Hollister City Council
February 17, 2026

CITY OF HOLLISTER

CITY COUNCIL AGENDA

REGULAR MEETING
Tuesday, February 17, 2026, 6:30 p.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023
Roxanne Stephens, Mayor Ana Cortez, City Manager
Rudy Picha, Council Member, District 1 Jennifer P. Thompson, City Attorney Rolan Resendiz, Council Member, District 2
Dolores Morales, Council Member, District 3
Priscilla de Anda, Council Member, District 4
Gordon Machado, City Treasurer

TELECONFERENCE NOTICE
Pursuant to Government Code Section 54953, subdivision (b), the following Council Meeting will include teleconference participation by Council Member Rolan Resendiz from 10th Street North between 1st and 5th Avenue North, 77710 Playa del Carmen, Q.R., Mexico. This notice and agenda will be posted at the teleconference location. Public comment from this address shall be allowed pursuant to Government Code Section 54953.3.

As of January 1, 2023, the Levine Act (Government Code Section 84308) applies to City Council proceedings involving a license, permit, or other entitlement for use.

Pursuant to Government Code Section 84308, no Council Member shall accept, solicit, or direct a contribution of more than $500 from any party or their agent, or from any participant or their agent, while a proceeding involving a license, permit, or other entitlement for use is pending before the City or for 12 months after a final decision is rendered in that proceeding. Any Council Member who has received a contribution of more than $500 within the preceding 12 months from a party or their agent, or from a participant or their agent, shall disclose that fact on the record of the proceeding and shall not make, participate in making, or in any way attempt to use their official position to influence the decision.

Pursuant to Government Code Section 84308(d), any party to a covered proceeding before the Council is required, and any participant to such a proceeding is strongly urged, to disclose on the record of the proceeding any contribution, including aggregated contributions, of more than $500 made within the preceding 12 months by them or their agent to any Council Member. The disclosure must include the name of the party or participant and any other person making the contribution, if any; the name of the recipient; the amount of the contribution; and the date the contribution was made.

The disclosure shall occur in the manner required under Government Code Section 84308 and any applicable state or local regulations, opinions, or policies. No party or their agent, and no participant or their agent, shall make a contribution of more than $500 to any Council Member during the proceeding or for 12 months after a final decision is rendered in that proceeding.

The foregoing statements do not constitute legal advice, and parties and participants are urged to consult with their own legal counsel regarding the requirements of the law.

NOTICE TO PUBLIC
Persons who wish to address the City Council are asked to complete a speaker’s card and give it to the City Clerk before addressing the City Council. Those who wish to address the City Council on an agenda item will be heard when the presiding officer calls for comments from the audience. City related items not on the agenda will be heard under the Public Input section of the agenda. Following recognition, persons desiring to speak are requested to advance to the podium and state their name and address. If you are joining us by Zoom, please click on the bottom of your screen to raise your hand. If you are joining us by Zoom using a cell phone, please press *9. After hearing audience comments, the public portion of the meeting will be closed, and the matter brought to the City Council for discussion.

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available for public inspection in the City Clerk’s Office at City Hall, 375 Fifth Street, Hollister, Monday through Friday, 8:30 a.m. to noon, 1:00 p.m. to 4:30 p.m. (City Hall is closed between 12:00 and 1:00 p.m.)

Requests to make presentations to the City Council should be submitted to the City Clerk’s Office at least ten days before the City Council meeting. It is customary for City staff members to review such matters before the formal presentation so that the City Council may have the benefit of all available data. PowerPoint presentations must be presented to the City Clerk by noon on the day of the City Council meeting.

The public may watch the meeting via live stream at:

City of Hollister Website
https://pub-hollister.escribemeetings.com/

Community Media Access Partnership (CMAP):
http://cmaptv.com/government/

City of Hollister YouTube Channel:
https://www.youtube.com/@cityofhollistercalifornia1489

Public Participation:

The public may attend meetings.

NOTICE: The City Council will hold its public meetings in person, with a virtual option for public participation based on availability. The City of Hollister utilizes Zoom teleconferencing technology for virtual public participation; however, we make no representation or warranty of any kind, regarding the adequacy, reliability, or availability of the use of this platform in this manner. Participation by members of the public through this means is at their own risk. (Zoom teleconferencing may not be available at all meetings.)

If you wish to make a public comment remotely during the meeting, please use the zoom registration link below:
https://us02web.zoom.us/webinar/register/WN_MNOr95ZCQrWzERqd5zRuwQ

City of Hollister City Council Meeting

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (831) 636-4300. Notification of 48 hours prior to the meeting will enable the City to attempt to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II].

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available for public inspection in the City Clerk’s Office at City Hall, 375 Fifth Street, Hollister, Monday through Friday, 8:30 a.m. to noon, 1:00 p.m. to 4:30 p.m. (City Hall is closed between 12:00 and 1:00 p.m.)

Notice to anyone attending any public meeting: The meeting may be broadcast live on Cable Channel 17 and/or recorded or photographed. Recent City Council meetings may also be viewed at www.CMAP.com and periodically on Cable Channel 17.

To access written translation during the meeting, please click this link:

Para acceder a la traducción durante la reunión, por favor haga clic en el enlace:

https://attend.wordly.ai/join/NLJC-7137
City of Hollister City Council Meeting

1.CALL TO ORDER

2.ROLL CALL

3.PLEDGE OF ALLEGIANCE

4.PUBLIC INPUT FOR ITEMS NOT ON THE AGENDA
This is the time for anyone in the audience to speak on any item not on the agenda and within the subject matter jurisdiction of the council. Speaker cards are available in the lobby, and are to be completed and given to the City Clerk before speaking. When the City Clerk calls your name, please come to the podium, state your name and city for the record, and speak to the City Council. If you are joining us by Zoom, please click on the bottom of your screen to raise your hand. If you are joining us by Zoom using a cell phone, please press *9.

Each speaker will be limited to three (3) minutes with a maximum of 30 minutes per subject.

Please note that state law prohibits the City Council from discussing or taking action on any item not on the agenda.

5.CONSENT ITEMS
All items listed under consent agenda will be enacted by one motion authorizing actions indicated for those items so designated. There will be no separate discussion of these items unless requested by a member of the City Council, a staff member, or a member of the public. There will be one public comment period for all items on the Consent Agenda.

5.1 APPROVE FEBRUARY 2, 2026 REGULAR MEETING MINUTES

5.2 APPROVE FEBRUARY 9, 2026 SPECIAL MEETING MINUTES

5.3 WARRANT REGISTER FEBRUARY 17, 2026
COUNCIL NEXT STEPS:

Ratify and approve the Warrant Registers for the General-Special-Enterprise- Assessments funds attached.

5.4 A RESOLUTION APPROVING A GRANT DEED MEMORIALIZING OWNERSHIP OF A PORTION OF LAND FORMERLY KNOWN AS “WELLER ALLEY”
COUNCIL NEXT STEPS:

Adopt a resolution approving a grant deed memorializing ownership of a portion of land formerly known as “Weller Alley.”

5.5 A RESOLUTION RENEWING A REGULATORY PERMIT FOR HOLLISTER

HOLISTICS TO OPERATE A CANNABIS CULTIVATION FACILITY
COUNCIL NEXT STEPS:

Adopt a resolution approving the renewal of a cannabis regulatory permit enabling Hollister Holistics to maintain operations of a cannabis cultivation facility at 1802 Shelton Drive for the 2026/2027 period.

5.6 A RESOLUTION APPROVING A SUPPLEMENTAL FUND APPROPRIATION FOR CIP C2506 VALLEY VIEW PARK WATER FEATURE IMPROVEMENTS, AND AUTHORIZING THE CITY MANAGER TO EXECUTE CONTRACT AMENDMENT #1

TO THE GENERAL SERVICES AGREEMENT WITH KNORR SYSTEMS

INTERNATIONAL
City of Hollister City Council Meeting

COUNCIL NEXT STEPS:

Adopt a resolution approving:

1. A supplemental appropriation of $30,100 to Fund 712 for the execution and payment of Contract Amendment #1 between the City of Hollister and Knorr Systems International; and

2. Contract Amendment #1 to the General Services Agreement with Knorr Systems International to provide additional services necessary for completion of CIP C2506.

5.7 A RESOLUTION APPROVING A FIVE-YEAR SERVICE AGREEMENT WITH APGN INC. FOR MAINTENANCE OF AERATION EQUIPMENT AT THE DOMESTIC

WASTEWATER TREATMENT PLANT
COUNCIL NEXT STEPS:

Adopt a resolution authorizing the City Manager to execute a five-year contract, and any related documents or financial obligations, with APGN Inc. for the maintenance and servicing of aeration equipment at the Domestic Wastewater Treatment Plant.

5.8 A RESOLUTION AUTHORIZING THE PURCHASE AND INSTALLATION OF TWO (2) 30HP CHOPPER PUMPS
COUNCIL NEXT STEPS:

Adopt a resolution authorizing the City Manager to execute a Task Authorization with Veolia Water West Operating Services, Inc. for the purchase and installation of (2) 30hp Chopper Pumps

6.PUBLIC HEARINGS

6.1 WATER RATE STUDY PUBLIC HEARING AND ADJUSTMENTS TO WATER RATES
COUNCIL NEXT STEPS:

1. Continue water rate adjustments discussion; and

2. If desired, reopen the Proposition 218 public hearing of January 17, 2026; and

3. Adopt a resolution approving water rate adjustments.

7.COUNCIL BUSINESS

7.1 WEST GATEWAY IMPROVEMENT PROJECT – CDBG CONTRACT NO. 21-CDBG- NH-20012 GRANT CLOSURE REPORT
COUNCIL NEXT STEPS:

Receive presentation from Adams Ashby Group regarding the CDBG Grant Closure for the West Gateway CIP Project.

7.2 DISCUSSION ON WHETHER TO BRING BACK AN ORDINANCE AMENDING SECTION 02.04.050 (MEETINGS- TIME AND PLACE) OF CHAPTER 02.04 (CITY COUNCIL) OF TITLE 2 (ADMINISTRATION AND PERSONNEL) OF THE

HOLLISTER MUNICIPAL CODE
COUNCIL NEXT STEPS:

Discuss whether to direct staff to bring back an ordinance amending the Hollister Municipal Code regarding the time and place of City Council meetings.

8.INFORMATIONAL REPORTS
Reports on compensable meetings attended. Brief reports or announcements concerning activities of members of the City Council and staff; opportunity to refer public or Council questions to staff for information; request staff to report to the Council on a matter at a future City of Hollister City Council Meeting

meeting; or direct staff to place a matter on a future agenda. Items in this category are for discussion and direction to staff only. No final policy action will be taken by the Council.

8.1 COMMITTEE ASSIGNMENTS
Receive oral reports from members regarding the activities of various Ad Hoc and Standing City Council Committees.

8.2 COUNCIL REPORTS
Receive informational reports from the City Council

1.CITY COUNCIL REQUESTS FOR FUTURE AGENDA ITEMS

8.3 CITY MANAGER REPORT

1.UPDATED CITY COUNCIL PROJECTS

9.ADJOURNMENT

10.VERIFICATION OF AGENDA POSTING
The agenda for the City Council of the City of Hollister TYPE OF MEETING meeting of MEETING DATE was posted on the bulletin board at City Hall on POSTING DATE per Government Code Section 54954.2.

