Daly City City Council
January 26, 2026

• Effective September 13, 2025, th e parties agree a one percen t (1.0%) salary increase shall be applied to the salary schedule.

• Effective September 12, 2026, th e parties agree to a one-h alf percent (0 .5%) salary increase shall be applied to the salary schedule.

• Effective September 11, 2027, th e parties agree to a one-h alf percent (0 .5%) salary increase shall be applied to the salary schedule.

*Section IRC 414h
The City will continue to make the Section IR C 414(h) option available to affected members during this agreement. Eligibili ty to participate and the irrevo cable conditions of the one-time- only election continue to be pursuant to the regulations as set forth by the Internal Revenue Service.

ARTICLE V - BENEFITS

The City will contribute toward the City spons ored benefit plans during the term of this Memorandum of Understanding as follows:

A. Medical Insurance Benefits

The City will contract with the Califor nia Public Employees Retirement System (CalPERS) for the purpose of providing empl oyees with medical insurance benefits.

The City’s monthly contribution to CalPERS for each eligible active employee for the purpose of medical insurance will be:

Employee Only up to $689.00
Employee +1 up to $689.00
Employee + Family up to $689.00

B. Cafeteria Plan Allowance

The City will maintain a Cafeteria Plan, pursuant to Section 125 of the Internal Revenue Code, for the purpose of providing active employees with access to various health and welfare benefits. Benefits available thr ough the Cafeteria Plan include, but are not limited to, medical insurance, flexible spending accounts for out-of-pocket medical expenses and dependent care, dental insura nce and life insurance benefits. The City agrees to provide a Cafeteria Plan Allowa nce to all active employees eligible to participate in City-sponsored health benefits under Section A of this Article. Any tax consequences resulting from Ci ty contributions to the Cafeteria Plan are the sole responsibility of the employee.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

The City will provide each eligible activ e employee with a monthly Cafeteria Plan Allowance for the purpose of participation in Section 125 Cafeteria Flexible Benefits Health and Welfare Plan., The City shall contribute to the monthly Cafeteria Allowance for eligible employees as follows:

1. Employee Only: 100% of the Kaiser Bay Area medical premium (for employees hired before January 1, 2020, the empl oyee only cafeteria allowance shall remain frozen at thirteen hundred dollars ($1300) per month until it equals the employee only Kaiser rate. This shall be referenced as grandfathered cash- back.). This amount is incl usive of the City’s direct health contributions in Section A above. In the event that the Kaiser Bay Area rate increases 15% or more in any year the parties shall split the cost of the rate increase above 15% for the plan year.

2. Employee +1: 95% of the Ka iser Bay Area medical premium. This amount is inclusive of the City’s di rect health contributions in Section A above. In the event that the Kaiser Bay Area rate in creases 15% or more in any year the parties shall split the cost of the rate increase above 15% for the plan year.

3. Employee +2: 95% Kaiser Bay Area medical premium. This amount is inclusive of the City’s di rect health contributions in Section A above. In the event that the Kaiser Bay Area rate in creases 15% or more in any year the parties shall split the cost of the rate increase above 15% for the plan year.

In the event an employee enrolls in a City healthcare plan for which the premium cost is less than the City contribution provided in Article V, Section A, any difference between the City’s maximu m monthly contribution to CalPERS under Article II, Section A and the actual premium cost will be added to the City’s Cafeteria Plan Allowance stated above.

C. City Sponsored Benefits
From Cafeteria Plan Allo wance employees must purch ase the following qualified benefits:

o City-sponsored Dental/Orthodontia Insurance

o City-sponsored Term Life Insurance in the amount of $25,000

o The life insurance amount will increase to $50,000 as soon as administratively possible.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

o City-sponsored Long Term Disability Insurance. Employees must purchase Long Term Disability Insurance, but may do so with post-tax dollars.

In the event the premium for the benefits selected by th e employee exceed the City’s contribution indicated above, the employee will pay the remaining balance through payroll deductions.

From Cafeteria Plan Allowance, employe es may purchase the following qualified benefits:

o City-sponsored Medical Insurance through the CalPERS Health Benefits Administration

D. Cash-Back

1. For employees hired before January 1, 2020, the Grandfathered cash-back as provided in paragraph B1 above, the gr andfathered cash back remaining amounts of Wage Supplements, if any, not used to purchase qualified benefits shall be added to employee wages. Any such amount of Wage Supplements added to wages is not compensation for retireme nt purposes as defined by the California Public Employees Retirement System.

2. Cash back is not applicable to bargaining unit members hired on or after January 1, 2020 or for any employee hired before January 1, 2020 who is not in the grandfathered cash-back group refe renced in paragraph B.1. above.

E. Opt-Out Cash In Lieu

1. No Coverage/Waiving Coverage for employees hired on or after January 1, 2020:

Cash in lieu is five hundred dollars ($500) per month minus the cost of the City sponsored qualified benefits (specified in section C, above) and shall be added to employee wages. This amount is not compensation for retirement purposes as defined by the California Public Employees’ Retirement System. An employee who waives coverage must provide proof of acceptable coverage in compliance with the law.

2. No Coverage/Waiving Coverage for employees hired before January 1, 2020: Cash in lieu is frozen at eleven hundred-fifty dollars ($1150) per month minus the cost of the City sponsored qualified benefits (specified in section C, above) and shall be added to employee wages. This amount is not compensation for retirement purposes as defined by the California Public Em ployees’ Retirement System. An employee who waives coverage must provide proof of acceptable covera ge in compliance with the law. In the event that an employee in this group purchases health insurance from the City’s Cafeteria Plan Allowance on or after January 1, 2020, and thereafter

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

elects to waive health coverage in the future, the cash in lieu benefit will be reduced to five hundred dollars ($500) per month.

3. Cash in lieu Eligibility: Employees who opt out of the CalPERS medical plan and receive cash must provide the following: (1) proof that th e employee and all individuals for whom the employee in tends to claim a personal exemption deduction (“tax family”), have or will have minimum es sential coverage through another source (other than coverage in the individual mark et, whether or not obtained through Covered California) for the plan year to which the opt out arrangement applies (“opt out period”); and (2) the employee must sign an attestation that the employee and his/he r tax family have or will have such minimum essential coverage for the opt out period. An employee must provide the attestation every plan year at open enrollment or within 30 days after the start of the plan year. The opt-out payment cannot be made and the City will not in fact make payment if the City knows that th e employee or tax family member doesn’t have such alternative coverage, or if the conditions in this paragraph are not otherwise satisfied. Employees and know n dependents who do not provide the annual information required will be enrolled in the lowest cost health plan.

F. Vision Reimbursement Program

Employees and their dependents are eligible for a maximum reimbursement of $200.00 per year for frames or lenses.
• Effective January 1, 2026, the above maximum calendar reimbursement for frames or lenses will increase to three hundred dollars ($300.00). • Effective January 1, 2027, the above maximum calendar reimbursement for frames or lenses will increase to three hundred and fifty dollars ($350.00). • Effective January 1, 2028, above maximum calendar reimbursement for frames or lenses will increase to four hundred dollars ($400.00).

G. Flexible Spending Accounts

Employees may elect to designate salary reduction amounts for these accounts as provided under IRS Sections 125, 105 and/ or 129. Salary reduction amounts may not exceed those limits as set forth by the City or by applicable law.

H. Long Term Disability

All affected employees shall purchase City-sponsored Long Term Disability Insurance if they have not already purchased this insurance with Wage Supplement Dollars as described in "B." above.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

I. State Disability Insurance

The City continues to contract with the St ate of California for employees represented by this bargaining unit for SDI coverage. Such coverage is entirely employee-paid.

The City reserves the right at any time during the term of the agreement to make available medical, dental, life or LTD benefits under plans offered by alternate carriers or through a program of self-insurance, self -administration or claims through a third- party administrator, or a combination of the above. In the event the City wishes to exercise this option, alternate coverage shall be substantially equivalent to or greater than the coverage in effect on the date the City makes such an election, with consultation from the Plant Maintenance Association.

ARTICLE VI - UNIFORM ALLOWANCE

For classic members as defined by CalPERS, the monetary value reported to PERS as taxable income for the purchase and maintenance of uniforms shall be based on the total the cost of uniforms and maintenance divided by the number of employees that use these uniforms. The annual updated total cost shall be attached to this MOU as Appendix C no later than December 31
st of each year of this Agreement. The classifications
below shall receive uniforms as determined by the Department.

For new members as defined by CalPERS as of January 1, 2013, the monetary value of uniforms and maintenance of uniforms will be treated in accordance with Public Employees Pension Reform Act (PEPRA).

ARTICLE VII - BILINGUAL PAY

The City provides one hundred dollars ($100.00) per month bilingual pay to those employees who become certified and eligible for such pay and who are routinely and consistently assigned to positions requiring communication skills in languages other than English.

Effective January 1, 2026, bilingual pay will increase to one hundred and fifty dollars ($150.00) per month.

The following languages are approved for bilingual pay compensation: Spanish, Tagalog, Mandarin, Cantonese, Korean, Vietnamese, and American Sign Language.

ARTICLE VIII – LONG TERM DISABILITY

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

The City agrees to provide a Long-Term Disability plan to provide sixty-six and two-thirds percent (66-2/3%) of salary to a maximum of $4,000 per month after a 60-day waiting period and exhaustion of accumulated sick leave. The City shall continue to contribute $26.50 per month toward the plan

ARTICLE IX – RETIREMENT

A. Pursuant to the Public Employees’ Retiremen t System (PERS) contract with the City of Daly City, the following provisions are provided for affected employees:

B. Classic Members: For classic members as defined by Public Employees’ Retirement System (PERS) and California Public Employees’ Pension Reform Act of 2013 the contract with the Public Employees' Retirement System (PERS) provides:

 Section 21354.3 - 3% @ Age 60 Formula
 Section 20042 - One-Year Final Compensation
 Section 21335 - Annual Cost-Of-Living Allowance Increase (3%)  Section 20965 - Credit for Unused Sick Leave
 Section 21548 - Pre-Retirement Optional Settlement 2W Death Benefit  Section 21573 - 1959 Survivor Benefit – Third Level
 Section 21620 - $500 Retired Death Benefit
 Section 21024 – Military Service Credit as Public Service

C. New Members: For new members hired on or after January 1, 2013, as defined by Public Employees’ Retirement System (PERS) and California Public Employees’ Pension Reform Act of 2013 the contract with the Public Employees' Retirement System (PERS) provides:

 Section 7522.20 - 2% @ Age 62
 Section 20037 - Three-Year Average Final Compensation  Section 21335 – Annual Cost-of-Living Allowance Increase (3%)  Section 20965 – Credit for Unused Sick Leave
 Section 21573 - 1959 Survivor Benefit Level 3
 Section 21548 - Pre-Retirement Optional Settlement 2W Death Benefits  Section 21024 – Military Service Credit as Public Service  Section 21620 - $500 Retired Death Benefit

D. Retiree Medical

A retiring employee shall place 100% of eligible Sick Leave Cash Out (in accordance with Rule XVII, Section 6 of the Rules and Regulations of the Classified Service) into the City- sponsored Retiree Health Savings Account. Th is provision does not apply to employees hired on or after January 1, 2020.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

For employees hired prior to November 14, 20 22, who retire from the City with a PERS retirement benefit (defined as an employee who is retiring from the City and is taking a service or disability retirement from PERS ) the City’s monthly contribution to retiree health for eligible employees and qualifying annuitants will be:

Employee up to $ 689.00
Employee + 1 up to $ 689.00
Family up to $ 689.00

For employees hired on or after November 14, 2022, the retiree health benefit shall be limited to the PEMHCA minimum. The City’s contribution to retiree health for qualifying annuitants will be increased annually as required under PEMHCA.

