By 1968 Rose City Transit Company was nearly bankrupt. It sought council permission for another fare increase (to 40 cents) and threatened to discontinue all service if this was not approved. On December 12, 1968, the city council declined to vote on the request and instead voted unanimously to revoke RCT's franchise, effective in six months, and to plan for the city to take over the transit system after that period. Commissioner William Bowes explained that it was felt the long trend of ever-increasing fares and declining patronage seen under private ownership was not sustainable, and that it was in the public interest for the transit system to be municipalized. In January 1969, mayor Terry Schrunk appointed a seven-member Mass Transit Advisory Commission to examine the issues and consider options for the future of public transit in the city. In June, it recommended that the city take over the system, taking possession of its vehicles and properties and giving RCT revenue certificates for the appraised value, an action the city said was provided for under the franchise agreement. However, other factors complicated the situation and delayed action for months. RCT said it considered the city's termination of the franchise to be invalid and continued to press for a fare increase. Meanwhile, in May 1969, the Oregon Legislature approved a bill (House Bill 1808) allowing the creation of multi-county mass transit districts with taxing authority and boards of directors to be appointed by the governor. The city council postponed the original mid-June takeover date by 60 days, but by August, the conflict between the city and Rose City Transit was far from resolved and appeared likely to go to court. On October 1, 1969, the city council passed a resolution calling for the establishment of a new Portland metropolitan area transit district. More specifically, the resolution called on Governor Tom McCall to appoint a seven-member board to administer the transit district, under the provisions of the new state legislation (House Bill 1808). The area would soon have a regional transit authority, rather than one run by the city of Portland. Within one week, McCall had made all seven appointments to what was provisionally referred to as the Portland Metropolitan Mass Transit District. About one month later the transit district had been formally named the Tri-County Metropolitan Transportation District, or "Tri-Met" for short. In mid-November, RCT was still asserting that the city's termination of its franchise was "illegal" and was awaiting a Multnomah County court ruling on the matter. The contract with its union employees had expired on October 31, and negotiations on a new contract had broken down, with the union calling for a strike to start on December 1, the date that Tri-Met was anticipating taking over the service.