City of Hollister City Council Meeting

PUBLIC PARTICIPATION NOTICE
The public may attend meetings in person or watch meetings via live stream at:

City of Hollister Website:
https://hollister.ca.gov/government/agendas___minutes.php

Community Media Access Partnership (CMAP):
http://cmaptv.com/government/

City of Hollister YouTube Channel:
https://www.youtube.com/@cityofhollistercalifornia1489

NOTICE: The City Council will hold its public meetings in person, with a virtual option for public participation based on availability. The City of Hollister utilizes Zoom teleconferencing technology for virtual public participation; however, we make no representation or warranty of any kind, regarding the adequacy, reliability, or availability of the use of this platform in this manner. Participation by members of the public through this means is at their own risk. (Zoom teleconferencing may not be available at all meetings.)

If you wish to make a public comment remotely during the meeting, please use the Zoom registration link below:

https://us02web.zoom.us/webinar/register/WN_MNOr95ZCQrWzERqd5zRuwQ

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (831) 636-4300. Notification 48 hours prior to the meeting will enable the City to attempt to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II].

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available for public inspection in the City Clerk’s Office at City Hall, 375 Fifth Street, Hollister, Monday through Friday, 8:30 a.m. to noon, 1:00 p.m. to 4:30 p.m. (City Hall is closed between 12:00 and 1:00 p.m.)

Notice to anyone attending any public meeting: The meeting may be broadcast live on Cable Channel 17 and/or videotaped or photographed. Recent City Council meetings may also be viewed at www.CMAP.com and periodically on Cable Channel 17.

To access written translation during the meeting, please scan the QR Code or click this link | Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace:
https://attend.wordly.ai/join/NLJC-7137
Choose Language and Click Attend | Seleccione su lenguaje y haga clic en asistir

Use a headset on your phone for audio or read the transcript on your device. | Use sus auriculares para escuchar el audio o leer la transcripción en el dispositivo.

1 City Council of the City of Hollister
Minutes of the Regular Meeting

February 2, 2026, 5:30 p.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023

Members Present: Roxanne Stephens, Mayor
Rudy Picha, District 1
Rolan Resendiz, District 2
Priscilla de Anda, District 4

Members Absent: Dolores Morales, District 3
_____________________________________________________________________

1. CALL TO ORDER
Mayor Stephens called the regular meeting of the City Council of the City of Hollister to order at 5:30 p.m.

2. ROLL CALL

3. CLOSED SESSION
City Attorney Jennifer Thompson read the closed session item titles.

Mayor Stephens opened public comment at 5:34 p.m.

There were no speakers for the closed session agenda items.

Mayor Stephens closed public comment at 5:34 p.m.

The City Council convened into closed session at 5:34 p .m.

3.1 CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9
Initiation of Litigation Pursuant to paragraph (4) of subdivision (d) of section 54956.9 of the Government Code (Deciding Whether to Initiate Litigation): 1 case

3.2 CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(d)(1)
Name of Case: Vincent Grewohl v. City of Hollister Unfair Practice Charge No. SF-CE-2294-M

2 3.3 CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9
Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of section 54956.9 of the Government Code (1 case)

3.4 CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO
GOVERNMENT CODE SECTION 54957.6
Agency designated representatives: Interim City Manager Jim Pia and City Attorney Jennifer Thompson
Employee Organizations: Service Employees International Union (SEIU), Local 521, Hollister Firefighters Union (HFFU) , Hollister Peace Officer Association (HPOA), and un-represented employees.

The City Council adjourned the closed session at 6:21 p.m.

4. PLEDGE OF ALLEGIANCE
Councilmember de Anda led the Pledge of Allegiance.

5. CLOSED SESSION REPORT
City Attorney Jennifer Thompson reported in closed session on Item 3.1, the City Council voted unanimously to initiate litigation to enforce an affordable housing agreement for 204 Hawkins. No other reportable action was taken.

6. PUBLIC INPUT FOR ITEMS NOT ON THE AGENDA
Robin Pollard spoke in support of the Hollister Community Garden and spoke against the City's plot fees. Ms. Pollard stated she is resigning from the Community Garden.

Jason Noble expressed frustration regarding delays in the City's permitting process.

Scott McPhail expressed concern regarding delays in the City's permitting process in order to remove red tags from his property.

Chris Peto expressed frustration regarding delays in the City's permitting process and requested the project he represents be allowed to move forward separate from the Housing Element and General Plan Amendment.

Mike Nino expressed frustration regarding delays in the City's building permitting process for replacement of facades at his property on Airline Highway.

Carlos Rivera expressed frustration regarding delays in the City's building permitting process.

Graham Mackie, Executive Director with San Business Council, expressed frustration regarding delays in the City's permitting process and offered to help the City resolve the issues.

3 Delia Gutierrez expressed frustration regarding delays in the City's building permitting process.

Rob Bernosky thanked the City's fire department for their response to a recent and incident. Mr. Bernosky expressed frustration regarding delays in the City's planning permitting process.

Jon Coulter expressed frustration regarding delays in the City's building permitting process.

Jose Villalpando expressed frustration regarding delays in the City's building permitting process, expiration of building permits for a project, and delays to his commercial building project.

Peter Hernandez commented on the need to update and improve the City's permitting procedures.

Yolanda Leon expressed concern regarding the City not meeting its legal obligations to eliminate unnecessary delays.

Art Correa expressed frustration regarding delays in the City's permitting process.

Joe Tonascia expressed frustration regarding inconsistences in the City's permitting process and delays to his project requiring a General Plan Amendment.

Julio Noriega expressed frustration regarding delays in the City's building permitting process.

Bertha Reyes expressed frustration regarding delays in the City's permitting process for her home that had a fire.

Alfred Valenzuela spoke regarding water access on his property.

Myriam Castillo expressed frustration regarding delays in the City's building permitting process.

7. CONSENT ITEMS
Mayor Stephens opened public comment at 7:31 p.m.

There were no speakers for the consent agenda items.

Mayor Stephens closed public comment at 7:31 p.m.

Moved by: Council Member Resendiz
Seconded by: Council Member Picha
The consent calendar items are approved as presented.

Ayes (4): Mayor Stephens, Council Member Picha, Council Member Resendiz, and Council Member de Anda

4 Absent (1): Council Member Morales
Carried (4 to 0)

7.1 APPROVE JANUARY 20, 2026 REGULAR MEETING MINUTES

7.2 WARRANT REGISTER FEBRUARY 2, 2026
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Ratify and approve the Warrant Registers for the General-Special- Enterprise-Assessments funds attached.

Carried

7.3 A RESOLUTION APPROVING THE FIRST AMENDMENT TO THE

AGREEMENT BETWEEN THE CITY AND AEROPLEX GROUP

PARTNERS LLC TO PERFORM AN AIRPORT RATES AND FEES
STUDY
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution approving the First Amendment to City of Hollister General Services Agreement between the City and Aeroplex Group Partners LLC to perform an Airport Rates and Fees Study.

Carried

7.4 RESOLUTIONS APPROVING THIRD AMENDMENTS TO LANDSCAPE

PROFESSIONAL SERVICES AGREEMENTS WITH SMITH & ENRIGHT,
BRIGHTVIEW, N. RAMIREZ
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Approve third amendments to Landscape Professional Services Agreements for, Smith and Enright, Brightview, and N. Ramirez and authorizing the City Manager to sign the amendments.

Carried

7.5 A RESOLUTION AUTHORIZING CITY STAFF TO CHANGE DIRECTION

IN BRINGING ASSISTIVE TECHNOLOGY TO SUPPORT PERMIT

ISSUING DEPARTMENTS
Moved by: Council Member Resendiz
Seconded by: Council Member Picha

5 Adopt a resolution authorizing City staff to change direction in bringing helpful technology to assist permit issuing departments.

Carried

8. COUNCIL BUSINESS

8.1 UPDATE SEWER/RECLAMATION FACILITY ODOR ISSUE
Public Works Director Javier Hernandez provided the staff report.

Mayor Stephens opened public comment at 7:54 p.m.

Joe Tonascia reported that the City's reclaimed water cannot be used and stated the sewer plant needs upgrades to properly function.

Mayor Stephens closed public comment at 7:57 p.m.

By consensus, the City Council directed staff to provide updates at each City Council meeting to include the following: challenges and progress in addressing the sewer plant odor, including actions underway, success of any action taken, update on the odor, additional information on the health standards being measured and test results, updates on the sewer system master plan, information regarding the City's sewer impact fees, seasonal sewer issues, and current inability to use reclaimed water.

8.2 A RESOLUTION APPROVING AN AGREEMENT WITH KIMLEY HORN

FOR THE DEVELOPMENT OF A SAFETY ACTION PLAN AND GRANT
ADMINISTRATION FOR THE SAFE STREETS FOR ALL (SS4A)
GRANT
Management Analyst Cassandra Orozco provided the staff report.

Mayor Stephens opened public comment at 8:12 p.m.

There were no speakers for this item.

Mayor Stephens closed public comment at 8:12 p.m.

Moved by: Council Member Picha
Seconded by: Council Member de Anda
Adopt a resolution approving an agreement with Kimley Horn to develop a Safety Action Plan and provide grant administration for the SS4A Grant.

Ayes (4): Mayor Stephens, Council Member Picha, Council Member Resendiz, and Council Member de Anda
Absent (1): Council Member Morales
Carried (4 to 0)

6 8.3 SPECIAL EVENT AND BANNER PERMIT FEES
City Clerk Jennifer Woodworth provided the staff report.

Mayor Stephens opened public comment at 8:18 p.m.

There were no speakers for this item.

Mayor Stephens closed public comment at 8:18 p.m.

Moved by: Council Member Resendiz
Seconded by: Council Member de Anda
Adopt a resolution to update the City’s fee schedule to include reimbursement of actual costs related to special event and banner permit fees with a 50% discount for non-profit organizations and governmental agencies to be implemented in a phased approach with a 10% increase per year in addition to CPI increases until the fee reaches the City’s actual costs.

Ayes (4): Mayor Stephens, Council Member Picha, Council Member Resendiz, and Council Member de Anda
Absent (1): Council Member Morales
Carried (4 to 0)

9. INFORMATIONAL REPORTS

9.1 COMMITTEE ASSIGNMENTS
Councilmember Picha reported the Oversight Board of the Successor Agency to the Hollister Redevelopment Agency met.

Mayor Stephens reported the San Benito County Tourism Advisory Committee met and discussed the County's Home of the Pinnacles National Park branding.

9.2 COUNCIL REPORTS

1. CITY COUNCIL REQUESTS FOR FUTURE AGENDA ITEMS

1. Informational Presentation on SHIELD and RIMS Programs - Mayor Stephens

2. Sewer Update - Councilmember Resendiz
By consensus, the City Council directed staff to return with an informational presentation on the SHIELD and RMS programs.

9.3 CITY MANAGER REPORT
City Manager Ana Cortez thanked everyone for the warm welcome she has received in the Hollister community and stated she is eager to listen

7 and learn from the community. Ms. Cortez shared her desire to respond to the concerns expressed by members of the public regarding the permitting process and desire to improve the process.

1. UPDATED CITY COUNCIL PROJECTS

10. ADJOURNMENT
Mayor Stephens adjourned the meeting at 8:34 p.m.

Jennifer Woodworth, City Clerk

1 City Council of the City of Hollister
Minutes of the Special Meeting

February 9, 2026, 6:00 p.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023

Members Present: Roxanne Stephens, Mayor
Rudy Picha, District 1
Rolan Resendiz, District 2
Dolores Morales, District 3
Priscilla de Anda, District 4

_____________________________________________________________________

1. CALL TO ORDER
Mayor Stephens called the special meeting of the City Council of the City of Hollister to order at 6:00 p.m.

