Hollister City Council
October 20, 2025

4 Section 12.06 Notice of Discipline or Rejection of Discipline ......................................... 401 Section 12.07 Appeal of Disciplinary Action ..................................................................... 401 Section 12.08 Appeal ............................................................................................................ 401 Section 12.09 Evidentiary Appeal Hearing Procedure...................................................... 412 Section 12.10 Serving of Notices ........................................................................................ 434 Section 12.11 Summary Suspension .................................................................................. 434 Section 12.12 Right to Representation ............................................................................... 434 Section 12.13 Records Purged ............................................................................................ 445

5 ARTICLE 1. PREAMBLE

This Memorandum of Understanding is entered into by the City of Hollister, hereinafter referred to as "City", and the Service Employees International Union, Local 521, CTW - CLC, hereinafter referred to as "Union," having met and conferred in good faith, do hereby jointly prepare and execute the following written Memorandum of Understanding (MOU). It is understood that the provisions set forth the full and complete understanding of the parties in accordance with Sections 3500-3510 of the Government Code of the State of California, otherwise known as the Meyers-Milias-Brown Act.

ARTICLE 2. NO DISCRIMINATION

The City and Union agree that there shall be no discrimination against any employee in the unit because of race, religion, creed, political affiliations, color, national origin, ancestry, age, sexual orientation, or sex, unless defined as a bona-fide occupation qualification as defined by Federal or State law. The City and Union also agree not to discriminate against any employee for his/her activity on behalf of, or membership in or lack of membership in, the Union. Any employee alleging a violation of this article shall have the burden of proving the existence of a discriminatory act or acts and of proving that but for such act or acts the alleged injury or damage to the grievant would not have occurred.

ARTICLE 3. RECOGNITION

Pursuant to Section 3500-3510 of the Government Code, the City certifies the Union as the recognized majority representative for all regular career, full-time employees in the General Unit. The General Unit includes all classifications of non-management, non- supervisory, and non-confidential employees in the City other than those classifications designated as local-safety in the Police and Fire Departments and the classes of Police Services Officer, Police Services Supervisor, and Multi Services Officer.

ARTICLE 4. NO ABROGATION OF RIGHTS

This M.O.U. does not modify any City Council rights.

ARTICLE 5. MAINTENANCE OF BENEFITS

The articles included in this agreement constitute a full and complete agreement with the City and Union on all matters within the scope of representation for the period stated in Article 18. Term Of Agreement. All present resolutions, ordinances, rules and regulations, practices and policies covering matters within the scope of representation will continue in force and effect during said period without change, except to conform to the terms of this M.O.U. subject to meet and confer. Notice of any matter proposed to be changed will be provided to the Union in a timely fashion.

6 CITY RIGHTS
ARTICLE 6. SALARY AND SPECIAL COMPENSATION

A. Salary Adjustments

1. Compensation Adjustments Sworn Unit Classifications

Effective the first full pay period after the execution of this MOU, by all parties, the City shall apply a four zero percent (040.00%) increase to the base salary of all unit classifications.

Additionally, all unit members shall receive a signing incentive in the amount of three hundred fifty dollars ($350.00). Payment of this signing incentive shall be made via the regular payroll process, in the first full pay period after the execution of this MOU. With this MOU being approved on September 3, 2024, this means the signing incentive shall be pad to members during payroll for the pay period of September 7, 2024 – September 20, 2024, with members receiving the $350.00 signing incentive in paychecks received on September 25, 2024

B. Retirement

1. Contribution

Tier 1

a. Effective the first full pay period after the execution of the MOU, and the City's subsequent adoption of the Resolution changing the CalPERS Retirement Employee Contribution Rate, all unit employees under the Miscellaneous CalPERS "2.5% @ age 55" Retirement Benefit Plan shall pay eight percent (8%) of their Compensation as part of the Employees' contribution.

Tier 2

b. Effective the first full pay period after the execution of the MOU, and the City's subsequent adoption of the Resolution changing the CalPERS Retirement Employee Contribution Rate, all unit employees under the Miscellaneous CalPERS "2% @ age 60" Retirement Benefit Plan shall pay seven percent (7%) of their Compensation as part of the Employees' contribution.

Tier 3

c. Effective on or after January l, 2013, all new employees hired on or after January 1, 2013, and who are defined as a "new member" under the Public Employee Pension Reform Act of 2013 (PEPRA), AB 340 shall pay

7 the employee contribution rate as established by State of California law.

2. 1959 PERS Survivor Death Benefit

The City shall provide the PERS Section 21574 "Fourth Level 1959 Survivor Death Benefit" for all eligible unit members for the term of this contract. The City shall pay the employer rate contribution. The employee shall pay the member rate contribution.

3. One-Year Final Compensation Benefit

The City shall provide the PERS Section 20042 "One Year Final Compensation" benefit for eligible unit members.

All new employees hired on or after January 1, 2013, and who are defined as a "new Member" under PEPRA, are subject to the new Benefit Formulas, Final Compensation Period, and Contribution requirements as established by the PEPRA.

C. Bilingual Allowance

Employees who perform technical bilingual skills (reading, writing and oral translation) for the benefit of the City on a regular and ongoing basis and who successfully pass City-administered proficiency test shall receive an allowance based on the level(s) of bilingual competency listed below.

Level I – Oral Translation

Employees who perform technical bilingual skills and who successfully pass a City- administered oral proficiency test shall receive an allowance of one hundred seventy-five dollars ($175.00) per month.

Level II – Written Translation

For employees who successfully pass the written proficiency test, shall receive an additional amount of one hundred and twenty-five dollars ($ 125.00) per month.

Each department within the City will be allowed 3 positions of level 2 bilingual services. If a department’s need for bilingual services becomes greater than the allotted 3 positions, the department head may request to increase its bilingual services pending City Managers approval.

Employees who become eligible for Level II will be required to serve as an oral translator and/or provide written translation in the course of the employ ee’s duties on a regular and on-going basis, per the City’s needs. These employees may be called upon by other departments on an as need basis.

8 Such Level II Bilingual Translators shall perform written translations that are viewed by a large audience of city residents (i.e. City mailers, informational brochures, inserts in city utility billings, social medial, public notices, and any additional documents as needed.) Employees, who are currently receiving Level I Bilingual Allowance, will not be required to retest in order to continue receiving the monthly allowance.

D. Compensatory Time

1. Overtime

Employees shall have the option to either receive paid compensation at a rate one and one-half (1 ½) times the employees regular rate of pay for all hours worked in excess of forty (40) hours per week, or to take compensatory time off from duty at a rate of one and one-half (1 1/2) times the amount of each overtime hour worked which exceeds forty (40) hours per week.

2. Holidays

Employees who work holidays shall have the option to either receive paid compensation at a rate one and one-half (1 1/2) times the employees' regular pay rate plus receive the employees' regular paid compensation for the holiday, or to take compensatory time off from duty at a rate one and one-half (1 1/2) times the amount of each hour worked plus receive eight (8) hours regular paid compensation. Employees who are called in on holidays shall also receive this option.

3. Maximum Accrual

Employees may accumulate a maximum of 240 hours (160 FLSA overtime hours worked) in their "comp time bank".

4. Compensatory Time Conversion To Cash

Employees may convert accumulated compensatory time to cash as follows:

a. Twice during the fiscal year an employee may request a cash payment of accumulated Compensatory Time Off (CTO).

b. Requests for payment must be made in writing to the Finance Department at least thirty (30) days in advance of June 1st and December 1st of each year.

c. Cash payment of CTO shall be paid on the first pay day which follows June 1st and December 1st of each year.

9 E. Overtime and Holiday Pay

1. Overtime Pay

Any employee represented by this unit who is authorized or required to work overtime in excess of forty (40) hours per week shall be compensated at the rate of time and one-half for each hour worked of the Fair Labor Standards Act (FLSA) regular rate of pay or granted as equivalent compensatory time off (CTO).

2. Holiday Pay

Any employee represented by this unit who is authorized or required to work on any City recognized holiday shall be compensated at the rate of time and one- half for each hour worked, in addition to regular pay for the holiday.

F. 24-Hour Hazardous Materials (Hazmat) Certification Premium Pay

Employees covered by this agreement who are required to perform duties and respond to emergency situations involving exposure to hazardous materials, and who possess and maintain a 24-Hour Hazardous Materials Technician Level III certification that meets 29 CFR 1910.120(q) shall be paid premium pay of five percent (5.0%) so long as they are assigned such responsibilities and maintain current certification for this Premium Pay.

Eligibility shall be effective on the first Payroll Period following ratification of this Memorandum of Understanding.

The City will review annually the number and types of occurrences to which employees qualifying for this premium pay are called to respond to in order to determine the cost-effectiveness of maintaining this program. The City reserves the right to re-negotiate the amount of the premium pay in consideration of the number and magnitude of the incidents, the actual response by the employee(s) both during and outside normal business hours, and other factors deemed relevant by the City.

G. Heavy Equipment Operation Premium

Effective upon execution of this M.O.U., Employees in the class of Maintenance Worker I/II, Senior Maintenance Worker, Junior Water Operator, and Water Operator I/II who maintain a Class A license and operate heavy equipment shall receive a premium payment of two dollars ($2.00) over his/her regular base rate for each hour worked.

H. License Certification

10 1. Land Surveyor License Certification

All employees who possess and maintain a valid California Land Surveyor License shall receive Annual Incentive Pay of five percent (5.0%) of base salary, payable as part of the employee's bi- weekly payroll.

2. Qualified Stormwater Developer (QSD)/ Qualified Stormwater Practitioner (QSP) Certification

An employee who possesses and maintains a valid QSD/ QSP Certification as required by the State of California for storm water best management practice shall receive Annual Incentive Pay of five percent (5.0%) of base salary, payable as part of the employee's biweekly payroll, if the employee's job assignment as determined by the City Manager requires the individual perform the work .

I. Longevity Pay

A longevity bonus shall be paid to employees of this unit who complete the following specified consecutive years of service after the effective date of this M.O.U.

NUMBER OF CONSECUTIVE YEARS LONGEVITY BONUS
10 – 14 Years Three Percent (3.0%) of Base Salary
15 – 19 Years Six Percent (6.0%) of Base Salary
20 or more Years Nine Percent (9.0%) of Base Salary

Unit members who have achieved a longevity bonus prior to July 1st, 2009 shall be entitled to receive the difference between the previous longevity bonus and the increased longevity bonus provided in this M.O.U. so that the net result is that employees receive the same bonus amount with equivalent years of service.

J. Standby Pay

Employees covered by this agreement who are assigned to standby duty shall be paid three hundred and fifty dollars ($350.00) for each week that they are so assigned or when there is a staff issue determined by management, prorated to a daily amount. The City shall have full discretion in making and administering standby assignments. This shall include, but not be limited to, the authority to:

1. Require an employee to be available at all hours by telephone or to use a pager.

2. To restrict travel.

3. Require employee to refrain from activities which would impair the ability to respond to emergency situations.

11 Management agrees to involve employees in discussions regarding standby policy modifications.

Standby assignments shall be scheduled three (3) months in advance to provide even distribution of on-call assignments to the extent possible. However, schedule adjustments may be necessary due to illness, vacation, vacancy, and/or other types of approved leave.

K. Callback Pay and Rest Periods After Emergency Callback

1. Callback Pay

Employees who are called back to work outside of their regularly scheduled hours, and not as a continuation of their work shift, in the event of an emergency, shall receive a minimum of two (2) hours compensation at time and-one-half base pay or compensation for hours worked (including eligible FLSA overtime), whichever is greater.

Employees may be assigned to a roll down call back list and shall not be subject to the standby provisions and requirements of Article 6.J. Roll down call back lists are composed of employees who may be called during an emergency and are called in sequence until a person whose name is on the list is contacted and able to respond in a timely manner.

2. Rest Periods After Emergency Callback

a. Rest Between Shifts: If an employee is called back for emergency work and performs four (4) or more hours of service during the eight (8) hours immediately preceding their next scheduled shift, the employee shall receive a minimum of eight (8) consecutive hours off before returning to duty. Any overlap between the rest period and the employee’s regular shift shall be paid at the regular rate of pay.

Example: An employee normally works 8:00 a.m. to 5:00 p.m. and is called back to respond to an emergency from 12:00 a.m. to 5:00 a.m. The employee is entitled to an eight-hour rest period and would not be required to report back to work until 1:00 p.m. That missed time from 8:00 a.m. to 1:00 p.m. would be paid at the employee’s regular rate.

b. Extended Emergency Response: For emergency work exceeding twelve (12) consecutive hours, employees shall be provided an eight (8) hour rest break before returning to duty, unless otherwise agreed due to continued emergency needs.

12 c. Late-Night Callbacks: If an employee is called back to work between 10:00 p.m. and 4:00 a.m., and works more than two (2) hours, the employee may be allowed to start their next regular shift later than usual or be granted paid administrative leave for part or all of that shift. This is subject to the City’s operational needs and requires supervisor approval.

The intent of this provision is to support employee rest and recovery following significant overnight emergency work.

K.L. Uniform Allowance

The City will provide uniforms for employees working at the City Yard and at the City Airport.

L.M. Cellphone Allowance

At the execution of the M.O.U., the City will pay a cell phone allowance of $40 per month to eligible employees (Water Maintenance Operator II, Senior Maintenance Worker, Wastewater Treatment Plant Operator II, Utility Engineer, Assistant Engineer, and Public Works Inspector) and those who are assigned by management to maintain a cell phone. Employees receiving this allowance shall keep the phone in service at all assigned times and shall maintain the phone in proper working order at the employee's expense. No employee will be allowed the Cell Phone Allowance if they also maintain a City provided Cell Phone. City has no financial responsibility for lost or damaged cell phones.

M.N. Cross-Connection Specialist Certification

At the execution of the M.O.U., an employee who possess and maintains a valid California/Nevada Cross-Connection Specialist Certification shall receive Annual Incentive Pay of five percent (5.0%) of base salary, payable as part of the employee's bi-weekly payroll, at the City Manager's discretion, if the employee's job assignment requires the individual to perform the work .

N.O. Notary Public Commission Pay

Any Union Employee who possesses, maintains, and is authorized by management to use a Notary Public Commission license on behalf of the City shall receive an allowance of one hundred twenty-five dollars ($125.00) per month. Employees who receive Notary Public Commission Pay shall remain subject to the needs and requirements of the City. The Commission Pay will be payable as part of the employee’s bi-weekly payroll.

O.P. Homeless Encampment Cleanup Assignment

13 Upon execution of this contract, whenever a Bargaining unit Worker volunteers to perform homeless encampment cleanup, the employee shall be paid, in addition to their basic compensation, two-hundred fifty dollars $250.00 differential per day worked.

Whenever the Bargaining unit Worker who is eligible for this differential is required to work overtime, such employee's base hourly rate plus the two-hundred fifty dollars $250.00 differential will be used in determining payment for overtime hours worked.

ARTICLE 7. INSURANCE

A. Description

The City of Hollister Flexible Benefits Plan/Cafeteria Plan (hereinafter "Plan") is available to full- time employees (hereinafter "Employees"). There will be three participation levels as referenced under Section [E]. Optional benefits are listed below. Once an election is made, it will remain in force until the next open enrollment period. A Third Party Administrator (T.P.A.) fee will be paid by the employees that participate in the Plan.

B. Health Insurance Options

The City shall provide employees with the choice of participating in the Public Employees' Medical and Hospital Care Act (PEMHCA) program offered by CALPERS.

C. IRS Code Section 125 Flexible Benefits/Cafeteria Plan

1. The City shall provide for unit members an IRS Code Section 125 Flexible Benefits/Cafeteria Plan in accordance with all applicable state and federal laws and regulations.

2. The City shall contribute towards the PEMHCA medical, dental and vision care plan amounts allocated in accordance with the City's IRS Code Section 125 Flexible Benefits/Cafeteria Plan as specified below.

3. The City shall allocate specified amounts of "Flex Credits" to the employee's flexible benefit account. These amounts shall consist of the following:

a. For Calendar Year 2024: The City will continue to contribute a dollar amount towards monthly medical insurance premiums at the following levels:

COVERAGE CITY CONTRIBUTION
Employee Only $1,342.93278.98
Employee Plus One $2,685.86557.96

14 Employee Plus Family $3,491.63325.36

For Calendar Year 2025: The City will increase its contribution by the actual increase to the PERS Platinum plan or an amount not to exceed five percent (5.00%).

b. An amount equivalent to theThe City will City's contributetion towards dental insurance in the following amounts:. The required contribution for employees electing dependent coverage in accordance with Section [E]

COVERAGE CITY CONTRIBUTION
Employee Only $49.80
Employee Plus One $100.63
Employee Plus Family $135.91

c. An amount equivalent to theThe City will 's contributeion towards vision insurance in the following amounts:.

COVERAGE CITY CONTRIBUTION
Employee Only $14.15
Employee Plus One $30.29
Employee Plus Family $30.29
The required contribution for employees electing dependent coverage in accordance with Section [E].

4. In the event that surplus Flex Credits are available, all Union Employees shall have the option to allocate such Flex Credits to one or more of the following:

a. Union Employees’ Flexible Spending Account.

b. Roth Individual Retirement Account (IRA).

c. ICMA or City-authorized 457 Deferred Compensation Plan.

If a Union Employee's residual "Flex Credits" are reduced, the employee will have the responsibility to pay the contribution no longer covered by the Surplus Flex Credits.

5. Employees who waive either dental and/or vision coverage shall have the option to apply available flex credits towards the cost of any optional premium listed in the respective sections below. The cost of the optional premium not covered by available flex credits shall remain the employee’s responsibility.

6. Employees who elect to waive any or all health coverage shall be subject to the terms and provisions described under Section [J] below.

15 D. Terms for Health Care Participation

Participation and coverage in the medical, dental, and vision care plans shall be in accordance with the terms and conditions of the insurance carrier.

E. Health Care Contributions

1. Employee-only Premium

The City shall contribute towards the medical, dental, and vision insurance plans an amount equal to the employee-only premium at the time of adoption of this M.O.U. for each member of the unit. The employee-only premium for medical insurance shall be in accordance with Section [C] above.

2. Employee Option for Dependent Coverage

For those employees who elect the option for dependent coverage for medical, dental, and vision insurance plans, the City shall contribute monthly amounts equal to the employee plus one and employee plus family toward such dependent coverage in accordance with Section [C] above.

F. Vision Insurance

The City shall provide a vision care insurance plan which is available to eligible unit members and qualified dependents during the term of this M.O.U.

The City shall offer vision care insurance for employees and qualified dependents as a pre-tax flexible benefit option. Participation and coverage shall be in accordance with the terms and conditions of the insurance carrier.

G. Dental Insurance

The City shall offer dental care insurance for employees and qualified dependents as a pre-tax flexible benefit option. Participation and coverage shall be in accordance with the terms and conditions of the insurance carrier.

H. Life Insurance

The City shall provide term life insurance in the amount equal to $50,000 for each member of the unit for the term of this M.O.U. Additional term life insurance may be purchased by the employee in increments of $10,000 up to a total of $250,000.

I. Long Term Disability Insurance

The City agrees to provide to all employees within this unit at City cost a Supplemental Long Term Disability Plan, coordinated with other existing benefits to

16 provide no more than a thirty (30) day exclusion or elimination period; no less than a one-year benefit for accident or illness; and a minimum scheduled benefit of sixty-six percent (66%) or two-thirds (2/3) of gross salary to a maximum of $3,500.00 per month for the term of this M.O.U. The City in its sole discretion shall select the Supplemental Long Term Disability Plan carrier that meets these requirements.

J. Health Insurance Waiver Option

1. Effective January 1, 2014, employees within this bargaining unit who elect not to participate in the City's health care insurance program will be compensated in an amount as follows:

$535 Employee Only
$1,075 Employee plus one
$1,380 Employee plus family

The compensation will be based on the employer’s contribution towards the premiums for the City's health plan at the level corresponding to the employee’s verified non-City insurance coverage (employee only, employee plus one dependent, or employee plus two or more dependents). To receive this benefit, employees must submit documentation demonstrating their enrollment in a qualified non-City health insurance plan at the applicable coverage level. This documentation must be provided at the time of waiver and during any subsequent verification periods as specified in Section [3] below. Upon verification of coverage, this cash amount will be paid as part of the employee’s bi-weekly payroll.in which the employee was participating (employee only, employee plus one dependent, employee plus two or more dependents) at the time of waiving City insurance coverage in accordance with Section [3] below.

This cash amount will be paid as part of the employee's bi-weekly payroll.

2. Employees within this bargaining unit shall be eligible to elect not to participate in the City's health care program.

3. Employees within this bargaining unit electing not to participate in the City's health care insurance program must annually provide proof of medical insurance coverage and verify any dependents as if they were receiving coverage through the City in order to maintain payment under this waiver option.

4. In addition to the coverage options specified under Article 7. Insurance of the Memorandum of Understanding between the City of Hollister and the Service Employees International Union, Local 521, the following optional health benefits shall be available to the employees of this bargaining unit.

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K. Optional Health Benefits

17 Employees that have elected to participate in a City offered medical plan can also elect to participate in the optional benefits. If the employee has any surplus flex credits after making all elections required to participate in the medical insurance, the employee can use that surplus toward optional qualified insurance benefits or one or both of the pre-tax spending accounts. Employees that wish to participate in the optional benefits plan, but do not have any surplus credits, can elect to have pre -tax payroll deductions in an amount to cover the cost of their elections.

Employees may pay the premiums for the following benefits on a voluntary basis:

- Medical Insurance
- Dental Insurance
- Vision Insurance
- Group Term Insurance up to $50,000 for Employees only - Accidental Death and Dismemberment Insurance
- Short Term Disability
- Cancer Insurance
- Supplemental Health Insurance
- Vision or Dental Insurance
- Accidental Only Insurance
- Intensive Care Insurance

L. Flexible Spending Accounts (FSA's)

The City agrees to establish a pre-tax dependent care reimbursement account up to the maximum reimbursement allowed by law.

The City agrees to establish a pre-tax medical reimbursement account, up to two thousand five hundred dollars ($2,500.00) per year per employee.the maximum amount allowed by law.

M. Voluntary Life Insurance

The City shall offer a voluntary supplemental life insurance plan through the flexible benefits plan for pre-tax contributions by the employees. Participation and coverage shall be in accordance with the terms and conditions of the insurance carrier.

Employees may also elect pre-tax payroll deductions to support other City sponsored voluntary supplemental insurance benefits.

N. In-Lieu Payment

The City will conduct a one-year pilot program with SEIU. This pilot program will require the City to contribute an amount equal to the difference between what the City would normally contribute in monthly medical benefit premiums and the employee’s selected health plan.

18 This difference will be paid-out to the employee as part of the City’s regular biweekly payroll process. An employee is only eligible for this provision if they are enrolled in medical benefits through one of the City’s offered plans. This payment shall be subject to all applicable state and federal taxes and is not PERS-able. The employee must notify Payroll, in writing, that they wish to enroll in this program .

EXAMPLE: Employee is enrolled in Employee Plus Family plan. The City’s monthly contribution is $3,325.36. The employee enrolls in a medical plan at a cost of $3,000 per month. The City would they pay-out the $325.26 monthly difference to the employee as part of the City’s regular payroll process.

Medical benefit enrollments sometimes change due to qualifying life events and/or through open enrollment. In the event an employee receives any in-lie payment that they were not eligible for, that employee shall immediately pay back the City the overpaid amount. The City and SEIU agree that the City may withhold any amount an employee incorrectly receives from that employee’s paycheck.

For employees who elect not to participate in the group medical coverage offered by the City, the City will provide dental and vision coverage for the employee and his/her dependents at no cost to the employee.

O. Cost-Savings

During the term of this agreement, the parties agree that upon request to meet and discuss regarding potential cost savings/sharing measures related to health and welfare plan designs or premiums.

ARTICLE 8. JOB RELATED DISABILITIES AND THE AMERICANS

WITH DISABILITIES ACT

A. Job Related Disabilities

City agrees to comply with applicable provisions of the the Labor Code of the State of California for employees within this unit deemed disabled or temporarily disabled as a result and because of such job relatedjob-related injury which requires them to be absent from active City service.

B. Americans with Disabilities Act

Circumstances surrounding compliance with the Americans with Disabilities Act (ADA) involve matters that are both personal and confidential, including with Civil Rights protections under law. Details about an individual case may not be disclosed to the City. However, should a unit member request an accommodation under ADA, and that requested accommodation would change the working conditions of members in the unit, the City shall meet with a representative from the unit to generally discuss the accommodation, but at no time shall the City disclose

19 Personally Identifiable Information (PII) or any other confidential information associated with any individual, up to and including an individual’s disability and/or medical diagnosis. Action taken by the City under this Article shall not be subject to the grievance procedure.

ARTICLE 9. SAFETY COMPLIANCE AND EQUIPMENT

A. Safety Compliance

The City and Union shall meet the requirements of Cal OSHA. The Union further agrees to bring any safety concerns immediately to the attention of management.

The City and the Union shall cooperate in pursuing safe working practices and shall establish a joint safety committee to address workplace safety concerns and develop actions that can be taken to address them. The committee shall meet on an as- needed basis, at the written request of either party, within ten (10) working days of such request or at another mutually agreed upon time. The committee shall consist of a minimum of two (2) union representatives and two (2) City representatives.

B. Safety Boot Allowance

All eligible unit employees, including employees assigned to the Public Works Department Operations and Maintenance Section which also includes the Public Works Inspector, Utilities, Streets, Parks, and Buildings & Grounds Divisions, and Development Services Department employees that work out in the field shall be reimbursed up to three hundred dollars ($300.00) per year, upon presentation of satisfactory proof-of-purchase, for safety shoes or boots which are approved and authorized by City management. Used safety shoes and boots are the property of the City and shall be returned to the City.

This allowance is to assist employees in purchasing City-approved work shoes and/or boots appropriate for the type of work being performed in accordance with General Industry Safety Orders, Title 8, Section 3385. Appropriate safety shoes and boots shall incorporate the following safety factors depending on the type of work performed:

1. Non-skid sole

2. Adequate ankle protection

3. Puncture protection

4. Impact/compression protection

C. CPR Training

20 From time to time, the City may offer CPR Training through the Certified Trainer with the City Fire Department. Subject to department needs. Employees may be granted release time to participate in this training.

D. Public Works Safety Equipment

The City agrees to provide necessary training and safety equipment for the classification of:

 Assistant Equipment Mechanic
 Equipment Mechanic
 Jr. Water Maintenance Operator
 Water Maintenance Operator I/II
 Maintenance Worker I/II
 Senior Maintenance Worker
 Tree Trimmer
 Airport Maintenance & Operations Specialist
 Street Sweeper Operator

This equipment may include, but not limited to: appropriate gloves, safety glasses, ear protection, chaps, hard hats, safety vests and breathing masks.

This equipment will be purchased by the City at no cost to unit members.