For employees hired on or after November 14, 2022 the City shall contribute $50 per month to the current ICMA City contracted retiree health savings account.

ARTICLE X - REIMBURSEMENT FOR REQUIRED CERTIFICATION

A. Affected employees required to hold certifications as a minimum requirement of their specific classification duty statements will be reimbursed by the Department of Water and Wastewater Resources for the required renewal fees. In order to be reimbursed, employees must present a copy of the fee invoice and eviden ce of the satisfactory renewal(s) of their cert ification.

Represented employees who hold a higher level certificate shall be reimbursed an amount of money equal to the required certificate renewal.

B. Affected employees required to satisfactorily complete continuing educ ational units (CEUs) in order to maintain required certification w ill be reimbursed for the fees associated with registering and completing such units upon pres entation of evidence of their satisfactory completion of the units. Prior to registration for continuing educational units, employees must have the approval of the course provider and content from the Depart ment Head or his/her designee.

C. Upon notification that an employee has passed a new state certification test and requirements, management will sign off on the new certificate within 30 days. This does not apply to Article XI “Certification/Educational Incentive and Supplemental Pay” or change the interpretation of that section.

ARTICLE XI –

CERTIFICATION/EDUCATIONAL INCENTIVE AND SUPPLEMENTAL PAY

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

The Certification/Educational Incentive and Supplemental Assignment Pay program is intended to provide an incentive for City employees to increase their technical skills in a specific field related to their assigned job classification and to prepare them for advancement when the opportunity arises.

Request for supplemental pay shall be made in writing to the Department Director via the employee’s immediate supervisor.

Employees are required to provide copies of their certification and maintain current certification status. If any section/category of the certification is not current, the employee will not be entitled to supplemental or incentive pay. The status of certifications is to be reviewed annually.

Supplemental pay will become effective on the first day of the pay period following verification of the Certificate by the City Manager or his/her designee.

A. Certification/Educational Incentive

Members of this employee association will be eligible for the following certification/educational incentive pay for possession of the following:

The classifications of Warehouse Clerk and Lead Warehouse Clerk are eligible to receive CWEA Mechanical Technologist effective on the first day of the pay period following verification of the Certificate by the City Manager or his/her designee.

Classification
Plant Maintenance Mechanic I Effective
Plant Maintenance Worker 9/3/2022
Plant & Equipment Maintenance Mechanic Grade Max 20%
CWEA Mechanical Technologist 1

5%
2 5%
3 5%
4 5%

Classification Effective
Distribution System Operator I/II 9/3/2022
W/WW Operations Technician Grade Max 25%
SWRCB Distribution Certification 1 5%
2 5%
3 5%
4 5%
5 5%

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

Classification Effective
Collection System Operator I/II 9/3/2022
Grade Max 20%
CWEA Collection Certification 1 5%
2 5%
3 5%
4 5%

Classification Effective
Instrument Technician 9/3/22
Plant & Equipment Maintenance Electrician Grade Max 20% CWEA Electrical/Instrument Technician
Certification 1 5%
2 5%
3 5%
4 5%

The SWRCB/CWEA Certification/Educa tional Incentive pay shall compound from one certificate grade to the next.

Effective on the first day of th e pay period following verification of the Certificate by the City Manager or his/her designee classifications in the Collection System (Collection System Operator I/II) and Plant Maintenance (Plant and Equipment Maintenance Electrician, Plant and Equipment Maintenance Mechanic, Senior Plant and Equipm ent Maintenance Mechanic, Plant Maintenance Worker, Plant Maintenance Mechanic I and Plant Operations Maintenance Worker I/II ) Divisions are eligible to receive 2.5% of base pay for possession of Grade 2 and additional 2.5% of base pay for possession of Grade 3 (total 5%) in anot her vocation (SWRCB or CWEA certification.

Maximum certification pay not to exceed twenty-five percent (25%) total.

B. Supplemental Pay

1. Class A California Driver’s License

• Employees in the classification of Collection System Operator I or II or Distribution System Operator I or II; who posse ss a valid Class A California driver’s license, and are designated by their department to operate a vehicle(s) requiring a Class A California driver’s license shall recei ve supplemental assignment pa y at the rate of $145 per month.

• The City agrees to reimburse employees for the cost incurred from successful completion of the California Department of Motor Vehicles (DMV), Class A California driver’s license testing and renewal process.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

ARTICLE XII - SAFETY FOOTWEAR AND EYEWEAR

The City provides a reimburseme nt amount of $350.00 for the purchas e and/or repair of safety footwear (including socks, boot laces and inserts), as needed, s ubject to prior approval of the supervisor and upon presentation of a valid receipt for actual purchase.

Effective September 1, 2025, tT he City agrees towill provide reimbursement for up to $200 for every 24- month period for City approved prescription safety eye wear, as needed. Employees will be responsible for submitting a receipt for such eyewear prior to receiving reimbursement.The City will purchase the safety eyewear upon request of the employee.

ARTICLE XIII - HOLIDAYS

A. Regular full-time employees shall be entitled to take the followi ng observed holidays at full pay, not to exceed eight (8) hours for any one (1) day, provided they are in a paid status on both their regularly scheduled workdays immediately preceding and following the holiday; and provided further th at employees shall be eligible for the five (5) floating holidays/forty (40) hours only upon completion of their initial probationary period.

New Year's Day Thanksgiving Day
President's Day (celebrated) Day after Thanksgiving Day Memorial Day (celebrated) Chri stmas Eve (last 4 hours of shift) Juneteenth (celebrated) Christmas Day
Independence Day New Year's Eve (last 4 hours of shift) Labor Day

Employees shall receive the on e-half day for Christmas Eve and New Year's Eve on the last regularly scheduled workday preceding the day observed as a Legal holiday for Christmas Day and New Year's Day.

Employees shall be granted floating holidays every SeptemberJanuary 1 st prorated based
upon the time period since the previous September January 1st, and shall be calculated at the rate of forty (40) hours per twelve (12) months or a portion thereof on a pro-rated basis.

In the event that a holiday falls within an employee’s normally scheduled work week and he or she is required to work, the employee shall receive regular pay for time worked, plus Holiday Compensation at the rate of one and one-half times (1.5X) regular pay.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

Unit members shall normally have the option of selecting compensatory time off or pay for hours worked on a holiday. However, for operational reasons, th e City retains the discretion of requiring the unit member to take pay in lieu of compensatory time off.

B. Christmas Eve/New Year's Eve Time Off

Employees may, at the discre tion of the Department Head,

1. Elect to work a full day at regular pay on Christmas Eve and receive a full day of holiday time off on New Year's Eve, or

2. Elect to work a full day at regular pay on New Year's Eve and receive a full day of holiday time off on Christmas Eve.

In the event an employee chooses to take a full day off on Christmas Eve with the intention of working a full day on New Year's Eve but does not work a full day on New Year's Eve, the time not worked on Christmas Eve shall be considered vacation or compensatory time off.

ARTICLE XIV - HOURS AND OVERTIME

The City agrees to permit affected employees to accrue at the discretion of the Director of Water and Wastewater Resources, compensatory time for overtime worked. Compensatory time off shall be taken within one hundred ei ghty (180) calendar days of the time accrued or an affected employee shall receive cash payment for said time. Affected employees shall receive cash payment for said time. Affected employees may take up to forty (40) hours of co mpensatory time off per calendar year subject to approval of the Director of Water and Wastewater Resources.

A. Work Week/Work Days

The regular workweek shall consist of fort y (40) hours and the regular workday shall consist of either eight (8) hours, ten (10) hours, twelve (12) hours or 9/80 work schedule (total of eight nine-hour days, one eight- hour day, and one day off spread over a two- workweek period). Any existed regular schedu le can be changed/adjusted at any time based on Department needs provided subject employee(s) are provided 30 days’ notice is given by Management in writing.

B. Overtime

Employees working in excess of their regular work day shall be granted overtime pay or compensating time off for the time worked at the discretion of the Department Head, at time and one-half (1.5X) of the employee' s base rate of pay. Employees subject to

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

the requirements of the FLSA who work in excess of their scheduled 40-hour workweek shall be granted overtime pay at time and one-half (1.5X) of the employee’s FLSA rate of pay.

C. Call-Back Minimum

Whenever an affected employee is called back to work for less than two three (32) hours, the employee shall receive a minimum of two three (32) hours at the rate of time and one-half.

If an employee has been called-back and receives another call during the initial minimum call- back period, the employee will not be entitled to another call-back minimum. If an employee is called back after the completion of a call-back and the end of the minimum call-back period, her or she will be entitled to another minimum call-back.

D. Holiday Call-Back Minimum

However, when an affected employee is called back to work on a City-celebrated holiday, the callback minimum will be four (4 ) hours at the rate of time and one-half, effective July 1, 2007.

E. Electronic Call Back

Electronic call back occurs when Plant Maintenance Unit workers has left the premises and is contacted (by phone or pager or electronically) regarding a work -related issue, but does not have to report to work at the direction of a supervisor or manager in order to resolve the issue.

The employee must spend more than de minimus time to resolve the issue. In such circumstances, the Plant Maintenance Unit worker will be paid for the time it took to respond to the issue (a minimum of 15 minutes) at the appropriate hourly rate of pay. If someone spends more than fifteen minutes, e.g. an hour, on the task the employee will be paid for their actual time worked. If the Plant Maintenance Un it worker has to return to work to complete such assignment, that time will be paid as call back hours. If the time spent to resolve the issue is de minimus this provision would not be apply.

E.F. Standby

The City retains the sole discretion to assign employees to standby duties and/or issue cellular telephones or other communication devices for the purposes of alerting employees of the necessity of call back. Employees on standby will be able to report for duty when called within an hour of said call.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

Effective September 3, 2022, the daily reimbursement rate shall be $100.00. Effective the first full pay period of September 2025, the daily reimbursement rate will increase to $105.00 per day.

ARTICLE XV – LEAVES

A. Vacation Accrual

The following leave provisions are establis hed by the Rules and Regulations of the Classified Service of the City of Daly City and are applicable to employees in the unit.

Vacation time is accumulated in accordance with the following schedule:

Accrual Rate Years During Which Vacation is Earned
13 days/year Accrues from initial employment date
18 days/year Accrues after 4th anniversary date
23 days/year Accrues after 12th anniversary date
28 days/year Accrues after 20th anniversary date

For purposes of this section one day is defined as eight (8) hours.

B. Two Hour Personal Leave

The City will continue to provi de affected employees two h ours of personal leave to be taken at any time during the calendar year that is agreeable to the employee and the employee's department head. Said two hours personal leave shall be taken each year pursuant to the above conditions and shall not accrue from year to year.

C. Bereavement Leave

A maximum of five (5) working days bereavement leave may be taken for deaths occurring in the immediate family. Payment for time off will be subject to formal request to the City Manager by the employee who shall state in the request the relationship of the deceased.” (The Rules and Regulations of the Classified Service, Rule 1, Definition of Terms, has been amended in the definition of Immediate Family for the purpose of Bereavement Leave to include live-in domestic partner.)

For the purposes of this sec tion, a working day shall be defined as the number of non- overtime hours in the day that the employee is scheduled to work.

D. Sick Leave

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

Sick leave shall not be considered as a right which may be used at the employee’s discretion, but a privilege which shall be allowed only in the case of necessity and personal sickness or disability or medical or dental treatment, and as requir ed by law. Full-time employees shall accrue sick leave at the rate of twelve (12) working days* (ninety-six (96) hours) per year. For classifications repres ented by this bargaining unit, there is no maximum accrual.