2. PLEDGE OF ALLEGIANCE
Councilmember Morales led the Pledge of Allegiance.

3. ROLL CALL

4. COUNCIL BUSINESS

4.1 PRESENTATION ON ENVIRONMENTAL COMPLIANCE

FRAMEWORKS
City Manager Ana Cortez and Public Works Director Javier Hernandez provided the staff report describing steps taken and planned to address to odors at the domestic wastewater treatment plant.

Councilmember de Anda arrived at 6:05 p.m.

Councilmember Picha arrived at 6:10 p.m.

Mayor Stephens opened public comment at 6:52 p.m.

There were no speakers for this item.

Mayor Stephens closed public comment at 6:52 p.m.

By consensus, the City Council directed staff to explore options for an aggressive payment of debt related to sewer infrastructure from the City's sewer enterprise fund; provide additional information regarding

2 environmental studies previously authorized by Council; schedule a City Council study session regarding the City's sewer treatment plant, including past information provided to Council and past Council direction; provide regular reporting to the City Council; work with treatment plant operat or for more frequent removal of solids; investigate options for purchasing machines to remove solids; and explore options to prevent additional connections to the City's sewer infrastructure and determine potential impact on sewer capacity from projects already in progress.

4.2 CITY OF HOLLISTER NEWLY ADOPTED PUBLIC NOTIFICATIONS

AND PUBLIC INFORMATION APPROACH
City Manager Ana Cortez and Public Works Director Javier Hernandez provided the staff report.

Mayor Stephens opened public comment at 7:34 p.m.

There were no speakers for this item.

Mayor Stephens closed public comment at 7:34 p.m.

By consensus, the City Council directed staff to provide environmental testing from a third party consultant more frequently than state requirements; provide an update on management of the West Hills Treatment Facility; confirm if proximity to San Benito Foods affects water quality in nearby wells; provide additional information on state water standards; and provide an update on the topics at a future Council study session.

5. ADJOURNMENT
Mayor Stephens adjourned the meeting at 7:43 p.m.

Jennifer Woodworth, City Clerk

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # Will auto populate once assigned

AGENDA ITEM: WARRANT REGISTER FEBRUARY 17, 2026

DEPARTMENT: Adminstrative Services
DEPARTMENT HEAD: Grizelle Gonzalez, Management Analyst
STAFF CONTACT: Maricela Romero, Accounting Tech II

COUNCIL NEXT STEPS: Ratify and approve the Warrant Registers for the General- Special-Enterprise-Assessments funds attached.

DISCUSSION:

FISCAL IMPACT: 25/26

ATTACHMENTS:

1. Expense Approval Register AP 1-15-26

2. Expense Approval Register DP 1-15-26

3. Expense Approval Register AP 1-23-26

4. Expense Approval Register DP 1-23-26

5. Expense Approval Register PYR 1-28-26

6. Expense Approval Register DP 1-29-26

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # City Attorney-2026-03

AGENDA ITEM: A RESOLUTION APPROVING A GRANT DEED MEMORIALIZING OWNERSHIP OF A PORTION OF LAND FORMERLY KNOWN AS “WELLER ALLEY”

DEPARTMENT: City Attorney
DEPARTMENT HEAD: Jennifer Thompson, City Attorney
STAFF CONTACT: Jennifer Thompson, City Attorney

COUNCIL NEXT STEPS: Adopt a resolution approving a grant deed memorializing ownership of a portion of land formerly known as “Weller Alley.”

DISCUSSION: On January 15, 1962, via Resolutions No. 61-30 and 62-4 (collectively “Resolutions”), the City of Hollister (“City”) declared its intent to vacate and abandon, and did vacate and abandon, Weller Alley. The City retained an easement and right of way for sanitary sewers, with the right to construct, maintain, operate, replace, remove, and renew those sewers on that property. As a result of these Resolutions, the property was no longer a public street and, instead, was absorbed by the adjoining p arcels.

In mid-2024, the owner of 140 San Benito Street and 102 San Benito Street, Mr. John H. Sicley, Sr., both adjacent to Weller Alley, asked that the City transfer a ten foot by eighty-four foot (10' x 84') strip of land formerly a part of Weller Alley to Mr. Sicely, Sr. because title to the strip of land was never transferred by recorded document to the adjacent property.

The portion of Weller Alley at issue here is a part of 102 San Benito Street (APN 054 - 190-002).

City staff further believes Mr. Sicley, Sr. already owns the relevant portion of Weller Alley because, while preparing survey transfer documents, the City Attorney and City Engineer worked with a title company to obtain and examine the latest vesting deed for 102 San Benito Street (APN 054-190-002), which is the deed by which Mr. Sicley, Sr. acquired ownership of that property in 2020. The legal description of that property contains a description that also includes the portion of Weller Alley at issue here.

Specifically, the legal description states that Parcel 3 included in the deed is composed of “Lots 1, 2, and 3 in block 5 of the City of Hollister, according to the map thereof filed March 23, 1870, in Vol. 1 of maps, at page 54, San Benito County records.” Because this is a lot and block description, as opposed to a metes and bounds description, which gives specific points and measurements, legal rules apply that help interpret this description. This includes California Civil Code section 831 which states, “An owner of land bounded by a road or street is presumed to own to the center of the way, but the contrary may be shown.”

The City Attorney and City Engineer also examined the map filed March 23, 1870, in Vol. 1 of maps, at page 54, and we believe Lots 1, 2, and 3 in block 5 describe 102 San

Benito Street (APN 054-190-002). Applying California Civil Code section 831, it is believed that this parcel includes the portion of land to the center of the alley. Therefore, the ten foot by eighty-four foot (10' x 84') strip of land in between 140 San Benito Street (APN 054-190-008) and 102 San Benito Street (APN 054-190-002) is already a part of 102 San Benito Street (APN 054-190-002).

Mr. Sicley, Sr. and his agent consulted with the San Benito County Assessor’s Office, Recorder’s Office, and the Title Company, and all parties agree that recording the attached Grant Deed is the appropriate path forward to clarify the abandonment of Weller Alley. Recording this document will allow the Title Company and Assessor’s Office to update their records and enable Mr. Sicley, Sr. to obtain title insurance.

FISCAL IMPACT: Mr. Sicley, Sr. reimbursed the City for costs associated with this process.

PREVIOUS COUNCIL OR COMMISSION ACTION: N/A

CEQA: N/A

ATTACHMENTS:

1. Resolution

2. Grant Deed

RESOLUTION NO. 2026-____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING A GRANT DEED MEMORIALIZING OWNERSHIP OF A
PORTION OF LAND FORMERLY KNOWN AS “WELLER ALLEY”

WHEREAS, on January 15, 1962, via Resolutions No. 61-30 and 62-4, the City of Hollister (“City”) vacated and abandoned Weller Alley; and

WHEREAS, because of the abandonment, Weller Alley was absorbed by adjoining parcels of land; and

WHEREAS, approval of the grant deed will memorialize ownership of a ten foot by eight- four foot (10' x 84') strip of land, formerly part of Weller Alley, to be a part of 102 San Benito Street.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hollister approves a grant deed memorializing ownership of a portion of Weller Alley by the owner of 102 San Benito Street.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 17, 2026, 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

Resolution No. 2026-XX

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-XXX 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 February 17, 2026 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 February 17, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # Community Development-2026-11

AGENDA ITEM: A RESOLUTION RENEWING A REGULATORY PERMIT FOR

HOLLISTER HOLISTICS TO OPERATE A CANNABIS CULTIVATION FACILITY

DEPARTMENT: Community Development
DEPARTMENT HEAD: Rod Powell, Assistant City Manager
STAFF CONTACT: Maria C. Mendez, Cannabis Affairs Manager

COUNCIL NEXT STEPS: Adopt a resolution approving the renewal of a cannabis regulatory permit enabling Hollister Holistics to maintain operations of a cannabis cultivation facility at 1802 Shelton Drive for the 2026/2027 period.

DISCUSSION: On August 14, 2017, the City Council granted approval for a Cannabis Use Permit/Development Agreement (CUP 2017-5) for Hollister Holistics, enabling the operation of a cannabis cultivation facility at 1802 Shelton Drive (Resolution No. 2017- 188).

On November 6, 2017, the City Council approved issuance of a required cannabis regulatory permit (Resolution 2017-269) to Hollister Holistics to allow operations of the cultivation facility.

Pursuant to Section 5.42.050 of the City of Hollister Municipal Code (HMC), renewal of a regulatory permit requires approval by the City Council. The City Council may deny a permit renewal request based upon the findings set forth in HMC Section 5.42.070(A). In this regard, staff have found no findings that would warrant denial of the regulatory permit.

The current regulatory permit is set to expire on March 17, 2026. This approval will allow the applicant to continue operations for 2026/2027.

FISCAL IMPACT: As a regulatory permittee, Hollister Holistics is required to pay quarterly taxes to the city. Non-approval of an applicable regulatory permit would result in a loss of current tax revenue.

PREVIOUS COUNCIL OR COMMISSION ACTION: On March 3, 2025, the City Council approved the renewal of Hollister Holistics cultivation regulatory permit for the 2025/2026 period.

CEQA: Exempt: Section 15301 The proposed action is exempt from the California Environmental Quality Act (CEQA) under Section 15301, which applies to the operation and maintenance of existing facilities. This exemption is appropriate as the project involves the renewal of a regulatory permit for an established cannabis cultivation facility, with no significant changes or expansion of operations anticipated. Therefore, no further environmental review is required.

ATTACHMENTS:

1. Resolution

2. Regulatory Permit Application

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

RENEWING REGULATORY PERMIT FOR HOLLISTER HOLISTICS TO
OPERATE A CANNABIS CULTIVATION FACILITY AT 1802 SHELTON DRIVE

WHEREAS, the City Council has adopted Ordinance 1179 permitting cannabis facilities; and

WHEREAS, the City Council at its regular meeting of August 14, 2017, approved a Cannabis Use Permit/ Development Agreement for Hollister Holistics located at 1802 Shelton Drive; and

WHEREAS, the City Council at its regular meeting of November 06, 2017, approved issuance of a cannabis cultivation regulatory permit to Hollister Holistics; and

WHEREAS, under the provisions of Section 5.42.040 of the Hollister Municipal Code, the renewal of a regulatory permit is subject to review and approval by the City Council; and

WHEREAS, Hollister Holistics has submitted a completed regulatory permit renewal application, and it has been deemed complete; and

WHEREAS, at its regular meeting of February 17, 2026, the City Council considered the applicant’s request, reviewed the staff report, and received written and /or oral testimony for and against the proposal; and

WHEREAS, under the provisions of Section 5.42.070 (A) of the Hollister Municipal Code the City Council may reject a permit based upon expressed findings; and

WHEREAS, after careful review, the Council did not make any of the specified findings required to deny Hollister Holistics a regulatory permit; and

WHEREAS, under the provisions of Section 5.42.14 the City Council may, if desired, place conditions of approval upon Hollister Holistics regulatory permit.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hollister hereby approves and authorizes staff to renew the regulatory permit for Hollister Holistics located at 1802 Shelton Drive to continue to operate a cannabis cultivation facility for 2026/2027 period.

Resolution No. 2026-XX
PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular Meeting held this 17th day of February 2026, 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 Jennifer P. Thompson, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-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 February 17, 2026, 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 February 17, 2026.

