Coast Golf Course Clubhouse – Levitt I.T.T. showed us a beautiful Concrete, Block and Stucco Clubhouse overlooking the Golf Course Waterway, which had a large Bar-B-Que acreage & large Pic-Nic acreage….all of which are within the I.L.S. recorded at H.U.D. and all of which are part of the F.T.C. Docket C-2854.
    Also, for many many years we have been asking and asking to have our ‘ Neighborhood Park ‘ returned also…it is Palm Coast first public ‘Neighborhood Park’…..the city has been largely non-responsive on all this – perhaps you could ask them HOW public recreation acreage will become private Golf Course Condos,
    Thank You.

  28. confidential says:

    I am all for the golf course to continuo functioning…but not in the current financial status…It needs at least to break even. An the threat of the golf villas in the center of the driving range should have already been resolved by our council and manager forcing the arm of the developer to give it up based in the non compliance of the original ITT Sheraton/ Palm Coast Resort destroyed and never replaced that made the city loose 300 plus jobs. How come we residents have to abide by city rules, contracts, ordinances and former Centex now Pulte, are exempted? They destroyed our community Palm Harbor Golf course, then after we raised holly hell and threaten to go and demonstrate against Centex in front of their Palm Coast Resort Apartments construction site, they decided to give us the golf course, that cost us over 5 million to repair to re-open and now we are still honoring those villas? C’mon Council and city legal team…you need to address this issue now…what about the statute of limitation regarding the never rebuilt Palm Coast Resort hotel and its 300 plus jobs to be recovered? You all in this city administration need to start fighting for us residents taxpayers. What about if they want to build those villas give us back the total amount we spend way over 5 million to repair the course!! Do it now that we still have the real state market depressed and no bank is giving loans to people to buy those villas if built and Pulte knows it! Those villas site is the course’s driving range and future club house location and the Palm Harbor Golf Course will not survive without it! Ask the golf enthusiast that use the course now.!

  29. PCresident says:

    This seems pretty easy to figure out the pricing of the course to break even. What is the total operating costs for the year? Divide this number by the total amount of rounds that can reasonably be played per day, and you have a break even number. This can then be used for the future to get into the black. I know this sounds like Kemper probably has done this, but I know not to take anything for granted anymore in life. Especially with elected officials and people of higher management; they always seem to over think simple matters and cause a fog to occur with their warped vision of what should happen.

    As to this course. I have lived in Palm Coast for almost 10 years and I just recently played this course about a month ago. The price is very reasonable for 18 holes with a cart. So much so, I intend to play more golf at this course (I did not know it was owned by the City prior to playing). I signed my kids up for golf lessons as well. It is obviously not a stop on the PGA, but for the weekend golfer, it sure does suite the needs of the weekend golfer. Lets face it, no one is going to qualify for the PGA tour playing on a private golf course, and playing on an expensive private golf course is just going increases the amount of money spent on golf balls, more money spent on greens fees and rounds of golf, and will not increase your annual income. Get over yourself if you think otherwise. The average weekend golfer can barely break par, let alone anything worth noting, otherwise we would be watching you play golf on television.

    I would be completely for upgrading the grounds surrounding the golf course to include a recreation facility like an indoor basketball court, ball room, and other amenities sufficient for a municipal run recreational facility attached to the golf course. I would personally pay a tax increase (specifically for the use of this recreational facility to be built). There is nothing in this community that offers a municipal operated indoor basketball court or recreational facility. The problem is the city, has with the lack of planning, erected a swimming pool behind a school, a “state of the art” tennis facility near a fire station, and have zero for indoor basketball/volleyball and other sports that can be played by kids/adults in one general area.

    This is not a retirement community anymore, and unfortunately, until we (the people raising families here) get the retirees off the commission of this city, the people who are raising their families here will not have a voice. What we have is a fat, lazy, pompous mayor, who utilizes a golf cart (possibly from this city run golf course, or better, from the Fire Department) to ride around on to get around at the Christmas Parade. Walk! It will not hurt you! The last thing I ever want to see is you (Mayor) and your family, utilizing a city owned golf cart, to cart you around, getting your city staff to move my family and friend’s folding chairs from the sidewalk to make way for you! You all are the dumb knuckles that planted trees in the middle of a walking path, not me! So walk! Get there early like everyone else does.

    Back on topic here… The golf course is a plus to the community. I am not happy it is a money pit right now, but I do have faith it could be a break even facility or a money maker if used appropriately (I know, I said this, but I have faith in the voters to remove all of these old people from the commission, and then in return removing the eye sore of City Manager Landon over the next two election cycles). I want to make sure I am understood correctly, I am not against older people on the commission as long as they have the views of this community as a whole. Meaning not only retirees live here, but also families with kids live here.

    *The red light cameras need to go.

    *The code enforcement division needs to be dismantled and turned into community development/vitalization (where they work with the citizens on ordinances, not against them).

    *The City needs to work with new business (big and small) to relocate/stay in the city, not against them. Become business friendly and give incentives to business that are already here to stay here. Create and implement an incentive based program with tiers for corporate companies creating jobs in Palm Coast (Under 30 jobs tier 1, 30 to 60 jobs tier 2, 60 to 100 jobs tier 3, etc…).

    *As described above, a recreation facility for the kids of Palm Coast to include an indoor basketball/volleyball court, baseball fields, swimming pool (obviously not going to move the swimming pool now, but can develop a plan to create the facility centrally located). Annual user fees can be used for operational costs for operation (obviously don’t get Kemper to operate this).

    *Buy a pre-existing structure to house City Hall permanently that the voter’s want the City to have! Stop deceiving the citizens and let them tell us what they want the City to have. If it is a modular home on some already overpriced city owned property, then a modular home it is!

    * Implement a benevolent program for city employees and go through classes on how to be polite to the citizens!

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