Any bargaining unit employee hired before January 1, 2020, having accumulated unused sick leave credit who is separa ted from employment by retiring as set forth in the Public Employees’ Retirement System contract or, for reason of death or abolishment of position, shall be paid fifty percent (50%) of said employee’s daily rate of pay for each day of accumulated and unused sick leave credit as of the date of said retirement, death, or abolishment of position. The sick leave max imum accrual of 200 days shall not apply to affected classifications. However, the maximum pay out of 50% of accumulated, unused sick leave at the time of re tirement, death or abolishment of position remains at a cash value not to exceed 100 days of pay.

Sick leave cash out shall be eliminated for all employees hired on or after January 1, 2020.

*For purposes of this section, a workday is defined as eight (8) hours.

E. Retiree Health Savings Account for Employees hired before January 1, 2020

A retiring employee may pla ce 100% of eligible Sick Leave Accrual Pay Out (in accordance with Leaves of Absence Rule XX, Section 6 of the Rules and Regulations of the Classified Service) into the City-sponsor ed Retiree Health Savings Account. “Sick Leave Accrual Pay Out” consists of 50 percent (50%) of said employee's daily rate of pay for each day of accumulated and unused Sick Leave credit as of the date of retirement, death, or abolishment of position.

This provision does not apply to employees hired on or after January 1, 2020.

ARTICLE XVI– GRIEVANCE PROCEDURE

A grievance is defined as a condition that exists as a result of an unsatisfactory adjustment or failure to adjust a claim or di spute by an employee or employee’s relative to the application or interpretation of the Rules and Regulations of the Classified Service, Departmental Rules and Regulations, Memorandum of Unde rstanding, established policies and procedures of the City or department (whether written or or al), or a dispute or disagreement as to the facts pertaining to a disciplinary matter.

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

The means, manner, method or merit of any service or activity provided by law or executive order; collective issues of salary, fringe benefits, work ing condition subject to meeting and conferring; any disciplinary action sh all not be a subject of the grievance procedure. All grievances shall be processed in accordance with the following procedure:

Step 1: No matter shall be considered a grievance until it is first taken up orally by the employee and/or the Steward with the Divi sion Head who will attempt to settle the matter. Employee shall file said grievance within thirty (30) calendar da ys of the date of the incident/event or direct knowledge of the incident/event.

Step 2: If any such grievance or complaint is not settled by the procedure above described, it shall within five (5) business days be set forth in wr iting by the Union and sub mitted to the Division Head. Within the ten (10) business days thereafte r if necessary, there shall be a meeting between the aggrieved employee, the Uni on Steward, and the Division Head in an attempt to settle the matter. Within five (5) business days following such meeting, th e employer shall give a written reply to the Union and aggrieved employee.

Step 3: If any such grievance has not been settled by the procedure described above, it shall within ten (10) business days be set forth in writing by the Union and submitted to the Department Head.

Within ten (10) business days thereafter, there shall be a meeting between the aggrieved employee, the Union Steward and the Division Head in an attempt to settle the matter. Within five (5) business days following such meeting, the employer shall give a written reply to the Union and aggrieved employee.

Step 4: If any such grievance or complaint is not settled by the procedure described above, it shall within five (5) business days be set forth in writing by the Union and submitted to the City Manager. Within ten (10) busine ss days thereafter, there shall be a meeting between the Union Business Agent, and the City Manager in an attemp t to settle the matter. Within five (5) business days following such meeting, the Employer shall give a written reply to the Union.

Step 5: If any such grievance has not been settled by the procedure described above, the grievance may within five (5) business days be submitted to the Personnel Board, if eligible as an appeal. A grievance submitted to the Personnel Board shall be processed in accordance with the Civil Service Rules. Alternatively, if both parties agree, the matter shall be submitted to fact finding as provided below in steps 6 and 7.

Step 6: Within five (5) busines s days following such request, the Employer, the Union Steward and the Union Business Agent shall agree on a fact finder and arrange for the time and place of fact finding. In case of disagreement on a fact finder, application shall be made to the State Mediation and Conciliation Service. The Employer and the Union shall each pay one-half (1/2) of the costs of fact finding, including the fees of the fact finder and other expenses of the fact finding

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

proceedings, but not including compensation or co st of representation, a dvocacy or witness for either party.

Step 7: Power of Fact Finder. The Finding of the Fact finder shall be submitted with a recommendation to the Personnel Board or the City Council for final action. The Personnel Board or the City Council shall act on the recommendation of the fact fi nder within thirty (30) days following submission of the recommendation.

Business days are described a bove and defined as Monday thr ough Friday and exclude defined holidays within this contract under Article XIII.

At anytime the time frames listed in this section may be extended on a case by case basis by written mutual agreement of the City and the Union.

ARTICLE XVII – GENERAL PROVISIONS

A. Labor Management Committee

Immediately following the conc lusion of labor negotiations the City and the Union will designate a subcommittee to meet and confer on changes to the Personnel Rules that are within the scope of bargaining. Changes to subjects that are within the scope of bargaining will not be made until the meet and confer process is completed.

B. Mandatory Direct Deposit

The parties agree that all employees will participate in mandatory direct deposit for payroll (including all compensation and vision reimbursements).

C. Layoffs

In the event that another bargaining unit receives a no layoff clause in their Memorandum of Understanding during the term of this agreement th e Union has the right to reopen negotiations on this subject.

D. Notice of New Employee Information and New Employee Orientation

1. Employee Information

The following provisions will apply regarding notice of new employees:

The City shall provide the Union with an el ectronic list of the following information for new employees within thirty (30) days of hire:

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

a. employee’s full name;
b. employee status;
c. hire date;
d. department;
e. job title;
f. hourly rate;
g. assigned work location;
h. work phone number
i. personal and cell phone number if available
j. work email address
k. personal email address, if available; and
l. address (home and mailing).

In addition, the City ag rees to provide an electronic list to the Union of the employee information above for all bargaining unit employees at least every one hundred twenty (120) days. In the event an employee prohibits the City from sharing an employee’s information items i, k, and l, above shall not be provided.

2. New Employee Orientation

The City shall provide the Union written notice of new employee orientations (no matter how few participants, and whether in person or online) at least ten (10) business days prior to the event. Representatives of the Union shall be permitted to make a presentation of up to thirty (30) minutes, and present written materials, during a portion of the orientation for which attendance is mandatory. No representative of management shall be present during the Union’s presentation. Paid release time shall be granted for stewards to participate in the new employee orientations. The Employer shall distribute at the new employee orientations a copy of this Agreement, the current salary schedule, a list of all job classifications represented by the Union.

E. Holiday Closure

The City reserves the right to close City Hall operations between December 24th and December 31st. During City Hall closure, empl oyees will be required to use available accrued vacation, comp time, floating holidays or other applicable leave (not sick leave) or take unpaid time if accrued leave is not available.

ARTICLE XVIII – COOPERATION BETWEEN PARTIES

It is hereby agreed between the parties that th is Memorandum of Understanding provides for the amicable adjustment of wages, hours and conditi ons of employment. The Stationary Engineers, Local 39 agrees that during the term of the Memorandum of Understanding there shall be no strike,

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

no picketing, stoppages of work for any cause, no work slow-downs, interruption of the normal conduct of the City's business, or any other job action by any of its members. The City agrees that during the term of this Memorandum of Understa nding it will not engage in any lockout of its employees.

The Union agrees to jointly cooperate with th e City in increasing co mmunications between the employees and the supervisors and to improve performance and productivity.

ARTICLE XIX – SEVERABILITY OF PROVISIONS

Should any section, clause, or provision of this Memorandum of Understanding be declared illegal by final judgment of a court of competent jurisd iction, such invalidation of such section, clause, or provisions shall not invalidate the remaining portions hereof, and such remaining portions shall remain in full force and effect for the duration of this Memorandum of Understanding.

In the event of such invalidation, the parties ag ree to meet and confer concerning substitute provisions for the provisions rendered or declared illegal.

ARTICLE XXI – FULL UNDERSTANDING

This Memorandum of Understanding constitutes a full and complete agreement by the parties on all subjects presented in negotiations for this successor agreement.

There will be no alteration or modification of any provision contained in this Memorandum without the written consent of all parties hereto.

ARTICLE XXII - DURATION

Except as specifically provided, the effective date of this Memorandum of Understanding is upon ratification by both parties.

The term of this Memorandum of Understanding shall be from September 1, 20252 through August 31, 20285.

ARTICLE XXIII - SIGNATORIES

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

Signatories of this Memorandu m of Understanding between the City of Daly City and the International Union of Operating Engineers/Stationary Engineers Local 39:

REPRESENTATIVES FOR THE CITY REPRESENTATIVES FOR THE
OF DALY CITY: INTERNATIONAL UNION OF

OPERATING ENGINEERS -
STATIONARY ENGINEERS LOCAL 39:

_________________________________________ __________ __________________________________________ __________ Natalie Sakkal Date Jeff Gladieux Date Director of Human Resources President

_________________________________________ __________ __________________________________________ __________ Donna WilliamsonTevon Edwards D a t e Bart FlorenceTim Eggen, Business Manager Date
Chief Negotiator President

_________________________________________ __________ __________________________________________ __________ Abby VeeserTimothy Nevin D a t e Brandy Johnson, Director of Date
Assistant City Manager/Deputy Intermi Director of Finance & Public Employees Administrative Services

_________________________________________ __________ __________________________________________ __________ Bonnie Woo Date Laura LeSieur, District Date
Senior Management AnalystAssistant to Representative the Director of Human Resources

_____________________________ ______
Mark E. Gong Date
Business Representative/Chief Negotiator

____________________________ _______
Caden Young Date
Bargaining Team Member

____________________________ ______
Mauro Rodriguez Date
Bargaining Team Member

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

APPENDIX A – CLASSIFICATIONS

PLANT MAINTENANCE UNIT CLASSIFICATIONS

1. Collection System Operator I/II

2. Distribution System Operator I/II

3. Instrument Technician

4. Lead Warehouse Clerk

5. Plant Maintenance Worker

6. Plant Maintenance Mechanic I

7. Plant & Equipment Maintenance Electrician

8. Plant & Equipment Maintenance Mechanic

9. Plant Operations Maintenance Worker I/II

9.10. Senior Plant and Equipment Maintenance Mechanic

10.11. Warehouse Clerk

11.12. Water & Wastewater Operations Technician

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

APPENDIX B-1 – BIWEEKLY SALARY SCHEDULE
Effective September 13, 20252

Range STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
P 025 A Plant Operations Maintenance Worker I 2703.25 2838.41 2980.33 3129.35 3285.82 P 029 A Plant Maintenance Worker 2829.13 2970.59 3119.12 3275.08 3438.83 P 029P A Collection S ystem Operator I 2904.90 3050.15 3202.66 3362.79 3530.93 P 029P A Distribution S ystem Operator I 2904.90 3050.15 3202.66 3362.79 3530.93 P 030 A Plant Operations Maintenance Worker II 2938.07 3084.98 3239.22 3401.19 3571.25 P 032 A Plant Maintenance Mechanic I 2965.29 3113.56 3269.24 3432.70 3604.33 P 033 A Warehouse Clerk 3068.21 3221.63 3382.71 3551.84 3729.43 P 034 A Collection S ystem Operator II 3157.24 3315.11 3480.86 3654.91 3837.65 P 034 A Distribution S ystem Operator II 3157.24 3315.11 3480.86 3654.91 3837.65 P 038 A Lead Warehouse Clerk 3297. 37 3462.24 3635.35 3817.11 4007.97 P 044 A Plant & Equipment Maintenance Mechanic 3630.97 3812.52 4003.15 4203.31 4413.47 P 052 A
Senior Plant and Equipment Maintenance
Mechanic 4230.43 4441.95 4664.05 4897.25 5142.12
P 052 A Water & Wastewater Operations Technician 4230.43 4441.95 4664.05 4897.25 5142.12 P 062 A Instrument Technician 4465.40 4688.67 4923.10 5169.26 5427.72 P 062 A Plant & Equipment Maintenance El ectrician 4465.40 4688.67 4923.10 5169.26 5427.72