_________________________________
Jennifer Woodworth, MMC
City Clerk of the City of Hollister

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # Public Works-2026-03

AGENDA ITEM: A RESOLUTION APPROVING A SUPPLEMENTAL FUND APPROPRIATION FOR CIP C2506 VALLEY VIEW PARK WATER FEATURE

IMPROVEMENTS, AND AUTHORIZING THE CITY MANAGER TO EXECUTE CONTRACT AMENDMENT #1 TO THE GENERAL SERVICES AGREEMENT WITH

KNORR SYSTEMS INTERNATIONAL

DEPARTMENT: Public Works
DEPARTMENT HEAD: Javier Hernandez, Public Works Director STAFF CONTACT: Dillon Albert, Assistant Engineer

COUNCIL NEXT STEPS: Adopt a resolution approving:

1. A supplemental appropriation of $30,100 to Fund 712 for the execution and payment of Contract Amendment #1 between the City of Hollister and Knorr Systems International; and

2. Contract Amendment #1 to the General Services Agreement with Knorr Systems International to provide additional services necessary for completion of CIP C2506.

DISCUSSION: On March 28th, 2025, the City of Hollister entered into a General Services Agreement with Knorr Systems International to provide construction services for CIP C2506 Valley View Park Water Feature Improvement project. During the execution of the work, it was found that the existing filter recirculation pump and components needed to be replaced to enable functionality. This unforeseen work was not included in the original project scope and therefore requires a contract amendment to be executed to complete the remainder of work, close out the project, and reopen the park’s water feature for this upcoming summer.

The budget adjustment establishes sufficient expenditure authority to pay $30,100 in construction service costs related to Contract Amendment #1 for the Valley View Park Water Feature Improvements project (CIP C2506). These costs are an allowable use of CFD special tax revenues under the CFD formation. The increase in expenditure appropriations will be offset by available CFD fund balance generated from special tax revenues received. This is a one-time appropriation and does not create an ongoing budget impact.

FISCAL IMPACT: Appropriation of $30,100 to Fund 712. One-time increase in budget will be offset by fund balance.

PREVIOUS COUNCIL OR COMMISSION ACTION: City Council Resolution 2025-40

CEQA: Approval of this Resolution does not constitute a project under the California Environmental Quality Act (CEQA) and review under CEQA is not required.

ATTACHMENTS:

1. Resolution_Final

2. KSI Contract Amendment 1_Final 2-3-26_signed

3. 002_PR-PW -Eng_Budget Adjustment Request (712)

RESOLUTION NO. 2026-XX

A RESOLUTION APPROVING A SUPPLEMENTAL FUND
APPROPRIATION FOR CIP C2506 VALLEY VIEW PARK WATER

FEATURE IMPROVEMENTS, AND AUTHORIZING THE CITY MANAGER
TO EXECUTE CONTRACT AMENDMENT #1 TO THE GENERAL

SERVICES AGREEMENT WITH KNORR SYSTEMS INTERNATIONAL

WHEREAS, on March 28th, 2025, the City of Hollister (City) entered into a General Services Agreement with Knorr Systems International (KSI) to provide construction services for CIP C2506 Valley View Park Water Feature Improvement project; and

WHEREAS, the Resolution of Formation of Community Facilities District (CFD) 4 identifies Parks in the List of Authorized Services and allows for improvement projects to be paid directly by revenue received from the levy of the special taxes ; and

WHEREAS, CIP C2506 extends the useful life, improves efficiency, and materially upgrades the Valley View Park Water Splash Pad; and

WHEREAS, a supplemental appropriation to Fund 712 establishes sufficient expenditure authority to pay construction service costs related to Contract Amendment #1 with KSI.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hollister does hereby resolve as follows:

SECTION 1
The City Council hereby approves the appropriation of $30,100 to Fund 712, utilizing available fund balance, for the payment of construction service costs associated with Contract Amendment #1 with Knorr Systems International .

SECTION 2
The City Council hereby authorizes the City Manager to execute Contract Amendment #1 to the General Services Agreement with Knorr Systems International to provide construction services for the completion of CIP C2506.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 17, 2026, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Resolution No. 2026-XX

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Jennifer P. Thompson, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-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 reg ular meeting held on February 17, 2026 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 February 17, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

1 EXHBIT E – ADDITIONAL SERVICES TO AGREEMENT – SCOPE OF CONTRACT SERVICES – ADDITIONAL; COMPENSATION SCHEDULE

THIS FIRST AMENDMENT TO AGREEMENT is made and entered into this 17th day of February, 2026, by and between the City of Hollister, California, a municipal corporation (“City”), and Knorr Systems, International (“Contractor”).

WHEREAS, City and Contractor previously entered into a General Services Agreement (“Agreement”) to provide contractor services for the Valley View Park Splash Pad Water Treatment Systems Upgrade project, dated March 28, 2025; and

WHEREAS, the Agreement Basic Services include services for replacement of the water treatment system for the splash pad at Valley View Park; and

WHEREAS, it is understood by City and Contractor that it may be necessary for Contractor to perform or secure the performance of services other than Basic Services (“Additional Services”); and

WHEREAS, the Agreement requires City and Contractor to agree in writing to any Additional Services and attach those agreed upon Additional Services to the Agreement as Exhibit E – Scope of Contractor Services – Additional; Compensation Schedule; and

WHEREAS, on November 11, 2025, Contractor provided City with a proposal for Additional Services which includes replacement of the filter recirculation pump, all pump and filter plumbing, backwash valve, installing a signet flow sensor, connecting to BECSys5 controller, and adding a Pulsar Precision 30 feed system (Exhibit E); and

WHEREAS, City and Contractor desire to amend said Agreement to provide for these Additional Services and extend the expiration date of the contract to June 30, 2026.

NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants hereinafter recited, agree as follows:

1. This Exhibit E, “Additional Services to the Agreement – Scope of Contract Services – Additional; Compensation Schedule” is added to the Agreement.

2. Section 5 is hereby amended to read as follows:

“5. Payment of Fees for Services. City agrees to pay Contractor based on a lump sum price for Basic Services satisfactorily performed and for any Additional Services performed. Total fees paid by City to Contractor for Services under the Agreement shall not exceed ONE HUNDRED SEVENTY THOUSAND FIVE HUNDRED Dollars ($170,500), inclusive of Basic Services and Additional Services described in Exhibit E. City agrees to make payment for Services within sixty (60) days of receipt of a detailed invoice from Contractor based on percentage of work completed, including any additional supporting Docusign Envelope ID: 61848DAD-0636-4A20-8DE5-92BE5A2B08A9

2 documentation that City reasonably requests. Contractor shall not submit its invoices to City more frequently than monthly.”

3. Extension of Agreement Term. The term of the Agreement as provided in Section 3 of the Agreement is hereby extended to and including June 30, 2026.

4. Except as herein amended, the Agreement dated March 28, 2025, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this First Amendment to Agreement to be executed on the date first above written.

CITY OF HOLLISTER

BY:

City Manager

ATTEST:

JENNIFER WOODWORTH, CITY CLERK

BY:

City Clerk

APPROVED AS TO FORM:

BY:

City Attorney

CONTRACTOR

BY:

Kim Slick, Sales Project Administrator
Knorr Systems International

Docusign Envelope ID: 61848DAD-0636-4A20-8DE5-92BE5A2B08A9

Proposed To
City of Hollister
Alex Flores
Driftwood Court and Valley View Rd.

Hollister, CA 95023

ESTIMATE
Ship To
Whale Park Splashpad @ Valley View Park
Alex Flores
Driftwood Ct &, Valley View Rd
HOLLISTER, CA 95023
11/11/25
Whale Park: CCH Elite 30 w/installation & Circulation pump replacement w/flowmeter
Date
331689Order #
City of Hollister
Net 30Billing Terms
Courier Service

BEST WAY
Phone:Fax:

Josh LopezConsultant
Kim SlickWQA
Order Description
Scope of Work:

Replace the filter recirculation pump, all pump and filter plumbing, backwash valve, installing a signet flow sensor and connecting to BECSys5 controller, and adding a Pulsar Precision 30 feed system.

Order Items
Unit PriceQuantityDescriptionLine Item Code Item Total
1CCH Elite 30 Feeder OnlyWS-026-00152 780.00 780.00
1Intelliflo XF VSF Variable Speed Ultra High Performance Circulation Pump, 3HP, 230V, 2" X 2", 50/60Hz
CS-007-00456 2,866.00 2,866.00
12" Multi-Port Valve Kit (Slip)FK-007-00002 290.00 290.00 1Low Flow, Polypro, 1/2" To 4" Pipes, Low Flow
Paddlewheel Sensor Blue Collar
CS-018-00220 506.00 506.00
13" Pvc Signet Saddle FittingCP-018-00270 313.00 313.00 1Installation Materials4020 7,072.00 7,072.00
1Technical ServiceKI 16,689.00 16,689.00

Docusign Envelope ID: ABFB94FB-9E2E-4F66-819B-DA485C2BC838Docusign Envelope ID: 61848DAD-0636-4A20-8DE5-92BE5A2B08A9

Proposed To
City of Hollister
Alex Flores
Driftwood Court and Valley View Rd.

Hollister, CA 95023

ESTIMATE
Ship To
Whale Park Splashpad @ Valley View Park
Alex Flores
Driftwood Ct &, Valley View Rd
HOLLISTER, CA 95023
11/11/25
Whale Park: CCH Elite 30 w/installation & Circulation pump replacement w/flowmeter
Date
331689Order #
City of Hollister
Net 30Billing Terms
Courier Service

BEST WAY
Phone:Fax:

Josh LopezConsultant
Kim SlickWQA
Signature Date
Please click link below to digitally accept this prospoal We are pleased to submit the above package for your consideration.

Terms & Conditions:

1. Orders paid by credit card will incur a 3.5% processing fee

2. Payment terms are subject to the credit agreement you have on file with KSI.

3. A deposit may be required to process your order

4. 18% APR is charged on all past due invoices

5. Pricing is valid for 30 days from date of this Estimate, after which is subject to change.

6. If applicable, returns must be pre-approved, shipped prepaid and accompany written RMA.

7. Minimum 20% restocking fee applies to all returns, % is based on actual manufacturer restock fee.

7. Freight cost is an estimate only and actual freight may be different at time of shipping.

8. Order is subject to applicable sales tax to ship point Proposal Acceptance http://remote.ceswaterquality.com/fmi/webd/ces-digisign?script=SigLink&param=digisign&$id=T1JEMzMxNjg5

http://remote.ceswaterquality.com/fmi/webd/ces-digisign?script=SigLink&param=digisign&$id=T1JEMzMxNjg5

Subtotal 28,516.00
Adjustment 0.00
Total 28,516.00
Shipping 458.75
Tax 1,094.01
Grand Total 30,068.76
Payments 0.00

Docusign Envelope ID: ABFB94FB-9E2E-4F66-819B-DA485C2BC838Docusign Envelope ID: 61848DAD-0636-4A20-8DE5-92BE5A2B08A9

• Fiscal Vear: 25-26
Fund Cost Center
712 8050
Summary and Justification:

BUDGETADJUSTMENTREQUESTFORM
Prepared By: Dillon Albert
DH Approval: Charles Wall
Javier Hernande
Account Number Account Title
750050 IMPROVEMENTS
Project Code
C2506-750050
Total:

Date: 1/12/2026
(Round up to the nearest dollar)
Increase Decrease
30,100.00
30,100.00
This budget adjustment establishes sufficient expenditure authority to pay $30,100 in construction service costs related to Contract Amendment #1 for the Valley View Park Water Feature Improvements project (CIP C2506). These costs are an allowable use of CFD special tax revenues under the CFD formation documents but were not fully budgeted in the adopted FY 2025-26 budget due to the unforeseen need for replacement of certain components. The increase in expenditure appropriations will be offset by available CFD fund balance generated from special tax revenues received.