ARTICLE 10. GRIEVANCE PROCEDURES: SWORN PERSONNEL

This grievance procedure shall be the sole and exclusive procedure for resolving grievances filed by sworn employees covered by this M.O.U.

A. Definition

A grievance is a claimed violation, misapplication, or misinterpretation of a specific provision of this agreement or the City's Personnel System Rules and Regulations which adversely affects the grievant.

B. Stale Grievance

A grievance shall be void unless filed in writing within fifteen (15) calendar days from the date upon which the City is alleged to have misinterpreted or misapplied this agreement, or within fifteen (15) calendar days from the time an employee might reasonably have been expected to have learned of the alleged misinterpret ation or misapplication. Such discovery period shall not exceed 180 days regardless of the date of discovery. In no event shall a grievance include a claim for money relief for more than the fifteen (15) day period plus such reasonable discovery period.

21 C. Informal Discussion with Employee's Supervisor

Before proceeding to the formal grievance procedure, an employee shall discuss his/her grievance with his/her immediate supervisor in private and attempt to work out a satisfactory solution. Any solution reached at this level must be reviewed by the Personnel Officer to assure compliance with this agreement before it has any binding effect.

D. Formal Written Grievance to Employee's Supervisor

If the employee chooses to formally pursue his/her grievance, he/she or his/her representative shall present the written grievance to his/her immediate within five (5) working days after the date upon which the grieving employee informally discusses the grievance with the supervisor. (In the event a group grievance is formally submitted by the recognized employee organization, its initial submission will be to the department head and subsequent steps will be followed as outlined in this section.) The formal written grievance shall specify the provisions of this M.O.U. or the City's Personnel System Rules and Regulations alleged to have been misinterpreted or misapplied, the remedy sought, and such other specific dates, times, places and persons and other facts necessary to derive a clear understanding of the matter being grieved. The immediate supervisor shall return a copy of the written grievance to the employee with the supervisor's answer thereto in writing within five (5) working days from receipt of the supervisor's answer within which to file an appeal to the next level.

E. Grievance to Department Head/City Manager

The department head or the City Manager, if the department head was the grievant's immediate supervisor, shall have seven (7) working days in which to review and answer the grievance in writing. Unless waived by mutual agreement of the employee or his/her representative and the department head or City Manager, a meeting is required at this level and the employee and his/her representative shall have the right to be present and participate in such a meeting. The time limits at this level may be extended by mutual agreement between the department head or City Manager and the employee or his/her representative.

F. Waiver of Appeal Steps

If the grievance is not resolved after the immediate supervisor has answered it in writing, the grievant(s) and the department head may, by mutual agreement, waive review of the grievance at Step E and proceed to present the grievance to the City Manager.

G. Advisory Fact Finding of Grievances

In the event the grievance is not resolved by the City Manager, the recognized

22 employee organization may with fifteen (15) calendar days after receipt of the decision of the City Manager, request that the grievance be heard by a fact finder.

H. Selection of a Fact Finder

The fact finder shall be selected by mutual agreement between the City and the Union. If the parties are unable to agree on the selection of a fact finder, they shall jointly request the State Mediation and Conciliation Service to submit a list of five (5) qualified fact finders. The City and the grievant, or his/her representative, shall then alternately strike names from the list until only one name remains, and that person shall serve as fact finder.

I. Duty of a Fact Finder

Except when an agreed statement of facts is submitted by the parties, it shall be the duty of the fact finder to hear and consider evidence submitted by the parties and to thereafter make written findings of fact and a proposed disposition of the grievance which shall be advisory in nature.

The proposed disposition shall be based solely on the interpretation of the applicable provisions of the M.O.U. and other personnel rules if applicable to the grievance, and he/she shall not add to, subtract from, modify or disregard any of the terms or provisions of the M.O.U. or such rules.

J. Payment of Costs

Each party to a hearing before a fact finder shall bear its own expenses in connection therewith. All fees and expenses of the fact finder shall be borne one -half by the City and one-half by the grievant.

If the City does not implement the proposed disposition of the grievance made by the fact finder, the City shall pay all fees and expenses of the fact finder.

K. Effect of Failure of Timely Action

Failure of the employee(s) to file an appeal within the required time period at any level shall constitute an abandonment of the grievance. Failure of the City to respond within the time limit at any step shall result in an automatic advancement of the grievance to the next step.

//

A. Union Dues Check-Off Deductions

1. In accordance with the provisions of this Article, the City shall make payroll deductions from the pay of employees who authorize such deductions in writing

23 on a form provided and/or approved by the City. Such deductions shall be made in accordance with rules and regulations established by the City and the provisions of this Article. Deductions shall be in a pay period basis and shall be made payable to the Union. The Union, as the formally recognized employee organization, may designate the Hollister Municipal Employees Association as the payee of the dues check-off check from the City and to receive the check on behalf of the Union by providing specific written authorization to the City Finance Director. In lieu of such written authorization the dues check-off check shall be forwarded directly to the Union.

2. All other legal and required payroll deductions shall have priority over dues check-off deductions. The employee's earnings must be sufficient after other legal and required deductions are made to cover the amount of the dues check- off authorized. When an employee is in a non- pay status for an entire pay period, no withholding will be made to cover that pay period from future earnings nor will the employee be required to deposit the amount of deductions with the City which would have been withheld if the employee had been in a pay status during the pay period. In the case of an employee who is in a non-pay status during only a part of the pay period and the salary is not sufficient to cover the full withholding, no deduction shall be made.

B. Maintenance of Membership

This section shall be applicable to employees hired by the City on or before November 15, 1995. Membership in the Union shall not be compulsory. An affected employee has the right to choose either to become a Union member or to refrain from becoming a Union member. All affected employees who have authorized payroll deductions for payment of Union dues prior to the effective date of this M.O.U. (by reaffirming such deductions by voluntarily completing a re-commit card), and all affected employees who establish dues payroll deductions during the term of this M.O.U., shall remain members of the Union (with understanding that the authorization of deduction dues shall renew each year on the anniversary of the date the employee’s signed re-commit card), provided that Union members on payroll deduction may end their authorization for deduction of Union dues by mailing (by certified mail) a signed resignation letter to SEIU Local 521’s central office, postmarked between 75 days and 45 days before such annual renewal date. This authorization is voluntary and is not a condition of the employee’s employment.

The Union shall keep an itemized record of its financial transactions and shall provide the City, and any requesting employee, with a detailed written financial report thereof in the form of a balance sheet and an operating statement, certified as to accuracy by the Union president and treasurer (or corresponding principal officer) or certified public accountant. Such report(s) shall be provided to the City prior to March 1st of each year. If the Union fails to provide the required written financial report(s), the City shall suspend dues check-off deductions for each pay period the

24 report(s) is unavailable.

C. Union Indemnification, Hold Harmless, and Defense

The Union agrees to indemnify, hold harmless, and defend the City and its officers, employees, and agents against all claims, proceedings, actions, and liability arising, directly or indirectly out of any actions taken or not taken by or on behalf of the City pursuant to any claims made and against any suits instituted against the City on account of the City's implementation and enforcement of Section A. Union Dues Check-Off Deduction, and Section B. Maintenance Of Membership of this Article.

ARTICLE 12. MISCELLANEOUS

A. Deferred Compensation Plan

The City shall continue to provide a voluntary Deferred Compensation Plan for all employees of this unit for the term of this M.O.U.

B. Tool Replacement Allowance

1. The City shall provide a tool replacement fund for the replacement of worn out or broken shop tools and the purchase of new shop tools as needed. This allowance will be available to those employees in classifications which are required as a condition of employment to provide their own shop tools for the performance of their duties within City service. The utilization of this fund shall not exceed five hundred dollars ($500.00) per employee for any fiscal year. All shop tools purchased and reimbursed under this provision shall be maintained by the employee so as to be immediately available for City work. This fund is meant as to have funds available for reimbursement not automatic payment to the employee.

2. The employee shall acquire the tool(s) and shall present documentary evidence (receipts and invoices, etc.) of the acquisition and ownership to the City for reimbursement. The Department Head or his designee may inspect and inventory all tools acquired under this provision.

C. Working Out of Classification Assignment

Unit employees assigned by management on a Personnel Action Form (P.A.F.) shall be compensated within the salary range for which the assignment is made, but in no case less than five percent (5%) subject to the following:

1. The position must be vacant and budgeted.

2. Must be assigned by Management.

25 3. The grievance procedure shall not be utilized by unit members in any conflict and Management's assignment or non-assignment is final a binding upon all parties.

D. Sick Leave Conversion To Cash

Eligible unit employees may convert a percentage of accrued, unused sick leave to cash at death or retirement from City employment. The provisions for this policy are as follows:

1. Employees of this unit may not "cash out" or be compensated for any of the first 240 hours of sick leave accrued.

2. Any current employee of this unit having completed 10 years of continuous service with the City and who retires from City service by filing for Service Retirement with CalPERS, will be compensated for fifty-percent (50%) of accrued, unused sick leave in excess of 240 hours at the employee's hourly rate of pay at the time of retirement from City service.

3. The surviving spouse, beneficiary(s), dependents), or estate of any current employee of this unit who has completed 10 years of continuous service with the City and dies while employed by the City prior to retirement, will be compensated for one hundred percent (100%) of accrued, unused sick leave in excess of 240 hours at the employee's hourly rate of pay at the time of death.

4. Any current employee of this unit having completed 10 years of continuous service with the City and having an unused sick leave accrual balance exceeding 500 hours may, at their option, "cash out" up to a maximum of 96 hours (12 days) of unused sick leave annually as long as the "cashed out" hours do not diminish the unused sick leave accrual balance to an amount less than 500 hours.

5. Compensation for unused, accrued sick leave will be made at the employee's rate of pay at the time of "cash out". Requests for payment of unused sick leave as described herein, shall be made in writing to the Administrative Services Department at least 30 days in advance of June 1st and December 1st of each year.

6. Payments of "cashed out" unused sick leave will be made on the first pay day which follows June 1st and December 1st of each year.

E. Vacation Leave

Vacation leave accrual for each represented unit member shall be as follows:

Years of Service Annual Vacation Accrual
1st through completion of 3rd 10 days
4th through completion of 7th 15 days
8th through completion of 15th 20 days

26 16th through completion of 20th 22 days
Beginning of 21st year 25 days

Employees may cash out up to a maximum of forty (40) hours of vacation leave annually. Compensation for vacation leave cashed out will be made at the employee’s rate of pay at the time of cash out. Request for payment of vacation time shall be made in writing to the Department of Administrative Services at least thirty (30) days in advance of June 1st and December 1st of each year. Payments of cashed-out vacation leave will be made on the first pay day which follows June 1st and December 1st of each year. This payment will be made in the regular payroll check issued for that pay period.

F. Flexible Work Schedule

Eligible unit members may work flexible work schedules (i.e. 4/10, 9/80) when feasible. It is not the intention of the City to reduce the number of hours that City services are available to the public. It is agreed that implementation of flexible work schedules shall be evaluated on a work unit basis, and will only be approved in those units where flexible work schedules can be implemented without reducing service levels and cost effectiveness.

An appointing authority (i.e. Supervisor, Department Head, etc.) requiring an employee to modify their schedule, either by changing the day worked or by modifying their work schedule/hours, shall provide the employee with no less than 4 working days’ notice to the employee.

G. Union Representatives Time Off

1. City shall grant Union employee board an aggregate of sixty (60) hours of paid time off from work per fiscal year for the purpose of attending Union sponsored educational and training opportunities as shown below:

a. Executive Board Meetings

b. Advisory Board Meetings

c. Bargaining Team Training

d. Steward Training

e. Budget Training

2. It is agreed that the employee representatives shall provide sufficient notice to their supervisors so that work schedules can be arranged to compensate for their absence.

27 3. The City will grant time off for "Meet and Confer" preparation and negotiations, for a time period not to exceed one hour before the respective negotiation session and one-half hour following the conclusion of same negotiation session.

4. Unless modified by mutual agreement at the onset of negotiations, time off in addition to that provided in G(3.) for any other "Meet and Confer" preparation shall be taken as leave in accordance with the City's established leave procedures and with sufficient notice to Supervisors to ensure appropriate coverage of operations.

H. Advance Notice

Except in cases of emergency as provided in Government Code § 3504.5, the City will provide 30 days written notice to the Union of any ordinance, rule, resolution, or regulation directly related to matters within the scope of representation proposed to be adopted by the City and shall give the Union the opportunity to meet with the City.

As provided by Government Code § 3504, "scope of representation" as used in this section shall include all matters relating to employment conditions and employer- employee relations, including, but not limited to, wages, hours, and other terms and conditions of employment, except, however, that the scope of representation shall not include consideration of the merits, necessity, or organization of any service or activity provided by law or executive order. In cases of emergency when the City determines that an ordinance, rule, resolution, or regulation must be adopted immediately without prior notice or meeting with the Union, the City shall provide notice and opportunity to meet at the earliest practicable time following the adoption of the ordinance, rule, resolution, or regulation.

I. Joint Labor-Management Committee

At the request of either party, the parties agree to convene a joint labor-management committee for the purpose of communication, information sharing, and problem solving on relevant issues.

J. Professional Development Incentive Program

Employees who have successfully completed probation shall be eligible to receive a one-time professional development incentive for obtaining certificates or degrees received after the date of this M.O.U. A professional development incentive shall not be awarded if the certification or degree is a minimum requirement for their position.

The certificate must relate to the employee's current position or future lateral or promotional opportunities with the General Employees Unit, Mid-Management Association or the unrepresented units of Confidential Employees and Executive Management. Vocational Training, for purposes of this section, is defined as a minimum of 20 hours of specific training in a career field which results in a certificate of completion. The minimum twenty (20) hours shall be documented classroom time

28 or in the case of a correspondence program identified as the average length of time required to complete the program certification as documented by the certifying agency or institution. Only one (1) professional development incentive per fiscal year can be received by an employee. If an employee receives a Ph.D., Master's degree or Bachelor's degree in a fiscal year, the employee may also receive one (1) additional professional development incentive for a certificate earned in the same fiscal year. Additionally, any additional development incentives earned in the same fiscal year do not rollover to the subsequent fiscal year.

The employee must request the professional development incentive within the same fiscal year the employee earned the eligible certificate, degree, and/or credential .

1. Professional Certificates - $2,500.00 Lump Sum:

- Professional Engineer Registration
- Professional Land Surveyor Registration
- Certified Public Accountant
- Engineer-In-Training
- Land Surveyor-In-Training
- American Institute of Certified Planners
- Paralegal Certificate
- Grade 5 Water Treatment Operator or Water Distribution Operator - Grade 5 Waste Water Treatment Operator
- QSP
- QSD

2. College Degrees and Certificates - $2,500.00 Lump Sum:

- Ph.D.
- Master’s Degree
- Bachelor’s Degree
- Associate’s Degree

3. Technical Certificates - $2,000.00 Lump Sum:

- Grade 4 Water Treatment Operator or Water Distribution Operator - Grade 3 Water Treatment Operator or Water Distribution Operator - Grade 2 Water Treatment Operator or Water Distribution Operator - Grade 1 Water Treatment Operator or Water Distribution Operator - Grade 4 Waste Water Treatment Operator
- Grade 3 Waste Water Treatment Operator
- Grade 2 Waste Water Treatment Operator
- Grade 1 Waste Water Treatment Operator
- I.C.B.O. Certificates
- Public Works Inspector - NICET
- Cross Connection Control Specialist Certification

29 - Certified Arborist
- Certified Pool Operator
- Collections Systems Maintenance
- Certified Storm Water Inspector

4. Vocational Certificates of Completion:

Examples:

- A(+) Certification (Computer Hardware, Software & Networking) - Microsoft Certified Systems Engineer
- Cisco Certified Network Associates
- Operation of Wastewater Treatment Plants Program administered by California State University, Sacramento Regional and Continuing Education Program
- Title 29 CFR 1910.120(q) - 24 Hour Hazardous Materials (Hazmat) Technician Level III Certification
The amount of the incentive for any Vocational Certificate of Completion shall be based on the following number of hours of course work:

Minimum Hours for Vocational
Certificate Amount
100 $ 1,500.00
80 $ 1,200.00
60 $ 900.00
40 $ 600.00
20 $ 300.00

5. Technical Certificates - $1,000.00 Lump Sum:

- Chemical Applicator
- Licensed Tree Trimmer
- Automotive Service Technician (A.S.E.)

6. Additional Eligibility Criteria

Additional licenses and certificates eligible for these professional development incentives, not listed in this Article, may be reviewed and approved by the Department Head in accordance with the following criteria:

- The license or certificate submitted for consideration must directly relate to the employee's current position or future lateral or promotional opportunities in accordance with the provisions of this section J.

- The employee earning the license or certificate shall be subject to duties and assignments commensurate with the level of proficiency attained under the

30 City's Professional Development Incentive Program.

- After the effective date of this M.O.U., all such requests for consideration for eligibility for such license and certificate incentives shall be submitted to the Department Head for review, with final approval by the City Manager at his/her sole discretion. The City Manager's determination is not subject to appeal.

The process for receiving a professional development incentive under this program shall be:

- Prior to beginning any class, program, seminar or study toward a desired certificate or degree, the employee must submit a request to his/her department head for consideration and approval of bonus award. Qualifying classes, programs, seminars or study toward a desired certificate or degree shall not be denied.

- If prior approval is not obtained, the class, program, seminar or study toward a desired certificate or degree shall not fall within the scope of this Professional Development Incentive Program.

- Upon obtaining a copy of the certificate or degree, payment will be pr ocessed for the specified incentive. Professional development incentives shall not be granted prior to receiving a copy of the degree or certificate.

The following are not eligible for consideration under this Section:

- Any driver's licenses

- Certificates, licenses, or degrees required for the position the employee holds

- Certificates, licenses, or degrees earned at the expense of the City including City sponsored training programs and consortium training programs except for approved tuition reimbursement pursuant to Section 8.10 (D) and (E) of the City of Hollister Personnel Rules & Regulations for Associate degrees, Bachelor's degrees, Master's degrees, and Ph.D. degrees.

K. Flexibility Staffed Entry Level Positions

The City shall advance employees that are in the entry level of flexibly staffed classifications (i.e. Maintenance Worker I, Support Services Assistant I, to a II, and to Senior, Account Technician I to II) to the journey level after meeting the experience requirements for the journey level classification, successfully passing a probationary period in the entry level classification and being given a satisfactory performance evaluation.

31 L. Length of Probationary Period for All Unit Members

1. Newly Hired Employees

Newly hired employees shall serve a mandatory one (1) year probationary period.

2. Promotional Appointments

Permanent employees whom are promoted shall serve a mandatory six (6) month probationary period. All existing employees that are subject to a probationary period as part of a promotion shall be returned to that employee's previous classification if the employee fails to meet the job requirements of the new classification within the probationary period.

M. Reclassification and Salary Adjustment Policy

The City and Union agree to develop a structured process for addressing individual reclassifications and resulting salary adjustments that will be consistent with the annual budget process.

City to address reclassification and salary adjustments consistent with this section of the MOU specifically for staff working in the Utilities, Recreation, and Fleet divisions no later than February 2024.

N. Christmas Eve

The City shall provide an additional paid half (1 1/2) day holiday on the afternoon (4 hours) of December 24th, known as Christmas Eve. The Christmas Eve holiday shall be observed on the afternoon of the workday proceeding the day on which the December 25th holiday, known as Christmas Day, is observed.

O. Layoff and Reduction in Time Procedures

In those instances, where the City may have to lay off or reduce the work hours of bargaining unit members due to lack of work or lack of funds, the following order of layoff/ reduction shall be used:

1. Temporary/ seasonal workers

2. Workers on probation

3. Career, regular employees

In the event that a career employee is laid off, the following criteria shall be used:

32 1. Layoff by seniority, in the classification and department determined to be eliminated.

2. A laid off employee has the right to "bump" or displace the most junior worker in the classification, providing the laid off worker is qualified to fill the position.

P. Automatic Payroll Deposit

All new unit members of the Union shall enroll in the automatic payroll deposit program at the time of their employment with the City or at the time of promotion to this unit.

Q. Tuition Reimbursement

The city will reimburse Union members up to four thousand five hundred dollars ($4,500.00) per fiscal year for tuition reimbursements in accordance to the rules set forth in the City’s Personnel Rules and Regulations

The employee must request the tuition reimbursement within the same fiscal year the employee incurred eligible expenses.

R. Dignity and Professionalism

The City is committed to providing a workplace where all persons employed by the City of Hollister, regardless of their classification or pay status are treated with dignity, respect and in a professional manner, by all other persons employed by the City of Hollister, regardless of their classification or pay status. We shall treat one another in the ways we want to be treated ourselves, including clear communications of expectations regarding performance, support of individual opportunities for growth, and provide opportunities for input into decisions when they impact bargaining unit employees directly.

S. New Employee Orientation

The Union will be given thirty (30) minutes at the end of the orientation to present Union information to bargaining unit employeesThe City shall allow a Union Representative thirty (30) minutes of release time to meet with any new employee for the purpose of union orientation. The City will notify the union representative of record, within 24 hours of the new employee’s acceptance of final offer, of the employee’s start date, and of the date and time of and work with the Union Representative to schedule an orientation, as soon as practicable, but no later than two (2) weeks after the employees’ hire date. If the City is unable to notify the Union Representative as outlined, the City will provide release time for the new employee and the Union Representative to complete the union orientation at a later scheduled date and time.

33 T. Timely Notification

When an employee discontinues paying membership dues, the Union should notify the City within 30 days.

U. Step Increases

Failure of an appointing authority to recommend a salary step advancement in accordance with the performance evaluation procedure shall be considered to be a recommendation of a salary step advancement effective on the anniversary date.

Timeliness of evaluations is not subject to the grievance procedure.

ARTICLE 13. HOLIDAYS

A. Holiday Schedule

All members are entitled to 12.50 paid holidays per year. Each paid holiday is the equivalent to 8.00 hours unless otherwise noted. The 12.50 paid holidays in the schedule below are the equivalent to 100.00 hours. The holidays are as follows:

In addition, each employee is entitled to four (4) floating holidays per fiscal year.

Each floating holiday is the equivalent to 8.00 hours, calculated as 32.00 total hours.

If one of the holiday listed above falls on a Sunday, then it shall be observed on the following Monday. If one of the holidays listed above falls on a Saturday, then it shall be observed on the previous Friday.

B. Holiday Office Closure

The City Manager may elect to close certain City offices to the public between the Christmas and New Year’s Day holidays. However, it will also be necessary to have a base level of staffing to open and operate certain offices during core business hours. Not all departments will be impacted as some public services must be provided on a continual basis.

To accommodate these needs, the City will provide all unit members a bank of thirty- two (32) HOLIDAY CLOSURE HOURS. An employee will have the option, with Department Head approval, to use HOLIDAY CLOSURE HOURS at any point between November 1 – December 31. There are no exceptions to these dates.

HOLIDAY CLOSURE HOURS cannot be cashed-out and carry no cash value.

Unused hours will be forfeited.

It is the employee’s responsibility to ensure that required hours are taken off work prior to the end of each applicable fiscal year. Management will make every effort to accommodate employees’ requests for the equivalent hours of time off. No Employee shall lose the floating holiday time as a result of a denied time-off request.

34 The Holiday Office Closure is neither grievable nor appealable. However, employees who believe that the Holiday Officer Closure has not been administered according to the provisions of this agreement, including not being granted the time off, may request a review by an advisory committee composed of one (1) union representative and one (1) City Management representative.

ARTICLE 15.ARTICLE 14. LEAVES OF ABSENCES

SEIU MOU shall defer to all rights under law associated with Bereavement Leave, and all eligible leaves under law associated with pregnancy and/or parenthood, including leave for reproductive loss as covered under California law.

City also agrees to extend the Bereavement Leave rules by including the following language:

 The City Manager may authorize any unit member to have an additional 3 days of City-paid Bereavement leave if the unit member is attending a memorial service for a covered family member and attending those services causes the unit member to travel more thatnthan 300 miles round trip.

 Use of any accumulated leave balances shall be granted by the City because of the death of a member of the employee’s family. “Family” shall mean the parent, stepparent, brother, sister, spouse, registered domestic partner, child, foster child, child of registered domestic partner, stepchild, grandparent, grandchild, father-in-law, daughter-in-law, son-in-law, step brother or step sister, sister-in-law, brother-in-law, aunt, uncle, niece, nephew, immediate family member of registered domestic partner and any relative residing in the immediate household.

 It is the intent of the City to attempt to accommodate newly hired employees who have not accumulated leave balances and are faced with death of an immediate family member as defined above.

ARTICLE 16. COMPENSATION SURVEY

ARTICLE 17.ARTICLE 15. MAINTENANCE OF OPERATIONS

The Union agrees that during the term of this M.O.U. neither the Union, nor any representative acting on its behalf, will cause, authorize, engage in, condone or sanction a strike, sick-in, work stoppage, slow down, picketing (other than informational picketing on the employees' own time), concerted or individual failure to report for duty, unauthorized absence, including compliance with a request of another unit's labor organization to engage in or honor such activities against the City, or any activity by any other euphemism known which results in less than the full and faithful performance of any duties of employment.

35 If the City determines that an employee has engaged in any activity above, the employee may be subject to disciplinary action up to and including discharge from City service.

ARTICLE 18.ARTICLE 16. PREVAILING M.O.U.

In the event of a conflict between a specific provision of this M.O.U. and a written rule, regulation, or resolution of the City or any of its divisions, the terms of the M.O.U. shall prevail and said written rule, regulation, or resolution shall be physically amended to conform to the specific provisions of this M.O.U.

ARTICLE 19.ARTICLE 17. DRUG FREE WORKPLACE POLICY

The City's Drug Free Workplace Policy, City Personnel Rule 2.05, adopted by Resolution 92-116 (August 3, 1992), is incorporated by reference into this M.O.U .

ARTICLE 20.ARTICLE 18. SAVINGS CLAUSE

If any article or section of this M.O.U. should be found invalid, unlawful or unenforceable by reason of any existing or subsequent enacted legislation or by judicial authority, all other articles and sections of this M.O.U. shall remain in full force and effect for the duration of this M.O.U. In the event of invalidation of any article or section, the City and the Union agree to meet within thirty (30) days for the purpose of meeting and conferring upon said article or section.

ARTICLE 21.ARTICLE 19. TERM OF AGREEMENT

The term of this M.O.U. shall commence on July 1, 20252025, 024and shall expire June 30, 20252026, unless otherwise agreed to by both parties. It is also agreed to by both parties to initiate the meet and confer process in a timely fashion, exchanging written proposals at least thirty (30) days prior to the termination of this agreement. An extension of the term of this agreement on a month to monthmonth-to-month basis may be made my mutual agreement of the parties.

The above constitutes a full and complete agreement between the parties on all matters within the scope of representation.