A = 40 hours/week

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

APPENDIX B-21 – BIWEEKLY SALARY SCHEDULE
Effective September 12, 20263

Range STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
P 025 A Plant Operations Maintenance Worker I 2797.86 2937.76 3084.64 3238.88 3400.82 P 029 A Plant Maintenance Work er 2928.15 3074.56 3228.29 3389.70 3559.19 P 029P A Collection S ystem Operator I 3006.57 3156.90 3314.75 3480.49 3654.51 P 029P A Distribution S ystem Operator I 3006.57 3156.90 3314.75 3480.49 3654.51 P 030 A Plant Operations Maintenance Worker II 3040.91 3192.95 3352.60 3520.23 3696.24 P 032 A Plant Maintenance Mechanic I 3069.08 3222.53 3383.66 3552.84 3730.49 P 033 A Warehouse Clerk 3175.60 3334.38 3501.10 3676.16 3859.96 P 034 A Collection S ystem Operator II 3267.75 3431.14 3602.69 3782.83 3971.97 P 034 A Distribution S ystem Operator II 3267.75 3431.14 3602.69 3782.83 3971.97 P 038 A Lead Warehouse Clerk 3412.77 3583.41 3762.58 3950.71 4148.25 P 044 A Plant & Equipment Maintenance Mechanic 3758.06 3945.96 4143.26 4350.42 4567.94 P 052 A
Senior Plant and Equipment Maintenance
Mechanic 4378.50 4597.42 4827.29 5068.66 5322.09
P 052 A Water & Wastewater Operations Technician 4378.50 4597.42 4827.29 5068.66 5322.09 P 062 A Instrument Technician 4621.69 4852.77 5095.41 5350.18 5617.69 P 062 A Plant & Equipment Maintenance Electrician 4621.69 4852.77 5095.41 5350.18 5617.69

A = 40 hours/week

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

APPENDIX BA-32 – BIWEEKLY SALARY SCHEDULE
Effective September 114, 20274

Range STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
P 025 A Plant Operations Maintenance Worker I 2895.79 3040.58 3192.61 3352.24 3519.85 P 029 A Plant Maintenance Work er 3030.64 3182.17 3341.28 3508.34 3683.76 P 029P A Collection S ystem Operator I 3111.81 3267.40 3430.77 3602.30 3782.42 P 029P A Distribution S ystem Operator I 3111.81 3267.40 3430.77 3602.30 3782.42 P 030 A Plant Operations Maintenance Worker II 3147.34 3304.70 3469.94 3643.44 3825.61 P 032 A Plant Maintenance Mechanic I 3176.50 3335.32 3502.09 3677.19 3861.05 P 033 A Warehouse Clerk 3286.75 3451.09 3623.64 3804.82 3995.06 P 034 A Collection S ystem Operator II 3382.12 3551.23 3728.79 3915.23 4110.99 P 034 A Distribution S ystem Operator II 3382.12 3551.23 3728.79 3915.23 4110.99 P 038 A Lead Warehouse Clerk 3532.22 3708.83 3894.27 4088.99 4293.44 P 044 A Plant & Equipment Maintenance Mechanic 3889.59 4084.07 4288.27 4502.69 4727.82 P 052 A
Senior Plant and Equipment Maintenance
Mechanic 4531.74 4758.33 4996.25 5246.06 5508.36
P 052 A Water & Wastewater Operations Technician 4531.74 4758.33 4996.25 5246.06 5508.36 P 062 A Instrument Technician 4783.45 5022.62 5273.75 5537.44 5814.31 P 062 A Plant & Equipment Maintenance Electrician 4783.45 5022.62 5273.75 5537.44 5814.31

A = 40 hours/week

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

APPENDIX C – UNIFORM ALLOWANCE

UNIFORM ALLOWANCE 2026

UNIFORM ALLOWANCE 2022

This Appendix memorializes the agreement between the City of Daly City (City) and International Union of Operating Engineers/Stationary Engi neers, Local 39, Plant Maintenance Unit (Union), collectively referred to as Parties, regarding uniform allowance for members of the Union.

1. The City purchases and main tains uniforms for Union members.

2. The City reports to CalPERS the monetary value for providing and maintaining members’ required uniforms (“uniform allowance”) for employees considered “classic members” by CalPERS as that term is defined by the Public Employee Pension Reform Act (PEPRA).

3. For calendar year 202 62, for each eligible employee who is a “classic member” of CalPERS, the amount of uniform allowance reported to CalPERS is derived from the total cost of uniforms and maintenance in the prior fiscal year in a department divided by the number of employees that use these uniforms in that department.

4. For calendar year 202 62, for each eligible employee who is a “classic member” of CalPERS, the amount of uniform allowance the City reports to CalPERS shall be the following:
a. $43.4939.52 per employee per pay period for eligible members who work in Plant and Equipment Maintenance (Dept. #373A). $23.4832.69 per employee per pay period for eligible members who work in Distribution System Maintenance (Dept. #375A).
b. $31.53 per employee per pay period for eligible members who work in Administration (Dept #370A). $39.8243.96 per employee per pay period for eligible members who work in Collection System Maintenance (Dept. #376A).

5. The following classifications shall re ceive uniforms as determined by the Department:

Collection System Maintenance Worker I/II
Distribution System Maintenance Worker I/II
Instrument Technician
Lead Warehouse Clerk
Plant & Equipment Maintenance Mechanic
Plant Maintenance Mechanic I

Memorandum of Understanding
City of Daly City and International Union of Operating Engineers-Stationary Engineers Local 39 Plant Maintenance Unit
September 1, 20252 through August 31, 20285

Plant Maintenance Worker
Plant Operations Maintenance Worker I/II
Senior Plant & Equipment Maintenance Mechanic
Utility Maintenance Worker (W/WW Distribution)
Utility Maintenance Worker (W/WW Collections)
Warehouse Clerk
Water/Wastewater Operations Technician

5. This uniform allowance is not CalPERS reportable special compensation for employees defined as “new members” under the Public Employees’ Pension Reform Act of 2013 (“PEPRA”).

City Council Agenda Report Item # _____

Meeting Date: January 26, 2026

Subject: Authorize the City Manager to Approve a Purchase Agreement for a TYMCO Model 600 Street Sweeper

Recommended Action

Staff recommends that the City Council authorize the City Manager, or his designee, to execute a purchase agreement with TYMCO, Inc., for the purchase of a TYMCO Model 600 street sweeper in the amount of $433,434.90, including sales tax.

Discussion

The Public Works Department - Maintenance Division oversees Daly City’s street sweeping program, sweeping approximately 12,500 curb miles of streets annually. Street sweeping helps maintain clean streets by removing debris such as paper and leaves, reduces dust, and removes metal particles and other hazardous materials left by vehicles. It also minimizes the risk of clogged stormwater facilities that can cause localized flooding during heavy rains and helps ensure compliance with local, State, and Federal stormwater regulations.

The Public Works Maintenance Division Street Section operates three street sweepers—two front-line units and one backup unit. The street sweeper identified for replacement is ten years old and has exceeded its seven-year service life. Replacing this unit will allow an existing sweeper to be reassigned as the backup while the new unit serves as a front-line sweeper.

The City of Daly City is a member of HGACBuy, a national cooperative purchasing program used successfully in the past. TYMCO, Inc. holds a current HGACBuy contract for its Model 600 street sweeper at a price determined to be fair, reasonable, and competitive. The purchase will be made using HGACBuy Contract No. SW04-20. The total cost, including tax and delivery, is $433,434.90.

California Government Code authorizes public agencies to use cooperative purchasing programs such as HGACBuy while remaining compliant with the City’s Municipal Code. Utilizing this program allows the City to efficiently procure vehicles and equipment.

Fiscal Impact

Sufficient funds to purchase the TYMCO Model 600 street sweeper in the amount of $433,434.90 is available in the Fiscal Year 2025-2026 Motor Vehicle Replacement Fund Account 55145300-55018.

Summary/Conclusion

Staff recommends that the City Council authorize the City Manager, or his designee, to execute a purchase agreement with TYMCO, Inc., for the purchase of a TYMCO Model 600 street sweeper in the amount of $433,434.90, including sales tax.

Staff is available to provide any additional information desired by the Mayor or Councilmembers.

Authorize the City Manager to Approve a Purchase Agreement for a TYMCO Model 600 Street Sweeper Meeting Date: January 26, 2026

Respectfully submitted,

Jeffery W. Fornesi Richard Chiu, Jr.

Assistant Director of Public Works Director of Public Works

Attachments:

1. HGACBuy: Contract Pricing Worksheet (Dated 12-18-2025)

●H€SACBuy contract pricing worksheet
For MOTOR VEHICLES Only
SW04-20
Expires
3/31/2026
Contract
No.:

Date
Prepared:
12/18/2025
This Worksheet isprepared by Contractor and given to End User. If a PO isissued,both documents M LIST be faxed to H-GAC(d 713-993-4548. Therefore please type or print lesiblv.

TYMCO, Inc. (ISSl E P.O, TO lAMCO. Inc.-nuyinj’
Agi'ncy: City of Daly City.CA Contractor:
email below)
Contact
I’cnion:

I’rcpareii
Jose Garcia,l-leetManager Kaye Morgan»v:
650-991-8027 254-799-5546I’hoDc: I’honc;
254-799-2722h'ax: lax:
[email protected] [email protected]: Hmail:

I’ruducI
Code: 'I'YMCO Model 600 Regenerative Air SweeperB53 Description:

A. I’roduct Item Base Unit Price Per Contractor's H-(>AC Contract: S 182.070.00 B. Published Options - Itemize below - Attach additional sheet(s)ifnecessary - Include Option Code in descriptionif Description DescriptionCost Cost
IlopperSuction ThroatLiner w/Wcar T'langc600011 StainlessSteelHopper 600091S 1.525.00 i S 23.1.30.00 Abrasion ProtectionPackage 600036 S 1.275.00 GutterBroom TillAdjuster- Right 600022 I S 850.00 1lopperDeluge 600043 A.O.D. Washdown System 60004S i S 2,050.00750.00 Pick-Up Head CurtainTiller600087 S 1.605.00 Auxiliary'Hydraulic System 600053 j S 1.130.00 Broom AssistPick-Up Head 600064 S 5.265.00 Auxiliary-1land Ilosew/llydraulicBoom 600052 ! S 5.075.00 TratllcDirectingLight- l.LD 600823 2023 l-TciglUlinerM2-l06Chassis600706S 1.200.00 i S 99.675.00 Pick-Up Ilead i’rcssureInletWater Injection600060 $ 1.830.00 QUOTE GOOD FOR 30 DAYS

DELIVERY SUBJECT TO TRUCK AVAILABILITY I
Subtotal From Additional Shcet(s):

Subtotal B: i S 145.360.00
C. Unpublished Options - Itemize below / attach additionalsheet(s) ifnecessary.