This is a one time adjustment and does not create an ongoing budget impact. *Route to Finance, for review, prior to approvals.

Approvals
FOR FINANCE USE ONLY:

Finance Review: Date: BA Entered By: ----------------------1 City Manager Approval: Date: Date:

City Council Approval: Res. No.: Date Approved: Journal No.

For guidance, reference COH_FIN 001 -Budget Adjustment Policy and Procedure 10/16/2025 Docusign Envelope ID: 7D915E5A-2C2F-43F9-A9C6-4BFC156ADA64 1/23/2026 | 4:52:15 PM PST
1/23/2026 | 4:53:12 PM PST

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # Public Works-2026-09

AGENDA ITEM: A RESOLUTION APPROVING A FIVE-YEAR SERVICE AGREEMENT WITH APGN INC. FOR MAINTENANCE OF AERATION EQUIPMENT AT THE

DOMESTIC WASTEWATER TREATMENT PLANT

DEPARTMENT: Public Works
DEPARTMENT HEAD: Javier Hernandez, Public Works Director STAFF CONTACT: Michael Grzan, Management Analyst

COUNCIL NEXT STEPS: Adopt a resolution authorizing the City Manager to execute a five-year contract, and any related documents or financial obligations, with APGN Inc. for the maintenance and servicing of aeration equipment at the Domestic Wastewater Treatment Plant.

DISCUSSION: The City of Hollister (“City”) owns a Domestic Wastewater Treatment Plant (DWWTP) that treats domestic sewage generated by the City of Hollister, San Juan Bautista, and San Benito County. Proper treatment of this wastewater requires several critical processes, which includes disinfection, and aeration. The aeration process utilizes blowers to introduce air into the wastewater, creating conditions necessary for biological treatment.

The aeration system provides an optimal environment for biomass to develop and multiply, allowing microorganisms to consume biochemical oxygen demand (BOD) present in the waste stream. Aeration also supports the nitrification process, in which ammonia is biologically converted to nitrate, an essential step in meeting Wastewater Discharge Requirements (WDRs).

To ensure the DWWTP operates efficiently and remains in compliance with State WDRs (General Waste Discharge Requirements Order No. R3-2020-0020), the aeration blowers must be routinely inspected and maintained. The blowers installed at the DWWTP were manufactured by APGN Inc., and due to their proprietary design, APGN Inc. is the only qualified firm authorized to provide maintenance, warranty, and inspection services for this equipment. Per Hollister Municipal Code (HMC) §3.06.270 this contract is exempt from competitive bidding due to their unique performance capabilities and therefore is a “Sole Source” service only available from APGN Inc.

“HMC 3.06.270 - Exceptions to the competitive process.

Exceptions to the competitive bidding requirements are goods or services pertaining to, but not limited to, physicians, attorneys, appraisers, architects, engineers, auctioneers, consultants, arbitrators, designers, financial auditors, insurance, copyrighted materials, sole source items, gas, electricity, water, telephones, and cooperative purchasing with other governmental agencies, such as school districts, joint powers authorities, local, county, state or federal agencies, when it is to the advantage of the city to purchase from such other governmental agencies.

"Sole source" describes a product or service available from only one known supplier as the result of unique performance capabilities, manufacturing processes, compatibility requirements, or market conditions. […]”

This contract does not involve any expansion or modification of the DWWTP. It is strictly for ongoing maintenance and servicing of existing aeration equipment.

Staff recommends that the City Council authorize the City Manager to execute a five - year service contract, and any related documents or financial obligations, with APGN Inc. for the maintenance and servicing of aeration equipment at the Domestic Wastewater Treatment Plant.

FISCAL IMPACT: The proposed agreement is for a total amount not-to-exceed $566,125, with annual payments not-to-exceed $113,225 per contract year. Funding for the first year of the agreement ($113,225) is included in the adopted Fiscal Year 2025– 2026 budget. Funding for subsequent years will be incorporated into future annual budgets in accordance with the agreement terms and subject to City Council appropriation.

PREVIOUS COUNCIL OR COMMISSION ACTION: N/A

CEQA: N/A

ATTACHMENTS:

1. 2026 Neuros Blower Contract Resolution

2. Neuros Sole Source Justification Letter

3. Final 2026 Neuros Blower Contract (003)

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

AUTHORIZING THE CITY MANAGER TO EXECUTE A FIVE-YEAR
SERVICE AGREEMENT WITH APGN INC. FOR THE MAINTENANCE OF

AERATION EQUIPMENT AT THE DOMESTIC WASTEWATER

TREATMENT PLANT

WHEREAS, the City of Hollister (“City”) owns a Domestic Wastewater Treatment Plant at 2690 San Juan Hollister Rd; and

WHEREAS, the Domestic Wastewater Treatment Plant requires maintenance, warranty, and inspection service of certain critical components necessary for the treatment of sewage; and

WHEREAS, per Hollister Municipal Code §3.06.270 the City may “Sole Source” services if, due to unique performance capabilities, there is only one known provider of said service; and

WHEREAS, certain aeration equipment is proprietary and APGN Inc. is the only qualified firm authorized to provide maintenance, warranty, and inspection services for this equipment.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HOLLISTER, that the City Council authorizes the City Manager to execute a five-year service contract, and any related documents or financial obligations, with APGN Inc. for the maintenance and servicing of aeration equipment at the Domestic Wastewater Treatment Plant.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 17, 2026, 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

Resolution No. 2026-XX

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-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 February 17, 2026, 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 February 17, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

APG-Neuros Corporation
160, Banker Road, Plattsburgh, NY 12901
Tel.: 518 324-4150 / 1 877 717-4150 Fax: 518 324-4155 Web site: www.apg-neuros.com

February 3rd, 2026.

Javier Hernandez, PE
City of Hollister | Engineering Department
Public Works Director | City Engineer
339 Fifth Street
Hollister, CA 95023
Cel: 831-537-7552
[email protected]

Subject: Sole Source Request – Service and Parts
Reference: 06-0002 Hollister, CA

Dear Javier Hernandez,

The APGN High Efficiency Turbo Blowers installed at the City of Hollister in Hollister, CA are highly engineered pieces of equipment.

These blowers utilize cutting edge technology which requires a specialized service person with extensive training to service and maintain. The components which require this specialized knowledge are the bump foil air bearings, the high-speed permanent magnet motor (22,000 RPM), the back swept forged impeller, the 400 hertz VFD, along with the programming in the PLC. This technology is designed to operate at the highest efficiency and reliability but without proper preventative maintenance perfo rmed by a factory trained service person, efficiency and reliability can be negatively affected.

Given the situation where the need for service is required, a traditional source cannot be used as this service providers do not have the required knowledge, experience, and skill set with the technology, and do not have a reliable and expedient source for repair parts. Therefore APG-Neuros strongly encourages and recommends utilizing APGN factory trained and certified technicians to maintain and service these blowers to ensure long life at peak performance and ensure optimal return on the investment of these blowers.

The parts or components utilized within the APGN Turbo Blower are customized or manufactured by APGN. The expertise required to manufacture the bearing and impeller is only available through APGN. The VFD and PLC operate with APGN designed and proprietary software. Therefore, all replacement parts should only be purchased from APGN for proper operation and control of these Turbo Blowers as no other known source can provide these parts to the required standards.

Sincerely,

Joe Gerardo
Life Cycle Regional Manager
A 1270 Michèle-Bohec, Blainville, QC J7C 5S4 Canada
A 160 Banker Road, Plattsburgh NY 12901 United States
M 951-370-4310
E [email protected]
Joe Gerardo Digitally signed by Joe Gerardo
DN: cn=Joe Gerardo, o=APGN, ou=Life
Cycle Regional Manager,
[email protected], c=US
Date: 2026.02.03 09:08:57 -08'00'

CITY OF HOLLISTER

GENERAL SERVICES AGREEMENT

This services agreement (“Agreement”) is made and entered into effect March 1, 2026 (the “Effective Date”), by and between the City of Hollister (“City”) and APGN Inc. (“Contractor” and together with City, the “Parties”).

1. Contractor Services. Contractor agrees to provide the following services to City (collectively, the “Basic Services”): For Asset Management and Maintenance Services (“Project”), (as further described in Exhibit A to this Agreement), Contractor shall provide additional services related to the Project other than Basic Services (i.e., “Additional Services”) if directed in writing by City to perform specific Additional Services and if sufficient contract funds for Additional Services remain to pay for the directed Additional Services (see Section 5, below). “Services” shall mean Basic and Additional Services. Contractor agrees to perform such Services as expeditiously as is consistent with professional skill and care and the orderly progress of the Services and the Project. All Services performed by the Contractor under this Agreement shall be conducted in a manner consistent with the level of care and skill ordinarily exercised by maintenance professionals specially qualified to provide the services required by the City.

2. Contractor Qualifications. Contractor represents and warrants to City that Contractor, and all of Contractor’s employees, agents or volunteers (the “Contractor Parties”), have in effect and shall maintain in full force throughout the Term of this Agreement all licenses, credentials, permits, and any other qualifications required by law to perform the Services and to fully and faithfully satisfy all of the terms set forth in this Agreement. Contractor and any Contractor Parties performing Services shall be competent to perform those Services.

3. Term. The term for performance of the Services shall begin on March 1, 2026, and shall end on March 1, 2031 (“Term”), except as otherwise stated in Section 4 below. Contractor shall complete the Services within the Term. There shall be no extension of the Term without an amendment signed by all Parties and approved by the City’s governing board. Written notice by the City Manager or designee shall be sufficient to stop further performance of the Services by Contractor or the Contractor Parties.

In the event of early termination, Contractor shall be paid for satisfactory Services performed to the date of termination. Upon payment by City, City shall be under no further obligation to Contractor, monetarily or otherwise, and City may proceed with the work in any manner City deems proper.

4. Termination. Either Party may terminate this Agreement at any time by giving thirty (30) days advance written notice to the other Party. Notwithstanding the foregoing, City may terminate this Agreement at any time by giving written notice to Contractor if (1) Contractor materially breaches any of the terms of this Agreement; (2) any act or omission of Contractor or the Contractor Parties exposes City to potential liability or may cause an increase in City’s insurance premiums; (3) Contractor is adjudged a bankrupt; (4) Contractor makes a general assignment for the benefit of creditors; or (5) a receiver is appointed because of Contractor’s insolvency. Such termination shall be effective immediately upon Contractor’s receipt of the notice.

5. Payment of Fees for Services. City agrees to pay Contractor based on a lump sum price for

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Services satisfactorily performed and listed in Exhibit B. Total fees paid by City to Contractor for Services under the Agreement shall not exceed FIVE HUNDRED SIXTY-SIX THOUSAND ONE HUNDRED TWENTY-FIVE DOLLARS ($566,125.00) for the entirety of the Agreement Term and limited to ONE HUNDRED THIRTEEN THOUSAND TWO HUNDRED TWENTY FIVE DOLLARS ($113,225.00) per contract year as listed in Exhibit B. City agrees to make payment for Services within thirty (30) days of receipt of a detailed invoice from Contractor based on percentage of work completed, including any additional supporting documentation that City reasonably requests.

