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5) Council action; Councilman Claire described other waste management companies in the area that can bid to the City's JPA. He added that no other company has been able to beat BFI's rates as of yet. In response to Mayor Hartnett's comments paraphrasing speaker Steve Howard's question "what if the council says no", and what are the City's obligations under the terms of the ITanchise, City Attorney Schricker advised that the ITanchise agreement provides that the ITanchisee is entitled to a fair rate of return which is subject to the Council's legislative discretion. City Attorney Schricker stated that "you have, by entering into the Joint Exercise of Powers Agreement with fellow agencies, elected to use a process, the purpose of which is to provide you with the evidence necessary to make an informed decision as to what is a fair rate ofreturn....based to a considerable extent, if not exclusively, on the results of the analysis prepared by the consultant....The law requires that the ITanchisee be granted a fair rate of return; consequently, you cannot, without some rational basis, vary from the evidence which has been presented to you on which to make an informed decision. If you need further evidence...you can request it. If you desire to analyze further the information prepared by the consultant, you can do so. If you want the consultant here to testifY, that is a reasonable request as well. It is a matter of ensuring that you are fully informed as to what is a reasonable rate of return in order that the conditions of the ITanchise agreement be fulfilled." In response to Council Members' request, Finance Director Ponty agreed to provide the entire detailed report from the independent consultant in future staff reports. MEMO 2/6/96 Council Members discussed the 3.7% shortfall projection for 1996 and if it was an appropriate assumption to factor into fair rate of return; the 13% fee ITom BFI to the City for billing, rights of way and administering the franchise agreement; the fact that the ITanchise agreement "locked in the ratio" and the City must abide by the terms of the agreement; the need to work with BFI to ensure a service is not taken away without providing very good alternatives; ITeezing the lifeline base rate; insisting on efficiencies of operations; and the difficulty of expressing concern over automatic rate increases without using the voting mechanism while acknowledging the fact that, in compliance with the terms of the Agreement, the resolution must be passed. TITLE READ. MIS: CLAIRE/BUCHAN RESOLUTION NO. 12691 ESTABLISHING RATES OF CHARGE FOR SANITARY INSPECTIONS, COLLECTIONS, RECYCLING AND REMOVAL OF REFUSE IN THE CITY OF REDWOOD CITY; MINUTE BOOK NO. 54 Special Meeting Minutes Page No.O62 February 5,1996 Page 10