Description Cost Description Cost
Low Hmission I’ackage StainlessSteelBlower IlousingS 1.500.00 S 1.500.00 Double DUO Skids w/3" ramps S 2.000.00 Water Level Gauge inCab S 600.00 Dump Switch inCab S Ilopper Screen Vibrator200.00 I $ 2.000.00 Amber Bar Light- LTD - Cab Mounted S 1.800.00 Manuals - John Deere Part.s/Service S 600.00 .AutoSweep Assisi(ASA) StainlessSteelIlopperDrainS 2.500.00 750.00I S 2026 FreightlinerM2-106 Chassis UPGRADE CARB
Compliant:;200 IIP Engine;23.000f/Rear Axle:Single
Speed; Aluminum Wheels (6);'Chrome Grill;Chrome
Bumper: Chrome Air Intake;BlueTooth Radio System
ProvisionCamera/Monitor System - 4 cameras.7" IID
WaierproorLCD Monitor RV-804A; A1 ID 1leavyDuty
Cameras: Video SplitterCable PD-1456; 5m A\ ID Cable
PX-1942
S 25.500.00 S 5.200.00
Subtotal C: IS 44.150.00
Check: Tolaicostof Unpublished Options (C) cannot exceed 25% of the totalof the Base Unit Priceplus PublishedOptions (At B). For thistransactionthe percentage is: 13% D. Total Cost Before .Any .ApplicableTrade-In / Other Allowances / Discounts (.A+B+C) j S 371.580.00 Quantity Ordered: X Subtotal of .A + B + C: S 371.580.001 Subtotal I): i S 371.580.00 F. Trade-Ins / Other Allowances /Special Discounts / Freight / Installation Description Cost Description Cost
EreighCPDI/Inscrvice S 12.500.00 I-AtWarranty - AllisonTransmission 5 years S 850.00 Surcharge - Base Unit S 9.550.00
CA Sales Tax (9.875%) S 38.954.90 Subtotal F: i S 61.854.90 Deiiven Date: 210 -300 Days (».Total Purchase Price (D+E+F): S 433.434.90

City Council Agenda Report Item # _____

Meeting Date: January 26, 2026

Subject: Set Time and Place for Public Hearing Under the Tax and Equity Fiscal Responsibility Act (“tefra”)

Recommended Action
Set Time and Place for TEFRA public hearing on Monday, February 9, 2026, regarding the issuance of an amount not to exceed $25 million of tax-exempt bond financing to finance development of multifamily housing at 493 Eastmoor Apartments.

Background
Eastmoor Multifamily, LP has requested that the California Statewide Communities Development Authority (CSCDA) serve as the municipal issuer of tax-exempt multifamily housing revenue bonds in an aggregate principal not to exceed $25 million. The proceeds of the bonds will be used to finance the acquisition, construction, improvement and equipping of a 72-unit multifamily rental housing project generally known as 493 Eastmoor Apartments. CSCDA is a joint powers authority sponsored by the League of California Cities and the California State Association of Counties created to enable local government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth and improve the overall quality of life in local communities throughout California.

In order for the bonds to qualify as tax-exempt bonds, the City must conduct a public hearing providing the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for financing of the project. The hearing is required by Section 147(f) of the Internal Revenue Code of 1986. The Code requires that the City Council hold a TEFRA hearing regarding the issuance of the bonds and adopt a resolution approving the issuance of the bonds.

Staff recommends that the City Council Members consent to hold a public hearing and consider adopting a resolution regarding the issuance of the bonds.

Staff is available to provide any additional information desired by the Mayor or Councilmembers.

Respectfully submitted,

Lenelle Suliguin Tatum Mothershead
Housing and Community Economic and Community Development Development Manager Director

City Council Meeting Agenda Report Item # _____
Props Meeting Date: January 26, 2026

Subject: Authorization to Perform Interior Concrete Restoration and Coating at Reservoir 6B

Recommended Action
Authorize staff to enter into a public improvement agreement with DN Tanks to perform interior concrete joint repairs and coating application for Reservoir 6B in an amount not to exceed $670,450, which includes a base contract amount of $583,000 and a 15% contingency.

Background
On November 8, 2023, City Council adopted Resolution 23-149 authorizing emergency seismic and roof repairs at Reservoir 6B. Structural seismic upgrades have been completed and most of the aluminum roof installation is finished. However, several interior components remain to fully complete the project.

During preparation for interior joint repairs, required testing of existing joint sealant identified the presence of polychlorinated biphenyls (PCBs). Additional sampling conducted between November 2023 and December 2024 confirmed PCB presence in joint materials and adjacent concrete. The City retained Remedy Engineering to develop a sampling plan, provide technical consultation, and prepare regulatory documentation.

A Risk-Based Cleanup and Disposal Application was submitted to the U.S. Environmental Protection Agency (USEPA) Region 9 in April 2025. USEPA approved the application in June 2025 and issued conditional approval of the PCB Cleanup Plan in August 2025. Final technical specifications for interior repair, washing, and sampling were issued in October 2025, allowing the City to proceed with repair planning.

Discussion
DN Tanks was the original specialty contractor for the reservoir and is currently under contract for remaining roof work. Because of their specialized knowledge of the structure and to maintain project continuity and schedule, staff engaged DN Tanks to provide a proposal for the required interior concrete restoration and coating work.

The proposed work includes:
• Interior joint repairs
• Surface preparation and coating application
• Coordination with PCB remediation activities to ensure structural integrity • Verification that surface profiles meet coating and repair specifications

This approach allows the City to complete regulatory-required remediation and restoration efficiently while minimizing risk to the structure and project timeline.

Fiscal Impact
This work was not included in the original project scope. Staff proposes funding the project in the amount of $670,450 from Water Fund 41 – Fund Balance to Water Capital Fund, Emergency Design & Repair Services Reservoir 6B (Account 441-721-00-55108). Sufficient capital reserve funds are available.

Summary/Conclusion
Staff recommends authorization to enter into a public improvement agreement with DN Tanks for interior concrete restoration and coating at Reservoir 6B in an amount not to exceed $670,450. This work is necessary to complete regulatory-required PCB remediation, restore the interior structure, and return the reservoir to full service.

Staff is available to answer any questions.

Respectfully submitted,

Joshua Cosgrove
Director of Water and Wastewater Resources

Attachments:

DN Budget Estimate

EL CAJON 351 Cypress Lane | El Cajon, CA 92020 | 619.440.8181 | www. dnllc.com

December 9, 2025

City of Daly City
153 Lake Merced Blvd.

Daly City, CA 94015

Attn: Michael T. Patolo
Water and Wastewater Maintenance Manager

RE: Reservoir 6B Interior Coating and Joint Rehabilitation Daly City, CA

Dear Mr. Patolo

As requested, DN has put together a budgetary estimate to provide the interior coating application and interior joint repairs, which corresponds to the USEPA PCB Cleanup Plan approval that you provided us with.

Background Information and Assumed Remediation Contractors Scope of Work:

The USEPA document indicates that the reservoir has joint and crack sealant that contains PCBs. As you had indicated, Daly City is planning to request quotes from remediation contractors to perform the necessary PCB remediation, which shall include removal of concrete of 12” from both sides of the vertical wall joints, and 18” wide from both sides of the floor joints and crack repairs, all with a uniform depth of removal of 1”. It is assumed that the remediation contractor shall perform the necessary surface preparation on the interior walls and floor (which shall include hydro- blasting/sandblasting/abrasive blasting, etc.) to achieve the necessary concrete surface profile (CSP) in conformance with the coating manufacturer's requirements. This is required to be performed by the remediation contractor, as it is assumed the interior concrete surface may have trace amounts of PCBs, and would need to be disposed of properly.

DN Proposed Scope of Work
Upon completion of the necessary concrete removal remediation and interior surface preparation, the interior locations (floor joints, wall joints, floor cracks) will be restored with a high-strength repair mortar. The interior walls, floor, and restored concrete will be coated with Sikagard 62 – 100% solids epoxy coating system. The USEPA had provided Daly City with this product request for the interior coating system.

The following includes the description of work and pricing for the scope of work proposed by DN. In addition, the assumptions for work are outlined, as well as the services and scope that shall be provided to DN by others.

Interior Concrete Restoration
Provide all labor, equipment, materials and incidentals required to restore the interior concrete locations where the remediation contractor removed the highly concentrated PCB concrete. This includes all of the vertical wall joints, floor joints, and previously repair floor cracks. The restored areas include the following width and depth - Wall Joints: 2’ wide and 1” deep on full vertical wall joints (1’ wide on both sides of joint). Floor Joints: 3’ wide and 1” deep on floor joints (1’-6” wide on both sides of joint). Floor Crack Repairs: 3’ wide and 1” deep on previously repaired floor cracks (1’-6” wide on both sides of floor crack repairs). DN shall restore these locations with a high-strength repair mortar.

Interior Concrete Coating Application
Provide all labor, equipment, materials and incidentals required to apply a full interior coating system to the interior walls and floor of the existing reservoir. The USEPA had previously provided Daly City with the product selection for the coating system – Sikagard-62, which is a 100% solids epoxy coating system.

Pricing:

Description of Work Pricing
Interior Concrete Restoration $243,000.00
Interior Concrete Coating Application $340,000.00
Total: $583,000.00

Assumptions:
 DN recommends the owner includes a 10% contingency to account for any general conditions/scope changes.
 Water for construction is provided to DN at no cost.
 Pricing includes prevailing wage rates. DN is a Union contractor  Remediation Contractor/Owner shall perform USEPA wipe test.  DN assumes wash water shall be drained through tank on-site.  Permits, fees, taxes, insurance or bonds are excluded.  Remediation Contractor shall perform necessary concrete surface preparation to achieve concrete surface profile as required by coating manufacturers prior to DN mobilization. DN and/or Sika rep shall inspect surface preparation to confirm it meets the coating manufacturer's requirements.
 If PCBs are detected upon wipe tests – Remediation Contractor shall perform necessary remediation services. This is outside of DN’s responsibility and scope of work.  Owner shall be responsible for filling of reservoir and necessary water quality testing.

If I can be of any further assistance, please do not hesitate to contact me.

Sincerely,
Dan Gancher
Regional Manager – Concrete Tank Services
[email protected]
503.476.6688

City Council Agenda Report Item # _____

Meeting Date: 01/26/2026

Subject: Annual Delegation of Authority to City Treasurer to Invest City Funds

Recommended Action
Adopt a resolution renewing delegation of investment authority to the City Treasurer as required by Government Code Section 53607.

Discussion
In order to comply with State of California Government Code Section 53607, the City Council must annually renew the delegation of authority for investing City funds to the City Treasurer.

Staff is available to provide any additional information desired by the Mayor or City Council Members.

Respectfully submitted,

Daneca Halvorson
City Treasurer

cc: City Manager
City Attorney
City Clerk

City Council Agenda Report Item #______

Meeting Date: 01/26/2026

Subject: 2026 Statement of Investment Policy

Recommended Action
Adoption of the City’s updated Statement of Investment Policy.

Background
In order to comply with State law, the City must annually review our investment policy at a public meeting. As a trustee and fiduciary, the City Council is a subject to the prudent investor standard, and must annually delegate investment responsibility to the City Treasurer through the adoption of our Statement of Investment Policy.

Summary/Conclusion
Consideration and adoption of the City’s updated Statement of Investment Policy is necessary to stay in conformance with state law, as well as have a formal document which clearly outlines our Investment Policy and purpose for the investment of the City’s funds.

Key updates:
• Placement service deposit language to reflect AB 2618’s 2031 sunset for 50% limits • Commercial paper limits to reflect the SB 595 2031 sunset and 397-day maturity where applicable.
• The zero/negative interest accrual exception’s sunset date

I am available to provide any additional information desired by the Mayor or Council members.

