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i the gift shop operated by the Hospital Auxiliary that donated all proceeds to hospital would be subject to taxation. Mayor Herkner questioned whether a use tax on equipment would be possible. Councilman Bury questioned whether any special rate for City residents might result if Hospital annexed. Councilman Petersen expressed concern on Council's obligation to City's taxpayers' with proposed loss of revenue to City. Councilman Bury questioned sewer service charges proposed to Hospital, if annexed and concurred with expressions of con- cern on affect of this annexation to City's taxpayers. City Manager advised a complete check would be made on possible service charges to Hospital with comparison of present charges and stated his assurance that satisfactory arrangements can be made. Councilman Henderson stated her approval of proposed annexation of the Hospital as an asset to the City and urged Council's affirmative action as felt this to be a worthwhile investment of citizens taxes. Councilman Petersen indicated his concern not only with effect of this hospital annexation, but also with advent of both the tax exempt Junior College and the State College. He asked that Council consider continuing this matter for several weeks until answers to questions submitted on this proposal were received from Staff. Councilman Rosselli moved to close the public hearing, seconded by Coun- cilman Henderson and carried. Councilman Granger moved to adopt RESOLUTION NO. 5321 OF THE CITY OF REDWOOD CITY APPROVING THE ANNEXATION TO THE CITY OF REDWOOD CITY OF CERTAIN UNINHABITED TERRI- TORY DESIGNATED "SEQUOIA HOSPITAL ANNEXATION" AND HEREIN DESCRIBED, AND HEREIN ANNEXING SAID TERRITORY TO THE CITY OF REDWOOD CITY PURSUANT TO THE PROVISIONS OF SECTION 35310.1 OF THE GOVERNMENT CODE, seconded by Councilman Keckley. On question, Councilman Bury asked if action taken on the Resolution also included recommendation made by Council for Staff re review. City Attorney indicated a secondary action could be added to present motion but recommended a supplementary motion as best procedure because adoption of Resolution required a roll call vote. Mayor Herkner asked that motion suggested by Councilman Bury be made after roll call on the present motion. Motion carried on roll call vote, Councilman Petersen voting no. Councilman Bury moved to instruct Staff to pursue every reasonable means to insure a recovery of funds in services to hospital which will be lost to City, so tax- payers would not suffer a loss, seconded by Councilman Petersen. On question, Rosselli expressed his concern for possible action to subject Hospital, when annexed, for higher rates for services than paid by those in the City. Councilman Henderson asked if it would be possible in future proposals of annexation for Staff to review terms and conditions which would result in unusual circumstances to City. City Manager assured Council a check would be made and still indicated his feeling that sewer rental charge might result in gain to City that would offset any loss.