CITY OF HOLLISTER SEIU, LOCAL 521

David MirrioneJim Pia, Interim City
Manager
Jay DonoatoCarolynne Roderick, SEIU
Negotiator

36 Mary LernerRobert Lomeli, City
Negotiator
Leonard MartinezFrank Garcia, SEIU
Negotiator

Casey Estorga, City Negotiator Art HernandezRodrigo Aguilera, SEIU Negotiator

Andrew Echevarria, SEIU Negotiator

37 EXHIBIT [A]
EXHIBIT [A]

Section 12.01 General

A. The expected standard for employees of the City shall be to render the best possible service to the public, to reflect credit upon the City service, and to serve the public interest. The tenure of every employee shall be conditioned on good behavior and satisfactory performance of duties. Disciplinary actions are intended to be corrective and progressive in nature with the objective of obtaining compliance with rules, orders, procedures, standards of conduct and expected job performance.

B. The procedures set forth in this section shall not apply to probationary employees who are rejected during probation, or to any employee serving in a seasonal or temporary appointment. These procedures shall not apply to a reduction in force, or a reduction in pay which is part of a reclassification action or reorganization approved by the City Council.

C. The City Manager may take disciplinary action based upon a Department Head recommendation or initiate such action based upon his/her own authority. The City Manager may delegate the responsibility to take disciplinary action to Departments Head(s). As used in this section, "disciplining authority" shall mean either a Department Head or the City Manager, whoever initiates the disciplinary action; "working day" shall mean any day of the month when the City offices are officially open for business.

D. The procedures set forth in this section shall not preclude an employee from entering into a written agreement with the City to settle a pending disciplinary matter, and further shall not preclude an employee from waiving any of the notice provisions herein provided for, as part of that written settlement agreement .

Section 12.02 Grounds for Discipline

An employee may be reprimanded, suspended, denied a merit increase, demoted or dismissed for any of the following reasons:

1. Furnishing false information to secure employment.

2. Incompetence, which shall mean that the employee lacks adequate ability, knowledge, motivation, or fitness to satisfactorily perform the duties which are within the scope of employment.

3. Inefficiency in performance of work which results in performance lower than that which is typically expected of the position.

38 4. Neglect of duty.

5. Insubordination, which shall mean refusal or failure to follow a direct, lawful order which the employee is capable of following.

6. Nonobservance of work hours.

7. Excessive absenteeism, tardiness, or absence without authorized leave.

8. Violation of city personnel rules and regulations, administrative policies and procedures, department rules and regulations, safety rules, resolutions, ordinances or codes.

9. Damage to or waste of public property, equipment or supplies, or unauthorized possession or use of public property, supplies or equipment.

10. Any conduct related to employment which impairs, disrupts or causes discredit to the employee's department or the city, including but not limited to conduct which is or would be cause for discipline under any other provisions of this section.

11. Willful failure or refusal to property perform official duty.

12. Gross negligence in the discharge of official duty.

13. Dishonesty involving employment.

14. Any act of moral turpitude which adversely reflects on the employee's ability or fitness to perform his/her duties.

15. Soliciting or taking for personal use a fee, gift or other valuable thing in the course of the employee's work, or in connection with the contributing party's expectation or hope of receiving favorable or better treatment than that afforded other persons.

16. Disclosure of confidential information to an unauthorized source.

17. Refusal to take and subscribe to any oath or affirmation which is required by law in connection with employment by the city.

18. Falsification of time sheets or any official city records.

19. Misuse of sick leave.

20. Consuming, possessing, or being under the influence of an alcoholic beverage, while on duty.

39 21. Unless legally authorized, using, consuming, injecting, possessing, being under the influence of, selling or offering for sale, while on duty, any drug which can or does impair, the employee's work performance, or any controlled substance as the latter term is defined in the California Health and Safety code.

22. Discourteous or disrespectful treatment of the public, other employees, or city officials.

23. Violation of city harassment policy.

24. Persistent failure or refusal to take, complete, or follow through with appropriate and reasonable treatment or corrective measures designed to remedy an employee's condition, such as alcohol or substance abuse, when said condition results in conduct which constitutes grounds for discipline under these rules.

25. Engaging in outside employment in violation of city policies or rules.

26. Engaging in non-City business during work hours, excluding employee free time such as lunch and breaks.

Section 12.03 Types of Disciplinary Action

As used in this section, "disciplinary action" shall mean any of the following and may be taken singly or in combination:

A. Counseling or Oral Warning. A counseling or oral warning will not be placed in an employee's personnel file except as part of a regular or special performance evaluation report of the employee on which the employee is given an opportunity to respond. A counseling or oral warning or a performance evaluation report is not subject to the appeal process outlined below.

B. Written Reprimand. A written reprimand shall be provided to an employee prior to being placed in the employee's personnel file. Such reprimands shall not be subject to the appeal process outlined below, but the employee shall have the right of rebuttal by providing a written statement which will be included in the personnel file along with the written reprimand.

C. Imposition of special employment conditions. Such action shall be subject to the appeal process outlined below.

D. Suspension with or without pay. Fringe benefits such as vacation and sick leave shall not accrue during a period of suspension without pay. However, health, dental and life insurance shall remain in effect during a period of suspension without pay.

Such action shall be subject to the appeal process outlined below.

40 E. Reduction in pay level not to exceed one (1) year. Such action shall be subject to the appeal process outlined below.

F. Demotion. Such action shall be subject to the appeal process outlined below.

G. Dismissal or Discharge. Such action shall be subject to the appeal process outlined below.

Section 12.04 Notice of Intended Disciplinary Action

A. In cases of proposed disciplinary action, except a counseling, oral warning, or written reprimand, the proposed disciplinary action shall be served on the employee personally or by mail. The written notice of intended disciplinary action which shall include:

1. The reasons for the disciplinary action, those facts alleged to be the basis for the intended action and copies of any documents or materials upon which the disciplinary action is based;

2. The specific action proposed to be taken, including any time period or other conditions associated with the discipline;

3. The proposed effective date of the intended disciplinary action; and

4. The right of the employee to respond to the proposed disciplinary action either in writing or orally, at the option of the employee. The employee shall be advised that he/she has ten (10) working days within which to file a written response or request, in writing, an informal pre-disciplinary conference before the disciplining authority or his/her designee.

B. A copy of the notice of intended disciplinary action shall be placed in the employee's personnel file.

Section 12.05 Pre-disciplinary Conference

Where an employee has requested an opportunity to respond orally, the disciplining authority or his/her designee shall cause an informal pre-disciplinary conference to be held to review the statement of charges and to provide the opportunity for the employee or his/her representative to answer the charges. The disciplining authority or his/her designee shall allow the parties to present any relevant evidence tending to prove or disprove the facts upon which the action is based or upon the nature and severit y of the proposed disciplinary action. Failure of the employee to appear at the pre -disciplinary conference, if requested, shall forfeit all the employee's right to respond to the statement of charges.

//

41 Section 12.06 Notice of Discipline or Rejection of Discipline

A. If the employee does not respond or upon conclusion of the pre-disciplinary conference, the disciplining authority or his/her designee shall, by written notice to the employee and the supervisor, affirm, reduce or abandon the proposed disciplinary action.

B. If the decision is to affirm or reduce the proposed disciplinary action, such action shall be served on the employee personally or by mail. The written notice of disciplinary action shall include:

1. The reasons for the disciplinary action, those facts alleged to be the basis for the disciplinary action and copies of any documents or materials upon which the disciplinary action is based;

2. The specific action proposed to be taken, including any time period or other conditions associated with the discipline;

3. The effective date of the disciplinary action; and

4. The right of the employee to appeal the disciplinary action. The employee shall be advised that he/she has ten (10) working days within which to file a written appeal of the disciplinary action.

C. A copy of the notice of disciplinary action shall be placed in the employee's personnel file.

D. If the notice is to abandon all action, the notice of intended disciplinary action shall be removed from all personnel files.

Section 12.07 Appeal of Disciplinary Action

An employee who has been discharged, demoted, reduced in salary, been made subject to specific employment conditions, or suspended without pay has the right to appeal to the City Manager the disciplinary action by filing a written notice of appeal within ten (10) working days from the date of the notice of discipline. The appeal must state specifically the reason or reasons upon which it is based. Failure to file within the time allowed constitutes abandonment of appeal rights. The evidentiary appeal shall be heard by a hearing officer who will serve as the City Manager’s designee.

Section 12.08 Appeal

A. The Personnel Officer shall be responsible for obtaining the hearing officer from JAMS (Judicial Arbitration and Mediation Services of California). The Personnel Officer shall ask JAMS to randomly provide the name of one retired judge who shall be impartial and who shall conduct the hearing on behalf of the City Manager. The

42 City shall pay for the services of the hearing officer.

B. The Hearing Officer shall assume responsibility for scheduling and conducting the hearing in accordance with the provisions of Chapter 12. The hearing officer shall conduct the hearing and prepare a report that includes findings of fact and recommendation(s). The City Manager shall be bound by the findings of fact but reserves final authority on the recommendation(s) of the Hearing Officer. The decision of the City Manager shall be final unless appealed to the City Council.

C. If the decision is to affirm or modify the disciplinary action, the decision shall be placed in the employee’s personnel file. If the decision is to modify or reverse the disciplinary action, that action shall be implemented. If reversed, the notice of the intended disciplinary action and the notice of disciplinary action shall be removed from the employee’s personnel file.

Section 12.09 Evidentiary Appeal Hearing Procedure

A. The Hearing Officer shall provide the appellant and City with written notice of the date, time, and place of the hearing no less than ten (10) working days in advance of the scheduled hearing date. Any time lines contained in this section may be extended upon mutual agreement of the City and the appellant for good cause.

B. The hearing shall be conducted in conformity with Sections 11512 through 11515, inclusive, of the Government Code. The hearing officer shall be deemed to be the administrative law judge in the proceeding.

C. The hearing shall be closed to the public unless the appellant, prior to the commencement of the hearing, requests in writing that it be open to the public. The hearing shall be conducted in accordance with the provisions of Section 11513 of the Government Code which reads:

1. Oral evidence shall be taken only on oath or affirmation.

2. Each party shall have these rights: to call and examine witnesses; to introduce exhibits; to cross- examine opposing witnesses on any matter relevant to the issues even though that matter was not covered in the direct examination; to impeach any witness regardless of which party first called him or her to testify; and to rebut the evidence against him or her. If the appellant does not testify on appellant’s own behalf, s/he may be called and examined as if under cross - examination.

3. The hearing need not be conducted according to technical rules relating to evidence and witnesses. Any relevant evidence shall be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in civil

43 actions. Hearsay evidence may be used for the purpose of supplementing or explaining other evidence but shall not be sufficient in itself to support a findin g unless it would be admissible over objection in a civil action. The rules of privilege shall be effective to the extent that they are otherwise required by statute to be recognized at the hearing, and irrelevant and unduly repetitious evidence shall be excluded.

D. The appellant may be examined and may examine or cause any person to be examined under Section 776 of the Evidence Code. The appellant shall be allowed to appear personally at the hearing, and appellant shall have the right to legal counsel or lay representation of appellant’s choice and sole expense at all times throughout the proceeding, and appellant shall be allowed to produce such competent evidence in his/her own defense and in rebuttal to the charges as the appellant or appellant’s/her representative may wish to offer.

E. The hearing shall be recorded by a stenographic reporter. If any transcript is ordered by the appellant or the City, the party ordering the transcript shall bear the cost of the transcription. If both the appellant and the City order transcriptions, the cost of the transcription, along with the cost of the reporter, shall be borne equally by the City and the appellant.

F. The Hearing Officer shall have the power to subpoena and require the attendance of witnesses, and the production of books, papers, and other evidence pertinent to the hearing, and to administer oaths to witnesses. In arriving at a recommendation, the hearing officer may consider any prior disciplinary actions taken against the appellant, or any prior proceedings under this section.

G. Unless the circumstances were beyond the control of the appellant, failure of the appellant to appear at the hearing shall be deemed a withdrawal of the appeal and the action of the department head in the notice of disciplinary action shall be final without right of appeal to the City Council. The participation of the appellant’s representative at the hearing shall constitute appearance of the appellant.

H. The City Manager shall review the hearing officer’s report including the findin gs of fact and recommendation(s) and within thirty (30) days from the hearing officer’s report issue his or her written decision affirming, reversing, or modifying the discipline which shall be final unless appealed to the City Council.

I. An employee can appeal the City Manager’s decision to the City Council by filing the written notice of appeal with the City Clerk within ten (10) working days from the date of the mailing of the City Manager’s decision.

J. Within ten (10) days after receipt of the appeal, the City Clerk shall give notice of the appeal to each member of the City Council, the City Manager, and other persons named or affected by the appeal and shall schedule a hearing before the City

44 Council.

K. The hearing before the City Council shall be non-evidentiary in nature and shall be limited to oral arguments from both parties or their representatives. The City Council shall be bound by the findings of fact prepared by the hearing officer. Appellant and City shall each have 20 minutes of oral argument with an additional 5 minutes of rebuttal argument. The hearing before the City Council shall be closed to the public unless prior to the hearing the appellant requests in writing that the hearing be open to the public.

L. The City Council shall deliberate in closed session and shall issue a decision which affirms, reverses, or modifies the discipline imposed by the City Manager.

M. If the Council’s decision is to affirm or modify the disciplinary action, the decision shall be placed in the employee’s personnel file. If the decision is to modify or reverse the disciplinary action, that action shall be implemented. If reversed, the notice of the intended disciplinary action and the notice of disciplinary action shall be removed from the employee’s personnel file.

N. The decision of the City Council shall be final and subject to judicial review under Code of Civil Procedure 1094.5.

Section 12.10 Serving of Notices

Written notices shall be served either by direct personal service on the person affected, or by mail. Mailed notices to the City Manager or his/her designee, a Department Head, an appellant and/or his/her designee, or the City Council shall be effective upon recorded deposit with the United States Postal Service.

Section 12.11 Summary Suspension

Prior to any disciplinary proceedings under this section, the City Manager may summarily place any City employee on an immediate suspended status with or without pay. Such suspensions shall be made only in cases where the employee's continued active duty status might, in the sole opinion of the City Manager, constitute a hazard to the employee or others, tend to bring the City service into discredit, or prolong acts or omissions of improper employee conduct. If the disciplinary action or suspension is not subsequently ordered and/or affirmed, the employee shall be reinstated in status and restored all pay and fringe benefits lost during such summary suspension.

Section 12.12 Right to Representation

An employee subject to a meeting, an investigation that may result in disciplinary action, a pre-disciplinary conference or hearing has the right, upon request, to be represented by an employee representative or an attorney retained by the employee at the employee's expense. Any employee, other than those defined as management, mid-

45 management and confidential employees shall be permitted to represent another City employee or group of City employees.

Section 12.13 Records Purged

An employee's personnel file shall be purged of all documents relating to ordered disciplinary actions, except dismissal, after three (3) years from the end of such action upon the written request of the employee or former employee against whom the action was taken.

MEMORANDUM OF UNDERSTANDING

BETWEEN

THE CITY OF HOLLISTER
AND
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 521

JULY 1, 2025 – JUNE 30, 2026
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1 Table of Contents

SECTIONS
PAGE

ARTICLE 1. PREAMBLE ........................................................................................................... 5 ARTICLE 2. NO DISCRIMINATION ............................................................................................ 5 ARTICLE 3. RECOGNITION ...................................................................................................... 5 ARTICLE 4. NO ABROGATION OF RIGHTS ............................................................................. 5 ARTICLE 5. MAINTENANCE OF BENEFITS ............................................................................. 5 ARTICLE 6. SALARY AND SPECIAL COMPENSATION .......................................................... 6 A. Salary Adjustments ......................................................................................................... 6 B. Retirement ........................................................................................................................ 6 C. Bilingual Allowance ......................................................................................................... 7 D. Compensatory Time ........................................................................................................ 8 E. Overtime and Holiday Pay ............................................................................................... 8 F. 24-Hour Hazardous Materials (Hazmat) Certification Premium Pay ............................. 9 G. Heavy Equipment Operation Premium ........................................................................... 9 H. License Certification........................................................................................................ 9 I. Longevity Pay ................................................................................................................ 10 J. Standby Pay ................................................................................................................... 10 K. Callback Pay and Rest Periods After Emergency Callback ........................................ 11 L. Uniform Allowance ........................................................................................................ 12 M. Cellphone Allowance ..................................................................................................... 12 N. Cross-Connection Specialist Certification ................................................................... 12 O. Notary Public Commission Pay .................................................................................... 12 P. Homeless Encampment Cleanup Assignment ............................................................ 12 ARTICLE 7. INSURANCE ........................................................................................................ 13 A. Description ..................................................................................................................... 13 B. Health Insurance Options.............................................................................................. 13 C. IRS Code Section 125 Flexible Benefits/Cafeteria Plan .............................................. 13 D. Terms for Health Care Participation ............................................................................. 14 E. Health Care Contributions............................................................................................. 14 F. Vision Insurance ............................................................................................................ 15 G. Dental Insurance ............................................................................................................ 15 H. Life Insurance ................................................................................................................ 15 Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

2 I. Long Term Disability Insurance .................................................................................... 15 J. Health Insurance Waiver Option ................................................................................... 15 K. Optional Health Benefits ............................................................................................... 16 L. Flexible Spending Accounts (FSAs) ............................................................................. 17 M. Voluntary Life Insurance ............................................................................................... 17 N. In-Lieu Payment ............................................................................................................. 17 O. Cost-Savings .................................................................................................................. 18 ARTICLE 8. JOB RELATED DISABILITIES AND THE AMERICANS WITH DISABILITIES ACT .......................................................................................................................................... 18 A. Job Related Disabilities ................................................................................................. 18 B. Americans with Disabilities Act .................................................................................... 18 ARTICLE 9. SAFETY COMPLIANCE AND EQUIPMENT ........................................................ 18 A. Safety Compliance ......................................................................................................... 18 B. Safety Boot Allowance .................................................................................................. 19 C. CPR Training .................................................................................................................. 19 D. Public Works Safety Equipment ................................................................................... 19 ARTICLE 10. GRIEVANCE PROCEDURES ............................................................................ 20 A. Definition ........................................................................................................................ 20 B. Stale Grievance .............................................................................................................. 20 C. Informal Discussion with Employee’s Supervisor....................................................... 20 D. Formal Written Grievance to Employee’s Supervisor ................................................. 20 E. Grievance to Department Head/City Manager .............................................................. 21 F. Waiver of Appeal Steps ................................................................................................. 21 G. Advisory Fact Finding of Grievances ........................................................................... 21 H. Selection of a Fact Finder ............................................................................................. 21 I. Duty of a Fact Finder ..................................................................................................... 21 J. Payment of Costs .......................................................................................................... 22 K. Effect of Failure of Timely Action ................................................................................. 22 ARTICLE 11. UNION SECURITY ............................................................................................. 22 A. Union Dues Check-Off Deductions ............................................................................... 22 B. Maintenance of Membership ......................................................................................... 23 C. Union Indemnification, Hold Harmless, and Defense .................................................. 23 ARTICLE 12. MISCELLANEOUS ............................................................................................. 23 A. Deferred Compensation Plan ........................................................................................ 23 B. Tool Replacement Allowance ....................................................................................... 24 Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

3 C. Working Out of Classification Assignment .................................................................. 24 D. Sick Leave Conversion to Cash .................................................................................... 24 E. Vacation Leave............................................................................................................... 25 F. Flexible Work Schedule ................................................................................................. 25 G. Union Representatives Time Off ................................................................................... 26 H. Advance Notice .............................................................................................................. 26 I. Joint Labor-Management Committee ........................................................................... 27 J. Professional Development Incentive Program ............................................................ 27 K. Flexibility Staffed Entry Level Positions ...................................................................... 30 L. Length of Probationary Period for All Unit Members .................................................. 30 M. Reclassification and Salary Adjustment Policy ........................................................... 31 N. Christmas Eve ................................................................................................................ 31 O. Layoff and Reduction in Time Procedures .................................................................. 31 P. Automatic Payroll Deposit ............................................................................................ 31 Q. Tuition Reimbursement ................................................................................................. 31 R. Dignity and Professionalism ......................................................................................... 32 S. New Employee Orientation ............................................................................................ 32 T. Timely Notification ......................................................................................................... 32 U. Step Increases ............................................................................................................... 32 ARTICLE 13. HOLIDAYS ......................................................................................................... 32 A. Holiday Schedule ........................................................................................................... 32 B. Holiday Office Closure .................................................................................................. 33 ARTICLE 14. LEAVE OF ABSENCES ..................................................................................... 33 ARTICLE 15. MAINTENANCE OF OPERATIONS ................................................................... 34 ARTICLE 16. PREVAILING M.O.U. .......................................................................................... 34 ARTICLE 17. DRUG FREE WORKPLACE POLICY ................................................................ 34 ARTICLE 18. SAVINGS CLAUSE ............................................................................................ 34 ARTICLE 19. TERM OF AGREEMENT .................................................................................... 35 EXHIBIT [A] .............................................................................................................................. 36 Section 12.01 General ......................................................................................................... 36 Section 12.02 Grounds for Discipline ................................................................................ 36 Section 12.03 Types of Disciplinary Action ....................................................................... 38 Section 12.04 Notice of Intended Disciplinary Action ....................................................... 39 Section 12.05 Pre-disciplinary Conference ........................................................................ 39 Section 12.06 Notice of Discipline or Rejection of Discipline .......................................... 40 Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

4 Section 12.07 Appeal of Disciplinary Action ..................................................................... 40 Section 12.08 Appeal ........................................................................................................... 40 Section 12.09 Evidentiary Appeal Hearing Procedure ...................................................... 41 Section 12.10 Serving of Notices ....................................................................................... 43 Section 12.11 Summary Suspension ................................................................................. 43 Section 12.12 Right to Representation .............................................................................. 43 Section 12.13 Records Purged ........................................................................................... 44

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5 ARTICLE 1. PREAMBLE

This Memorandum of Understanding is entered into by the City of Hollister, hereinafter referred to as "City", and the Service Employees International Union, Local 521, CTW - CLC, hereinafter referred to as "Union," having met and conferred in good faith, do hereby jointly prepare and execute the following written Memorandum of Understanding (MOU). It is understood that the provisions set forth the full and complete understanding of the parties in accordance with Sections 3500-3510 of the Government Code of the State of California, otherwise known as the Meyers-Milias-Brown Act.

ARTICLE 2. NO DISCRIMINATION

The City and Union agree that there shall be no discrimination against any employee in the unit because of race, religion, creed, political affiliations, color, national origin, ancestry, age, sexual orientation, or sex, unless defined as a bona-fide occupation qualification as defined by Federal or State law. The City and Union also agree not to discriminate against any employee for his/her activity on behalf of, or membership in or lack of membership in, the Union. Any employee alleging a violation of this article shall have the burden of proving the existence of a discriminatory act or acts and of proving that but for such act or acts the alleged injury or damage to the grievant would not have occurred.

ARTICLE 3. RECOGNITION

Pursuant to Section 3500-3510 of the Government Code, the City certifies the Union as the recognized majority representative for all regular career, full-time employees in the General Unit. The General Unit includes all classifications of non-management, non- supervisory, and non-confidential employees in the City other than those classifications designated as local-safety in the Police and Fire Departments and the classes of Police Services Officer, Police Services Supervisor, and Multi Services Officer.

ARTICLE 4. NO ABROGATION OF RIGHTS

This M.O.U. does not modify any City Council rights.

ARTICLE 5. MAINTENANCE OF BENEFITS

The articles included in this agreement constitute a full and complete agreement with the City and Union on all matters within the scope of representation for the period stated in Article 18. Term Of Agreement. All present resolutions, ordinances, rules and regulations, practices and policies covering matters within the scope of representation will continue in force and effect during said period without change, except to conform to the terms of this M.O.U. subject to meet and confer. Notice of any matter proposed to be changed will be provided to the Union in a timely fashion.

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6 ARTICLE 6. SALARY AND SPECIAL COMPENSATION

A. Salary Adjustments

Compensation Adjustments

Effective the first full pay period after the execution of this MOU , by all parties, the City shall apply a zero percent (0.00%) increase to the base salary of all unit classifications.

B. Retirement

1. Contribution

Tier 1

a. Effective the first full pay period after the execution of the MOU, and the City's subsequent adoption of the Resolution changing the CalPERS Retirement Employee Contribution Rate, all unit employees under the Miscellaneous CalPERS "2.5% @ age 55" Retirement Benefit Plan shall pay eight percent (8%) of their Compensation as part of the Employees' contribution.

Tier 2

b. Effective the first full pay period after the execution of the MOU, and the City's subsequent adoption of the Resolution changing the CalPERS Retirement Employee Contribution Rate, all unit employees under the Miscellaneous CalPERS "2% @ age 60" Retirement Benefit Plan shall pay seven percent (7%) of their Compensation as part of the Employees' contribution.

Tier 3

c. Effective on or after January l, 2013, all new employees hired on or after January 1, 2013, and who are defined as a "new member" under the Public Employee Pension Reform Act of 2013 (PEPRA), AB 340 shall pay the employee contribution rate as established by State of California law.

2. 1959 PERS Survivor Death Benefit

The City shall provide the PERS Section 21574 "Fourth Level 1959 Survivor Death Benefit" for all eligible unit members for the term of this contract. The City shall pay the employer rate contribution. The employee shall pay the member Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

7 rate contribution.

3. One-Year Final Compensation Benefit

The City shall provide the PERS Section 20042 "One Year Final Compensation" benefit for eligible unit members.

All new employees hired on or after January 1, 2013, and who are defined as a "new Member" under PEPRA, are subject to the new Benefit Formulas, Final Compensation Period, and Contribution requirements as established by the PEPRA.

C. Bilingual Allowance

Employees who perform technical bilingual skills (reading, writing and oral translation) for the benefit of the City on a regular and ongoing basis and who successfully pass City-administered proficiency test shall receive an allowance based on the level(s) of bilingual competency listed below.

Level I – Oral Translation

Employees who perform technical bilingual skills and who successfully pass a City- administered oral proficiency test shall receive an allowance of one hundred seventy-five dollars ($175.00) per month.

Level II – Written Translation

For employees who successfully pass the written proficiency test, shall receive an additional amount of one hundred and twenty-five dollars ($ 125.00) per month.

Each department within the City will be allowed 3 positions of level 2 bilingual services. If a department’s need for bilingual services becomes greater than the allotted 3 positions, the department head may request to increase its bilingual services pending City Managers approval.

Employees who become eligible for Level II will be required to serve as an oral translator and/or provide written translation in the course of the employee’s duties on a regular and on-going basis, per the City’s needs. These employees may be called upon by other departments on an as need basis.

Such Level II Bilingual Translators shall perform written translations that are viewed by a large audience of city residents (i.e. City mailers, informational brochures, inserts in city utility billings, social medial, public notices, and any additional documents as needed.) Employees, who are currently receiving Level I Bilingual Allowance, will not be required to retest in order to continue receiving the monthly allowance.