Respectfully submitted,

Daneca Halvorson
City Treasurer

Attachment: Statement of Investment Policy
cc with attachment: City Manager
City Attorney
City Clerk

CITY OF DALY CITY, CALIFORNIA

STATEMENT OF INVESTMENT
POLICY
CALENDAR YEAR 2026

2026

2026

CITY OF DALY CITY

STATEMENT OF INVESTMENT
POLICY

TABLE OF CONTENTS

I. INTRODUCTION .................................................................................................................. 4 II. SCOPE .................................................................................................................................... 4 III. INVESTMENT OBJECTIVES ............................................................................................. 4 IV. STANDARDS OF CARE ....................................................................................................... 5 V. SAFEKEEPING AND CUSTODY ....................................................................................... 5 VI. AUTHORIZED AND SUITABLE INVESTMENTS .......................................................... 7 VII. PROHIBITED INVESTMENT VEHICLES AND PRACTICES ................................... 12 VIII. INVESTMENT POOLS/MUTUAL FUNDS ..................................................................... 13 IX. COLLATERALIZATION .................................................................................................. 13 X. DIVERSIFICATION, MAXIMUM MATURITES, AND CREDIT QUALITY ............ 14 XI. PERFORMANCE EVALUATION .................................................................................... 16 XII. INVESTMENT REPORTING ............................................................................................ 16 XIII. AUTHORITY TO INVEST MONIES................................................................................ 17 XIV. ADOPTION .......................................................................................................................... 17 XV. GLOSSARY OF INVESTMENT TERMS ........................................................................ 18

I. INTRODUCTION

Moneys not required for immediate expenditure by the City of Daly City shall be invested in compliance with governing provisions of law and this policy. The City will maintain adequate cash availability while ensuring that principal invested is protected from loss. Only after those two overriding requirements are met will the City strive for maximum yield on invested idle funds.

II. SCOPE

This investment policy applies to all financial assets under direct control of the City of Daly City.

These funds are accounted for in the City's Annual Comprehensive Financial Report (ACFR) and include the General Fund, Special Revenue Funds, Capital Project Fund, Enterprise Funds, Internal Service Funds, certain Agency Funds, and other funds that may be created from time to time.

This policy does not apply to investment activities of moneys held by a trustee or fiscal agent and pledged to the payment or security of bonds or other indebtedness, or obligations under a lease, installment sale, or certificates of participation, or assets of the City-sponsored Deferred Compensation Plan. Such funds are invested in accordance with statutory provisions governing the issuance, or in accordance with the ordinance, resolution, indenture, or agreement of the City which provides for the issuance, or the instructions of the participants. These funds are identified in the ACFR as Cash with Fiscal Agent, debt service components of certain Enterprise Funds, or as Amounts Due Participants in the Deferred Compensation Plan.

III. INVESTMENT OBJECTIVES

The primary objectives, in priority order, of the City of Daly City's investment activities shall be:

A. Safety
Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The goal will be to mitigate credit risk and interest rate risk.

B. Liquidity

The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.

C. Return on Investments
The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs.

IV. STANDARDS OF CARE
A. Prudence
The City adheres to the guidance provided by the "prudent investor standard," which obligates a fiduciary to ensure that investments shall be made with the exercise of that degree of judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of individual business matters, not for speculation but for investment. Exercise of prudence considers the probable safety of capital as well as the probable income to be derived.

This standard of prudence shall be applied in the context of managing an overall portfolio.

Investment officials acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided that deviations from expectation are reported in a timely fashion, and appropriate action is taken to control adverse developments.

B. Ethics and Conflicts of Interest
All participants in the investment process shall act as custodians of the public trust. Investment officials shall recognize that the investment portfolio is subject to public review and evaluation.

Thus, employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

Employees and investment officials shall disclose to the Finance Director any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City.

All participants in the investment process are required to comply with terms of the Political Reform Act, Fair Political Practices Commission Regulations promulgated thereunder (2 C.C.R. §§ 18110 through 18998), the City’s Conflict of Interest Policy, including, without limitation, filing of Form 700, notification and recusal obligations, and Government Code section 1090 prohibitions.

V. SAFEKEEPING AND CUSTODY
A. Authorized Financial Dealers and Institutions

1. Broker/Dealers

A list will be maintained of financial institutions and depositories authorized to provide investment services. In addition, a list will be maintained of approved security broker/dealers selected by conducting a process of due diligence. These may include ‘primary” dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3- 1 (uniform net capital rule).

The Treasurer shall determine which financial institutions are authorized to provide investment services to the City. Institutions eligible to transact investment business with City include:

a. Primary government dealers as designated by the Federal Reserve Bank; b. Nationally or state-chartered banks;
c. The Federal Reserve Bank; and,
d. Direct issuers of securities eligible for purchase.

All broker/dealers who desire to become qualified for investment transactions must supply the following (as appropriate):
• Proof of Financial Industry Regulatory Authority certification • Proof of State registration
• Certification of having read the City’s investment policy, including a statement that the dealer shall make a good faith effort to ensure that recommended investments conform to this policy • Audited financial statements demonstrating compliance with state and federal capital adequacy guidelines
• Evidence of adequate insurance coverage
Selection of financial institutions and broker/dealers authorized to engage in transactions with the City shall be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the City may rely on the adviser for selection.

2. Financial Institutions
The Treasurer shall establish selection criteria for approval of institutions to do business with the City of Daly City. To qualify for consideration, an institution must have an office in California and that office must perform the transactions with the City. Additionally, all financial institutions who desire to become depositories must supply the following (as appropriate):

• Audited financial statements demonstrating compliance with state and federal capital adequacy guidelines
• Proof of state registration
• Evidence of adequate insurance coverage
Upon adoption, and when changes are made thereafter, the City shall send a copy of the current investment policy to all parties doing business with the City. Confirmation of receipt of this policy shall be considered evidence that the dealer understands the City's investment policies and intends to show the City only appropriate investments.

3. Competitive Transactions
The Treasurer shall obtain competitive bid information on all purchases of investment instruments purchased on the secondary market (excluding FDIC Insured certificates of deposit). A competitive bid can be executed through a bidding process involving at least three separate brokers/

financial institutions or through the use of a nationally recognized trading platform.

If the City is offered a security for which there is no readily available competitive offering on the same specific issue, then the Treasurer shall document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities as the same original issue price.

If the City hires an investment adviser to provide investment management services, the adviser must provide documentation of competitive pricing execution on each transaction. The investment adviser will retain documentation and provide upon request.

B. Delivery Versus Payment
Securities transactions, including collateral for repurchase agreements, shall be executed on a delivery vs. payment (DVP) basis. Funds are not wire-transferred until securities are delivered into safekeeping with the City's third- party custodian. The custodial relationship is subject to an agreement for services which may be separate from the agreement for other banking services. The safekeeping requirement does not apply to LAIF, purchase of mutual funds or securities which are physically delivered to the City.

C. Third-Party Safekeeping
Securities will be held by an independent third-party safekeeping institution selected by the City.

All securities will be evidenced by safekeeping receipts in the City’s name. The safekeeping institution shall annually provide a copy of its most recent report on internal controls - Service Organization Control Reports (formerly 70, or SAS 70) prepared in accordance with the Statement on Standards for Attestation Engagements (SSAE) No. 16 (effective June 15, 2011.)

D. Internal Control
The City Treasurer shall establish a system of internal controls, which shall be documented in writing. These controls shall be designed to prevent losses of public funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the City.

VI. AUTHORIZED AND SUITABLE INVESTMENTS

The City’s investments are governed by California Government Code, Sections 53600 et seq .

Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits listed in this section apply at the time the security is purchased.

Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the

current policy.

An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and issuer to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.

1. M
UNICIPAL SECURITIES include obligations of the City of Daly City, the State of California and any local agency within the State of California, provided that:

• The securities are rated in a rating category of “A” or its equivalent or better by at least one “NRSRO”.
• No more than 5% of the total portfolio may be invested in any single issuer. • No more than 30% of the total portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.

2. M
UNICIPAL SECURITIES (REGISTERED TREASURY NOTES OR BONDS) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue - producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California.

• The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). • No more than 5% of the total portfolio may be invested in any single issuer. • No more than 30% of the total portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.

3. U.S. TREASURIES and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries, provided that:

• The maximum maturity does not exceed five (5) years.

4. F
EDERAL AGENCIES or United States Government -Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. There are no limits on the dollar amount or percentage that the City may invest in Federal Agency or Government-Sponsored Enterprises (GSEs), provided that:

• No more than 30% of the total portfolio may be invested in any single Agency/GSE issuer. • No more than 20% of the total portfolio may be invested in callable agency securities. • The maximum maturity does not exceed five (5) years.

5. BANKER’S ACCEPTANCES, provided that:

• They are issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO. • No more than 40% of the total portfolio may be invested in Banker’s Acceptances. • No more than 5% of the total portfolio may be invested in any single issuer. • The maximum maturity does not exceed 180 days.

6. COMMERCIAL PAPER, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:

a. SECURITIES issued by corporations:

(i) A corporation organized and operating in the United States with assets more than $500 million.
(ii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO. (iii) If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO.

b. S
ECURITIES issued by other entities:

(i) The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.
(ii) The securities must have program -wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond. (iii)The securities are rated “A-1” or its equivalent or better by at least one NRSRO.

• No more than 10% of the outstanding commercial paper of any single issuer. • No more than 25% of the City’s investment assets under management may be invested in Commercial Paper. Under a provision sunsetting on January 1, 2031, no more than 40% of the total portfolio may be invested in Commercial Paper if the City’s investment assets under management are greater than $100,000,000.
• No more than 5% of the total portfolio may be invested in any single issuer. • The maximum maturity does not exceed 397 days.

7. N
EGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), issued by a nationally or state-chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:

• The amount of the NCD insured up to the FDIC limit does not require any credit ratings. • Any amount above the FDIC insured limit must be issued by institutions which have short -term debt obligations rated “A -1” or its equivalent or better by at least one NRSRO; or long- term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO. • No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS). • No more than 5% of the total portfolio may be invested in any single issuer.

• The maximum maturity does not exceed five (5) years.

8. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:

• The amount per institution is limited to the maximum covered under federal insurance. • No more than 20% of the total portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.

9. COLLATERALIZED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:

• No more than 20% of the total portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.

10. P
LACEMENT SERVICE DEPOSITS, provided that:

• No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including CDARS.
• Under a provision sunsetting on January 1, 2031, no more than 50% of the portfolio may be invested in deposits through a placement service, including Certificates of Deposit, if the Agency is a city, district or local agency that does not pool money with other local agencies. • The maximum maturity does not exceed five (5) years.

11. COLLATERALIZED BANK DEPOSITS. The City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651. There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.

12. R
EPURCHASE AGREEMENTS collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City may invest, provided that:

• Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third party custodian.
• Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA). • The maximum maturity does not exceed one (1) year.

13. STATE OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND (LAIF), provided that:

• The City may invest up to the maximum amount permitted by LAIF. • LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the Treasurer to adequately judge the risk inherent in LAIF’s portfolio.

14. LOCAL GOVERNMENT INVESTMENT POOLS

• Including Other LGIPs permitted by the City, including San Mateo County Treasurer’s Pool, CalTRUST, California Asset Management Program (CAMP), and California Class, or Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (q), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria: (1) The adviser is registered or exempt from registration with the Securities and Exchange Commission. (2) The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (q), inclusive. (3) The adviser has assets under management in excess of five hundred million dollars ($500,000,000). • There is no issuer limitation for Local Government Investment Pools

15. C
ORPORATE MEDIUM TERM NOTES (MTNS), provided that:

• The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. • The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in MTNs. • No more than 5% of the total portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

16. A

SSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES, AND COLLATERALIZED MORTGAGE OBLIGATIONS FROM ISSUERS NOT DEFINED IN SECTIONS 3 AND 4 OF THE AUTHORIZED INVESTMENTS SECTION OF THIS POLICY, provided that:

• The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO. • No more than 20% of the total portfolio may be invested in these securities. • No more than 5% of the total portfolio may be invested in any single Asset-Backed or Commercial Mortgage security issuer.
• The maximum maturity does not exceed five (5) years.

17. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:

a. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.

• No more than 10% of the total portfolio may be invested in shares of any one mutual fund.

b. M
ONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:

(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.

• No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.

c. No more than 20% of the total portfolio may be invested in these securities.

18. S
UPRANATIONALS, provided that:

• Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank. • The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO. • No more than 30% of the total portfolio may be invested in these securities. • No more than 10% of the total portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

VII. PROHIBITED

INVESTMENT VEHICLES AND PRACTICES

• State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options.
• In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited.

• Investment in any security that could result in a zero interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2031, securities backed by the U.S.

Government that could result in a zero- or negative -interest accrual if held to maturity are permitted.
• Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
• Purchasing or selling securities on margin is prohibited. • The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
• The purchase of foreign currency denominated securities is prohibited. • The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.

VIII. INVESTMENT

POOLS/MUTUAL FUNDS

The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. Annually, the City Treasurer shall seek responses to the following questions from any investment pool or mutual fund in which the City invests:

• A description of eligible investment securities, and a written statement of investment policy and objectives.
• A description of interest calculations and how it is distributed, and how gains and losses are treated. • A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. • A description of who may invest in the program, how often, and what size deposit and withdrawal are allowed.
• A schedule for receiving statements and portfolio listings. • Are reserves, retained earnings, etc. utilized by the pool/fund? • A fee schedule, and when and how it is assessed.
• Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?

IX. COLLATERALIZATION

C
ERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an City of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit.

The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.

C
OLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.

REPURCHASE AGREEMENTS. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:

• The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against t hose securities.
• Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above. • The City shall receive monthly statements of collateral.

X. DIVERSIFICATION,

MAXIMUM MATURITES, AND CREDIT QUALITY

The City will diversify its investments by security type, maturity, and institution in order to reduce market and credit risks associated with concentrating investments in specific security types, maturity segments, or in individual financial institutions. Diversification strategies shall be established by the Treasurer and will be determined based on our investment objectives of Safety, Liquidity, and Return. There is no minimum Portfolio percentage and/or dollar limit for diversification. The maximum Portfolio percentage and/or dollar limits for diversification are indicated in Section VI, Authorized and Suitable Investments.

To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Generally, no investment shall be made in any security which, at the time of the investment, has a term remaining to maturity in excess of five years. However, the City Council specifically grants the authority to the City Treasurer to invest a maximum of $14,000,000 of the City’s portfolio in Government National Mortgage Association securities which, at the time of investment, have terms remainin g to maturity in excess of five years. Additionally, the City Council may grant express authority to exceed this term for this or other individual investments.

1. Mitigating Credit Risk in the Portfolio . Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:

• The diversification requirements included in the “Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio.
• No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy. • The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.

• If a security owned by the City is downgraded to a level below the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:

• Any actions taken related to the downgrade by the investment manager will be communicated to the Treasurer in a timely manner.

• If a decision is made to retain the security, the situation will be monitored and reported to the City Council.

2. Mitigating Market Risk in the Portfolio . Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. On the other hand, longer-term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer -term investments only with funds that are not needed for current cash flow purposes.

The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:

• The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.

• The maximum stated final maturity of individual securities in the portfolio will be five (5) years, except as otherwise stated in this policy.

• The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances.

No more than 5% of the portfolio may be invested in any one issuer, excluding Treasuries and Federal Agency issuers, California LGIPs such as Local Agency Investment Fund (LAIF), CAMP, CalTRUST, San Mateo County Treasurer’s Pool, and FDIC Insured/ Collateralized investments.

Investments into the State of California Local Investment Fund and the San Mateo County Investment Pool meet our diversification requirements.

The City will diversify its investments by security type, maturity, and institution in order to reduce market and credit risks associated with concentrating investments in specific security types, maturity segments, or in individual financial institutions. Diversification strategies shall be established by the Treasurer and will be determined based on our investment objectives of Safety, Liquidity, and Return. There is no minimum Por tfolio percentage and/or dollar limit for diversification. The maximum Port folio percentage and/or dollar limits for diversification are indicated in Section VI, Authorized and Suitable Investments.

To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Generally, no investment shall be made in any security which, at the time of the investment, has a term remaining to maturity in excess of five years. However, the City Council specifically grants the authority to the City Treasurer to invest a maximum of $14,000,000 of the

City’s portfolio in Government National Mortgage Association securities which, at the time of investment, have terms remaining to maturity in excess of five years. Additionally, the City Council may grant express authority to exceed this term for this or other individual investments.

XI. PERFORMANCE EVALUATION

The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a market average rate of return during a market/economic environment of stable interest rates, taking into account the City’s risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.

The Treasurer shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the Treasurer’s quarterly report. The Treasurer shall select an appropriate, readily available index to use as a market benchmark. Benchmarks may change over time based on changes in market conditions or cash flow requirements.

XII. INVESTMENT REPORTING

The City Treasurer will make quarterly reports to the City Council within 45 days after the end of quarter. The reports will include the following informational items:

• A listing of all securities, investments, and moneys held by the City, showing the type of investment, issuer, date of maturity, rate of interest earned over the quarter, par, and dollar amount invested.

• A description of any of the City’s funds, investments, or programs that are under the management of contracted parties, including lending programs.

• With respect to all securities held by the City, and under management of any outside party that is not also a local agency of the State of California Local Agency Investment Fund, the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation.

• The transaction details of any transactions in the City’s portfolio, including reinvestments, purchases, and sales of securities.

• A statement that the portfolio conforms to this Statement of Investment Policy or the manner in which the portfolio is not in compliance.

• A statement of the City’s ability to meet its cash pool expenditure requirements for the next six months or provide an explanation as to why sufficient money shall, or may, not be available.

XIII. AUTHORITY TO INVEST MONIES

Pursuant to Government Code § 53600 et. Seq., with the annual adoption of this Statement of Investment Policy, the City Council hereby delegates the authority to invest or reinvest funds of the City, and sell or exchange securities so purchased, to the City Treasurer for a one-year period, who will thereafter assume full responsibility for those transactions until the delegation of authority is revoked or expires, in accordance with this Statement of Investment Policy.

XIV. ADOPTION

The investment policy shall be adopted by resolution of the City Council of the City of Daly City.

The policy shall be reviewed at a public meeting on an annual basis by the City Council and any modifications to the policy must be approved by the City Council.

XV. GLOSSARY OF INVESTMENT TERMS

AGENCIES. Shorthand market terminology for any obligation issued by a government -sponsored entity (GSE), or a federally related institution . Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:

FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry.

FFCB issues discount notes and bonds.

FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.

FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.

FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.

GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.

PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.

TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds.

A
SSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.

BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade transactions.

It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.

B
ENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.

BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from their own position.

CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its maturity.

The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its current securities and reissue them at a lower rate of interest.

C
ERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.

CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM (CDARS). A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage.

Intrafi is an entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.

C
OLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.

COLLATERALIZED BANK DEPOSIT. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.

C
OLLATERALIZED TIME DEPOSIT. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess o f the limit covered by the Federal Deposit Insurance Corporation.

C
OMMERCIAL PAPER. The short-term unsecured debt of corporations.

COUPON. The rate of return at which interest is paid on a bond.

CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.

DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position.

DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.

DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short -term securities, such as T -bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities o f that maturity and/or quality.

D
IVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.

DURATION. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.

F
EDERALLY INSURED TIME DEPOSIT. A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.

F
IDUCIARY. A person or organization that acts on behalf of another person(s) or organization that puts their clients’ interest ahead of their own as they are bound both legally and ethically to act in the other’s best interests.

L
EVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.

LIQUIDITY. The speed and ease with which an asset can be converted to cash.

LOCAL AGENCY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

LOCAL GOVERNMENT INVESTMENT POOL. Investment pools that range from the State Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These

funds are not subject to the same SEC rules applicable to money market mutual funds.

MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole." MARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral.

MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.

MARKET VALUE. The price at which a security can be traded.

MATURITY. The final date upon which the principal of a security becomes due and payable. The investment’s term or remaining maturity is measured from the settlement date to final maturity.

MEDIUM TERM NOTES. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market oppor tunities or to investor preferences.

MODIFIED DURATION. The percent change in price for a 100 -basis point change in yields. Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.

MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.

MONEY MARKET MUTUAL FUND. A mutual fund that invests exclusively in short -term securities.

Examples of investments in money market funds are certificates of deposit and U.S. Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.

MORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.

M
UNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.

MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money mark et instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.

N
ATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO). A credit rating agency that the Securities and Exchange Commission in the United States uses for regulatory purposes.

Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.

N
EGOTIABLE CERTIFICATE OF DEPOSIT (CD). A short -term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state -licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market.

PAYDOWN. A reduction in the principal amount owed on a bond, loan, or other debt.

PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U .S. Government securities

market.

PRUDENT INVESTOR (PRUDENT PERSON) RULE. A standard of responsibility which applies to fiduciaries.

In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.”
REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.

S
AFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.

SECURITIES AND EXCHANGE COMMISSION (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.

SECURITIES AND EXCHANGE COMMISSION (SEC) RULE 15C3-1. An SEC rule setting capital requirements for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.

S
TRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate.

Issuers of such notes lock i n a reduced cost of borrowing by purchasing interest rate swap agreements.

S
UPRANATIONAL. A Supranational is a multi- national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.

T
OTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.

U.S.

TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.

T
REASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six- month T-bills at regular weekly auctions. It also issues “cash management” b ills as needed to smooth out cash flows.

TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.

TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.

YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.

City Council Agenda Report Item # _____

Meeting Date: January 26, 2026

Subject: Set Time and Place to Consider Adoption of an Entertainment Zone Ordinance Pursuant to SB 969

Recommendation

Staff recommends that the City Council set the time and place for consideration of an ordinance to establish an Entertainment Zone program consistent with Senate Bill 969. Staff propose February 9, 2026, as the date for this item to be returned for Council consideration.

Background
SB 969, which took effect on January 1, 2025, provides cities with the authority to allow controlled outdoor alcohol consumption within designated public areas during specific events, subject to the adoption of a local ordinance. This new state law is intended to support community-based events and economic activity while ensuring public safety and regulatory compliance.

To exercise this authority, a local ordinance must be adopted. Setting time and place for consideration is a procedural requirement and does not establish or activate any Entertainment Zone.

Fiscal Impact
None is associated with this action.

Conclusion:

Staff recommends setting February 9, 2026 as the date to consider first reading adoption of the proposed ordinance.

