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that under the current contract formula, LAGCo would be unable to exercise the 5-year contract extension due to escalating operating costs. City Manager Cahill explained that the agreement did allow for special adjustments. Historically, the Town has used the process of a subcommittee consisting of staff and a Councilmember to review major agreements and he anticipated that the review would be completed within 60 days. Councilmember Kerr expressed his hope that the company would consider modernizing their fleet with more fuel efficient trucks and trucks that would require Jess frequent trips. Kerr noted that they were the largest user of fuel in Town. Mayor Pro Tem Jones concurred with Kerr's position to broaden the task of the subcommittee to investigate options that would achieve a reduction in the use of conventional fossil fuel and to review the associated costs. Zirelli commented that LAGCo was sensitive to the Town's environmental issues and they were currently looking at different fuel options including use of the biodiesel B20. Councilmember Mordo volunteered to work with the City Manager on the subcommittee. He questioned if the Town had an obligation to get competing bids for the Franchise. City Attorney Mattas explained that there was no obligation to seek bids but if desired, it was permitted. Council consensus was that the company was providing excellent service to the community. • City Manager Cahill offered that the Town was planning on surveying other LAGCo customers to determine their level of satisfaction with the purveyor. MOTION SECONDED AND CARRIED: Moved by Jones, seconded by O'Malley and passed unanimously to appoint Councilmember Mordo to serve as the Council representative on the subcommittee reviewing the Franchise agreement between the Town and Los Altos Garbage Company. 6.4 Consideration of Mid-Year Budget Adjustments Administrative Services Director Sarah Ragsdale introduced this item to Council. Council had before them a staff report that included: the Fund Balance/Retained Earnings Summary; Revenue Budgets; Expenditure Budgets; and, Interfund Transfers. Ragsdale offered that the item was a request for a mid-year budget adjustment and directed the Council to the spreadsheet titled Attachment 1 to her staff report. She reviewed the columns with Council and noted that revenues were up in comparison to expenditures in part due to the passage of AB 117 and savings in operating areas. Mayor Pro Tem Jones offered that Ragsdale's reporting method followed the recommended governmental accounting standards and was also presented in an acceptable business reporting format that was more understandable. He congratulated the • Administrative Services Director on her efforts. 8 City Council Meeting Minutes March 22,2007