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8 D. Compensatory Time

1. Overtime

Employees shall have the option to either receive paid compensation at a rate one and one-half (1 ½) times the employees regular rate of pay for all hours worked in excess of forty (40) hours per week, or to take compensatory time off from duty at a rate of one and one-half (1 1/2) times the amount of each overtime hour worked which exceeds forty (40) hours per week.

2. Holidays

Employees who work holidays shall have the option to either receive paid compensation at a rate one and one-half (1 1/2) times the employees' regular pay rate plus receive the employees' regular paid compensation for the holiday, or to take compensatory time off from duty at a rate one and one-half (1 1/2) times the amount of each hour worked plus receive eight (8) hours regular paid compensation. Employees who are called in on holidays shall also receive this option.

3. Maximum Accrual

Employees may accumulate a maximum of 240 hours (160 FLSA overtime hours worked) in their "comp time bank".

4. Compensatory Time Conversion To Cash

Employees may convert accumulated compensatory time to cash as follows:

a. Twice during the fiscal year an employee may request a cash payment of accumulated Compensatory Time Off (CTO).

b. Requests for payment must be made in writing to the Finance Department at least thirty (30) days in advance of June 1st and December 1st of each year.

c. Cash payment of CTO shall be paid on the first pay day which follows June 1st and December 1st of each year.

E. Overtime and Holiday Pay

1. Overtime Pay

Any employee represented by this unit who is authorized or required to work overtime in excess of forty (40) hours per week shall be compensated at the rate of time and one-half for each hour worked of the Fair Labor Standards Act (FLSA) regular rate of pay or granted as equivalent compensatory time off Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

9 (CTO).

2. Holiday Pay

Any employee represented by this unit who is authorized or required to work on any City recognized holiday shall be compensated at the rate of time and one - half for each hour worked, in addition to regular pay for the holiday .

F. 24-Hour Hazardous Materials (Hazmat) Certification Premium Pay

Employees covered by this agreement who are required to perform duties and respond to emergency situations involving exposure to hazardous materials, and who possess and maintain a 24-Hour Hazardous Materials Technician Level III certification that meets 29 CFR 1910.120(q) shall be paid premium pay of five percent (5.0%) so long as they are assigned such responsibilities and maintain current certification for this Premium Pay.

Eligibility shall be effective on the first Payroll Period following ratification of this Memorandum of Understanding.

The City will review annually the number and types of occurrences to which employees qualifying for this premium pay are called to respond to in order to determine the cost-effectiveness of maintaining this program. The City reserves the right to re-negotiate the amount of the premium pay in consideration of the number and magnitude of the incidents, the actual response by the employee(s) both during and outside normal business hours, and other factors deemed relevant by the City.

G. Heavy Equipment Operation Premium

Effective upon execution of this M.O.U., Employees in the class of Maintenance Worker I/II, Senior Maintenance Worker, Junior Water Operator, and Water Operator I/II who maintain a Class A license and operate heavy equipment shall receive a premium payment of two dollars ($2.00) over his/her regular base rate for each hour worked.

H. License Certification

1. Land Surveyor License Certification

All employees who possess and maintain a valid California Land Surveyor License shall receive Annual Incentive Pay of five percent (5.0%) of base salary, payable as part of the employee's bi- weekly payroll.

2. Qualified Stormwater Developer (QSD)/ Qualified Stormwater Practitioner (QSP) Certification

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10 An employee who possesses and maintains a valid QSD/ QSP Certification as required by the State of California for storm water best management practice shall receive Annual Incentive Pay of five percent (5.0%) of base salary, payable as part of the employee's biweekly payroll, if the employee's job assignment as determined by the City Manager requires the individual perform the work .

I. Longevity Pay

A longevity bonus shall be paid to employees of this unit who complete the following specified consecutive years of service after the effective date of this M.O.U.

NUMBER OF CONSECUTIVE YEARS LONGEVITY BONUS
10 – 14 Years Three Percent (3.0%) of Base Salary
15 – 19 Years Six Percent (6.0%) of Base Salary
20 or more Years Nine Percent (9.0%) of Base Salary

Unit members who have achieved a longevity bonus prior to July 1st, 2009 shall be entitled to receive the difference between the previous longevity bonus and the increased longevity bonus provided in this M.O.U. so that the net result is that employees receive the same bonus amount with equivalent years of service.

J. Standby Pay

Employees covered by this agreement who are assigned to standby duty shall be paid three hundred and fifty dollars ($350.00) for each week that they are so assigned or when there is a staff issue determined by management, prorated to a daily amount. The City shall have full discretion in making and administering standby assignments. This shall include, but not be limited to, the authority to :

1. Require an employee to be available at all hours by telephone or to use a pager.

2. To restrict travel.

3. Require employee to refrain from activities which would impair the ability to respond to emergency situations.

Management agrees to involve employees in discussions regarding standby policy modifications.

Standby assignments shall be scheduled three (3) months in advance to provide even distribution of on-call assignments to the extent possible. However, schedule adjustments may be necessary due to illness, vacation, vacancy, and/or other types of approved leave.

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11 K. Callback Pay and Rest Periods After Emergency Callback

1. Callback Pay

Employees who are called back to work outside of their regularly scheduled hours, and not as a continuation of their work shift, in the event of an emergency, shall receive a minimum of two (2) hours compensation at time-and-one-half base pay or compensation for hours worked (including eligible FLSA overtime), whichever is greater.

Employees may be assigned to a roll down call back list and shall not be subject to the standby provisions and requirements of Article 6.J. Roll down call back lists are composed of employees who may be called during an emergency and are called in sequence until a person whose name is on the list is contacted and able to respond in a timely manner.

2. Rest Periods After Emergency Callback

a. Rest Between Shifts: If an employee is called back for emergency work and performs four (4) or more hours of service during the eight (8) hours immediately preceding their next scheduled shift, the employee shall receive a minimum of eight (8) consecutive hours off before returning to duty. Any overlap between the rest period and the employee’s regular shift shall be paid at the regular rate of pay.

Example: An employee normally works 8:00 a.m. to 5:00 p.m. and is called back to respond to an emergency from 12:00 a.m. to 5:00 a.m. The employee is entitled to an eight-hour rest period and would not be required to report back to work until 1:00 p.m. That missed time from 8:00 a.m. to 1:00 p.m. would be paid at the employee’s regular rate.

b. Extended Emergency Response: For emergency work exceeding twelve (12) consecutive hours, employees shall be provided an eight (8) hour rest break before returning to duty, unless otherwise agreed due to continued emergency needs.

c. Late-Night Callbacks: If an employee is called back to work between 10:00 p.m. and 4:00 a.m., and works more than two (2) hours, the employee may be allowed to start their next regular shift later than usual or be granted paid administrative leave for part or all of that shift. This is subject to the City’s operational needs and requires supervisor approval.

The intent of this provision is to support employee rest and recovery following significant overnight emergency work.

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12 L. Uniform Allowance

The City will provide uniforms for employees working at the City Yard and at the City Airport.

M. Cellphone Allowance

At the execution of the M.O.U., the City will pay a cell phone allowance of $40 per month to eligible employees (Water Maintenance Operator II, Senior Maintenance Worker, Wastewater Treatment Plant Operator II, Utility Engineer, Assistant Engineer, and Public Works Inspector) and those who are assigned by management to maintain a cell phone. Employees receiving this allowance shall keep the phone in service at all assigned times and shall maintain the phone in proper working order at the employee's expense. No employee will be allowed the Cell Phone Allowance if they also maintain a City provided Cell Phone. City has no financial responsibility for lost or damaged cell phones.

N. Cross-Connection Specialist Certification

At the execution of the M.O.U., an employee who possess and maintains a valid California/Nevada Cross-Connection Specialist Certification shall receive Annual Incentive Pay of five percent (5.0%) of base salary, payable as part of the employee's bi-weekly payroll, at the City Manager's discretion, if the employee's job assignment requires the individual to perform the work.

O. Notary Public Commission Pay

Any Union Employee who possesses, maintains, and is authorized by management to use a Notary Public Commission license on behalf of the City shall receive an allowance of one hundred twenty-five dollars ($125.00) per month. Employees who receive Notary Public Commission Pay shall remain subject to the needs and requirements of the City. The Commission Pay will be payable as part of the employee’s bi-weekly payroll.

P. Homeless Encampment Cleanup Assignment

Upon execution of this contract, whenever a Bargaining unit Worker volunteers to perform homeless encampment cleanup, the employee shall be paid, in addition to their basic compensation, two-hundred fifty dollars $250.00 differential per day worked.

Whenever the Bargaining unit Worker who is eligible for this differential is required to work overtime, such employee's base hourly rate plus the two -hundred fifty dollars $250.00 differential will be used in determining payment for overtime hours worked .

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13 ARTICLE 7. INSURANCE

A. Description

The City of Hollister Flexible Benefits Plan/Cafeteria Plan (hereinafter "Plan") is available to full- time employees (hereinafter "Employees"). There will be three participation levels as referenced under Section [E]. Optional benefits are listed below. Once an election is made, it will remain in force until the next open enrollment period. A Third Party Administrator (T.P.A.) fee will be paid by the employees that participate in the Plan.

B. Health Insurance Options

The City shall provide employees with the choice of participating in the Public Employees' Medical and Hospital Care Act (PEMHCA) program offered by CALPERS.

C. IRS Code Section 125 Flexible Benefits/Cafeteria Plan

1. The City shall provide for unit members an IRS Code Section 125 Flexible Benefits/Cafeteria Plan in accordance with all applicable state and federal laws and regulations.

2. The City shall contribute towards the PEMHCA medical, dental and vision care plan amounts allocated in accordance with the City's IRS Code Section 125 Flexible Benefits/Cafeteria Plan as specified below.

3. The City shall allocate specified amounts of "Flex Credits" to the employee's flexible benefit account. These amounts shall consist of the following:

a. The City will contribute a dollar amount towards monthly medical insurance premiums at the following levels:

COVERAGE CITY CONTRIBUTION
Employee Only $1,342.93
Employee Plus One $2,685.86
Employee Plus Family $3,491.63

b. The City will contribute towards dental insurance in the following amounts:

COVERAGE CITY CONTRIBUTION
Employee Only $49.80
Employee Plus One $100.63
Employee Plus Family $135.91
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14 c. The City will contribute towards vision insurance in the following amounts:

COVERAGE CITY CONTRIBUTION
Employee Only $14.15
Employee Plus One $30.29
Employee Plus Family $30.29

4. In the event that surplus Flex Credits are available, all Union Employees shall have the option to allocate such Flex Credits to one or more of the following :

a. Union Employees’ Flexible Spending Account.

b. Roth Individual Retirement Account (IRA).

c. ICMA or City-authorized 457 Deferred Compensation Plan.

If a Union Employee's residual "Flex Credits" are reduced, the employee will have the responsibility to pay the contribution no longer covered by the Surplus Flex Credits.

5. Employees who waive either dental and/or vision coverage shall have the option to apply available flex credits towards the cost of any optional premium listed in the respective sections below. The cost of the optional premium not covered by available flex credits shall remain the employee’s responsibility.

6. Employees who elect to waive any or all health coverage shall be subject to the terms and provisions described under Section [J] below.

D. Terms for Health Care Participation

Participation and coverage in the medical, dental, and vision care plans shall be in accordance with the terms and conditions of the insurance carrier.

E. Health Care Contributions

1. Employee-only Premium

The City shall contribute towards the medical, dental, and vision insurance plans an amount equal to the employee-only premium at the time of adoption of this M.O.U. for each member of the unit. The employee-only premium for medical insurance shall be in accordance with Section [C] above.

2. Employee Option for Dependent Coverage

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15 For those employees who elect the option for dependent coverage for medical, dental, and vision insurance plans, the City shall contribute monthly amounts equal to the employee plus one and employee plus family toward such dependent coverage in accordance with Section [C] above.

F. Vision Insurance

The City shall provide a vision care insurance plan which is available to eligible unit members and qualified dependents during the term of this M.O.U.

The City shall offer vision care insurance for employees and qualified dependents as a pre-tax flexible benefit option. Participation and coverage shall be in accordance with the terms and conditions of the insurance carrier.

G. Dental Insurance

The City shall offer dental care insurance for employees and qualified dependents as a pre-tax flexible benefit option. Participation and coverage shall be in accordance with the terms and conditions of the insurance carrier.

H. Life Insurance

The City shall provide term life insurance in the amount equal to $50,000 for each member of the unit for the term of this M.O.U. Additional term life insurance may be purchased by the employee in increments of $10,000 up to a total of $250,000.

I. Long Term Disability Insurance

The City agrees to provide to all employees within this unit at City cost a Supplemental Long Term Disability Plan, coordinated with other existing benefits to provide no more than a thirty (30) day exclusion or elimination period; no less than a one-year benefit for accident or illness; and a minimum scheduled benefit of sixty -six percent (66%) or two-thirds (2/3) of gross salary to a maximum of $3,500.00 per month for the term of this M.O.U. The City in its sole discretion shall select the Supplemental Long Term Disability Plan carrier that meets these requirements.

J. Health Insurance Waiver Option

1. Effective January 1, 2014, employees within this bargaining unit who elect not to participate in the City's health care insurance program will be compensated in an amount as follows:

$535 Employee Only
$1,075 Employee plus one
$1,380 Employee plus family

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16 The compensation will be based on the employer’s contribution towards the premiums for the City's health plan at the level corresponding to the employee’s verified non-City insurance coverage (employee only, employee plus one dependent, or employee plus two or more dependents). To receive this benefit, employees must submit documentation demonstrating their enrollment in a qualified non-City health insurance plan at the applicable coverage level. This documentation must be provided at the time of waiver and during any subsequent verification periods as specified in Section [3] below. Upon verification of coverage, this cash amount will be paid as part of the employee’s bi-weekly payroll.

2. Employees within this bargaining unit shall be eligible to elect not to participate in the City's health care program.

3. Employees within this bargaining unit electing not to participate in the City's health care insurance program must annually provide proof of medical insurance coverage and verify any dependents as if they were receiving coverage through the City in order to maintain payment under this waiver option.

4. In addition to the coverage options specified under Article 7. Insurance of the Memorandum of Understanding between the City of Hollister and the Service Employees International Union, Local 521, the following optional health benefits shall be available to the employees of this bargaining unit.

K. Optional Health Benefits

Employees that have elected to participate in a City offered medical plan can also elect to participate in the optional benefits. If the employee has any surplus flex credits after making all elections required to participate in the medical insurance, the employee can use that surplus toward optional qualified insurance benefits or one or both of the pre-tax spending accounts. Employees that wish to participate in the optional benefits plan, but do not have any surplus credits, can elect to have pre -tax payroll deductions in an amount to cover the cost of the ir elections.

Employees may pay the premiums for the following benefits on a voluntary basis:

- Medical Insurance
- Dental Insurance
- Vision Insurance
- Group Term Insurance up to $50,000 for Employees only - Accidental Death and Dismemberment Insurance
- Short Term Disability
- Cancer Insurance
- Supplemental Health Insurance
- Vision or Dental Insurance
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17 - Accidental Only Insurance
- Intensive Care Insurance

L. Flexible Spending Accounts (FSA's)

The City agrees to establish a pre-tax dependent care reimbursement account up to the maximum reimbursement allowed by law.

The City agrees to establish a pre-tax medical reimbursement account, up to the maximum amount allowed by law.

M. Voluntary Life Insurance

The City shall offer a voluntary supplemental life insurance plan through the flexible benefits plan for pre-tax contributions by the employees. Participation and coverage shall be in accordance with the terms and conditions of the insurance carrier.

Employees may also elect pre-tax payroll deductions to support other City sponsored voluntary supplemental insurance benefits.

N. In-Lieu Payment

The City will conduct a one-year pilot program with SEIU. This pilot program will require the City to contribute an amount equal to the difference between what the City would normally contribute in monthly medical benefit premiums and the employee’s selected health plan.

This difference will be paid-out to the employee as part of the City’s regular biweekly payroll process. An employee is only eligible for this provision if they are enrolled in medical benefits through one of the City’s offered plans. This payment shall be subject to all applicable state and federal taxes and is not PERS -able. The employee must notify Payroll, in writing, that they wish to enroll in this program.

EXAMPLE: Employee is enrolled in Employee Plus Family plan. The City’s monthly contribution is $3,325.36. The employee enrolls in a medical plan at a cost of $3,000 per month. The City would they pay-out the $325.26 monthly difference to the employee as part of the City’s regular payroll process.

Medical benefit enrollments sometimes change due to qualifying life events and/or through open enrollment. In the event an employee receives any in-lie payment that they were not eligible for, that employee shall immediately pay back the City the overpaid amount. The City and SEIU agree that the City may withhold any amount an employee incorrectly receives from that employee’s paycheck.

For employees who elect not to participate in the group medical coverage offered by the City, the City will provide dental and vision coverage for the employee and Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

18 his/her dependents at no cost to the employee.

O. Cost-Savings

During the term of this agreement, the parties agree that upon request to meet and discuss regarding potential cost savings/sharing measures related to health and welfare plan designs or premiums.

ARTICLE 8. JOB RELATED DISABILITIES AND THE AMERICANS

WITH DISABILITIES ACT

A. Job Related Disabilities

City agrees to comply with applicable provisions of the Labor Code of the State of California for employees within this unit deemed disabled or temporarily disabled as a result and because of such job-related injury which requires them to be absent from active City service.

B. Americans with Disabilities Act

Circumstances surrounding compliance with the Americans with Disabilities Act (ADA) involve matters that are both personal and confidential, including with Civil Rights protections under law. Details about an individual case may not be disclosed to the City. However, should a unit member request an accommodation under ADA, and that requested accommodation would change the working conditions of members in the unit, the City shall meet with a representative from the unit to generally discuss the accommodation, but at no time shall the City disclose Personally Identifiable Information (PII) or any other confidential information associated with any individual, up to and including an individual’s disability and/or medical diagnosis. Action taken by the City under this Article shall not be subject to the grievance procedure.

ARTICLE 9. SAFETY COMPLIANCE AND EQUIPMENT

A. Safety Compliance

The City and Union shall meet the requirements of Cal OSHA. The Union further agrees to bring any safety concerns immediately to the attention of management.

The City and the Union shall cooperate in pursuing safe working practices and shall establish a joint safety committee to address workplace safety concerns and develop actions that can be taken to address them. The committee shall meet on an as - needed basis, at the written request of either party, within ten (10) working days of such request or at another mutually agreed upon time. The committee shall consist of a minimum of two (2) union representatives and two (2) City representatives.

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19 B. Safety Boot Allowance

All eligible unit employees, including employees assigned to the Public Works Department Operations and Maintenance Section which also includes the Public Works Inspector, Utilities, Streets, Parks, and Buildings & Grounds Divisions, and Development Services Department employees that work out in the field shall be reimbursed up to three hundred dollars ($300.00) per year, upon presentation of satisfactory proof-of-purchase, for safety shoes or boots which are approved and authorized by City management. Used safety shoes and boots are the property of the City and shall be returned to the City.

This allowance is to assist employees in purchasing City-approved work shoes and/or boots appropriate for the type of work being performed in accordance with General Industry Safety Orders, Title 8, Section 3385. Appropriate safety shoes and boots shall incorporate the following safety factors depending on the type of work performed:

1. Non-skid sole

2. Adequate ankle protection

3. Puncture protection

4. Impact/compression protection

C. CPR Training

From time to time, the City may offer CPR Training through the Certified Trainer with the City Fire Department. Subject to department needs. Employees may be granted release time to participate in this training.

D. Public Works Safety Equipment

The City agrees to provide necessary training and safety equipment for the classification of:

• Assistant Equipment Mechanic
• Equipment Mechanic
• Jr. Water Maintenance Operator
• Water Maintenance Operator I/II
• Maintenance Worker I/II
• Senior Maintenance Worker
• Tree Trimmer
• Airport Maintenance & Operations Specialist
• Street Sweeper Operator

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20 This equipment may include, but not limited to: appropriate gloves, safety glasses, ear protection, chaps, hard hats, safety vests and breathing masks.

This equipment will be purchased by the City at no cost to unit members.

ARTICLE 10. GRIEVANCE PROCEDURES: SWORN PERSONNEL

This grievance procedure shall be the sole and exclusive procedure for resolving grievances filed by sworn employees covered by this M.O.U.

A. Definition

A grievance is a claimed violation, misapplication, or misinterpretation of a specific provision of this agreement or the City's Personnel System Rules and Regulations which adversely affects the grievant.

B. Stale Grievance

A grievance shall be void unless filed in writing within fifteen (15) calendar days from the date upon which the City is alleged to have misinterpreted or misapplied this agreement, or within fifteen (15) calendar days from the time an employee might reasonably have been expected to have learned of the alleged misinterpretation or misapplication. Such discovery period shall not exceed 180 days regardless of the date of discovery. In no event shall a grievance include a claim for money relie f for more than the fifteen (15) day period plus such reasonable discovery period.

C. Informal Discussion with Employee's Supervisor

Before proceeding to the formal grievance procedure, an employee shall discuss his/her grievance with his/her immediate supervisor in private and attempt to work out a satisfactory solution. Any solution reached at this level must be reviewed by the Personnel Officer to assure compliance with this agreement before it has any binding effect.

D. Formal Written Grievance to Employee's Supervisor

If the employee chooses to formally pursue his/her grievance, he/she or his/her representative shall present the written grievance to his/her immediate within five (5) working days after the date upon which the grieving employee informally discusses the grievance with the supervisor. (In the event a group grievance is formally submitted by the recognized employee organization, its initial submission will be to the department head and subsequent steps will be followed as outlined in this section.) The formal written grievance shall specify the provisions of this M.O.U. or the City's Personnel System Rules and Regulations alleged to have been misinterpreted or misapplied, the remedy sought, and such other specific dates, times, places and persons and other facts necessary to derive a clear understanding Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

21 of the matter being grieved. The immediate supervisor shall return a copy of the written grievance to the employee with the supervisor's answer thereto in writing within five (5) working days from receipt of the supervisor's answer within which to file an appeal to the next level.

E. Grievance to Department Head/City Manager

The department head or the City Manager, if the department head was the grievant's immediate supervisor, shall have seven (7) working days in which to review and answer the grievance in writing. Unless waived by mutual agreement of the employee or his/her representative and the department head or City Manager, a meeting is required at this level and the employee and his/her representative shall have the right to be present and participate in such a meeting. The tim e limits at this level may be extended by mutual agreement between the department head or City Manager and the employee or his/her representative.

F. Waiver of Appeal Steps

If the grievance is not resolved after the immediate supervisor has answered it in writing, the grievant(s) and the department head may, by mutual agreement, waive review of the grievance at Step E and proceed to present the grievance to the City Manager.

G. Advisory Fact Finding of Grievances

In the event the grievance is not resolved by the City Manager, the recognized employee organization may with fifteen (15) calendar days after receipt of the decision of the City Manager, request that the grievance be heard by a fact finder .

H. Selection of a Fact Finder

The fact finder shall be selected by mutual agreement between the City and the Union. If the parties are unable to agree on the selection of a fact finder, they shall jointly request the State Mediation and Conciliation Service to submit a list of five (5) qualified fact finders. The City and the grievant, or his/her representative, shall then alternately strike names from the list until only one name remains, and that person shall serve as fact finder.

I. Duty of a Fact Finder

Except when an agreed statement of facts is submitted by the parties, it shall be the duty of the fact finder to hear and consider evidence submitted by the parties and to thereafter make written findings of fact and a proposed disposition of the grievance which shall be advisory in nature.

The proposed disposition shall be based solely on the interpretation of the applicable Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

22 provisions of the M.O.U. and other personnel rules if applicable to the grievance, and he/she shall not add to, subtract from, modify or disregard any of the terms or provisions of the M.O.U. or such rules.

J. Payment of Costs

Each party to a hearing before a fact finder shall bear its own expenses in connection therewith. All fees and expenses of the fact finder shall be borne one -half by the City and one-half by the grievant.

If the City does not implement the proposed disposition of the grievance made by the fact finder, the City shall pay all fees and expenses of the fact finder.

K. Effect of Failure of Timely Action

Failure of the employee(s) to file an appeal within the required time period at any level shall constitute an abandonment of the grievance. Failure of the City to respond within the time limit at any step shall result in an automatic advancement of the grievance to the next step.

ARTICLE 11. UNION SECURITY

A. Union Dues Check-Off Deductions

1. In accordance with the provisions of this Article, the City shall make payroll deductions from the pay of employees who authorize such deductions in writing on a form provided and/or approved by the City. Such deductions shall be made in accordance with rules and regulations established by the City and the provisions of this Article. Deductions shall be in a pay period basis and shall be made payable to the Union. The Union, as the formally recognized employee organization, may designate the Hollister Municipal Employees Association as the payee of the dues check-off check from the City and to receive the check on behalf of the Union by providing specific written authorization to the City Finance Director. In lieu of such written authorization the dues check-off check shall be forwarded directly to the Union.

2. All other legal and required payroll deductions shall have priority over dues check-off deductions. The employee's earnings must be sufficient after other legal and required deductions are made to cover the amount of the dues check- off authorized. When an employee is in a non- pay status for an entire pay period, no withholding will be made to cover that pay period from future earnings nor will the employee be required to deposit the amount of deductions with the City which would have been withheld if the employee had been in a pay status during the pay period. In the case of an employee who is in a non -pay status during only a part of the pay period and the salary is not sufficient to cover the full Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

23 withholding, no deduction shall be made.

B. Maintenance of Membership

This section shall be applicable to employees hired by the City on or before November 15, 1995. Membership in the Union shall not be compulsory. An affected employee has the right to choose either to become a Union member or to refrain from becoming a Union member. All affected employees who have authorized payroll deductions for payment of Union dues prior to the effective date of this M.O.U. (by reaffirming such deductions by voluntarily completing a re-commit card), and all affected employees who establish dues payroll deductions during the term of this M.O.U., shall remain members of the Union (with understanding that the authorization of deduction dues shall renew each year on the anniversary of the date the employee’s signed re-commit card), provided that Union members on payroll deduction may end their authorization for deduction of Union dues by mailing (by certified mail) a signed resignation letter to SEIU Local 521’s central office, postmarked between 75 days and 45 days before such annual renewal date. This authorization is voluntary and is not a condition of the employee’s employment.

The Union shall keep an itemized record of its financial transactions and shall provide the City, and any requesting employee, with a detailed written financial report thereof in the form of a balance sheet and an operating statement, certified as to accuracy by the Union president and treasurer (or corresponding principal officer) or certified public accountant. Such report(s) shall be pro vided to the City prior to March 1st of each year. If the Union fails to provide the required written financial report(s), the City shall suspend dues check-off deductions for each pay period the report(s) is unavailable.

C. Union Indemnification, Hold Harmless, and Defense

The Union agrees to indemnify, hold harmless, and defend the City and its officers, employees, and agents against all claims, proceedings, actions, and liability arising, directly or indirectly out of any actions taken or not taken by or on behalf of the City pursuant to any claims made and against any suits instituted against the City on account of the City's implementation and enforcement of Section A. Union Dues Check-Off Deduction, and Section B. Maintenance Of Membership of this Article.

