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Mayor Keller indicated that although this is not a public hearing, four people from MSI have requested to speak in favor of the rate increase and John Bush has e requested to speak against the rate increase. Council consensus was to allow them to speak. Speaking in favor of the rate increase: Michael S. Jarvill, 96 East Broadway, stated that he is the attorney representing the board of directors of MSI. They have a deadl ineof November 3 to have a plan of profitable operation to present to the bankruptcy court to allow continued operation as a company. The plan must be developed and formulated prior to that date, which takes time. They must know immediately if the rate increase is to be granted. If another week goes by, they would not have time to formulate their plan. The board is responsible and accountable to United States Bankruptcy Court Chapter 11 to protect MSI for the benefit of the creditors. If they do not get the rate increase immediately, they must petition for termination of . service so as not to deplete MSI's assets any further. There is a new management team and they have not had much time to make changes. MSI was in an unhealthy position when the new team came in and it cannot be turned around overnight. A lot of money has been spent on the Touche Ross study. The information provided by Touche Ross was the best and most reliable available and a great deal of City money has been spent on obtaining it. It would be logical to follow the Touche Ross formula and to work with the information available as best they can. R. Kim Short, 2339 West 28th Avenue, stated that he was hired as a financial consultant for MSI. He distributed information to the council regarding the Albany ambulance situation. Once MSI filed bankruptcy, the court gave them 120 e days to prove it can be a viable company operating at a profit. He feels that MSI can survive and meet their financial obligations. A reorganization plan is being prepared. He thinks they have a good handle on the plan and can have a viable company. In MSI's rate increase proposal, a 10.5-percent profit margin was bui lt in. The plan requires an increase in rates. MSI has been subsidizing the city and the public with its low rates. They feel that they cannot cut expenses very much more. If a temporary rate.increase is not granted, they will petition the court for liquidation. They are asking for a temporary rate increase to present to the courts. J. Wesley Morgan, 2859 Tomahawk Lane, said that he began his participation as president of the company three weeks ago. He does not know a good deal about the information but is trying to understand the situation. In 1978, the rate increase was held off due to the pending study; in 1979, the rate increase was held off because the study was in progress. In the meantime, $32,000 has been spent on the study. There is some question in regard to the matrix. They are using audited information from MSI and plugging it into the matrix. The inflationary factor was not plugged in. They are looking at 40-percent inflation in the medical field since 1978. They used the best information they had and prepared it as best they could. They are not asking for the maximum amount. MSI has been a leader in the industry as has Bill Leonard. They are not asking ..... . e MINUTES--Eugene City Council October 15, 1980 Page 5 ---.._---" - ._- - --"" -.-