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Knowles Subdivision, being the area in the vicinity of Bay Road, Douglas Avenue and the Southern Pacific right of way, seconded by Councilman Keckley. Councilman Granger questioned other zoning in the area and was advised by the Planning Direc- tor this zoning more restrictive than that in the adjacent County parcels, but proposed zoning had been requested by the applicant. Motion carried. PUBLIC HEARING, Sequoia Hospital Annexation, declared open and affidavit of publication ordered filed. Staff report stated Board of Directors of the Hospital District requested this annexation and Council previously adopted a Resolution of Intention to annex, setting the public hearing. No communications were reported on file. Councilman Granger asked if prezoning procedures had been instigated in this case. Planning Director advised no request had been made by the Hospital District for prezoning nor had proceedings been initiated by the City, previous instance of prezoning having been requested by the property owner in order he might be assured of the zoning restrictions when annexation proceedings completed. City Attorney advised Council that prezoning proceedings optional by initiation of City or request of property owner, and that ordinance required initiation of zoning proceedings by the Planning Commission within 40 days after any annexa- tion finalized, if not pre -zoned. Councilman Petersen asked reasons for Hospital District requesting annexation to the City at this time as he understood they had previously been opposed to such annexation. City Manager stated Sequoia Hospital had always considered itself to be a part of Redwood City but Board of Directors had felt because they were a District hospital it would be better if they did not annex to any City, but recent circumstances had indicated a change was now desirable. He stated since Hospital had acquired the Sunshine Convalescent Home across the street, which was totally within the City of Redwood City, their plans for construction of a tunnel to connect this auxiliary to the main Hospital building, complications would result for this construction under two jurisdictions. He also advised they would be subject to a reduction in their water rates from City as they now were paying the higher fee for services outside the City, a revenue loss to the City which he felt would be more than offset by prestige to City of a hospital with their nationwide recognition. City Manager also advised proposed annexation would provide a point of contiguity for further annexation to rear of hospital area. Councilman Petersen questioned fire and police protection costs and was advised fire protection governed by agree- ment with the City, policing handled by four deputized guards hired by the hospital. Councilman Bury questioned whether any offsetting of revenue possible by any sales tax revenue or a reasonable consideration of other type of income by amend- ment to City's business license ordinance. Councilman Keckley stated a possi- ble revenue from the Hospital's pharmacy and was not aware whether proceeds from W', 27a