Respectfully submitted,

Maybelle Manio Timothy J. Nevin
Economic Development Specialist Assistant City Manager

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DALY CITY

COMMENDING TATUM MOTHERSHEAD ON THE OCCASION OF HER RETIREMENT

WHEREAS, Tatum Mothershead began her career with the City on October 4, 1999, serving as an Assistant Planner in the Department of Economic & Community Development; and

WHEREAS, on April 2, 2001, Tatum Mothershead was promoted to Associate Planner, providing technical planning support and assistance to the Planning Division; and

WHEREAS, Tatum Mothershead served in a temporary appointment as Senior Planner beginning July 19, 2002, before being officially promoted to Senior Planner on July 21, 2003, assuming increased responsibilities related to planning review and project coordination; and

WHEREAS, on April 21, 2008, Tatum Mothershead was promoted to Planning Manager, where she oversaw assigned planning functions, supervised staff, and managed administrative responsibilities in accordance with City policies and procedures; and

WHEREAS, Tatum Mothershead served in a Temporary Appointment as Director of Economic & Community Development beginning October 21, 2013, and was promoted to Director of Economic & Community Development effective January 1, 2016, overseeing departmental operations and programs; and

WHEREAS, during her employment with the City, Tatum Mothershead participated in professional development opportunities, including completion of the 2007 Leadership Academy, the 2013 Succession Academy, and the 2024 Public Sector Leadership Academy, which provided training in organizational processes and management fundamentals; and

WHEREAS, over the course of more than two decades of service, Tatum Mothershead maintained ongoing service within the Department of Economic & Community Development and applied her knowledge in carrying out departmental responsibilities; and

WHEREAS, throughout her tenure, Tatum Mothershead carried out her assigned duties and responsibilities and contributed to the ongoing operations and functions of the City;

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Daly City, that it does hereby commend Director of Economic & Community Development Tatum Mothershead on the occasion of her retirement and acknowledge her years of service and dedication as a City employee.

BE IT FURTHER RESOLVED, that the City Council of the City of Daly City extends its best wishes to Tatum Mothershead upon her retirement and thanks her for her service to the organization.

I hereby certify the foregoing to be a true copy of a Resolution adopted by the City Council of Daly City, California, at a regular meeting thereof held on the day of , 2025, by the following vote of the members thereof:

AYES, and in favor thereof, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

CITY CLERK OF THE CITY OF DALY CITY
APPROVED:

MAYOR OF THE CITY OF DALY CITY

ORDINANCE NO. 1485

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DALY CITY AMENDING CHAPTER 2.16 OF THE MUNICIPAL CODE RE: ARTS AND CULTURE COMMISSION

The City Council of the City of Daly City, DOES ORDAIN as follows:

SECTION 1. Section 2.16.020 of the Daly City Municipal Code is hereby amended to read as follows:

2.160.020 Duties.

The arts and culture commission shall have the following duties:

A. To advise the city council on all matters affecting the culture of the city which includes but not limited to city budget, funding, programming, and historic artifacts/ artwork that contributes to the culture of Daly City.

B. To work in collaboration with other city boards, commissions and community stakeholders to uplift art and culture that is relevant and responsive to the needs of our youth, families, seniors, neighborhoods and community.

C. To raise awareness of social issues affecting our community through art and culture.

D. To encourage programs that includes stories and experiences that heal, connect and unites us together as a community.

E. To establish, outreach and sustain authentic relationships between the city and our diverse community.

F. To review and make recommendations upon all works of art to be acquired by the city, either by purchase, gift or otherwise, and with respect to their locations.

G. Recommend needed changes in laws, legislation, and policies needed to promote the aesthetic, cultural development and historical preservation of the City.

H. Be available to city departments, when appropriate, to advise on arts, cultural and historical issues.

I. To undertake and carry out all functions reasonably necessary to accomplish the objectives and to discharge the functions of the commission; and to exercise such other functions as may be prescribed by the city council.

SECTION 2. Section 2.16.030 of the Daly City Municipal Code is hereby amended to read as follows:

2.16.030 Qualification of commissioners.

Commissioners may be those persons who have demonstrated a strong commitment to

the arts through individual patronage, education, or professional experience or knowledge of a particular arts and culture field, and the general public. Efforts should be made to include commissioners who represent a diversity of backgrounds. Commissioners shall commit to volunteering time to serve on the board which meets monthly, and on an ad hoc basis as needed.

In selecting commissioners, city council members may consider whether candidates would be able to effectively and ethically serve in light of any foreseeable conflicts of interest.

SECTION 3. Section 2.16.050 of the Daly City Municipal Code is hereby amended to read as follows:

2.16.050 Rules.

The arts and culture commission by resolution may adopt rules for the election and terms of its officers, for the transaction of business, and shall keep a record of its resolutions, transactions, findings and determinations, which shall be a public record.

Election for Chair and Vice Chair for the Arts and Culture commission will take place at every January meeting. Chair and Vice Chair will hold their positions for twelve months of the year they are elected.

SECTION 4. Section 2.16.060 of the Daly City Municipal Code is hereby added to read as follows:

2.16.060 Art in Public Places Account.

A. An “Art in Public Places Account” is hereby established as a designated City fund to support public art, cultural programming, and related Commission initiatives.

B. Funding Sources. The Account may receive:

1. Donations from individuals, businesses, foundations, and organizations.

2. Allocations or appropriations made by the City Council.

3. Grants or contributions designated for public art or cultural programming.

4. Any other funds permitted under applicable laws.

C. Use of Funds. Monies within the Account shall be used exclusively for:

1. Public art projects, including acquisition, installation, maintenance, and restoration.

2. Cultural programs and events that advance the Commission’s duties.

3. Preservation and interpretation of historic artifacts or artwork.

4. Community arts engagement, education, and outreach.

SECTION 5. Section 2.16.090 of the Daly City Municipal Code is hereby added to read as follows:

2.16.090 Coordination with Arts and Culture Commission.

The Arts and Culture Commission shall provide oversight of the Art in Public Places Account and advise the City Council on public art policies, programs, and cultural initiatives that enhance community identity, inclusivity, and historic preservation. Staff shall manage operational aspects consistent with City financial policies and Council direction.

SECTION 6. Environmental Determination. The City Council of the City of Daly City finds and determines that the implementation of measures described in this Chapter is in furtherance police powers of the City of Daly City, and that these purposes are exempt from the provisions of the California Environmental Quality Act (CEQA); Chapter 3 (commencing with Section 21100) of Division 13 of the Public Resources Code, as provided in categorical exemption Classes 1, 4, 5, 7, 8, 9, and or 21 of the CEQA Guidelines (Title 14, California Code of Regulations, Sections 15301-15329).

SECTION 7. Effective Date and Publication: Pursuant to the provisions of Government Code Section 36933, a summary of this ordinance shall be prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this ordinance is scheduled to be adopted, the City Clerk shall (1) publish the summary, and (2) post it in the City Clerk’s office a certified copy of this ordinance. Within fifteen (15) days after the adoption of this ordinance, the City Clerk shall (1) publish the summary and (2) post in the City Clerk’s office a certified copy of the full text of this ordinance along with the names of those City Council members voting for and against this ordinance or otherwise voting. This Ordinance shall be in full force and effect thirty (30) days from and after its passage.

SECTION 8. Severability: If any section, subsection or sentence of this Ordinance is found by a court of competent jurisdiction to be invalid or unlawful, the City Council finds and declares that the remainder of this ordinance would be and is enforceable and would have been adopted notwithstanding the finding of invalidity as to any section, subsection or sentence.

Introduced this 8 th day of December , 2025.

Passed and adopted as an Ordinance of the City of Daly City at a regular meeting of the City Council of the City of Daly City held on the day of , 2026, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

CITY CLERK OF THE CITY OF DALY CITY

APPROVED:

MAYOR OF THE CITY OF DALY CITY

1 ORDINANCE NO. 1486

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DALY CITY AMENDING CHAPTER 2.20 OF THE MUNICIPAL CODE RE: RECREATION COMMISSION

The City Council of the City of Daly City, DOES ORDAIN as follows:

SECTION 1. Section 2.20.020 of the Daly City Municipal Code is hereby amended to read as follows:

2.20.020 Membership – Appointment - Compensation.

The city recreation commission shall consist of five members, and one Youth Advisory Member (“Youth Commissioner”) and an alternate who must be at least 13 years old, and no more than 17 years old at the time of appointment ("Youth Commissioners"), to be appointed by the mayor, subject to the confirmation of the city council. Such members shall serve without compensation.

Youth Commissioners shall serve only in an advisory capacity to the Recreation Commission and shall not count towards a quorum of the commission. Youth Commissioners shall be residents of the city, in middle school and/or high school.

SECTION 2. Section 2.20.030 of the Daly City Municipal Code is hereby amended to read as follows:

2.20.030 Membership – Term.

Commissioners serve in an advisory capacity at the pleasure of the city council. Initially, the terms of two members of the recreation commission shall be for two years. The remaining three members shall serve for three years. Thereafter, the terms of all members shall be for three years.

Each Youth Commissioner shall serve at the pleasure of the Council for up to two years and until the appointment and qualification of a successor.

SECTION 3. Section 2.20.060 of the Daly City Municipal Code is hereby amended to read as f follows:

2.20.060 Relation with the press.

Commissioners shall refer all requests for information made by the press to the chair and/or director of recreation services and shall not endeavor to interpret any action of the commission.

SECTION 4. Section 2.20.090 of the Daly City Municipal Code is hereby amended to read as follows:

2.20.090 Powers and duties.

The powers and duties of the recreation commission shall be as follows:

A. Act in an advisory capacity to the city council on all matters pertaining to recreation services offered by the city, including key budget items, capital improvements, facility

2 issues affecting the community, recommendations for user fees, service levels in relation to core and discretionary programs, fundraising initiatives, and legislative issues affecting the department of recreation services while addressing the diverse elements of the Daly City community.

B. Consider the annual budget of the department of recreation services prior to its submission by the city manager to the city council and provide advice with respect thereto to the city manager and to the city council.

C. Provide advice and community perspectives regarding recreation services and programming for the inhabitants of the city, promote and stimulate public interest therein and to the fullest possible extent the cooperation of special authorities and other public and private agencies interested therein.

D. To gather community opinions, needs and perceptions regarding recreational opportunities and needs and to advise the director of recreation services of this information. Further, to provide information to the community regarding available programs and facilities and encourage their participation and use.

SECTION 5. Section 2.20.110 of the Daly City Municipal Code is hereby amended to read as follows:

2.20.110 Relation to staff.

The city manager shall appoint a staff liaison to the recreation commission who will coordinate and provide all staff support. The staff liaison will attend all commission meetings and act as secretary to the commission. They will bring department-related policy matters for consideration to the commission as well as respond to policy-related inquiries.

SECTION 6. Environmental Determination. The City Council of the City of Daly City finds and determines that the implementation of measures described in this Chapter is in furtherance police powers of the City of Daly City, and that these purposes are exempt from the provisions of the California Environmental Quality Act (CEQA); Chapter 3 (commencing with Section 21100) of Division 13 of the Public Resources Code, as provided in categorical exemption Classes 1, 4, 5, 7, 8, 9, and or 21 of the CEQA Guidelines (Title 14, California Code of Regulations, Sections 15301-15329).

SECTION 7. Effective Date and Publication: Pursuant to the provisions of Government Code Section 36933, a summary of this ordinance shall be prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this ordinance is scheduled to be adopted, the City Clerk shall (1) publish the summary, and (2) post it in the City Clerk’s office a certified copy of this ordinance. Within fifteen (15) days after the adoption of this ordinance, the City Clerk shall (1) publish the summary and (2) post in the City Clerk’s office a certified copy of the full text of this ordinance along with the names of those City Council members voting for and against this ordinance or otherwise voting. This Ordinance shall be in full force and effect thirty (30) days from and after its passage.

SECTION 8. Severability: If any section, subsection or sentence of this Ordinance is found by a court of competent jurisdiction to be invalid or unlawful, the City Council finds and declares that the remainder of this ordinance would be and is enforceable and would have been adopted notwithstanding the finding of invalidity as to any section, subsection or sentence.

3 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DALY CITY AMENDING CHAPTER 2.20 OF THE MUNICIPAL CODE RE: RECREATION COMMISSION

Introduced this 8th day of December , 2025.

Passed and adopted as an Ordinance of the City of Daly City at a regular meeting of the City Council of the City of Daly City held on the day of , 2026, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

CITY CLERK OF THE CITY OF DALY CITY

APPROVED:

MAYOR OF THE CITY OF DALY CITY