Contractor shall not submit its invoices to City more frequently than monthly.

6. Indemnity. Contractor shall defend, indemnify, and hold harmless City and its agents, representatives, officers, consultants, employees, and City Council (collectively, the “City Parties”), from and against any and all claims, demands, liabilities, damages, losses, suits and actions, and expenses (including, but not limited to attorney fees and costs including fees of consultants) of any kind, nature and description (collectively, the “Claims”) directly or indirectly arising out of, connected with, or resulting from any act, error, omission, negligence, or willful misconduct of Contractor, the Contractor Parties or their respective agents, subcontractors, employees, material or equipment suppliers, invitees, or licensees in the performance of or failure to perform Contractor’s obligations under this Agreement, including, but not limited to Contractor’s or the Contractor Parties’ use of the site, Contractor’s or the Contractor Parties’ performance of the Services, Contractor’s or the Contractor Parties’ breach of any of the representations or warranties contained in this Agreement, or for injury to or death of persons or damage to property or delay or damage to the City or the City Parties. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity, which would otherwise exist as to a party, person, or entity described in this paragraph. The indemnification provided for in this Section 6 includes, without limitation to the foregoing, claims that may be made against City by any taxing authority asserting that an employer-employee relationship exists by reason of this Agreement, and any claims made against City alleging civil rights violations by Contractor or Contractor Parties under the California Fair Employment and Housing Act (“FEHA”).

7. Equipment and Materials. Contractor at its sole cost and expense shall provide and furnish all tools, labor, materials, equipment, transportation services and any other items (collectively, “Equipment”) which are required or necessary to perform the Services in a manner which is consistent with generally accepted standards of the profession for similar services. Notwithstanding the foregoing, City shall not be responsible for any damages to persons or property as a result of the use, misuse or failure of any Equipment used by Contractor or the Contractor Parties, even if such Equipment is furnished, rented or loaned to Contractor or the Contractor Parties by City. Furthermore, City may reject any Equipment or workmanship that does not conform to the requirements of this Agreement, and Contractor must then promptly remedy or replace it at no additional cost to City and subject to City’s reasonable satisfaction.

8. Insurance. Without in any way limiting Contractor’s liability, or indemnification obligations set forth in Section 6 above, Contractor shall secure and maintain throughout the Term of this Agreement the following insurance: See Exhibit D. Neither Contractor nor any of the Contractor Parties shall commence performing any portion of the Services until all required insurance has been obtained and certificates indicating the required coverages have been delivered to and approved by City. All insurance policies shall include an endorsement stating that City and City Parties are named additional insureds. All of the policies shall be amended to provide that the insurance shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days’ prior written notice has

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been given to City. If such a notice is not given or even if City receives a notice, City may, at its sole option, terminate this Agreement. All insurance policies shall include an endorsement stating that it is primary to any insurance or self-insurance maintained by City and shall waive all rights of subrogation against City and/or the City Parties. A copy of the declarations page of Contractor’s insurance policies shall be attached to this Agreement as proof of insurance.

9. Independent Contractor Status. The Parties agree that Contractor is free from the control and direction of City in connection with Contractor’s performance of the Services. Contractor is hereby retained to provide the specified Services for City, which are outside the usual course of City’s business. Contractor certifies that it is customarily engaged in an independently established trade, occupation, or business to provide the Services required by this Agreement. Contractor understands and agrees that Contractor and the Contractor Parties shall not be considered officers, employees, agents, partners, or joint venturers of City, and are not entitled to benefits of any kind or nature normally provided to employees of City and/or to which City’s employees are normally entitled.

10. Taxes. All payments made by City to Contractor pursuant to this Agreement shall be reported to the applicable federal and state taxing authorities as required. City will not withhold any money from fees payable to Contractor, including FICA (social security), state or federal unemployment insurance contributions, or state or federal income tax or disability insurance. Contractor shall assume full responsibility for payment of all federal, state and local taxes or contributions, including unemployment insurance, social security and income taxes with respect to Contractor and the Contractor Parties and otherwise in connection with this Agreement.

11. Confidential Information. All City information disclosed to Contractor during the course of performance of services under this Agreement shall be treated as confidential and shall not be disclosed to any other persons or parties except as authorized by City, or required by law.

12. Designation of Key Personnel. The individuals specified in the attached Exhibit C shall provide the Services set forth herein and shall be the persons primarily in charge of such work. No other individuals may provide services for Contractor on the this project without first obtaining the written approval of the City Manager.

13. Assignment/Successors and Assigns. Contractor shall not assign or transfer by operation of law, or otherwise, any or all of its rights, burdens, duties or obligations under this Agreement without the prior written consent of City. Subject to the foregoing, this Agreement shall be binding on the heirs, executors, administrators, successors, and assigns of the respective Parties.

14. Conflict of Interest. Contractor warrants that neither Contractor, nor any of its employees, agents or subcontractors, has an actual or potential conflict of interest with the City in respect to the Services to be performed under this Agreement for the City. None of such individuals shall, during the term of this Agreement, acquire any interest which conflicts, or could potentially conflict, in any manner with the interests of the City.

15. Notice to Proceed; Progress; Completion. Upon execution of this Agreement by the parties, and approval of it by the City Council, City shall give Contractor written notice to proceed with the

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Services. Such notice may authorize Contractor to render all the Services contemplated herein, or such portions or phases as may be directed by the City. In the latter event, City shall, in its sole discretion, issue subsequent notices from time to time regarding further portions or phases of the Services. Upon receipt of such notices, Contractor shall diligently proceed with the Services authorized and complete such Services within the agreed time period.

16. Severability. If any provision of this Agreement shall be held invalid or unenforceable by a court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Agreement.

17. Amendments. The terms of this Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written agreement signed by both Parties and approved by the City Council.

18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding its choice of law rules. Any action or proceeding seeking any relief under or with respect to this Agreement shall be brought solely in the Superior Court of the State of California for the County of San Benito subject to transfer of venue under applicable State law, provided nothing in this Agreement shall constitute a waiver of immunity to suit by the City.

19. Written Notice. Written notice shall be deemed to have been duly served if delivered in person to Contractor at the address located next to the party signatures below, or if delivered at or sent by registered or certified or overnight mail to the last business address known by the person who sends the notice.

20. Compliance with Law. Each and every provision of law and clause required by law to be inserted into this Agreement shall be deemed to be inserted herein and this Agreement shall be read and enforced as though it were included therein. Contractor shall comply with all applicable federal, state, and local laws, rules, regulations and ordinances. Contractor agrees that it shall comply with all legal requirements for the performance of duties under this Agreement and that failure to do so shall constitute material breach.

21. Non-Discrimination. There shall be no unlawful discrimination in the contracting of persons under this Agreement because of race, color, national origin, age, ancestry, religion, sex, or sexual orientation of such persons.

22. Attorneys’ Fees. If a party to this Agreement commences a legal action against the other party to enforce a provision of this Agreement or seek damages related to the services provided under this Agreement, the prevailing party in the legal action will be entitled to recover from the other party, all of its reasonable litigation expense, costs, and fees actually incurred, including reasonable attorneys’ and experts’ fees.

23. Liability of City. Notwithstanding anything stated herein to the contrary, City shall not be liable for any special, consequential, indirect or incidental damages, including but not limited to lost profits in connection with this Agreement.

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24. Time. Time is of the essence for performance of the Services under this Agreement.

25. Waiver. No delay or omission by either Party in exercising any right under this Agreement shall operate as a waiver of that or any other right and no single or partial exercise of any right shall preclude either Party from any or further exercise of any right or remedy.

26. Reports. Contractor shall maintain complete and accurate records with respect to the Services rendered and the costs incurred under this Agreement, including records with respect to any payments to employees and subcontractors. All such records shall be prepared in accordance with generally accepted accounting procedures. Upon request, Contractor shall make such records available to City for the purpose of auditing and copying such records for a period of five years from the date of final payment under this Agreement.

27. Ownership of Documents. All plans, studies, drawings, calculations, reports, specifications, estimates, and other documents or any other works of authorship fixed in any tangible medium of expression, including but not limited to physical drawings, data magnetically or otherwise recorded on computer disks, or other writings prepared or caused to be prepared by the Contractor under this Agreement (“Documents”) shall be and shall remain the property of the City for all purposes, not only as they relate or may relate to the Services but as they relate or may relate to any other project.

Contractor will provide the City with a complete set of Documents, and will retain, on the City's behalf, the originals or reproducible copies of all Documents, however stored, in the Contractor’s files for a period of no less than fifteen (15) years. Contractor shall promptly make available to City any original documents it has retained under this Agreement upon request by the City.

28. Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for the City to copy, use, modify, reuse or sublicense any and all copyrights, designs and other intellectual property embodied in the Documents (“Intellectual Property”) not only as they relate or may relate to the Services but as they relate or may relate to other projects. The Contractor shall require any and all subcontractors and subconsultants to agree in writing that the City is granted a similar non-exclusive and perpetual license for the Intellectual Property of such subcontractors or consultants provided to Contractor as part of the Services. The compensation for the Services includes compensation not only for any such use of the Intellectual Property in connection with the Services, but also for any re-use of the Intellectual Property by the City in relation to other projects. Contractor represents and warrants that Contractor has the legal right to license the Intellectual Property that Contractor, its subcontractors, or its subconsultants prepare or cause to be prepared under this Agreement.

29. Entire Agreement. This Agreement is intended by the Parties as the final expression of their agreement with respect to such terms as are included herein and as the complete and exclusive statement of its terms and may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement, nor explained or supplemented by evidence of consistent additional terms.

30 Ambiguity. The Parties to this Agreement, hereby represent that the language contained herein is to be construed as jointly proposed and jointly accepted, and in the event of any subsequent determination of ambiguity, all Parties shall be treated as equally responsible for such ambiguity.

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31. Execution of Other Documents. The Parties to this Agreement shall cooperate fully in the execution of any and all other documents and in the completion of any additional actions that may be necessary or appropriate to give full force and effect to the terms and intent of this Agreement.

32. Execution in Counterparts. This Agreement may be executed in counterparts such that the signatures may appear on separate signature pages. A copy, facsimile, or an original, with all signatures appended together, shall be deemed a fully executed agreement.

33. Warranty of Authority. The persons who have signed this Agreement warrant that they are legally authorized to do so on behalf of the respective parties, and by their signatures, bind the respective parties to this Agreement.

34. Mediation. A party to this Agreement shall, as a condition precedent to initiating any litigation against the other party, demand mediation of any dispute. The parties shall endeavor to include any third-party claimant in the mediation. The parties shall select a mediator and schedule the mediation within thirty (30) days of the initial demand for mediation. If the parties cannot agree on a mediator, the mediator shall be appointed by JAMS. The parties to the mediation, including the parties to this Agreement, shall pay equal shares of the mediator’s fees. Each party shall bear its own attorney’s fees related to the mediation.

35. Forms. Prior to performing any Services, Contractor shall prepare, execute, and submit all forms that may be required by law for this Agreement, including but not limited to an Iran Contract Act certification (Public Contract Code §2204). If a form is necessary, Contractor shall use the City’s versions of these forms, which the City shall make available upon request.