ARTICLE 12. MISCELLANEOUS

A. Deferred Compensation Plan

The City shall continue to provide a voluntary Deferred Compensation Plan for all employees of this unit for the term of this M.O.U.

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24 B. Tool Replacement Allowance

1. The City shall provide a tool replacement fund for the replacement of worn out or broken shop tools and the purchase of new shop tools as needed. This allowance will be available to those employees in classifications which are required as a condition of employment to provide their own shop tools for the performance of their duties within City service. The utilization of this fund shall not exceed five hundred dollars ($500.00) per employee for any fiscal year. All shop tools purchased and reimbursed under this provision shall be maintained by the employee so as to be immediately available for City work. This fund is meant as to have funds available for reimbursement not automatic payment to the employee.

2. The employee shall acquire the tool(s) and shall present documentary evidence (receipts and invoices, etc.) of the acquisition and ownership to the City for reimbursement. The Department Head or his designee may inspect and inventory all tools acquired under this provision.

C. Working Out of Classification Assignment

Unit employees assigned by management on a Personnel Action Form (P.A.F.) shall be compensated within the salary range for which the assignment is made, but in no case less than five percent (5%) subject to the following:

1. The position must be vacant and budgeted.

2. Must be assigned by Management.

3. The grievance procedure shall not be utilized by unit members in any conflict and Management's assignment or non-assignment is final a binding upon all parties.

D. Sick Leave Conversion To Cash

Eligible unit employees may convert a percentage of accrued, unused sick leave to cash at death or retirement from City employment. The provisions for this policy are as follows:

1. Employees of this unit may not "cash out" or be compensated for any of the first 240 hours of sick leave accrued.

2. Any current employee of this unit having completed 10 years of continuous service with the City and who retires from City service by filing for Service Retirement with CalPERS, will be compensated for fifty-percent (50%) of accrued, unused sick leave in excess of 240 hours at the employee's hourly rate of pay at the time of retirement from City service.

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25 3. The surviving spouse, beneficiary(s), dependents), or estate of any current employee of this unit who has completed 10 years of continuous service with the City and dies while employed by the City prior to retirement, will be compensated for one hundred percent (100%) of accrued, unused sick leave in excess of 240 hours at the employee's hourly rate of pay at the time of death .

4. Any current employee of this unit having completed 10 years of continuous service with the City and having an unused sick leave accrual balance exceeding 500 hours may, at their option, "cash out" up to a maximum of 96 hours (12 days) of unused sick leave annually as long as the "cashed out" hours do not diminish the unused sick leave accrual balance to an amount less than 500 hours.

5. Compensation for unused, accrued sick leave will be made at the employee's rate of pay at the time of "cash out". Requests for payment of unused sick leave as described herein, shall be made in writing to the Administrative Services Department at least 30 days in advance of June 1st and December 1st of each year.

6. Payments of "cashed out" unused sick leave will be made on the first pay day which follows June 1st and December 1st of each year.

E. Vacation Leave

Vacation leave accrual for each represented unit member shall be as follows:

Years of Service Annual Vacation Accrual
1st through completion of 3rd 10 days
4th through completion of 7th 15 days
8th through completion of 15th 20 days
16th through completion of 20th 22 days
Beginning of 21st year 25 days

Employees may cash out up to a maximum of forty (40) hours of vacation leave annually. Compensation for vacation leave cashed out will be made at the employee’s rate of pay at the time of cash out. Request for payment of vacation time shall be made in writing to the Department of Administrative Services at least thirty (30) days in advance of June 1st and December 1st of each year. Payments of cashed-out vacation leave will be made on the first pay day which follows June 1st and December 1st of each year. This payment will be made in the regular payroll check issued for that pay period.

F. Flexible Work Schedule

Eligible unit members may work flexible work schedules (i.e. 4/10, 9/80) when feasible. It is not the intention of the City to reduce the number of hours that City services are available to the public. It is agreed that implementation of flexible work schedules shall be evaluated on a work unit basis, and will only be approved in Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

26 those units where flexible work schedules can be implemented without reducing service levels and cost effectiveness.

An appointing authority (i.e. Supervisor, Department Head, etc.) requiring an employee to modify their schedule, either by changing the day worked or by modifying their work schedule/hours, shall provide the employee with no less than 4 working days’ notice to the employee.

G. Union Representatives Time Off

1. City shall grant Union employee board an aggregate of sixty (60) hours of paid time off from work per fiscal year for the purpose of attending Union sponsored educational and training opportunities as shown below:

a. Executive Board Meetings

b. Advisory Board Meetings

c. Bargaining Team Training

d. Steward Training

e. Budget Training

2. It is agreed that the employee representatives shall provide sufficient notice to their supervisors so that work schedules can be arranged to compensate for their absence.

3. The City will grant time off for "Meet and Confer" preparation and negotiations, for a time period not to exceed one hour before the respective negotiation session and one-half hour following the conclusion of same negotiation session.

4. Unless modified by mutual agreement at the onset of negotiations, time off in addition to that provided in G(3.) for any other "Meet and Confer" preparation shall be taken as leave in accordance with the City's established leave procedures and with sufficient notice to Supervisors to ensure appropriate coverage of operations.

H. Advance Notice

Except in cases of emergency as provided in Government Code § 3504.5, the City will provide 30 days written notice to the Union of any ordinance, rule, resolution, or regulation directly related to matters within the scope of representation proposed to be adopted by the City and shall give the Union the opportunity to meet with the City.

As provided by Government Code § 3504, "scope of representation" as used in this section shall include all matters relating to employment conditions and employer - Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

27 employee relations, including, but not limited to, wages, hours, and other terms and conditions of employment, except, however, that the scope of representation shall not include consideration of the merits, necessity, or organization of any service or activity provided by law or executive order. In cases of emergency when the City determines that an ordinance, rule, resolution, or regulation must be adopted immediately without prior notice or meeting with the Union, the City shall provide notice and opportunity to meet at the earliest practicable time following the adoption of the ordinance, rule, resolution, or regulation.

I. Joint Labor-Management Committee

At the request of either party, the parties agree to convene a joint labor-management committee for the purpose of communication, information sharing, and problem solving on relevant issues.

J. Professional Development Incentive Program

Employees who have successfully completed probation shall be eligible to receive a one-time professional development incentive for obtaining certificates or degrees received after the date of this M.O.U. A professional development incentive shall not be awarded if the certification or degree is a minimum requirement for their position .

The certificate must relate to the employee's current position or future lateral or promotional opportunities with the General Employees Unit, Mid-Management Association or the unrepresented units of Confidential Employees and Executive Management. Vocational Training, for purposes of this section, is defined as a minimum of 20 hours of specific training in a career field which results in a certificate of completion. The minimum twenty (20) hours shall be documented classroom time or in the case of a correspondence program identified as the average length of time required to complete the program certification as documented by the certifying agency or institution. Only one (1) professional development incentive per fiscal year can be received by an employee. If an employee receives a Ph.D., Master's degree or Bachelor's degree in a fiscal year, the employee may also receive one (1) additional professional development incentive for a certificate earned in the same fiscal year. Additionally, any additional development incentives earned in the same fiscal year do not rollover to the subsequent fiscal year.

The employee must request the professional development incentive within the same fiscal year the employee earned the eligible certificate, degree, and/or credential .

1. Professional Certificates - $2,500.00 Lump Sum:

- Professional Engineer Registration
- Professional Land Surveyor Registration
- Certified Public Accountant
- Engineer-In-Training
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28 - Land Surveyor-In-Training
- American Institute of Certified Planners
- Paralegal Certificate
- Grade 5 Water Treatment Operator or Water Distribution Operator - Grade 5 Waste Water Treatment Operator
- QSP
- QSD

2. College Degrees and Certificates - $2,500.00 Lump Sum:

- Ph.D.
- Master’s Degree
- Bachelor’s Degree
- Associate’s Degree

3. Technical Certificates - $2,000.00 Lump Sum:

- Grade 4 Water Treatment Operator or Water Distribution Operator - Grade 3 Water Treatment Operator or Water Distribution Operator - Grade 2 Water Treatment Operator or Water Distribution Operator - Grade 1 Water Treatment Operator or Water Distribution Operator - Grade 4 Waste Water Treatment Operator
- Grade 3 Waste Water Treatment Operator
- Grade 2 Waste Water Treatment Operator
- Grade 1 Waste Water Treatment Operator
- I.C.B.O. Certificates
- Public Works Inspector - NICET
- Cross Connection Control Specialist Certification
- Certified Arborist
- Certified Pool Operator
- Collections Systems Maintenance
- Certified Storm Water Inspector

4. Vocational Certificates of Completion:

Examples:

- A(+) Certification (Computer Hardware, Software & Networking) - Microsoft Certified Systems Engineer
- Cisco Certified Network Associates
- Operation of Wastewater Treatment Plants Program administered by California State University, Sacramento Regional and Continuing Education Program
- Title 29 CFR 1910.120(q) - 24 Hour Hazardous Materials (Hazmat) Technician Level III Certification
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29 The amount of the incentive for any Vocational Certificate of Completion shall be based on the following number of hours of course work:

Minimum Hours for Vocational
Certificate Amount
100 $ 1,500.00
80 $ 1,200.00
60 $ 900.00
40 $ 600.00
20 $ 300.00

5. Technical Certificates - $1,000.00 Lump Sum:

- Chemical Applicator
- Licensed Tree Trimmer
- Automotive Service Technician (A.S.E.)

6. Additional Eligibility Criteria

Additional licenses and certificates eligible for these professional development incentives, not listed in this Article, may be reviewed and approved by the Department Head in accordance with the following criteria:

- The license or certificate submitted for consideration must directly relate to the employee's current position or future lateral or promotional opportunities in accordance with the provisions of this section J.

- The employee earning the license or certificate shall be subject to duties and assignments commensurate with the level of proficiency attained under the City's Professional Development Incentive Program .

- After the effective date of this M.O.U., all such requests for consideration for eligibility for such license and certificate incentives shall be submitted to the Department Head for review, with final approval by the City Manager at his/her sole discretion. The City Manager's determination is not subject to appeal.

The process for receiving a professional development incentive under this program shall be:

- Prior to beginning any class, program, seminar or study toward a desired certificate or degree, the employee must submit a request to his/her department head for consideration and approval of bonus award. Qualifying classes, programs, seminars or study toward a desired certificate or degree shall not be denied.

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30 - If prior approval is not obtained, the class, program, seminar or study toward a desired certificate or degree shall not fall within the scope of this Professional Development Incentive Program.

- Upon obtaining a copy of the certificate or degree, payment will be processed for the specified incentive. Professional development incentives shall not be granted prior to receiving a copy of the degree or certificate.

The following are not eligible for consideration under this Section:

- Any driver's licenses

- Certificates, licenses, or degrees required for the position the employee holds

- Certificates, licenses, or degrees earned at the expense of the City including City sponsored training programs and consortium training programs except for approved tuition reimbursement pursuant to Section 8.10 (D) and (E) of the City of Hollister Personnel Rules & Regulations for Associate degrees, Bachelor's degrees, Master's degrees, and Ph.D. degrees.

K. Flexibility Staffed Entry Level Positions

The City shall advance employees that are in the entry level of flexibly staffed classifications (i.e. Maintenance Worker I, Support Services Assistant I, to a II, and to Senior, Account Technician I to II) to the journey level after meeting the experience requirements for the journey level classification, successfully passing a probationary period in the entry level classification and being given a satisfactory performance evaluation.

L. Length of Probationary Period for All Unit Members

1. Newly Hired Employees

Newly hired employees shall serve a mandatory one (1) year probationary period.

2. Promotional Appointments

Permanent employees whom are promoted shall serve a mandatory six (6) month probationary period. All existing employees that are subject to a probationary period as part of a promotion shall be returned to that employee's previous classification if the employee fails to meet the job requirements of the new classification within the probationary period.

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31 M. Reclassification and Salary Adjustment Policy

The City and Union agree to develop a structured process for addressing individual reclassifications and resulting salary adjustments that will be consistent with the annual budget process.

N. Christmas Eve

The City shall provide an additional paid half (1 1/2) day holiday on the afternoon (4 hours) of December 24th, known as Christmas Eve. The Christmas Eve holiday shall be observed on the afternoon of the workday proceeding the day on which the December 25th holiday, known as Christmas Day, is observed.

O. Layoff and Reduction in Time Procedures

In those instances, where the City may have to lay off or reduce the work hours of bargaining unit members due to lack of work or lack of funds, the following order of layoff/ reduction shall be used:

1. Temporary/ seasonal workers

2. Workers on probation

3. Career, regular employees

In the event that a career employee is laid off, the following criteria shall be used:

1. Layoff by seniority, in the classification and department determined to be eliminated.

2. A laid off employee has the right to "bump" or displace the most junior worker in the classification, providing the laid off worker is qualified to fill the position .

P. Automatic Payroll Deposit

All new unit members of the Union shall enroll in the automatic payroll deposit program at the time of their employment with the City or at the time of promotion to this unit.

Q. Tuition Reimbursement

The city will reimburse Union members up to four thousand five hundred dollars ($4,500.00) per fiscal year for tuition reimbursements in accordance to the rules set forth in the City’s Personnel Rules and Regulations

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32 The employee must request the tuition reimbursement within the same fiscal year the employee incurred eligible expenses.

R. Dignity and Professionalism

The City is committed to providing a workplace where all persons employed by the City of Hollister, regardless of their classification or pay status are treated with dignity, respect and in a professional manner, by all other persons employed by the City of Hollister, regardless of their classification or pay status. We shall treat one another in the ways we want to be treated ourselves, including clear communications of expectations regarding performance, support of individual opportunities for growth, and provide opportunities for input into decisions when they impact bargaining unit employees directly.

S. New Employee Orientation

The City shall allow a Union Representative thirty (30) minutes of release time to meet with any new employee for the purpose of union orientation. The City will notify the union representative of record, within 24 hours of the new employee’s acceptance of final offer, of the employee’s start date, and of the date and time of and work with the Union Representative to schedule an orientation, as soon as practicable, but no later than two (2) weeks after the employees’ hire date. If the City is unable to notify the Union Representative as outlined, the City will provide release time for the new employee and the Union Representative to complete the union orientation at a later scheduled date and time.

T. Timely Notification

When an employee discontinues paying membership dues, the Union should notify the City within 30 days.

U. Step Increases

Failure of an appointing authority to recommend a salary step advancement in accordance with the performance evaluation procedure shall be considered to be a recommendation of a salary step advancement effective on the anniversary date.

Timeliness of evaluations is not subject to the grievance procedure.

ARTICLE 13. HOLIDAYS

A. Holiday Schedule

All members are entitled to 12.50 paid holidays per year. Each paid holiday is the equivalent to 8.00 hours unless otherwise noted. The 12.50 paid holidays in the schedule below are the equivalent to 100.00 hours. The holidays are as follows:

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33 In addition, each employee is entitled to four (4) floating holidays per fiscal year.

Each floating holiday is the equivalent to 8.00 hours, calculated as 32.00 total hours .

If one of the holiday listed above falls on a Sunday, then it shall be observed on the following Monday. If one of the holidays listed above falls on a Saturday, then it shall be observed on the previous Friday.

B. Holiday Office Closure

The City Manager may elect to close certain City offices to the public between the Christmas and New Year’s Day holidays. However, it will also be necessary to have a base level of staffing to open and operate certain offices during core business hours. Not all departments will be impacted as some public services must be provided on a continual basis.

To accommodate these needs, the City will provide all unit members a bank of thirty - two (32) HOLIDAY CLOSURE HOURS. An employee will have the option, with Department Head approval, to use HOLIDAY CLOSURE HOURS at any point between November 1 – December 31. There are no exceptions to these dates.

HOLIDAY CLOSURE HOURS cannot be cashed-out and carry no cash value.

Unused hours will be forfeited.

It is the employee’s responsibility to ensure that required hours are taken off work prior to the end of each applicable fiscal year. Management will make every effort to accommodate employees’ requests for the equivalent hours of time off. No Employee shall lose the floating holiday time as a result of a denied time -off request.

The Holiday Office Closure is neither grievable nor appealable. However, employees who believe that the Holiday Officer Closure has not been administered according to the provisions of this agreement, including not being granted the time off, may request a review by an advisory committee composed of one (1) union representative and one (1) City Management representative.

ARTICLE 14. LEAVES OF ABSENCES

SEIU MOU shall defer to all rights under law associated with Bereavement Leave, and all eligible leaves under law associated with pregnancy and/or parenthood, including leave for reproductive loss as covered under California law.

City also agrees to extend the Bereavement Leave rules by including the following language:

• The City Manager may authorize any unit member to have an additional 3 days of City-paid Bereavement leave if the unit member is attending a memorial service for a covered family member and attending those services causes the unit member to travel more than 300 miles round trip.

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34 • Use of any accumulated leave balances shall be granted by the City because of the death of a member of the employee’s family. “Family” shall mean the parent, stepparent, brother, sister, spouse, registered domestic partner, child, foster child, child of registered domestic partner, stepchild, grandparent, grandchild, father-in-law, daughter-in-law, son-in-law, step brother or step sister, sister-in-law, brother-in-law, aunt, uncle, niece, nephew, immediate family member of registered domestic partner and any relative residing in the immediate household.

It is the intent of the City to attempt to accommodate newly hired employees who have not accumulated leave balances and are faced with death of an immediate family member as defined above.

ARTICLE 15. MAINTENANCE OF OPERATIONS

The Union agrees that during the term of this M.O.U. neither the Union, nor any representative acting on its behalf, will cause, authorize, engage in, condone or sanction a strike, sick-in, work stoppage, slow down, picketing (other than informational picketing on the employees' own time), concerted or individual failure to report for duty, unauthorized absence, including compliance with a request of another unit's labor organization to engage in or honor such activities against the City, or any activity by any other euphemism known which results in less than the full and faithful performance of any duties of employment.

If the City determines that an employee has engaged in any activity above, the employee may be subject to disciplinary action up to and including discharge from City service.

ARTICLE 16. PREVAILING M.O.U.

In the event of a conflict between a specific provision of this M.O.U. and a written rule, regulation, or resolution of the City or any of its divisions, the terms of the M.O.U. shall prevail and said written rule, regulation, or resolution shall be physically amended to conform to the specific provisions of this M.O.U.

ARTICLE 17. DRUG FREE WORKPLACE POLICY

The City's Drug Free Workplace Policy, City Personnel Rule 2.05, adopted by Resolution 92-116 (August 3, 1992), is incorporated by reference into this M.O.U.

ARTICLE 18. SAVINGS CLAUSE

If any article or section of this M.O.U. should be found invalid, unlawful or unenforceable by reason of any existing or subsequent enacted legislation or by judicial authority, all other articles and sections of this M.O.U. shall remain in full force and effect for the Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

35 duration of this M.O.U. In the event of invalidation of any article or section, the City and the Union agree to meet within thirty (30) days for the purpose of meeting and conferring upon said article or section.

ARTICLE 19. TERM OF AGREEMENT

The term of this M.O.U. shall commence on July 1, 2025, and shall expire June 30, 2026, unless otherwise agreed to by both parties. It is also agreed to by both parties to initiate the meet and confer process in a timely fashion, exchanging written proposals at least thirty (30) days prior to the termination of this agreement. An extension of the term of this agreement on a month-to-month basis may be made my mutual agreement of the parties.

The above constitutes a full and complete agreement between the parties on all matters within the scope of representation.

CITY OF HOLLISTER SEIU, LOCAL 521

Jim Pia, Interim City Manager Carolynne Roderick, SEIU Negotiator

Robert Lomeli, City Negotiator Frank Garcia, SEIU Negotiator

Rodrigo Aguilera, SEIU Negotiator

Andrew Echevarria, SEIU Negotiator

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10/15/2025 | 8:55:13 AM PDT
10/15/2025 | 9:22:59 AM PDT

36 EXHIBIT [A]
SECTION 12. DISCIPLINARY PROCEDURE

Section 12.01 General

A. The expected standard for employees of the City shall be to render the best possible service to the public, to reflect credit upon the City service, and to serve the public interest. The tenure of every employee shall be conditioned on good behavior and satisfactory performance of duties. Disciplinary actions are intended to be corrective and progressive in nature with the objective of obtaining compliance with rules, orders, procedures, standards of conduct and expected job performance .

B. The procedures set forth in this section shall not apply to probationary employees who are rejected during probation, or to any employee serving in a seasonal or temporary appointment. These procedures shall not apply to a reduction in force, or a reduction in pay which is part of a reclassification action or reorganization approved by the City Council.

C. The City Manager may take disciplinary action based upon a Department Head recommendation or initiate such action based upon his/her own authority. The City Manager may delegate the responsibility to take disciplinary action to Departments Head(s). As used in this section, "disciplining authority" shall mean either a Department Head or the City Manager, whoever initiates the disciplinary action; "working day" shall mean any day of the month when the City offices are officially open for business.

D. The procedures set forth in this section shall not preclude an employee from entering into a written agreement with the City to settle a pending disciplinary matter, and further shall not preclude an employee from waiving any of the notice provisions herein provided for, as part of that written settlement agreement .

Section 12.02 Grounds for Discipline

An employee may be reprimanded, suspended, denied a merit increase, demoted or dismissed for any of the following reasons:

1. Furnishing false information to secure employment.

2. Incompetence, which shall mean that the employee lacks adequate ability, knowledge, motivation, or fitness to satisfactorily perform the duties which are within the scope of employment.

3. Inefficiency in performance of work which results in performance lower than that which is typically expected of the position.

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37 4. Neglect of duty.

5. Insubordination, which shall mean refusal or failure to follow a direct, lawful order which the employee is capable of following.

6. Nonobservance of work hours.

7. Excessive absenteeism, tardiness, or absence without authorized leave .

8. Violation of city personnel rules and regulations, administrative policies and procedures, department rules and regulations, safety rules, resolutions, ordinances or codes.

9. Damage to or waste of public property, equipment or supplies, or unauthorized possession or use of public property, supplies or equipment.

10. Any conduct related to employment which impairs, disrupts or causes discredit to the employee's department or the city, including but not limited to conduct which is or would be cause for discipline under any other provisions of this section .

11. Willful failure or refusal to property perform official duty.

12. Gross negligence in the discharge of official duty.

13. Dishonesty involving employment.

14. Any act of moral turpitude which adversely reflects on the employee's ability or fitness to perform his/her duties.

15. Soliciting or taking for personal use a fee, gift or other valuable thing in the course of the employee's work, or in connection with the contributing party's expectation or hope of receiving favorable or better treatment than that afforded other persons.

16. Disclosure of confidential information to an unauthorized source.

17. Refusal to take and subscribe to any oath or affirmation which is required by law in connection with employment by the city.

18. Falsification of time sheets or any official city records.

19. Misuse of sick leave.

20. Consuming, possessing, or being under the influence of an alcoholic beverage, while on duty.

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38 21. Unless legally authorized, using, consuming, injecting, possessing, being under the influence of, selling or offering for sale, while on duty, any drug which can or does impair, the employee's work performance, or any controlled substance as the latter term is defined in the California Health and Safety code.

22. Discourteous or disrespectful treatment of the public, other employees, or city officials.

23. Violation of city harassment policy.

24. Persistent failure or refusal to take, complete, or follow through with appropriate and reasonable treatment or corrective measures designed to remedy an employee's condition, such as alcohol or substance abuse, when said condition results in conduct which constitutes grounds for discipline under these rules.

25. Engaging in outside employment in violation of city policies or rules.

26. Engaging in non-City business during work hours, excluding employee free time such as lunch and breaks.

Section 12.03 Types of Disciplinary Action

As used in this section, "disciplinary action" shall mean any of the following and may be taken singly or in combination:

A. Counseling or Oral Warning. A counseling or oral warning will not be placed in an employee's personnel file except as part of a regular or special performance evaluation report of the employee on which the employee is given an opportunity to respond. A counseling or oral warning or a performance evaluation report is not subject to the appeal process outlined below.

B. Written Reprimand. A written reprimand shall be provided to an employee prior to being placed in the employee's personnel file. Such reprimands shall not be subject to the appeal process outlined below, but the employee shall have the right of rebuttal by providing a written statement which will be included in the personnel file along with the written reprimand.

C. Imposition of special employment conditions. Such action shall be subject to the appeal process outlined below.

D. Suspension with or without pay. Fringe benefits such as vacation and sick leave shall not accrue during a period of suspension without pay. However, health, dental and life insurance shall remain in effect during a period of suspension without pay.

Such action shall be subject to the appeal process outlined below.

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39 E. Reduction in pay level not to exceed one (1) year. Such action shall be subject to the appeal process outlined below.

F. Demotion. Such action shall be subject to the appeal process outlined below.

G. Dismissal or Discharge. Such action shall be subject to the appeal process outlined below.

Section 12.04 Notice of Intended Disciplinary Action

A. In cases of proposed disciplinary action, except a counseling, oral warning, or written reprimand, the proposed disciplinary action shall be served on the employee personally or by mail. The written notice of intended disciplinary action which shall include:

1. The reasons for the disciplinary action, those facts alleged to be the basis for the intended action and copies of any documents or materials upon which the disciplinary action is based;

2. The specific action proposed to be taken, including any time period or other conditions associated with the discipline;

3. The proposed effective date of the intended disciplinary action; and

4. The right of the employee to respond to the proposed disciplinary action either in writing or orally, at the option of the employee. The employee shall be advised that he/she has ten (10) working days within which to file a written response or request, in writing, an informal pre-disciplinary conference before the disciplining authority or his/her designee.

B. A copy of the notice of intended disciplinary action shall be placed in the employee's personnel file.

Section 12.05 Pre-disciplinary Conference

Where an employee has requested an opportunity to respond orally, the disciplining authority or his/her designee shall cause an informal pre-disciplinary conference to be held to review the statement of charges and to provide the opportunity for the employ ee or his/her representative to answer the charges. The disciplining authority or his/her designee shall allow the parties to present any relevant evidence tending to prove or disprove the facts upon which the action is based or upon the nature and severity of the proposed disciplinary action. Failure of the employee to appear at the pre -disciplinary conference, if requested, shall forfeit all the employee's right to respond to the statement of charges.

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40 Section 12.06 Notice of Discipline or Rejection of Discipline

A. If the employee does not respond or upon conclusion of the pre-disciplinary conference, the disciplining authority or his/her designee shall, by written notice to the employee and the supervisor, affirm, reduce or abandon the proposed disciplinary action.

B. If the decision is to affirm or reduce the proposed disciplinary action, such action shall be served on the employee personally or by mail. The written notice of disciplinary action shall include:

1. The reasons for the disciplinary action, those facts alleged to be the basis for the disciplinary action and copies of any documents or materials upon which the disciplinary action is based;

2. The specific action proposed to be taken, including any time period or other conditions associated with the discipline;

3. The effective date of the disciplinary action; and

4. The right of the employee to appeal the disciplinary action. The employee shall be advised that he/she has ten (10) working days within which to file a written appeal of the disciplinary action.

