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c Mr. Delay said his was the only vote against this recommendation from the task . force. He felt this should go to the council because it is a basic method for rate increases. When trying to analyze it, he did not know they would use the model of a public utility. He is not in favor of that model. This model would require considerable staff time to ensure that the methodology is followed. Whenever the public has a reason to get this close to an industry, there is reason to look at other service delivery mechanisms. He philosophically dis- agrees with the model. MSI is multi-divisional and they are eliminating those portions of the company that are not profitable. There is no method to evaluate systems so that service requirements and equipment needs can be set by juris- dictions. The appropriate return on assets managed is unknown. He does not like this kind of mechanism. Feedback should be provided to the task force requesting them to not look further at the percentage but to look at other appropriate service delivery systems. . . Councilor Obie noted that Mr. Delay sees this as regulation versus non-regula- tion and does not find any measurement method acceptable but, in the interim, standards are needed. Part of MSI's problem has been due to the political environment and because there are no guidelines. This is a first step in estab- lishing a process. He supports the methodology and it would assist MSI or other service providers with rate determinations. As time passes, changes could/be made as necessary. Mr. Lieuallen asked if the recommendation includes a percentage. Mr. Henry responded that Touche Ross talked about eight percent but went up to 14 per- cent. Mr. Obie stated that the City sets a percentage based upon performance. . Mr. Lieuallen asked if criteria are included. Mr. Obie stated that they are not but should be. Mr. Obie asked whether public officials would be involved in the rate setting if the service delivery were done by a private nonprofit, organization. Mr. Delay stated there should be an evaluation system related to service delivery. He thinks a nonprofit mechanism would be good. It could be set up by local jurisdictions or hospitals. Cost overruns, poor decisions, facility problems, etc., have caused MSI to keep coming back for rate increases and he does not like that. There is nothing in the proposal to guarantee a level of service delivery or to be able to remove a company if they are doing badly. Mr. Lieuallen stated that many issues are being raised and that he also has a difficult time accepting this model. The more of an operation that is debt financed, the more assets, thus better return. He is not in favor of approving this report. Mr. Obie stated that this will provide a guideline for the council to help it determine how valid the rate requests are. Ms. Smith noted that the council is being asked to approve the methodology in principle only as recommended by the task force. Ms. Smith moved, seconded by Mr. Lieuallen, to approve the Touche Ross rate-setting methodology for ambulance rates in principle. only. Mr. Henry stated that the task force should be encouraged to pursue other . delivery systems. MINUTES--Eugene City Council November 26, 1980 Page 11