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* * * * * * * * * * * * * * * * * * * *

CITY OF HOLLISTER: CONTRACTOR:

By: By:

Name: Name:

Title: Title:

Address for City Notices: Address for Contractor Notices:
1321 South St

1270, Michèle-Bohec,
Hollister, CA 95023 Blainville, Québec J7C 5S4

Josée Chiurillo
Aftermarket Director
Josee Chiurillo Digitally signed by Josee
Chiurillo
Date: 2026.02.10 14:36:53
-05'00'

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EXHIBIT A

SCOPE OF SERVICES

1. Equipment Warranty Maintenance and Coverage

APGN Inc. shall maintain manufacturer warranties for the City’s turbo blower equipment, including the repair or replacement of major components that become inoperable during the warranty period. This scope applies to five (5) NX100-C050 Turbo Blowers and four (4) NX150-C080 Turbo Blowers and includes the following components:

a. Blower Core Components

1. High-efficiency impeller

2. Permanent magnet synchronous motor

3. Bump-foil air bearings

4. Diffuser fan

5. Motor casing

b. Electrical and Control Components

1. Variable Speed Drive (VSD) / Inverter

2. Input line reactor

3. Sine-wave (sinus) filter

4. Blower local control panel and associated PLC components

5. HMI touch screen components

c. Mechanical and Monitoring Components

1. Internal vibration and absorption mounts

2. Vibration sensors and monitoring equipment

3. Discharge expander (discharge cone)

4. Blow-off bypass valve and associated solenoid components

5. Blow-off silencer

6. Sound-attenuating materials within the enclosure

7. Check valve seals and discs

8. Stop valve body seals and discs

9. External expansion joints

2. Remote Monitoring System

APGN Inc. shall provide a Remote Monitoring System, along with associated technical support services, subject to the City’s policies regarding cybersecurity, and network access.

3. Extended Preventative Routine Maintenance (EPRM) Program

APGN Inc. shall provide an Extended Preventative Routine Maintenance (EPRM) Program for the covered turbo blowers, which shall include the following services:

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a. Two (2) on-site maintenance and inspection visits performed by a manufacturer-certified Field Service Technician.
b. Refresher training for City staff on blower operation and maintenance. c. Inspection and cleaning or replacement of internal turbo blower air intake filters. d. Inspection and cleaning of dirt and debris within the blower enclosure, including sealing as required.
e. Bump-start alignment of core bearings and verification of bearing health for continued operation.
f. Verification that PLC and HMI software is operational and appropriate for blower control functions
g. Inspection for loose electrical and mechanical connections, with tightening performed as necessary.
h. Verification of sensor functionality and replacement of sensors as required. i. Review and adjustment of control parameters to ensure proper adaptation to the operating environment.
j. Inspection of paint and fasteners, including touch-up painting or fastener replacement as required. Touch-up painting shall not apply to areas exceeding the size of a U.S. quarter-dollar coin.
k. Remote technical support provided by telephone as needed, with a response time within one (1) hour.
l. Up to one hundred fifty (150) hours of technical support during the service term. m. Reporting on blower operation and diagnostics for operating units, when available through remote monitoring capabilities.

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EXHIBIT B

COMPENSATION

City shall pay Contractor a not-to-exceed amount for services under the Agreement of Five Hundred Sixty-Six Thousand One Hundred Twenty-Five Dollars ($566,125.000) for the entirety of the term for the performance of services. This total amount is limited to One Hundred Thirteen Thousand Two Hundred Twenty-Five Dollars ($113,225.00) per contract year, as listed below::

• Term Year One: $113,225.00
o March 1, 2026 to March 1, 2027
• Term Year Two: $113,225.00
o March 1, 2027 to March 1, 2028
• Term Year Three: $113,225.00
o March 1, 2028 to March 1, 2029
• Term Year Four: $113,225.00
o March 1, 2029 to March 1, 2030
• Term Year Five: $113,225.00
o March 1, 2030 to March 1, 2031

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EXHIBIT C

PROJECT STAFF

NAME TITLE HOURLY RATE
(Prevailing Wage)

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EXHIBIT D

INSURANCE REQUIREMENTS

Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Contractor, his agents, representatives, employees, or subcontractors.

MINIMUM SCOPE AND LIMIT OF INSURANCE

Coverage shall be at least as broad as:

1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury, and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

2. Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per accident for bodily injury and property damage.

3. Workers’ Compensation: As required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.

4. Professional Liability (Errors and Omissions): Insurance appropriate to the Contractor’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. (If applicable)
If the Contractor maintains broader coverage and/or higher limits than the minimums shown above, the Cityrequires and shall be entitled to the broader coverage and/or the higher limits maintained by the contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.

Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:

Additional Insured Status
The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as ISO Form CG 20

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10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used).

Primary Coverage
For any claims related to this contract, the Contractor’s insurance coverage shall be primary and non-contributory and at least as broad as ISO CG 20 01 04 13 with respect to the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Contractor’s insurance and shall not contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies.

Umbrella or Excess Policy
The Contractor may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Contractor’s primary and excess liability policies are exhausted.

Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City.

Waiver of Subrogation
Contractor hereby grants to City a waiver of any right to subrogation which any insurer of said Contractor may acquire against the City by virtue of the payment of any loss under such insurance. Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.

Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. The City may require the Contractor to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City. The CGL and any policies, including Excess liability policies, may not be subject to a self-insured retention (SIR) or deductible that exceeds $250,000 unless approved in writing by City. Any and all deductibles and SIRs shall be the sole responsibility of Contractor or subcontractor who procured such insurance and shall not apply to the Indemnified Additional Insured Parties. City may deduct from any amounts otherwise due Contractor to fund the SIR/deductible. Policies shall NOT

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contain any self-insured retention (SIR) provision that limits the satisfaction of the SIR to the named policy holder. The policy must also provide that defense costs, including the Allocated Loss Adjustment Expenses, will satisfy the SIR or deductible. City reserves the right to obtain a copy of any policies and endorsements for verification.

Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City.

Claims Made Policies (note – should be applicable only to professional liability, see below)
If any of the required policies provide claims-made coverage:

1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

3. If coverage is canceled or non-renewed and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Contractor must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work.

Verification of Coverage
Contractor shall furnish the City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and endorsements and copies of the Declarations & Endorsements pages are to be received and approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # Public Works-2026-08

AGENDA ITEM: A RESOLUTION AUTHORIZING THE PURCHASE AND
INSTALLATION OF TWO (2) 30HP CHOPPER PUMPS

DEPARTMENT: Public Works
DEPARTMENT HEAD: Javier Hernandez, Public Works Director STAFF CONTACT: Michael Grzan, Management Analyst

COUNCIL NEXT STEPS: Adopt a resolution authorizing the City Manager to execute a Task Authorization with Veolia Water West Operating Services, Inc. for the purchase and installation of (2) 30hp Chopper Pumps

DISCUSSION: The City of Hollister (“City”) owns and operates a Domestic Wastewater Treatment Plant (DWWTP) that provides wastewater treatment services for the City of Hollister, the City of San Juan Bautista, and San Benito County.

As part of the treatment process, the DWWTP utilizes chopper pumps that are designed to grind solids and debris present in the wastewater stream and convey the material downstream for further treatment. These pump s play a critical role in protecting downstream equipment and ensuring the treatment process is reliable and efficient.

Over time, two (2) of the existing chopper pumps have experienced a loss of partial functionality, which has reduced their operational efficiency. Continued operation of the pumps in their current condition may impair proper treatment and potentially cause additional damage to other critical components of the DWWTP.

To restore full operational efficiency and protect critical equipment, staff recommends replacing the two (2) affected pumps with new 30-horsepower chopper pumps.

According to Hollister Municipal Code 3.06.270 the City may “Sole Source” equipment if due to compatibility requirements there is only one known provider of the equipment.

“HMC 3.06.270 - Exceptions to the competitive process.

Exceptions to the competitive bidding requirements are goods or services pertaining to, but not limited to, physicians, attorneys, appraisers, architects, engineers, auctioneers, consultants, arbitrators, designers, financial auditors, insurance, copyrighted materials, sole source items, gas, electricity, water, telephones, and cooperative purchasing with other governmental agencies, such as school districts, joint powers authorities, local, county, state or federal agencies, when it is to the advantage of the city to purchase from such other governmental agencies.

"Sole source" describes a product or service available from only one known supplier as the result of unique performance capabilities, manufacturing processes, compatibility requirements, or market conditions.”

Currently, the failing equipment are specialized 30hp Vaughn Model SP10R -160 Belt Driven Self-Priming Chopper pumps. The proposed replacements are in -kind, matching the existing equipment specifications and functionality, and therefore are only available directly from the manufacturer Vaughn Company Inc.

Veolia Water West Operating Services, Inc. (“Veolia”), the City’s contracted plant operator, will provide the equipment and perform the installation.

Staff is requesting City Council to authorize the City Manager to execute a Task Authorization with Veolia for the purchase and installation of (2) 30hp Chopper Pumps.

FISCAL IMPACT: This expense will be funded through Fund 660.

PREVIOUS COUNCIL OR COMMISSION ACTION: N/A

CEQA: N/A

ATTACHMENTS:

1. Resolution to purchase and install two (2) 30hp chopper pumps

2. 015_Public Works_Budget Adjustment Request

3. Task Authorization for Vaughn Model SP10R-160 Belt Driven Self-Priming Chopper 30 HP

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

AUTHORIZING THE CITY MANAGER TO EXECUTE A TASK

AUTHORIZATION WITH VEOLIA WATER WEST OPERATING
SERVICES, INC. FOR THE PURCHASE AND INSTALLATION OF TWO (2) 30HP CHOPPER PUMPS

WHEREAS, the City of Hollister (“City”) owns a Domestic Wastewater Treatment Plant at 2690 San Juan Hollister Rd which is operated under an agreement by Veolia Water West Operating Services, Inc.; and

WHEREAS, the Domestic Wastewater Treatment Plant requires maintenance of critical equipment necessary for the treatment of sewage; and

WHEREAS, certain critical equipment has, over time, experienced a loss of partial functionality reducing their operational efficiency; and

WHEREAS, per Hollister Municipal Code §3.06.270 the City may “Sole Source” equipment if, due to compatibility requirements, there is only one known provider of the equipment; and

WHEREAS, the proposed replacements are in-kind, matching the existing equipment specifications and functionality, and therefore are only available directly from one manufacturer; and

WHEREAS, sufficient funds are available in Fund 660, and a budget appropriation in the amount of $135,434 is required to fund the purchase and installation of the chopper pumps.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HOLLISTER, that the City Council authorizes the City Manager to execute a Task Authorization with Veolia Water West Operating Services, Inc. for the purchase and installation of two (2) 30hp Chopper Pumps and approves a budget appropriation in the amount of $135,434 from available fund balance in Fund 660 for this purpose.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 17, 2026, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Resolution No. 2026-XX

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Jennifer P. Thompson, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-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 February 17, 2026 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 February 17, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

BUDGET ADJUSTMENT/APPROPRIATION REQUEST FORM
Fiscal Year: FY2025-2026 Prepared By:Michael Grzan Date:2/2/2026 DH Approval:

Fund Cost Center Account Number Account Title Project Code Increase Decrease 660 4990 750070 Machinery & Equipment 135,434.00
Total:135,434.00 -
Summary and Justification:

Date: BA Entered By:

Date:Date:

Res. No.:Date Approved: Journal No.

FOR FINANCE USE ONLY:

Approvals
(Round up to the nearest dollar)
*Route to Finance, for review, prior to approvals.