C. A copy of the notice of disciplinary action shall be placed in the employee's personnel file.

D. If the notice is to abandon all action, the notice of intended disciplinary action shall be removed from all personnel files.

Section 12.07 Appeal of Disciplinary Action

An employee who has been discharged, demoted, reduced in salary, been made subject to specific employment conditions, or suspended without pay has the right to appeal to the City Manager the disciplinary action by filing a written notice of appeal within ten (10) working days from the date of the notice of discipline. The appeal must state specifically the reason or reasons upon which it is based. Failure to file within the time allowed constitutes abandonment of appeal rights. The evidentiary appeal shall be heard by a hearing officer who will serve as the City Manager’s designee.

Section 12.08 Appeal

A. The Personnel Officer shall be responsible for obtaining the hearing officer from JAMS (Judicial Arbitration and Mediation Services of California). The Personnel Officer shall ask JAMS to randomly provide the name of one retired judge who shall be impartial and who shall conduct the hearing on behalf of the City Manager. The Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

41 City shall pay for the services of the hearing officer.

B. The Hearing Officer shall assume responsibility for scheduling and conducting the hearing in accordance with the provisions of Chapter 12. The hearing officer shall conduct the hearing and prepare a report that includes findings of fact and recommendation(s). The City Manager shall be bound by the findings of fact but reserves final authority on the recommendation(s) of the Hearing Officer. The decision of the City Manager shall be final unless appealed to the City Council.

C. If the decision is to affirm or modify the disciplinary action, the decision shall be placed in the employee’s personnel file. If the decision is to modify or reverse the disciplinary action, that action shall be implemented. If reversed, the notice of the intended disciplinary action and the notice of disciplinary action shall be removed from the employee’s personnel file.

Section 12.09 Evidentiary Appeal Hearing Procedure

A. The Hearing Officer shall provide the appellant and City with written notice of the date, time, and place of the hearing no less than ten (10) working days in advance of the scheduled hearing date. Any time lines contained in this section may be extended upon mutual agreement of the City and the appellant for good cause.

B. The hearing shall be conducted in conformity with Sections 11512 through 11515, inclusive, of the Government Code. The hearing officer shall be deemed to be the administrative law judge in the proceeding.

C. The hearing shall be closed to the public unless the appellant, prior to the commencement of the hearing, requests in writing that it be open to the public. The hearing shall be conducted in accordance with the provisions of Section 11513 of the Government Code which reads:

1. Oral evidence shall be taken only on oath or affirmation.

2. Each party shall have these rights: to call and examine witnesses; to introduce exhibits; to cross- examine opposing witnesses on any matter relevant to the issues even though that matter was not covered in the direct examination; to impeach any witness regardless of which party first called him or her to testify; and to rebut the evidence against him or her. If the appellant does not testify on appellant’s own behalf, s/he may be called and examined as if under cross- examination.

3. The hearing need not be conducted according to technical rules relating to evidence and witnesses. Any relevant evidence shall be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in civil Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

42 actions. Hearsay evidence may be used for the purpose of supplementing or explaining other evidence but shall not be sufficient in itself to support a finding unless it would be admissible over objection in a civil action. The rules of privilege shall be effective to the extent that they are otherwise required by statute to be recognized at the hearing, and irrelevant and unduly repetitious evidence shall be excluded.

D. The appellant may be examined and may examine or cause any person to be examined under Section 776 of the Evidence Code. The appellant shall be allowed to appear personally at the hearing, and appellant shall have the right to legal counsel or lay representation of appellant’s choice and sole expense at all times throughout the proceeding, and appellant shall be allowed to produce such competent evidence in his/her own defense and in rebuttal to the charges as the appellant or appellant’s/her representative may wish to offer.

E. The hearing shall be recorded by a stenographic reporter. If any transcript is ordered by the appellant or the City, the party ordering the transcript shall bear the cost of the transcription. If both the appellant and the City order transcriptions, the co st of the transcription, along with the cost of the reporter, shall be borne equally by the City and the appellant.

F. The Hearing Officer shall have the power to subpoena and require the attendance of witnesses, and the production of books, papers, and other evidence pertinent to the hearing, and to administer oaths to witnesses. In arriving at a recommendation, the hearing officer may consider any prior disciplinary actions taken against the appellant, or any prior proceedings under this section.

G. Unless the circumstances were beyond the control of the appellant, failure of the appellant to appear at the hearing shall be deemed a withdrawal of the appeal and the action of the department head in the notice of disciplinary action shall be final without right of appeal to the City Council. The participation of the appellant’s representative at the hearing shall constitute appearance of the appellant.

H. The City Manager shall review the hearing officer’s report including the findings of fact and recommendation(s) and within thirty (30) days from the hearing officer’s report issue his or her written decision affirming, reversing, or modifying the discipline which shall be final unless appealed to the City Council.

I. An employee can appeal the City Manager’s decision to the City Council by filing the written notice of appeal with the City Clerk within ten (10) working days from the date of the mailing of the City Manager’s decision.

J. Within ten (10) days after receipt of the appeal, the City Clerk shall give notice of the appeal to each member of the City Council, the City Manager, and other persons named or affected by the appeal and shall schedule a hearing before the City Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

43 Council.

K. The hearing before the City Council shall be non-evidentiary in nature and shall be limited to oral arguments from both parties or their representatives. The City Council shall be bound by the findings of fact prepared by the hearing officer. Appellant and City shall each have 20 minutes of oral argument with an additional 5 minutes of rebuttal argument. The hearing before the City Council shall be closed to the public unless prior to the hearing the appellant requests in writing that the hearing be open to the public.

L. The City Council shall deliberate in closed session and shall issue a decision which affirms, reverses, or modifies the discipline imposed by the City Manager.

M. If the Council’s decision is to affirm or modify the disciplinary action, the decision shall be placed in the employee’s personnel file. If the decision is to modify or reverse the disciplinary action, that action shall be implemented. If reversed, the notice of the intended disciplinary action and the notice of disciplinary action shall be removed from the employee’s personnel file.

N. The decision of the City Council shall be final and subject to judicial review under Code of Civil Procedure 1094.5.

Section 12.10 Serving of Notices

Written notices shall be served either by direct personal service on the person affected, or by mail. Mailed notices to the City Manager or his/her designee, a Department Head, an appellant and/or his/her designee, or the City Council shall be effective upon recorded deposit with the United States Postal Service.

Section 12.11 Summary Suspension

Prior to any disciplinary proceedings under this section, the City Manager may summarily place any City employee on an immediate suspended status with or without pay. Such suspensions shall be made only in cases where the employee's continued active duty status might, in the sole opinion of the City Manager, constitute a hazard to the employee or others, tend to bring the City service into discredit, or prolong acts or omissions of improper employee conduct. If the disciplinary action or suspension is not subsequently ordered and/or affirmed, the employee shall be reinstated in status and restored all pay and fringe benefits lost during such summary suspension.

Section 12.12 Right to Representation

An employee subject to a meeting, an investigation that may result in disciplinary action, a pre-disciplinary conference or hearing has the right, upon request, to be represented by an employee representative or an attorney retained by the employee at the employee's expense. Any employee, other than those defined as management, mid - Docusign Envelope ID: EEE3F607-E0A1-4A26-B11B-AE5101D4C218

44 management and confidential employees shall be permitted to represent another City employee or group of City employees.

Section 12.13 Records Purged

An employee's personnel file shall be purged of all documents relating to ordered disciplinary actions, except dismissal, after three (3) years from the end of such action upon the written request of the employee or former employee against whom the action was taken.

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: October 20, 2025
REPORT # Police-2025-11

AGENDA ITEM: ORDINANCE FOR RECOVERY OF EMERGENCY RESPONSE

PERSONNEL COSTS RELATED TO DUI INCIDENTS

DEPARTMENT: Police
DEPARTMENT HEAD: Carlos Reynoso, Police Chief
STAFF CONTACT: Carlos Reynoso, Police Chief

RECOMMENDED ACTION:

1.Hold a public hearing and introduce ordinance to amend Title 9 of the Hollister Municipal Code to add Chapter 9.50 for recovery of emergency response personnel costs related to DUI incidents;

2. Direct staff to bring back a resolution determining the hourly fully funded rate for the public safety personnel to be charged under this new ordinance; and

3. Schedule a second reading and adoption for the November 3, 2025, City Council meeting.

DISCUSSION: Despite ongoing public education efforts and the well-documented dangers associated with impaired driving, DUI incidents continue to pose a significant threat to public safety in the City of Hollister. These incidents not only endanger the lives of those driving under the influence but also put innocent community members at serious risk of injury or death.

The Hollister Police and Fire Departments dedicate substantial resources to the apprehension of DUI offenders and the response to DUI -related collisions. These responses are time-intensive and divert critical personnel away from other emergency calls and community safety needs.

Between January 2022 and August 26, 2025, Hollister public safety personnel responded to 77 DUI-related traffic collisions. During the same period, the Police Department made 525 DUI arrests.

Despite widespread public awareness campaigns and enforcement efforts, impaired driving remains a persistent issue.

Under California Government Code Sections 53150 et seq., municipalities are authorized to recover costs associated with emergency responses to DUI incidents. Several cities, including Clovis, California, have implemented ordinances to pursue such cost recovery.

The Government Code permits recovery in cases where a DUI arrest is made and the individual was involved in a traffic collision, evaded law enforcement in violation of Vehicle Code Section 2800.1, drove the wrong way on a one -way street, operated a vehicle on the wrong side of the road, or drove in a reckless manner, among other qualifying circumstances.

While the exact amount of potential cost recovery is currently undetermined, For the year 2024, Hollister P.D. had a total of 28 DUI related traffic accident reports. From when the call is initiated to the time it closes, those cases took an average of 2 hours and 28 minutes. In addition to the average time of investigating, processing the crash scene and booking the offender at the jail, there would be an average of one additional hour it would take for the officer to write the report. Therefore, on average, it takes 3 hours and 28 minutes from when the call is initiated to the time the officer completes the report. The actual fully funded cost of all officers and fire personnel has not been established.

However, if that amount is $150 an hour for one officer and one fire fighter, the cost of an average DUI incident cost recovery may be about $1,000 per qualifying incident.

The city could recover tens of thousands of dollars annually. Final cost recovery rates would be established in coordination with the Police, Fire, and Finance Departments.

It should be noted; this ordinance is a recovery of the cost that the city departments have already incurred by responding to the incident. These DUI incidents are all preventable by residents not getting behind the wheel, using a ride sharing app, using a designated driver or a taxi.

Besides the City of Clovis, the following California cities also have similar cost recovery ordinances authorized under Government Code Sections 53150 – 53159; Moorpark, Oakley, Lawndale, Stockton, Cypress, Chico, Atascadero and Piedmont.

Staff recommends the City Council hold a public hearing, introduce the ordinance, and schedule a second reading for the November 3, 2025, City Council meeting for the adoption of Chapter 9.50 for recovery of emergency response personnel costs related to DUI incidents and direct staff to determine the hourly fully funded rate for the public safety personnel to be charged under this new ordinance and return with a resolution adding the item to the City’s fee schedule.

FISCAL IMPACT: Unknown but possibly up to $30,000 in revenue per year in cost recovery.

PREVIOUS COUNCIL OR COMMISSION ACTION: Previous first reading of the ordinance presented on October 6, 2025.

CEQA: N/A

ATTACHMENTS:

1. Ordinance

Ordinance No. XXXX

ORDINANCE NO. XXXX
AN ORDINANCE OF THE CITY OF HOLLISTER AMENDING TITLE 9
(PUBLIC PEACE, MORALS AND WELFARE) OF THE HOLLISTER
MUNICIPAL CODE TO ADOPT CHAPTER 9.50, RECOVERY OF

EMERGENCY RESPONSE COSTS FOR DRIVING UNDER THE

INFLUENCE INCIDENTS
WHEREAS, persons who drive a vehicle while under the influence of alcohol or any drug create a serious hazard to themselves and others;
WHEREAS, the City of Hollister’s (“City”) Police and Fire Departments are required to spend a significant amount of time in the apprehension and arrest of persons who drive while under the influence of alcohol or any drug and in responding to accidents caused by persons driving under the influence (“DUI”);
WHEREAS, the time spent by the Police and Fire Departments for that purpose is costly and detrimentally affects the ability of those departments from being available to respond to other calls or incidents;
WHEREAS, as authorized pursuant to California Government Code sections 53150 et seq., the City intends to recover costs incurred for emergency responses for driving under the influence incidents.

NOW THEREFORE THE CITY COUNCIL OF THE CITY OF HOLLISTER DOES ORDAIN AS FOLLOWS:

SECTION 1: The Hollister Municipal Code is hereby amended to add Title 9, Chapter

9.50, Recovery of Emergency Response Costs for Driving Under the Influence Incidents, to read as follows:

TITLE 9 – PUBLIC PEACE, MORALS AND WELFARE
CHAPTER 9.50 - RECOVERY OF EMERGENCY RESPONSE COSTS FOR DRIVING

UNDER THE INFLUENCE INCIDENTS

9.50.010 Purpose
It is the policy of the City of Hollister (“City”) to discourage the operation of motor vehicles while under the influence of alcohol and/or drugs and to discourage the operation of motor vehicles in a manner intended to injure another person or property.

It is also the policy of the City to encourage careful and responsible conduct by persons operating motor vehicles.

Ordinance No. XXXX

The City has determined that the negligent operation of a motor vehicle by persons driving under the influence of alcohol and/or drugs imposes a burden upon City services above and beyond the regular services normally required for traffic law enforcement.

The City has further determined that persons who negligently operate motor vehicles while under the influence of alcohol and/or drugs should bear a share of the extraordinary burden on the public risk they create.

In furtherance of these policies and in light of these findings, the City has implemented a program for the recovery of emergency response costs for driving under the influence incidents (“Costs Recovery Program”) as authorized by Government Code sections 53150 through 53158.

9.50.020 Definitions
(a) For purposes of this chapter, a person is under the influence of an alcoholic beverage or any drug, or combined influence of an alcoholic beverage and any drug, when as a result of drinking an alcoholic beverage or using a drug, or both, his or her physical or mental abilities are impaired to a degree that he or she no longer has the ability to operate a motor vehicle with the caution and characteristic of a sober person of ordinary prudence under the same or similar circumstances. For the purposes of this chapter, the presumptions described in provisions of Section 23152 of the California Vehicle Code shall apply.
(b) For purposes of this chapter, an “emergency response” is one for which police personnel and equipment respond to an “incident” beyond the police response required for a mere traffic stop leading to an arrest.
(c) For purposes of this chapter, an “incident” is an event involving any person who is under the influence of an alcoholic beverage or any drug, or the combined influence of an alcoholic beverage and any drug, whose negligent operation of a motor vehicle due to influence results in, or presents the potential of, loss of life, significant bodily injury, significant property damage, or environmental hazard, and includes, but is not limited to, the following:
(1) An accident with another vehicle, person, or property. (2) Evading a peace officer in violation of California Vehicle Code section 2800.1. A conviction is not required.
(3) Failure to stop within a reasonable time after the officer activates the emergency lights or siren with the intent to pull the suspect over. A reasonable time is presumed to be one-half (1/2) of a mile after the officer is behind the suspect, provided the emergency lights or siren are visible or audible to the suspect and the suspect sees or hears or reasonably should have seen or heard the lights or siren. A reasonable time

Ordinance No. XXXX

may be less or more than one-half (1/2) of a mile depending on surrounding circumstances, including type of street, speed, weather conditions, level o f traffic, and availability of a safe place to stop.
(4) Failure to yield to an emergency vehicle in violation of California Vehicle Code section 21806. A conviction is not required.
(5) Driving the wrong way on a one-way street.
(6) Driving on the wrong side of the road.
(7) Repeatedly crossing median dividers.
(8) Stopping or abandoning a vehicle in a lane of traffic, on a median divider, on railroad crossing tracks, or similar dangerous situation. (9) Weaving across heavy lanes of traffic or weaving on and off the roadway. (10) Reckless driving in violation of California Vehicle Code section 23103. A conviction is not required.
(11) Driving in a manner causing other vehicles to take evasive action to avoid an accident.

This is a nonexclusive list. Other driving situations that the arresting officer believes may constitute an emergency response shall be reviewed on a case -by-case basis.

9.50.030 Emergency Cost Recovery
Calculation of the amount due for “emergency response” shall include the direct and reasonable costs of an appropriate emergency response, including salary, benefits and overhead as established by the City, for each member of th e Police Department or Fire Department responding to the incident. The calculation shall also be comprised of direct costs which include, but are not limited to:
(1) The costs of police, fire, emergency medical services, and other emergency services in responding to the scene of the incident;
(2) The costs of the emergency services at the scene of the incident, including directing traffic and ensuring public safety at the scene of the accident; (3) The costs of obtaining appropriate medical assistance, removing vehicles, investigating the cause of an accident, conducting field sobriety tests, and arresting and detaining the suspect;
(4) The costs of transporting the suspect, booking, performing chemical tests, writing customarily required reports, and performing follow-up investigation to complete the reports.

Ordinance No. XXXX

9.50.040 Collection of Charges
(a) The chief of police or his/her designee shall calculate the charges payable under this section and shall forward the information that is required to invoice the person responsible for the incident to the finance and management services agency. (b) If the person responsible for the incident is a minor, then the parents or guardian of such minor shall be liable for the cost of the emergency response as defined in this chapter.
(c) If the invoice remains unpaid within thirty (30) days after it is mailed, and no arrangements have been made for payments, at its discretion, the City may pursue any and all legal and equitable remedies to collect the unpaid invoice pursuant to this chapter, including the commencement of a collections action. Pursuit of one remedy does not preclude the pursuit of another remedy

9.50.050 Procedures for Implementation of Cost Recovery Program (a) The City shall not pursue recovery of driving under the influence response costs when providing assistance to an allied agency during an incident subject to this ordinance.

(b) The City may seek recovery of incident-related costs for driving under the influence of alcohol or a combination of alcohol and controlled substances when all of the following conditions are satisfied:

(1) An arrest has been made for violation of California Vehicle Code Section 23152, Section 23153, or a more serious offense involving alcohol and/or con trolled substances;

(2) The arrested individual has been determined by the investigating officer to have caused the incident requiring City response; and

(3) A supporting evidential test demonstrates a Blood Alcohol Concentration of 0.08 percent or greater, with breath tests requiring two readings of at least 0.08 percent each (Preliminary Alcohol Screening tests shall not satisfy this requirement); or

(4) For commercial vehicle operators, a supporting evidential test demonstrates a Blood Alcohol Concentration of 0.04 percent or greater while operating a commercial vehicle.

(c) A conviction for violation of California Vehicle Code Section 23152, Section 23153, or a more serious related offense shall be required for cost recovery when any of the following circumstances apply:

(1) Blood Alcohol Concentration test results fall below 0.08 percent, or below

0.04 percent for commercial vehicle operators;

Ordinance No. XXXX

(2) Chemical testing yields positive results for controlled substances only;

(3) No supporting Blood Alcohol Concentration or controlled substance test is available due to refusal or other circumstances.

(d) For purposes of this cost recovery program, a conviction shall include cases resulting in a plea of nolo contendere to the original charges under California Vehicle Code Section 23152, Section 23153, or more serious offenses involving alcohol and/or controlled substances. Cases resolved through plea agreements to lesser offenses shall also constitute convictions under this section.

9.50.060 Appeal
Any person who wishes to file an appeal of an invoice issued pursuant to this chapter, may do so pursuant to sections 1.18.060 through 1.18.080, except that such request for hearing must be made within fifteen (15) days from the issuance of the invoice.

9.50.070 Severability
If any section, subsection, sentence, clause, phrase or portion of this chapter is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this chapter. The City Council declares that it would have adopted each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared inval id or unconstitutional.

9.50.080 Enforcement of Other Laws

Nothing in this chapter prevents the City from enforcing other laws pertaining to the recovery of emergency response costs, including recovery pursuant to Government Code sections 53150 through 53158, or pursuant to any subsequently enacted laws or amendments to existing laws.

SECTION 2. SEVERABILITY. If any part of this Ordinance is held invalid for any reason by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of this Ordinance, and the City Council hereby declares that it would have passed the remainder of the Ordinan ce if such invalid portion thereof had been deleted.

SECTION 3. EFFECTIVE DATE. This Ordinance shall take effect and be in force thirty (30) days from and after its final passage.

Ordinance No. XXXX

SECTION 4. PUBLICATION. Within fifteen (15) days after passage, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation.

INTRODUCED at a regular City Council meeting on October 20, 2025 and adopted as an ordinance of the City of Hollister at a regular City Council meeting on _________, 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney

Ordinance No. XXXX

I, JENNIFER WOODWORTH, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Ordinance No. XXXX is an original ordinance, or true and correct copy of a City ordinance, duly adopted by the Council of the City of Hollister at a regular meeting of said Council held on ___________, 2025, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on ________________, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: October 20, 2025
REPORT # Public Works-2025-50

AGENDA ITEM: WATER RATE STUDY PRESENTATION

DEPARTMENT: Public Works
DEPARTMENT HEAD: William Via, Public Works Director
STAFF CONTACT: William Via, Public Works Director

RECOMMENDED ACTION: Receive the presentation and provide direction to staff.

DISCUSSION: Raftelis Financial Consultants, Inc. (RFC) is in the process of completing a study of the City's water rates. The study recommends a phased increase in water rates and charges over the next 5-year period beginning on or about January 1, 2026. The proposed water rates are necessary to meet the cost of operation and maintenance of the City's water enterprise program, and to provide adequate revenue to finance Capital Improvement Projects.

The last rate study was completed in 2013 with the last rate increase taking effect on January 1, 2019. Since that time, the cost of operating the water system and delivering potable water to the City’s customers has increased and the revenue collected is not keeping pace with the expenses.

The presentation will briefly discuss the process, the financial position of the Water Enterprise Fund, the proposed rates, the next steps in the process, and will include a comparison of the City’s current rates and proposed rates with other surrounding jurisdictions.

FISCAL IMPACT: Neutral. The proposed rate increase is sufficient to address increased costs to the City's water enterprise program.

PREVIOUS COUNCIL OR COMMISSION ACTION: Last rate study and rate adoption on August 19, 2013, Resolution No. 2013-122.

CEQA: This activity is not a project pursuant to California Environmental Quality Act Statute Section 21065 and Guidelines Section 15378(b)(5), as it is an administrative activity of government that will not result in direct or a reasonably foreseeable indirect physical change in the environment.

ATTACHMENTS:

None

1 City of Hollister
Water Rate Study
Financial Plan and Rate Presentation
October 20th, 2025

•Introduction
•Why rate increases needed
•Water
›Assumptions
›Financial Plan Alternatives
›Bill Impacts
2 Agenda

What is a Rate Study?
A financial planning and rate setting process that considers:

Community Objectives:

Conservation, Affordability
Fairness & Equity
Rate and Revenue Stability
Promotes Utility Financial
Viability by Recovering
Costs:

O&M
Capital
Reserves
Debt Service
Legally Defensible
3 Page 351 of 481

Rate Study Process
04 Rate Setting Framework –What is important?
Identify financial goals and pricing objectives01
02 03
05 Financial Plan –How much $?
Evaluate operating and capital costs; conduct cash
flow and scenario analysis
Rate Design –How will customers pay?
Conduct rate calculations and customer impact analyses
Study Documentation
Rate study report; review of rates by legal
counsel
Rate Adoption
Notice customers, host Public
Hearing, collect and count protests,
consider adoption of rates / charges
Stakeholder Engagement
(start early and often)4 Page 352 of 481

Why Would the City do a Water
Rate Study?
•Rates must keep up with the City’s
costs to operate the utilities
•Utility service is not like other government
services (Police, Fire, Libraries, Parks)
that are funded by tax dollars from the
General Fund
•The water utilities are primarily funded by
customer rate revenue
›It’s a non-profit business
•By law (Proposition 218), rates must be
based on the cost to serve water
5 Page 353 of 481

Water and Sewer Utilities Are Not Covering Expenses
An Increase is long overdue: City has not raised rates/charges since 2018! Deficit: Water fund is currently operating at a deficit Lowest charges: It has the lowest water rates/charge out of 8 surrounding agencies Inflation: Post Covid-19 inflation reached highest rate since 1981 and has impacted operational and capital project costs
Inflation up 25% since 2018 (Bureau of Labor Statistics Data) Rain: FY 2023 and 2024 were wet years; selling 12% less water than in 2021 while most of your costs are fixed
Wholesale Water Costs:

Urban JPA costs up 48% since 2018
SBCWD groundwater costs up 175% since 2018
Aging Infrastructure / Deferred Maintenance6
Why Rate
Increases are
Needed:

Water Rate Survey
7 Page 355 of 481

Water & Sewer
Compared to
Other Goods
8 Page 356 of 481

Revenue must be
used to cover the
costs for which
the charge was
imposed
The charge must
be for a service
that is actually
used or
immediately
available
The fee may not
exceed the
proportional cost
to serve the
parcel
Proposition 218
Requirements –
Paraphrased
Cannot collect
more than what
you need
Must send a
written notice to
customers no less
than 45 days
before a public
hearing
9 Page 357 of 481

Water
10 Page 358 of 481

Reserve Target Approximate $ Value over
Study Period
Operating 20% of O&M Expenses $2.2M
Capital 2% of Asset Value $2M
Total $4.2M
11 Assumptions / Reserve Targets

12 O&M Expenses
Expenses Summary FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Expenses by Category
Personnel $2,495,056 $2,628,097 $2,725,879 $2,827,542 $2,933,249 $3,043,171 Services and Supplies $1,816,957 $1,675,072 $1,743,589 $1,814,914 $1,889,163 $1,966,457 Contractual $645,435 $664,608 $691,192 $718,840 $747,594 $777,497 Water Supply Costs $5,330,000 $5,070,000 $5,472,800 $5,907,712 $6,377,300 $6,884,335 Minor Capital $375,200 $52,300 $54,392 $56,024 $57,704 $59,436 Unfunded Accrued Liability $343,071 $323,973 $336,932 $350,409 $364,426 $379,003 Other Expenses $346,340 $350,000 $364,000 $378,560 $393,702 $409,450 Total Expenses $11,352,059 $10,764,050 $11,388,784 $12,054,001 $12,763,139 $13,519,349

Financial Plan Alternatives
•Revenue increases do not exactly equate to customer bill impacts 13 Alternative FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
1 Revenue
Increase
95%17%3%3%2%
Capital
Execution
60%60%60%60%60%
Loan $9M
2 Revenue
Increase
60%40%2%2%2%
Capital
Execution
15%15%20%65%75%
Loan $7M

14 Capital Improvement Projects
Capital - Inflated FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Alternative 1 $0 $1,840,601 $1,840,601 $1,840,601 $1,840,601 $7,362,404 Alternative 2 $0 $460,150 $460,150 $613,534 $1,993,984 $3,527,818

Alternative 1
15 Page 363 of 481

Alternative 1 –Projected Reserve Balances
16 Page 364 of 481

Rate Derivation
•The City gets groundwater from San Benito County Water District and surface water from the Hollister Urban Area JPA
•Groundwater is less expensive
•City aims to use less ground water due to water quality concerns •This especially increases the tier 1 rate because it is based on the cost of groundwater
•Therefore, revenue increases are not the same as single family residential bill impacts
17 Page 365 of 481

First Year Bill Impacts
18 Page 366 of 481

Alternative 1 Five Year Rates
19 Line No.Monthly Fixed Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 5/8"$13.29 $29.10 $34.05 $35.07 $36.12 $36.84
2 3/4"$13.29 $29.10 $34.05 $35.07 $36.12 $36.84
3 1"$28.16 $45.50 $53.24 $54.84 $56.49 $57.62
4 1 1/2"$52.68 $86.49 $101.19 $104.23 $107.36 $109.51
5 2"$78.95 $135.68 $158.75 $163.51 $168.42 $171.79
6 3"$155.53 $291.46 $341.01 $351.24 $361.78 $369.02
7 4"$232.13 $521.02 $609.59 $627.88 $646.72 $659.65
8 6"$461.93 $1,316.30 $1,540.07 $1,586.27 $1,633.86 $1,666.54 9 8"$713.61 $2,300.14 $2,691.16 $2,771.89 $2,855.05 $2,912.15 Line No.Commodity Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 Single Family Residential
2 Tier 1 $3.38 $7.09 $8.30 $8.55 $8.81 $8.99
3 Tier 2 $5.54 $9.51 $11.13 $11.46 $11.80 $12.04
4 Tier 3 $6.34 $10.80 $12.64 $13.02 $13.41 $13.68
5 Multi-Family/Industrial $4.39 $8.23 $9.63 $9.92 $10.22 $10.42 6 Commercial $4.39 $8.04 $9.41 $9.69 $9.98 $10.18
7 Landscape $4.39 $9.05 $10.59 $10.91 $11.24 $11.46 Page 367 of 481

Alternative 2
20 Page 368 of 481

Alternative 2 –Projected Reserve Balances
21 Page 369 of 481

First Year Bill Impacts
22 Page 370 of 481

Alternative 2 Five Year Rates
23 Line No.Monthly Fixed Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 5/8"$13.29 $23.98 $33.33 $34.00 $34.68 $35.37
2 3/4"$13.29 $23.98 $33.33 $34.00 $34.68 $35.37
3 1"$28.16 $37.52 $52.15 $53.19 $54.25 $55.34
4 1 1/2"$52.68 $71.37 $99.20 $101.18 $103.20 $105.26
5 2"$78.95 $111.98 $155.65 $158.76 $161.94 $165.18
6 3"$155.53 $240.61 $334.45 $341.14 $347.96 $354.92
7 4"$232.13 $430.17 $597.94 $609.90 $622.10 $634.54
8 6"$461.93 $1,086.85 $1,510.72 $1,540.93 $1,571.75 $1,603.19 9 8"$713.61 $1,899.23 $2,639.93 $2,692.73 $2,746.58 $2,801.51 Line No.Commodity Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 Single Family Residential
2 Tier 1 $3.38 $5.81 $8.08 $8.24 $8.40 $8.57
3 Tier 2 $5.54 $7.79 $10.83 $11.05 $11.27 $11.50
4 Tier 3 $6.34 $8.85 $12.30 $12.55 $12.80 $13.06
5 Multi-Family/Industrial $4.39 $6.74 $9.37 $9.56 $9.75 $9.95 6 Commercial $4.39 $6.58 $9.15 $9.33 $9.52 $9.71
7 Landscape $4.39 $7.42 $10.31 $10.52 $10.73 $10.94 Page 371 of 481

Thank you
Contacts
Steve Gagnon, P.E./ [email protected]
Lindsay Roth / [email protected]
Journ Galvan / [email protected]
24 Page 372 of 481

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: October 20, 2025
REPORT # Public Works-2025-51

AGENDA ITEM: A RESOLUTION APPROVING THE SAN BENITO URBAN AREA

WATER SUPPLY AND TREATMENT AGREEMENT WITH THE SAN BENITO

COUNTY WATER DISTRICT

DEPARTMENT: Public Works
DEPARTMENT HEAD: William Via, Public Works Director
STAFF CONTACT: William Via, Public Works Director

RECOMMENDED ACTION: Adopt a resolution approving the San Benito Urban Area Water Supply and Treatment Agreement with the San Benito County Water District.

DISCUSSION: In 2013, the City of Hollister (Hollister) entered into the Hollister Urban Area Water Supply and Treatment Agreement with the San Benito County Water District (SBCWD) to provide high-quality treated water to the residents of Hollister and the surrounding urban area. On February 18, 2025, the Hollister City Council approved a term sheet containing principles of agreement and authorized staff to negotiate. As a result of a long planning process, staff determined a new agreement would be preferred to amending the prior agreement. The San Benito Urban Area Water Supply and Treatment Agreement adds the City of San Juan Bautista as a new treated water customer, joining existing customers Hollister and Sunnyslope County Water District (Sunnyslope).

Additionally, the Accelerated Drought Response Project (ADRoP) to SBCWD’s treated water system and to lay out the mechanisms for funding and cost recovery for this project are included in the agreement.

The Hollister Urban Area Water and Wastewater Master Plan (Master Plan) was first completed in 2008 and updated again in 2017 and 2023. The Master Plan provides a long-term vision for water, wastewater, and recycled water management actions and infrastructure improvements to address water quality concerns and improve water supply reliability. The Master Plan also identified the need for the region to begin preliminary work toward the development of additional long-term water supplies to serve the region in times of drought. All projects identified in the 2008 Master Plan and 2017 Master Plan update have since been completed, and we are now in the process of implementing the 2023 recommendations as described below.

In August of 2021, SBCWD, Sunnyslope , Hollister, City of San Juan Bautista, and the County of San Benito entered into a Memorandum of Understanding (MOU) agreeing to update the Master Plan in order to confirm water demand forecasts, identify preferred long term water supply options, and incorporate San Juan Bautista into the urban water supply planning. The water quality goals found in the Master Plan update are meant to ensure wastewater salinity targets are met to provide residents satisfactory water service and to avoid fines and penalties from the Water Resources Control Board.

The 2023 Master Plan update presents a series of projects, as well as the alternatives considered, to achieve a reliable supply of high -quality water to the urban areas in San

Benito County for existing and future residents. A key near-term project is the Accelerated Drought Response Project, referred to as ADRoP. This project is needed to improve the reliability of water supplies for existing residents during drought conditions. The environmental documentation for this project expressly prohibits its use to accommodate future growth. ADRoP consists of the expansion of the West Hills Water Treatment Plant, conveyance pipelines, and the installation of up to 5 aquifer storage and recovery wells near Fallon Road. The City and SSCWD previously provided letters of support for the project for inclusion in grant applications, three of which have been awarded, totaling an estimated amount of $20 million in State and Federal grants. SBCWD has issued bond debt to cover the remaining capital costs for ADRoP.

FISCAL IMPACT: ADRoP will be funded by a Water Reliability Charge that is included in the Raw Water Charge for water treated at the water treatment plants (Lessalt Water Treatment Plant and West Hills Water Treatment Plant) and delivered to City of Hollister, Sunnyslope County Water District, and San Juan Bautista customers. The current reliability charge is $250 per acre-foot of water (325,851 gallons) and will be updated with SBCWD's new rate study, to be implemented in March 2026. Currently, this amounts to about $500,000 per year for the City from the Water Enterprise Fund (620), depending on the amount of surface water used. It is anticipated that the rate will go down due to the District receiving approximately $20 million in grant funding to fund a portion of the ADRoP project.

PREVIOUS COUNCIL OR COMMISSION ACTION: Resolution No. 2025-21 approving the Urban Area Water Master Plan Term Sheet and authorizing the City Manager to negotiate a contract with the Urban Area member agencies.

CEQA: This activity is not a project pursuant to California Environmental Quality Act Statute Section 21065 and Guidelines Section 15378(b)(5), as it is an administrative activity of government that will not result in direct or a reasonably foreseeable indirect physical change in the environment.

ATTACHMENTS:

1. Resolution

2. Agreement

RESOLUTION NO. 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING THE SAN BENITO URBAN AREA WATER SUPPLY AND

TREATMENT AGREEMENT WITH THE SAN BENITO COUNTY WATER

DISTRICT

WHEREAS, the City of Hollister entered into the Hollister Urban Area Water Supply and Treatment Agreement with San Benito County Water District in 2013; and

WHEREAS, the Hollister Urban Area Water and Wastewater Master Plan was completed in 2008 and updated in 2017 and again in 2023; and

WHEREAS, in August of 2021, SBCWD, Sunnyslope, Hollister, City of San Juan Bautista, and the County of San Benito (Parties) entered into a Memorandum of Understanding (MOU) agreeing to update the Master Plan in order to confirm water demand forecasts, identify preferred long term water supply options, and incorporate San Juan Bautista into the urban water supply planning; and

WHEREAS, on February 18, 2025, the Hollister City Council approved a term sheet containing the principles of an agreement and authorized staff to negotiate an amendment to the Agreement; and

WHEREAS, the parties have determined that it is in their mutual interest to terminate the former agreement and replace it with this agreement; and

WHEREAS, the Agreement will include the City of San Juan Bautista, add the Accelerated Drought Response Project (ADRoP) to San Benito County Water District’s treated water system, lay out the mechanisms for funding and cost recovery of ADRoP , and change the name of the agreement to the San Benito Urban Area Water Supply and Treatment Agreement.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hollister hereby approves the San Benito Urban Area Water Supply and Treatment Agreement.

Resolution No. 2025-XX

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on October 20, 2025, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2025-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on October 20, 2025 at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on October 20, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

4936-8823-1989.8 009140.018

SAN BENITO URBAN AREA

WATER SUPPLY AND TREATMENT

AGREEMENT

i

TABLE OF CONTENTS
Page
ARTICLE 1: DEFINED TERMS ................................................................................................ 2 ARTICLE 2: TERM OF AGREEMENT ..................................................................................... 2 ARTICLE 3: QUANTITY OF TREATED WATER TO BE PROVIDED ....................................... 3

3.1. Amount of Delivery ............................................................................................... 3

3.2. Sources of Water ................................................................................................. 3 (a) Central Valley Project Water ..................................................................... 3 (b) Water Transfers ........................................................................................ 3 (c) Groundwater ............................................................................................ 4

3.3. Selection of Water Sources and Schedule of Water Demands ............................. 4

3.4. Limitations in Supply ............................................................................................ 4

3.5. Water Quality ....................................................................................................... 5 (a) Water Quality Goals ................................................................................. 5 (i) TDS Concentration ....................................................................... 5 (ii) Hardness ...................................................................................... 5 (b) Future Projects to Meet Water Quality Goals ............................................ 5 (c) District Responsible for Quality of Treated Water Delivered ...................... 6 ARTICLE 4: ADVISORY COMMITTEE .................................................................................... 6

4.1. Function of Advisory Committee ........................................................................... 6

4.2. Limit of Authority of Advisory Committee .............................................................. 6

4.3. Meetings of the Advisory Committee .................................................................... 7 ARTICLE 5: TREATMENT FACILITIES AND ADROP .............................................................. 7

5.1. TREATMENT FACILITIES .................................................................................... 7 (a) District Commitment of Funds .................................................................. 7 (b) Lessalt WTP ............................................................................................. 7 (1) Location and Capacity ............................................................. 7 (2) Included Costs ......................................................................... 8 (3) Pipeline to High Pressure Zone ............................................... 8 (4) Ownership ............................................................................... 8 (c) West Hills WTP ........................................................................................ 8 (1) Location and Capacity ............................................................. 8 (2) Included Capital Costs ............................................................. 8 (3) Ownership ............................................................................... 8

ii

(d) Non-Conveyance Covenant...................................................................... 9 (e) Operation and Maintenance of Treatment Facilities .................................. 9 (1) Operation Pursuant to Operation and Maintenance
Agreement......................................................................... 9 (2) Wholesale Customers Responsible for Operation of
Distribution Pipelines ......................................................... 9 (3) District Responsible for WTP Inflow and Outflow ..................... 9 (f) Wholesale Customers’ Respective Shares of Treatment Capacity ............ 9

5.2. ADROP .............................................................................................................. 10 (a) Project Description and Capacity ............................................................ 10 (b) Included Capital Costs ............................................................................ 10 (c) Grant Funding ........................................................................................ 10 (d) Operation and Maintenance of ADRoP ................................................... 10 (1) Expansion of West Hills WTP ................................................ 10 (2) ASR Wells and Pipelines ....................................................... 11

5.3. CAPITAL IMPROVEMENTS .............................................................................. 11 (a) Capital Improvements to Comply with Law or Regulation ....................... 11 (b) Capital Improvements to Accommodate Future Growth Demands .......... 11 ARTICLE 6: PAYMENT FOR TREATED WATER SERVICE ................................................... 12

6.1. Wholesale Customers’ Payment Obligations and Covenants ............................. 12

6.2. Wholesale Customers’ Obligation to Take Delivery of Water .............................. 12

6.3. Costs to Be Paid to District .............................................................................. 12 (a) Capital Costs .......................................................................................... 13 (1) Capital Treatment Component – Treatment Facilities............. 13 (2) Reliability Fee Component – ADRoP ..................................... 13 (3) Capital Replacement Reserve ComponentError! Bookmark not defined. (b) Fixed Operational Costs ......................................................................... 14 (1) Administrative Fee Component .............................................. 14 (2) Direct Cost Component ......................................................... 15 (3) Fixed Treatment Component ................................................. 15 (c) Variable Operational Costs ..................................................................... 15 (1) Water Supply Component ...................................................... 15 (2) Variable Treatment Component ............................................. 16 (d) ADRoP – Deferred Costs During Storage Years ..................................... 16 (e) Extraordinary Operations and Maintenance ............................................ 16

iii

6.4. Financial Covenants .......................................................................................... 17 (a) Adequacy of Wholesale Customers’ Revenue Sources .......................... 17 (b) Financial Reporting Requirements.......................................................... 17 (c) Wholesale Customers’ Pledge of Revenues ........................................... 17

6.5. Billing and Payment ........................................................................................... 18 (a) Invoices .................................................................................................. 18 (b) Non-reimbursable District Credit - SJB ................................................... 18 (c) Payment ................................................................................................. 18

6.6. Accounting ......................................................................................................... 18 (a) Application of Wholesale Customer Payments ....................................... 19 (b) Account Management............................................................................. 19 ARTICLE 7: DISPUTES AND ATTORNEYS’ FEES ................................................................ 19 ARTICLE 8: LIMITATION OF LIABILITY ................................................................................ 20 ARTICLE 9: TERMINATION .................................................................................................. 20 ARTICLE 10: DEFAULT ........................................................................................................... 20

10.1. Notice and Right to Cure .................................................................................... 20

10.2. Consequences of Default ................................................................................... 21 ARTICLE 11: AMENDMENTS ................................................................................................. 21

11.1. Amendment Only by Writing ............................................................................... 21

11.2. Changes in Parties’ Service Areas ..................................................................... 21 ARTICLE 12: SUCCESSORS AND ASSIGNS ......................................................................... 22 ARTICLE 13: ASSIGNMENT ................................................................................................... 22 ARTICLE 14: NOTICES ........................................................................................................... 22 ARTICLE 15: NO THIRD PARTY BENEFICIARIES ................................................................. 22 ARTICLE 16: OTHER PROVISIONS ....................................................................................... 23

16.1. Integration .......................................................................................................... 23 (a) Memorandum of Understanding, December 2004 and as
amended in February 2008..................................................................... 23 (b) Hollister Urban Area Water and Wastewater Master Plan, 2008. ............ 23 (c) Coordinated Water Supply and Treatment Agreement, 2010. ................. 23 (d) Water Supply and Treatment Agreement Statement of Intent, 2011. ...................................................................................................... 23 (e) Hollister Urban Area Water Supply and Treatment Agreement, 2013. ...................................................................................................... 23 (f) San Benito Urban Areas Water Supply and Treatment Master Plan Update, 2023. ......................................................................................... 23

iv

16.2. Relationship of Parties ....................................................................................... 23

16.3. Controlling Law .................................................................................................. 23

16.4. Captions ............................................................................................................ 23 EXHIBIT A: Capital Recovery Schedule .................................................................................... 25 EXHIBIT B: Description of ADRoP and Associated Costs .......................................................... 30 EXHIBIT C: Explanation of Cost Components ........................................................................... 31 EXHIBIT D: Wholesale Customers’ Water Service Areas .......................................................... 33 EXHIBIT E: District’s Zone 6 Boundary ..................................................................................... 35

1 SAN BENITO URBAN AREA WATER SUPPLY AND TREATMENT AGREEMENT This SAN BENITO URBAN AREA WATER SUPPLY AND TREATMENT AGREEMENT (“Agreement”) by and among the CITY OF HOLLISTER (“Hollister”), SAN BENITO COUNTY WATER DISTRICT (“District”), SUNNYSLOPE COUNTY WATER DISTRICT (“SSCWD”), and CITY OF SAN JUAN BAUTISTA (“SJB”), sometimes referred to herein as the “Parties” or individually as a “Party,” shall be effective as of the date is fully executed by the Parties.

EXPLANATORY RECITALS:

A. WHEREAS, pursuant to the Hollister Urban Area Water Supply and Treatment Agreement entered into on May 29, 2013, by and among Hollister, District, and SSCWD (“Former Agreement”), the Parties, but not including SJB, established principles and objectives for the development of a Water and Wastewater Master Plan (“Master Plan”) and for a Coordinated Water Supply and Treatment Plan (“Coordinated Plan”) (collectively “Plans”) for the Hollister Urban Area (“HUA”), which efforts have been memorialized in the documents enumerated in Article 16.1 of this Agreement; and
B. WHEREAS, pursuant to the Former Agreement, the Parties, but not including SJB, agreed to equitably allocate the capital costs and the costs for the operation and maintenance of certain facilities which were necessary for the implementation of the Plans and consisted of: the upgrade to the Lessalt Water Treatment Plant (“Lessalt WTP”); the construction of the West Hills Water Treatment Plant (“West Hills WTP”); a transmission pipeline from the West Hills WTP to the distribution system; and a transmission pipeline from the Lessalt WTP to the High Pressure Zone (collectively, “Treatment Facilities”); and C. WHEREAS, District advanced from its reserves $34,000,000 to fund the aggregate costs of the Treatment Facilities, consisting of construction costs, final design, environmental review, permitting, and construction management services; and D. WHEREAS, the construction and land acquisition necessary for the Treatment Facilities has been completed; and
E. WHEREAS, the Treatment Facilities are being operated and maintained pursuant to an operation and maintenance agreement executed on August 14, 2013 by and between District and SSCWD (“O&M Agreement”), and last renewed for a five-year term on July 26, 2023, including as it may be amended, replaced, or renewed in the future; and F. WHEREAS, the Parties, now including SJB, have determined that it is in their mutual interests to continue implementing the Plans in the Urban Area (“UA”) under this Agreement and to assure the District’s recovery of the capital costs of the Treatment Facilities

2 by equitably allocating the costs of those Treatment Facilities among Hollister, SSCWD, and now SJB (collectively, “Wholesale Customers”, or individually, “Wholesale Customer”); and G. WHEREAS, the Parties have determined that it is in their mutual interests to terminate the Former Agreement and replace it with this Agreement, to add SJB as a Party, and to update the terms of the Former Agreement to reflect developments since 2013; and H. WHEREAS, the Parties have determined that it is in their mutual interest to also include in this Agreement terms and conditions to account for the capital costs and the operation and maintenance of a project to improve water supply reliability for the region, the Accelerated Drought Response Project (“ADRoP”); and
I. WHEREAS, the Parties contemplate the construction of a transmission pipeline to provide treated water to SJB’s area of service, the full costs of which shall be incurred and paid solely by SJB, and the construction, operation, and maintenance costs of which shall be subject to a separate agreement; and
J. WHEREAS, District holds water entitlements necessary for the provision of wholesale treated water to Wholesale Customers; and
K. WHEREAS, pursuant to this Agreement, District will provide wholesale treated water to Wholesale Customers for their use in supplement to their existing groundwater wells to provide municipal and industrial (“M&I”) water service within Wholesale Customers’ respective service areas.

NOW THEREFORE, in consideration of the terms and conditions contained herein and the covenants entered into herein, the Parties hereby agree as follows:

ARTICLE 1: DEFINED TERMS
Defined terms are indicated by quotation marks, and sometimes also with parentheses, when first used in this Agreement, and the defined terms are thereafter capitalized. Such defined terms shall have the meaning that is provided when the term is first used, regardless of whether the term is defined in the Explanatory Recitals or in Articles 2 through 16 herein.

ARTICLE 2: TERM OF AGREEMENT
Upon execution of this Agreement by all of the Parties, the Agreement shall become effective and shall remain in force until the capital costs of the Treatment Facilities and ADRoP described in Article 5 herein, including applicable interest, have been fully recovered by District, or until 30 years after its execution, whichever period shall be longer. Thereafter, this Agreement shall be

3 automatically renewed as to each Wholesale Customer for subsequent 10-year terms unless a written request for non-renewal is delivered by a Party to each of the other Parties to this Agreement no later than twelve (12) months prior to the expiration of any renewal period. Notice of non-renewal given by one Wholesale Customer shall not affect the right of the other Wholesale Customers to renew this Agreement.

ARTICLE 3: QUANTITY OF TREATED WATER TO BE PROVIDED

3.1. Amount of Delivery
District, subject to supply limitations and exercise of District’s discretion each year as described herein and in Articles 3.3 and 3.4 herein, shall deliver to the Lessalt WTP and the West Hills WTP an aggregate of 5,060 acre-feet (“AF”) annually of untreated water, at an average rate of

4.25 million gallons per day (“mgd”) for treatment and subsequent delivery to Wholesale Customers for distribution to their municipal and industrial customers, provided however, that District’s obligation shall be limited to a maximum delivery rate of no more than 6.5 mgd. District will retain discretion concerning the allocation of water deliveries between the Lessalt WTP and West Hills WTP, respectively, but shall seek input from Wholesale Customers concerning their desired allocations. Water will be deemed delivered by the District to a Wholesale Customer when it passes into the transmission pipelines at the Lessalt WTP or the West Hills WTP used for the conveyance of water to that Wholesale Customer. The quantity delivered will be as measured by the meter on each such transmission pipeline.

3.2. Sources of Water
The Parties acknowledge that District has the following sources of untreated water available to satisfy its obligations under this Agreement:
(a) Central Valley Project Water
M&I water delivered to District from the federal Central Valley Project (“CVP”) through the San Luis Reservoir, San Felipe Project, Hollister Conduit and San Justo Reservoir pursuant to Contract No. 8-07-20-W0130A-P between the United States and District, as amended and supplemented (“CVP Contract”); and
(b) Water Transfers
Episodic purchases of imported surface water, including permanent sales and long-term transfers, out-of-basin banked water, and spot market purchases that can, from time to time, be supplied to District through the San Luis Reservoir, San Felipe Project, Hollister Conduit and San Justo Reservoir; and

4 (c) Groundwater
Groundwater supplies and surface diversions that District may develop from subbasins to the north of the HUA, including any supplies that may become available through a North County Groundwater Bank generally described in the Master Plan and coordinated Plan but yet to be developed, and subject to uncertainty due to unknown results of field testing, regulatory and permitting conditions, and operational limitations.

3.3. Selection of Water Sources and Schedule of Water Demands District shall prepare and provide to Wholesale Customers a written projection estimating the quantity of water to be supplied that year from each of the sources of supply described in Article

3.2 above, by March 1 of each year, or within 14 days of the initial CVP allocation, whichever is later. Within 14 days of receiving District’s written projection, each Wholesale Customer shall provide to District a schedule of its estimated monthly water demand for that year. The actual quantity of water supplied from each source may vary from District’s projection due to hydrologic conditions, pumping restrictions in the Sacramento-San Joaquin Delta, aquifer conditions, or other unanticipated factors affecting availability or cost. The choice of how much water to deliver each year from each source of supply, including whether District supplements its sources of supply using ADRoP, described in Article 5.2 herein, is a matter within District’s sole discretion.

Wholesale Customers acknowledge that the CVP Contract supplies available to them are subject to the entitlements and allocations established annually by District.

3.4. Limitations in Supply
The Wholesale Customers acknowledge that District has no control over hydrologic conditions, administrative decisions affecting the Delta, or other factors that may reduce the availability and delivery of imported surface water supplies from the San Luis Reservoir and the San Felipe Project. District shall determine the total available supply each year. District shall work together with Wholesale Customers to maximize District’s entitlement to CVP M&I deliveries under any Water Shortage Policy adopted by the U.S. Bureau of Reclamation for water allocation during times of shortage. If, in any year, CVP Contract supplies and other imported supplies are reduced to a level that prevents District from delivering to Wholesale Customers the full amount specified in Article 3.1 above, no liability shall accrue against District or any of its officers, agents or employees for any damage, direct or indirect, arising therefrom. In the event that District is unable to deliver the full amount specified in Article 3.1 above in any year, the total available supply shall be allocated between the Lessalt WTP and West Hills WTP in proportion to their respective projected annual production requirements provided to District pursuant to

5 Article 3.3 above. The Wholesale Customers further acknowledge that District has an obligation to deliver water to M&I customers other than Wholesale Customers. District shall utilize the water shortage contingency plan included in its most recent urban water management plan adopted pursuant to the Urban Water Management Planning Act (Water Code section 10610 et seq.), as the water shortage contingency plan may be amended and updated from time to time, to allocate water during a condition of water shortage and shall reduce allocations to Wholesale Customers and to such other M&I customers by the same percentage.

3.5. Water Quality
(a) Water Quality Goals
District shall have the sole discretion as to the sources of water used for treated water deliveries in any year, but shall exercise such discretion only after consultation with the Advisory Committee, as provided in Article 4.1 herein with the goal of achieving, in combination with groundwater from the municipal wells of Hollister, SSCWD, and SJB, drinking water of the lowest hardness and mineral content practicable, which, in any event, shall meet all regulatory requirements for drinking water. Water quality goals not included in this Agreement shall be identified in future Water Master Plans and reflected by an amendment to this Agreement. The Water Quality Goals for drinking water are agreed to be both:
(i) TDS Concentration
A Total Dissolved Solids (TDS) concentration target of 500 milligrams per liter (mg/L) but not greater than 700 mg/L; and
(ii) Hardness
A hardness of not greater than 120 mg/L (calcium carbonate). (b) Future Projects to Meet Water Quality Goals
The Parties acknowledge that these Water Quality Goals will not be fully achieved solely through the Treatment Facilities as described herein. In furtherance of achieving the Water Quality Goals, the Parties agree to use their best efforts to plan and implement additional projects in the future to acquire additional surface water supplies and/or implement additional groundwater demineralization projects pursuant to separate agreements. Any such separate agreement shall be among the District and those Wholesale Customers who commit to, and contribute towards, the additional funding for such projects.

6 (c) District Responsible for Quality of Treated Water Delivered Except as otherwise provided in the O&M Agreement, District shall be responsible for meeting treated water quality requirements established by the California Department of Public Health (“DPH”) Drinking Water Program, shall provide required reports to DPH and shall be responsible for any fines resulting from violation of water quality parameters due to the quality of water produced at the Lessalt WTP and West Hills WTP, provided, however, that the amount of any such fines that are not a result of District’s negligence may be recovered as part of the Treated Water Component of rates. Wholesale Customers shall be responsible for meeting water quality requirements in their respective portions of the water distribution systems and for reports required by DPH regarding such distribution systems.

ARTICLE 4: ADVISORY COMMITTEE
Upon execution of this Agreement, the Parties shall form a four-member Advisory Committee composed of one management representative of each Party, who shall serve at the pleasure of the elected body of such Party. Changes in the designated representatives may be made only upon written notice to each other Party at the addresses set forth in Article 14.

4.1. Function of Advisory Committee
The function of the Advisory Committee will be to facilitate communication among the Parties and to coordinate responses to mutual concerns regarding water supply, water quality, and related issues including the selection of sources of water as such sources influence costs and quality. Potential activities to be addressed include the design, permitting, construction, operation, maintenance, repair and replacement of surface water treatment plants, including, but not limited to, the operation and maintenance of the Treatment Facilities; ADRoP; regulatory requirements for drinking water quality; response to droughts or other water supply disruptions; and allocation of treated surface water supplies in times of shortage, emergencies or other unique needs of the Parties that may arise. The communication, coordination, and cooperation provided for by the establishment of the Advisory Committee shall extend to all provisions of the Agreement, provided that, each Party shall retain exclusive decision making authority for all actions, opinions and determinations to be made concerning facilities owned by that Party.

4.2. Limit of Authority of Advisory Committee
Final responsibility and discretion for any decisions relating to construction, operation or maintenance of a distribution system or facility shall remain with the Party that owns the affected distribution system or facility, including that decisions relating to the operation or expansion of

7 the Treatment Facilities and the West Hills transmission pipeline shall be the responsibility of District unless otherwise provided in the O&M Agreement. The Advisory Committee shall be consulted by District each year concerning District’s preliminary projection of the selection and proportions of water to be used from the various sources available to District during that year, and shall be advised by District of the potential impacts of such selection and proportions on rates and water quality. The Parties will strive to agree on such selection and proportions of water sources, but District shall have the ultimate authority and discretion on these issues in the event that agreement cannot be reached by April 1.

4.3. Meetings of the Advisory Committee
Regular meetings of the Advisory Committee shall be held quarterly in the months of February, May, August and October of each year at a date and time agreed upon by all Parties. However, special meetings may be called by any Party on ten days’ written notice to each other Party, as necessary to address specific subjects related to the implementation of this Agreement, or upon 72 hours prior written notice in the event of circumstances that require a decision before a regularly noticed meeting can be called. It is anticipated that a special meeting may need to be called in April of each year so that the Parties can consider proposed budgets for the ensuing fiscal year. Agendas for all meetings, together with documents to be considered at such meetings, shall be provided to each member at least one week before each meeting of the Advisory Committee, or in the event of emergency, as soon as possible before a meeting.

ARTICLE 5: TREATMENT FACILITIES AND ADROP

5.1. TREATMENT FACILITIES
(a) District Commitment of Funds
District has advanced the amount of $34,000,000 to fund the completion of the Treatment Facilities described below in Articles 5.1(b) and (c), which included the design, permitting and construction of the Treatment Facilities. Pursuant to the payment structure and related terms as provided in Article 6 herein, Wholesale Customers have agreed to repay District for the full cost of design, construction and financing of said Treatment Facilities. (b) Lessalt WTP
(1) Location and Capacity
The Lessalt WTP is located at the intersection of Fairview Road and Sunnyslope Road in San Benito County. It currently has a production capacity of approximately 2 mgd.

8 (2) Included Costs
The costs of the Lessalt Upgrade Project incurred after September 1, 2011, including but not limited to design, engineering, environmental review, permitting, construction and related legal expenses, have been borne by District and shall be recovered from Wholesale Customers as described in Article 6 hereof.
(3) Pipeline to High Pressure Zone
A dedicated distribution pipeline was constructed and financed by District to serve the “High Pressure Zone” from the Lessalt WTP, for which the costs of such construction, including design, engineering, land acquisition, permitting, environmental review and legal expenses, have been borne by District and shall be recovered from Wholesale Customers as described in Article 6 hereof.
(4) Ownership
The Lessalt WTP, together with all real property and related appurtenances, is owned by District, with the exception of the distribution pipeline described in Article 5.2(b)(3) above which is owned by SSCWD.
(c) West Hills WTP
(1) Location and Capacity
The West Hills WTP is located on the western side of the City of Hollister, north of Union Road.

The West Hills WTP has a capacity of 4.5 mgd and is designed for possible future expansion to 9 mgd. As of the date this Agreement is executed, the Parties expect that the West Hills WTP will be expanded to 6.75 mgd to accommodate the component of ADRoP described in Article

5.2(d)(1) herein.
(2) Included Capital Costs
The costs of the West Hills WTP, including but not limited to design, engineering, environmental review, permitting, construction and related legal expenses, have been borne by District and shall be recovered from Wholesale Customers as described in Article 6 hereof. (3) Ownership
The West Hill WTP, together with all real property and related appurtenances necessary to its operation, including the water transmission line to the connection point of Hollister ’s distribution system at Nash Road, is owned by District.

9 (d) Non-Conveyance Covenant
District covenants that, during the term of this Agreement or subsequent extensions of this Agreement, it shall not convey title to any such real property or to any portion of the Treatment Facilities without amendment to this Agreement.
(e) Operation and Maintenance of Treatment Facilities
(1) Operation Pursuant to Operation and Maintenance Agreement The Treatment Facilities, including the Lessalt WTP, the West Hills WTP and the distribution mains between the treatment plants and each Wholesale Customer ’s distribution system, shall be operated and maintained pursuant to the O&M Agreement. (2) Wholesale Customers Responsible for Operation of Distribution Pipelines
Wholesale Customers shall be responsible for meeting all statutory and regulatory requirements related to the operation of their respective water distribution systems, including water quality, and shall make all required reports to the DPH and any other applicable entities. Each Wholesale Customer shall ensure that each water service connection in its service area is metered and shall impose on its customers all water conservation requirements imposed on District by state or federal law and by District’s CVP Contract, and shall provide District with such information as may be requested by District so that District can comply with such requirements.
(3) District Responsible for WTP Inflow and Outflow
District shall provide and maintain meters, valves and controls, and instrumentation at connections to the Hollister Conduit, at the turnouts to the Lessalt WTP and West Hills WTP, and at the outlets of the Lessalt WTP and West Hills WTP where the outlet connects to Wholesale Customers’ distribution systems. District shall have the meters tested and calibrated annually. A copy of the annual test report will be provided to Wholesale Customers. (f) Wholesale Customers’ Respective Shares of Treatment Capacity The respective annual treatment capacity of the Treatment Facilities reserved for each Wholesale Customer shall be as follows:

Hollister: Forty-six percent (46%).

SSCWD: Forty-six percent (46%).

SJB: Eight percent (8%).

There shall be no changes in a Wholesale Customer ’s respective percentage of the treatment capacity absent a separate agreement or an amendment to this Agreement.

10 5.2. ADROP
(a) Project Description and Capacity
The Accelerated Drought Response Project (“ADRoP”) includes the expansion of the West Hills WTP to a capacity of 6.75 mgd (“West Hills Expansion”); construction and development of up to five aquifer storage and recovery well sites, including the wells, pumps, disinfection building, electrical cabinets, transformers, appurtenant structures, and security fences (“ASR Wells”); and the installation of water transmission pipelines to convey recharge and recovery water to and from the ASR Wells (“ASR Pipelines”). ADRoP is expected to have the capacity to inject, store, and recover up to 2,700 acre-feet of water each year. ADRoP, including the associated costs and funding, is described further in Exhibit B hereto.
(b) Included Capital Costs
The costs of ADRoP will include, but are not limited to, design, engineering, environmental review, permitting, construction and related legal expenses, for which District, at District’s discretion, will seek bond revenues or advance such costs from District’s undesignated reserves. The costs of ADRoP shall be recovered by District from Wholesale Customers as described in Article 6 herein.
(c) Grant Funding
District has been awarded three grants, totaling $20,000,000, to fund the construction and implementation of ADRoP. District received $1,800,000 from the California Department of Water Resources (“DWR”) funded through the Integrated Regional Water Management program; $11,500,000 from DWR funded through the Sustainable Groundwater Management Grant Program; and $6,700,000 from the U.S. Bureau of Reclamation funded through the Small Surface Water and Groundwater Storage Projects program. Such grant funding, including any grants that may be secured in the future for funding ADRoP, shall offset Wholesale Customers’ repayment obligations described in Article 6.3(a)(2). Any capital costs not recovered through grant funding shall be recovered from Wholesale Customers as described in Article 6. (d) Operation and Maintenance of ADRoP
(1) Expansion of West Hills WTP
Upon completion of the West Hills Expansion, the West Hills WTP, as expanded, shall continue to be operated and maintained pursuant to the O&M Agreement.

11 (2) ASR Wells and Pipelines
The construction, operation, and maintenance of the ASR Wells and ASR Pipelines may be operated and maintained under a separate operation and maintenance agreement. Whether the ASR Wells and ASR Pipelines are operated under the existing O&M Agreement or a separate agreement shall be determined at District’s sole discretion. (e) Ownership of ADRoP
All buildings, storage tanks, pipelines, structures, improvements, appurtenances, and fixtures associated with ADRoP, including the West Hills Expansion, ASR Wells, and ASR Pipelines, shall be owned by District.

5.3. CAPITAL IMPROVEMENTS
(a) Capital Improvements to Comply with Law or Regulation District shall have the responsibility to construct additional capital improvements for the Treatment Facilities and ADRoP necessary to comply with law or regulation, up to a total expenditure equal to the amount then accumulated in a fund for such improvements (“Capital Replacement Reserve”), provided that this responsibility shall not require the District to expand the capacity of the Treatment Facilities beyond the level necessary to meet District’s obligation to treat 5,060 AF of untreated water each year as described in Article 3.1 herein. Should the costs for such required capital improvements exceed the amount then accumulated in the Capital Replacement Reserve, District shall be required to acquire funding at the best available rate. If District must acquire third-party financing, each Wholesale Customer agrees to pay District its actual true principal and interest costs, plus 25 basis points, in equal monthly installments on a twenty-year amortization schedule. District shall provide notice to Wholesale Customers at least six months prior to acquiring such third-party financing to the extent reasonably practicable under the circumstances.
(b) Capital Improvements to Accommodate Future Growth Demands District shall not be obligated to plan, design or construct future improvements for increased capacity of the Treatment Facilities or ADRoP or of raw water supply to the Treatment Facilities to accommodate future growth and demand, nor shall Wholesale Customers be obligated to pay for such improvements. Notwithstanding, District and one or more Wholesale Customer may agree to assume such obligations through a separate agreement, or, if all Parties agree, by an amendment to this Agreement.

12 ARTICLE 6: PAYMENT FOR TREATED WATER SERVICE

6.1. Wholesale Customers’ Payment Obligations and Covenants The full cost of treated water service for which Wholesale Customers shall collectively be obligated to pay District shall include the whole of the Capital Costs, Fixed Operational Costs, and Variable Operational Costs of the Treatment Facilities and ADRoP, which are comprised of the various cost components set forth herein in Article 6.3, subparagraphs (a) through (c) (“Full Costs”). With respect to the cost components that obligate Wholesale Customers to pay costs based upon their respective share of treatment capacity, Article 5.1(f) herein shall govern each Wholesale Customer ’s respective share. Wholesale Customers confirm, represent, and warrant to maintain fully effective water rates sufficient to meet Wholesale Customers’ payment obligations hereunder during the term of the Agreement.

6.2. Wholesale Customers’ Obligations and Delivery of Water No Wholesale Customer shall be required to take delivery of the full amount of water it has requested from District pursuant to Article 3.3 herein. Provided, however, that each Wholesale Customer shall remain obligated to pay the whole of their respective amount of the Capital Costs and Fixed Operational Costs described in Article 6.3 herein each year, regardless of whether they request or accept delivery of water. If a Wholesale Customer requests water for a given year, regardless of whether the Wholesale Customer takes delivery of the full requested quantity, that Wholesale Customer shall remain obligated to pay at least seventy-five percent (75%) of the Variable Operational Costs, described in Article 6.3 herein, for the quantity of water the Wholesale Customer requested.

6.3. Costs to Be Paid to District
Except as provided in Article 6.3(f) herein, each Wholesale Customer shall make monthly payments to District for its respective percentage of the Full Cost based on the structure of payment obligations and cost components outlined in subparagraphs (a) through (c) below. For purposes of subparagraphs (b) and (c) below, the Wholesale Customers’ obligation to pay Fixed Operational Costs and Variable Operational Costs for the Treatment Facilities shall include those costs associated with the West Hills WTP following completion of the West Hills Expansion. A description of each cost component of the Full Cost, including the methodology for calculating each, is described further in Exhibit C hereto.

13 (a) Capital Costs
Wholesale Customers shall pay the capital costs for the Treatment Facilities and ADRoP. Such capital costs include, but are not limited to, the cost of developing, permitting, preparing environmental review documents, designing, bidding, and constructing, including legal consultation (“Capital Costs”), for the Treatment Facilities and ADRoP. Wholesale Customers agree to reimburse District for the Capital Costs pursuant to the cost components set forth herein.
(1) Capital Treatment Component – Treatment Facilities The Capital Treatment Component shall be calculated such that when paid through completion of the Wholesale Customer’s amortized monthly installment payments (“Capital Recovery Schedule”), District shall have recovered the entirety of the Capital Costs for the Treatment Facilities. The amount payable by each Wholesale Customer shall be based on the percentage of the treatment capacity to which each Wholesale Customer is entitled pursuant to this Agreement. Subject to Article 6.3(f), the Capital Recovery Schedule, set forth in Exhibit A hereto, shall describe the payment schedule for the Capital Treatment Component Payable by each Wholesale Customer.
(2) Reliability Fee Component – ADRoP
The Reliability Fee Component shall be based on an amount determined by District to be sufficient for District to recover any remaining Capital Costs for ADRoP not recovered through grant funding, which shall be derived via bond financing or from District’s undesignated reserves, the option of which shall be at District’s sole discretion. In the event District issues bonds to cover the remaining Capital Costs associated with ADRoP, either in whole or in part, the Reliability Fee Component shall include repayment of the principal of the bonds but shall not include any applicable interest accrued on those bonds, and payment of such interest shall remain District’s obligation. The amount of the Reliability Fee Component payable by each Wholesale Customer shall be on a per-acre-foot basis of treated water delivered to each Wholesale Customer, including that District shall also collect the Reliability Fee Component from each of District’s other M&I customers, including those not receiving water pursuant to this Agreement. The Wholesale Customers’ obligation to pay the Reliability Fee Component shall be terminated as of the date that District has collected the whole of the unfunded Capital Costs associated with ADRoP, excluding interest.

14 (3) Capital Replacement Reserve Component
The Capital Replacement Reserve Component shall be established and maintained in a manner consistent with District’s Policy on Restriction and Designation of Net Assets/Cash (“Reserve Policy”), attached hereto as Exhibit F, including as that Policy may be amended from time to time by District upon 30 days’ notice to Wholesale Customers. As set forth in the Reserve Policy, last adopted on May 28, 2025, the amount collected through the Capital Replacement Reserve Component will be used only for capital replacement of assets to account for depreciation of the Treatment Facilities, and funds so expended will be replaced through subsequent contributions. The obligation of Hollister and SSCWD to pay the Capital Replacement Reserve Component under this Agreement shall be postponed until SJB has fully paid its respective share of the Capital Replacement Reserve Component, upon which Hollister and SSCWD shall begin payment of their respective shares. (b) Fixed Operational Costs
Wholesale Customers shall pay the fixed operational costs for the Treatment Facilities. "Fixed Operational Costs" consist of the operation and maintenance expenses associated with the Treatment Facilities that do not vary or depend on the amount of water that is treated or delivered. Each year, when District makes its preliminary supply projection as described in Article 3.3 herein, District shall identify the anticipated costs for each component of the Fixed Operational Costs. The amount of the aggregate Fixed Operational Costs payable to District by each Wholesale Customer, comprised of the cost components below, shall be based on the percentage of the treatment capacity to which each Wholesale Customer is entitled pursuant to this Agreement.
(1) Administrative Fee Component
The Administrative Fee Component shall be based on an amount equal to five percent (5%) of District’s total payroll expenses, enabling District to recover a share of its costs of management, supervision, accounting, and the legal and general administrative costs of owning, managing, and operating the Treatment Facilities and ADRoP.

15 (2) Direct Cost Component
The Direct Cost Component shall be based on the amount necessary for District to recover the fixed costs of ownership of the Treatment Facilities, including property insurance, fees imposed by the California Department of Public Health, and other similar costs of ownership.

(3) Fixed Treatment Component
The Fixed Treatment Component shall be based on the amount necessary for District to recover the fixed costs of treating water using the Treatment Facilities. (c) Variable Operational Costs
Wholesale Customers shall pay the variable operational costs for the Treatment Facilities and ADRoP. "Variable Operational Costs" consist of the operation and maintenance expenses associated with the Treatment Facilities and ADRoP that vary depending upon the volume of water that is treated and delivered. The amount of the aggregate Variable Operational Costs payable to District by each Wholesale Customer, comprised of the cost components below, shall be based on the percentage of treated water delivered to each Wholesale Customer pursuant to this Agreement.
(1) Water Supply Component
The Water Supply Component shall be based on the amount necessary for District to obtain raw water for the ensuing year from the Central Valley Project (CVP) and other sources delivered to the Treatment Facilities. District’s revenue requirements shall be determined in conformity with District’s normal rate-setting process, which District reserves the right to modify upon one year ’s notice to Wholesale Customers.

Shortage Conditions – Additional Costs: During periods of shortage, should the actual cost of raw water exceed the amount projected by District in its normal rate-setting process, District shall consult with the Advisory Committee to determine if additional costs shall be incurred.

Should the recommendation of the Advisory Committee be to incur additional costs, such costs shall be borne by Wholesale Customers and recovered through the Water Supply Component.

Recovery of such additional costs shall be included in the Water Supply Component of rates and charges invoiced to Wholesale Customers, amortized over a twelve-month period beginning on the date when District obligates itself to incur such additional costs.

Requests for Additional Water: In any year, any Wholesale Customer may request additional water to be delivered that year, and District shall accommodate the request provided it determines that additional water is available and delivery of the additional water does not affect

16 the other Wholesale Customers’ costs or allocation of water for that year. All costs incurred by District to deliver such requested additional water shall be borne by the Wholesale Customer or Wholesale Customers making the request and recovered through the Water Supply Component. (2) Variable Treatment Component
The Variable Treatment Component shall be based on the amount necessary for District to recover the Variable Operational Costs of treating raw water using the Treatment Facilities and for delivering treated water to the ASR Wells for purposes of ADRoP. (d) ADRoP – Deferred Payment of Costs Incurred During Storage Years Notwithstanding the foregoing, in years when District’s total water supply is determined by District to be sufficient to store water using the ASR Wells, payment for any costs associated with the Water Supply Component or Variable Treatment Component attributable to water stored using the ASR Wells and ASR Pipelines shall be deferred and those costs shall be borne by District until such time that any stored water is recovered from the ASR Wells and delivered to Wholesale Customers. District shall account and bill for water recovered from the ASR Wells in the same manner it would account and bill for transfer water acquired by District, and District shall recover such deferred payments through the Water Supply Component. District shall also recover such unpaid costs for water stored using the ASR Wells and ASR Pipelines from its other M&I customers, including those not receiving water pursuant to this Agreement, in the same manner as from the Wholesale Customers.
(e) Extraordinary Operations and Maintenance
Extraordinary operations and maintenance costs outside of the anticipated annual budgeted amount shall be discussed by the Advisory Committee before District commits to such costs or includes them in a Wholesale Customer ’s invoice. Nevertheless, if District determines after discussion with the Advisory Committee that such costs are necessary to provide a safe reliable source of potable water that meets all regulatory requirements, or if such costs are required to provide for the continuing safe operation of the Treatment Facilities or ADRoP, District shall have authority to incur such costs and include them in the Wholesale Customers’ invoice, itemizing such costs under the cost component District determines is appropriate, amortized over a 12 month period.
(f) SJB’s Deferred Payment Obligations
Notwithstanding the foregoing payment obligations, SJB shall not be obligated to pay any cost components set forth in Article 6.3 herein until (i) SJB first takes delivery of water pursuant to this Agreement, or (ii) two (2) years has passed from the date of execution of this Agreement,

17 whichever shall occur first (the “Payment Commencement Date”), provided, however, that SJB shall not be obligated to pay Variable Operational Costs or the Reliability Fee Component until SJB first takes delivery water. During the period from the date of execution of this Agreement to the Payment Commencement Date, Hollister and SSCWD shall collectively be obligated to pay the whole of the Fixed Operational Costs, with each paying one-half of such costs. On the Payment Commencement Date, or within a reasonable time thereafter, District shall prepare an updated Capital Recovery Schedule to incorporate SJB’s obligation to pay the whole of its respective share of the Capital Treatment Component. The updated Capital Recovery Schedule shall also reflect the contribution applied against SJB’s payment obligations as set forth in Article 6.5(b) herein. District shall provide each Wholesale Customer a reasonable time to review the updated Capital Recovery Schedule. Upon the approval of the updated Capital Recovery Schedule by all Parties, which approval shall not be unreasonably withheld, the updated Capital Recovery Schedule shall replace and supersede the original Capital Recovery Schedule set forth in Exhibit A hereto without the need for a formal amendment.

6.4. Financial Covenants
(a) Adequacy of Wholesale Customers’ Revenue Sources
Wholesale Customers shall maintain adequate revenue sources to pay the whole of their respective share of the annual Full Cost of treated water service during the term of this Agreement.
(b) Financial Reporting Requirements
The financial reporting requirements shall be as follows: (i) Each Party shall provide audited financial statements to each other Party within nine (9) months of the fiscal year end, and (ii) each Wholesale Customer shall provide to District an annual budget for its respective water enterprise within 30 days of its approval, demonstrating compliance with Wholesale Customer ’s financial obligation set forth in Article 6.4(a) herein. (c) Wholesale Customers’ Pledge of Revenues
In order to secure the payment of the Capital Treatment Component payable by Wholesale Customers to the District, each Wholesale Customer hereby pledges its “Net Revenues”, hereby defined as the amount equal to all of the gross revenues received by Wholesale Customers during any period, less the amount required by the Wholesale Customer to pay for all Fixed Operational Costs and Variable Operational Costs which are payable during any such period.

Subject to preexisting pledges or liens on the Wholesale Customers’ Net Revenues, this pledge shall constitute a first pledge of and charge and lien upon the Wholesale Customers’ Net

18 Revenues for the repayment of the Capital Treatment Component and shall be valid and binding from and after execution of this Agreement, without any physical delivery thereof or further act. The pledge to District under this Paragraph shall be on parity with any pledges or liens against the Wholesale Customers’ revenues prior in time to the execution of this Agreement. After execution of this Agreement and upon written request by any Wholesale Customer, District shall promptly consider, in good faith, any request by the Wholesale Customer that District consent to subordination or other modification of District’s secured position to the extent that subordination or other modification does not materially impair District’s secured position, and shall not unreasonably withhold consent to that request.

6.5. Billing and Payment
(a) Invoices
District will issue invoices to each Wholesale Customer by the 10th day of each month. The invoices shall show the total amount due, and the amounts owed by Wholesale Customers for Capital Costs, Fixed Operational Costs, and Variable Operational Costs, separately stated in the categories and components described above and illustrated in Exhibit C attached hereto. (b) Non-Reimbursable District Contribution - SJB
District shall contribute a non-reimbursable contribution to be applied against SJB’s payment obligations for the Full Cost of treated water service in a total aggregate amount of $869,565. (c) Payment
Wholesale Customers shall remit payments due and owing after application of available credits to District on or before the 15th of the month following receipt of the invoice. District may assess a late charge to a Wholesale Customer that fails to make full and timely payment. The late charge payable to District shall be ten percent (10%) of the amount of the late payment that is overdue for ten (10) or more days. The late charge shall increase by an additional ten percent (10%) each year that the late payment remains outstanding. Any amount in dispute must be paid pending resolution of the disputed amount. A dispute concerning the amount owed on an invoice does not relieve a Wholesale Customer of the obligation to pay the full invoice amount in a timely manner.

6.6. Accounting

19 (a) Application of Wholesale Customer Payments
In the event a Wholesale Customer ’s payment for any given invoice is insufficient to meet the Wholesale Customer ’s obligation to pay the Full Cost of treated water service, District shall apply the revenue received for that invoice to satisfy the Wholesale Customer ’s obligation, in whole or in part, for payment of any cost component of the Full Cost of treated water service, the allocation of which is to be determined at District’s sole discretion. (b) Account Management
District shall keep its accounts pertaining to this Agreement separate and distinct from its general funds, and consistent with generally accepted accounting principles. District shall, each year, upon request of a Wholesale Customer, provide the Wholesale Customer a detailed accounting of costs and expenses for the Treatment Facilities and ADRoP, disposition of all Wholesale Customer revenues, and a summary of all water deliveries made during the year.

Wholesale Customers and District shall enter into good faith negotiations to resolve any discrepancies or disputes relating to accountings, reports, or records of use.

ARTICLE 7: DISPUTES AND ATTORNEYS’ FEES
If a dispute arises between the Parties regarding breach of this Agreement or interpretation of any term of this Agreement, the Parties shall first attempt to resolve the dispute by good faith negotiation, followed by mediation if negotiation fails to resolve the dispute. The steps for dispute resolution agreed by the Parties are as follows:

Step One:

The managers or other persons designated by the disputing Parties will negotiate on behalf of the entities they represent. The nature of the dispute shall be reduced to writing by each such Party together with the relevant facts asserted and shall be presented to the manager of the other Party who shall then meet and attempt to resolve the issue. If the dispute is resolved at this step, there shall be a written memorialization of such resolution, signed by each disputing Party’s manager and ratified by each Party which shall be binding upon the Parties.

Step Two:

If the dispute cannot be resolved within ten (10) days at Step One, the disputing Parties shall submit the matter to non-binding mediation. The dispute shall be heard by a mutually acceptable mediator and any common costs of mediation shall be borne equally by the disputing Parties. The Parties shall each bear their own costs and fees therefore. If the issue is