Finance Review:

City Manager Rev/Approval:

City Council Approval:

Staff is seeking authorization to purchase two (2) 30hp Chopper Pumps in order to replace two (2) existing damaged Chopper Pumps. This would be accomplished by a Task Authorization with Veolia Water West Operating Services, Inc., whom through the new equipment would be purchased, and installed. This increase will be offset by using available fund balance.

For guidance, reference COH_FIN 001 - Budget Adjustment Policy and Procedure 10/16/2025 Docusign Envelope ID: 691539E9-F452-4D4E-A91D-1A259D0C1161 2/9/2026 | 12:24:40 PM PST
2/9/2026 | 12:27:16 PM PST
2/9/2026 | 10:36:03 PM PST

CITY OF HOLLISTER CA

REPAIR / REPLACEMENT REQUEST
Task # 62- Vaughn Model SP10R-160 Belt Driven Self-Priming Chopper 30 HP (Rockwell Solutions) DATE:January 16, 2026
TO:Javier Hernandez / Public Works Director
FROM:Troy McCoy, Regional VP Operations
SUBJECT:Task Authorization for Vaughn Model SP10R-160 Belt Driven Self-Priming Chopper 30 HP Scope / Justification:

This Task Authorization is for the emergency purchase of two 30hp Vaughan chopper pump for the influent pump station. There is an urgent need to replace the three existing influent pumps at the Hollister Water Reclamation Plant's Influent Pump Station, and one pump was already replaced by Task Authorization 61. The remaining existing pumps are currently in an emergency state, with their impellers severely worn due to the high volume of trash and rags in the inflow, which they are not designed to handle. Additional replacement pumps are required to manage the newly acquired flow and effectively handle the excessive trash and rags. Currently, Veolia has installed a temporary, rented bar screen as an interim solution, but a permanent fix is necessary. To address these issues, two 30hp Vaughan chopper pump Model SP10R-160 are required to be purchased as soon as possible. The cost of these replacements is $135,433.20. The lead time is 6-8 weeks and will be installed by our staff. This will allow for Veolia to stop renting certain equipment included in the short-term solution.

The City hereby authorizes these services and agrees to reimburse Veolia the amount set forth below.

This Task Authorization is executed by the City of Hollister, CA (the "City") and Veolia Water West Operating Services, Inc. ("Veolia") as of the last date set forth below to authorize Veolia to take the actions and deliver the services described above.

This Task Authorization is governed by that certain Agreement for Operations and Maintenance Services, dated as of August 3, 2010 (as amended, the “Agreement”), by and between the City and Veolia. All capitalized terms used but not otherwise defined in this Task Authorization shall have the meaning ascribed to such terms in the Agreement.

This Task Authorization sets forth the entire agreement between the City and Veolia with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. Except as expressly modified or amended herein, all the terms and conditions set forth in the Agreement remain unchanged, in full force and effect, and are incorporated by reference. In the event of a conflict between the provisions of the Agreement and this Task Authorization, the provisions of this Task Authorization shall govern and control. This Task Authorization may be executed in multiple counterparts, each of which is deemed an original but together constitute one and the same instrument, and a signature delivered by email or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signature. The individuals executing this Task Authorization represent and warrant that they have the right, power, legal capacity, and authority to enter into this Task Authorization on behalf of the respective legal entities of the City and Veolia. This Task Authorization shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

Qty Description cost unit Tax Shipping Fee Ext. Total
2 Vaughan Model SP10R-160
Belt-Driven Self-Priming Chopper Pump 3200
GPM @23 FT - 30 HP
($58,884.00) ea ($117,768.00)
Total ($117,768.00)
Sub Total ($117,768.00)
OH&P (15%)($17,665.20)
Total ($135,433.20)
Submitted By:_____________________________1/16/2026 Total Cost of Repair / Replacement Troy McCoy, Regional VP Operations Date Actual Total 15/16 Difference Approved by:_______________________________________
Javier Hernandez / Public Works Director Date
Approved by:_______________________________________
Jim Pia (Interim) / City Manager Date

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # Public Works-2026-000

AGENDA ITEM: WATER RATE STUDY PUBLIC HEARING AND ADJUSTMENTS TO

WATER RATES

DEPARTMENT: City Manager
DEPARTMENT HEAD: Ana Cortez, City Manager
STAFF CONTACT: Javier Hernandez, Public Works Director

COUNCIL NEXT STEPS:

1. Continue water rate adjustments discussion; and

2. If desired, reopen the Proposition 218 public hearing of January 17, 2026 ; and

3. Adopt a resolution approving water rate adjustments.

DISCUSSION:

Over the past several years, the cost of operating and maintaining the City’s water system and delivering safe, potable water to customers has increased significantly.

Despite these rising costs, it has been more than twelve years since the City completed a comprehensive water rate study and eight years since the last rate adjustment.

The City of Hollister is subject to Proposition 218, which requires that water rates be set at no more than the amount necessary to recover the cost of providing service.

Proposition 218 also has strict noticing requirements. On December 3, 2025, more than 10,000 notices were distributed to ensure all affected parcels and customer addresses were properly notified of the proposed increase.

Under state law, any City customer or property owner subject to the proposed rate increases may submit a written protest. The notice identified January 20, 2026, as the date of the public hearing. Following the public hearing, the City Council continued the item to the February 17, 2026 City Council meeting. At that meeting, the City Council may vote to reopen the public hearing. For a majority protest to occur, the City Clerk must receive written protests from most affected parcels, totaling 3,644 accounts.

During the January 20, 2026 Proposition 218 public hearing 281 valid protests were certified by the City Clerk. Protest tabulation results will be presented at the public hearing.

Enterprise Operation: Water Purchasing and Distribution

The City’s water system delivers reliable, safe drinking water to approximately 7,500 customer accounts. To accomplish this, the city maintains five groundwater wells, purchases water from San Benito County Water District, contracts Sunnyslope Water District for water treatment, and operates approximately 260 miles of water mains throughout the community.

Rate Calculations and Study Findings

Accurate water rates are essential to fund the operation and maintenance of the City’s water enterprise and to generate sufficient revenue for necessary Capital Improvement Projects (CIPs). Water rates are designed to recover costs associated with:

 Personnel
 Operations and Maintenance
 Capital Investments
 Administrative Costs
 Reserves

On October 20, 2025, Raftelis Financial Consultants, Inc. (RFC) presented a comprehensive water rate study to the City Council. The study recommended phased rate increases over a five-year period beginning in 2026.

Rate Increase: Alternative 2

Following the presentation and discussion at the October meeting, Council directed staff to move forward with the required Proposition 218 process and schedule a public hearing using the rate presented in Alternative 2 from the discussion. Alternative 2 provides an approximate 83% initial increase, while Alternative 1 would have been approximately 95% initial increase for the average user.

Water Rate Adjustment Justification

Water rates are calculated based on the above-mentioned cost components and are not arbitrary. By analyzing these specific and measurable expenditures, the study ensures rates are structured to recover only the revenue necessary to sustainably operate, maintain, and improve the City’s water system in compliance with legal and financial requirements.

 Personnel
Personnel costs have been significantly impacted by CalPERS itemized unfunded liabilities and labor contract obligations.

 Operations & Maintenance
Water utilities commonly adopt annual Customer Price Index (CPI) adjustments to accommodate inflationary cost increases for personnel, operations and maintenance. The City has not adopted such policy, so rates have not reflected inflation since the last increase in 2018.

The San Benito County Water District (SBCWD) owns and operates water infrastructure, including two surface water treatment plants in the Hollister urban area. SBCWD sells water to Sunnyslope Water District and the City of Hollister.

As a California special district and water purveyor, SBCWD sets rates to ensure the long-term sustainability of its operations. These wholesale water costs are invoiced to the City and are paid through revenues collected from utility

customers.

A second and equally important cost is associated with the City’s c ontract with Sunnyslope Water District for water treatment. Sunnyslope’s fees are based on cost recovery and charged to the City of Hollister.

 Capital Infrastructure Needs
Capital investment is a critical and costly component of maintaining a safe and reliable water system. While the City does not own a water treatment facility, it is responsible for maintaining a complex and aging water distribution network.

Approximately eight years ago, the City identified more than:

 60,000 linear feet of small-diameter cast iron water mains, and  17,000 linear feet of large-diameter cast iron water mains that require replacement.
 Additional sections of aging and undersized mains no longer meet current performance standards.

Several portions of the system consist of narrow pipelines and deteriorating cast iron mains, contributing to:

 Low system pressures
 Excessive water velocities
 Fire flow capacity below 75–80% of required standards

These conditions indicate diminished hydraulic capacity and internal pipe deterioration.

Deferred maintenance due to limited financial resources has increased the risk of emergency repairs. Emergency repairs are typically more expensive and disruptive than planned capital improvements because they often require after - hours labor, temporary pavement restoration, traffic control measures, and service interruptions.

 Administrative Costs
The City provides support to all utilities. This is reflected by financial/accounting support, human resources administration, governance and strategic management. The City has not had a systematic way to recover these costs from the utility. Previous audits found that a cost allocation schedule was imperative.

In 2026, we will apply this schedule to accurately recover costs and to address findings.

 Financial Policy and Reserves
City fiscal policy requires that Water Utility reserves equal approximately 20% of operating expenses. Current water rates do not generate sufficient revenue to meet this reserve target.

Community Concerns and Assistance Options

The City Council has expressed concern regarding the impact of a substantial rate increase on low-income households. Alternative 2 reflects an initial 83% increase over current rates.

To help mitigate this impact, the City may consider expanding its existing Low-Income Senior Citizen Discount Program. The current program provides a 25% discount on the first tier of water service to qualifying seniors. An expanded program could extend eligibility to households that demonstrate participation in PG&E’s CARE (California Alternate Rates for Energy) program, thereby assisting qualifying low-income families and individuals.

Rate Structure Concerns
The City Manager would like to conduct an in-house analysis of:

1. How to implement an equitable industrial, commercial, residential, low-income water rate structure.

2. Personnel, operations, and administrative costs and tracking mechanisms.

3. Water prices and the rate structure of San Benito County Water District and Sunnyslope Water District.

4. Redesigning water bill to clearly show costs associated with SBCWD and Sunnyslope Water District services.

FISCAL IMPACT:

The Water fund had a 1.5M deficit in FY24-25. This year, staff forecast a 1.8M deficit. This structural deficit requires a careful examination of expenses. Alternative 2 introduces an 83% increase in water rates over five years.

Adoption of a Bridge Rate Adjustment (BRA), based on inflation rate, may also be considered. The aggregate Consumer Price Index for 2023-2025 is 10.3%. The Council may consider a 10.3% increase in FY25-26 and future increases that will be proposed no later than December 2026.

Any rate adjustment will be effective on the next feasible water billing cycle.

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).

ATTACHMENTS:

1. Resolution

2. Water Rate Study Presentation of February 17, 2026

3. Proposition 218 Notice

4. Proposition 218 Presentation of January 20, 2026

5. City Council Report of October 20, 2025

6. City Council Report of January 20, 2026

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING CITY WATER RATES AND FINDING THE RATES WILL

NOT EXCEED THE ESTIMATED AMOUNT NECESSARY TO FUND THE

OPERATION OF THE CITY WATER SYSTEM

WHEREAS, pursuant to the Hollister Municipal Code Section 13.08.180, water rates may be set and modified by resolution of the City Council; and

WHEREAS, it is the desire of the City Council to maintain flexibility to best meet the needs of the City and water consumers; and

WHEREAS, proposed water rate changes were presented to Council at its October 20, 2025, meeting and again at the Council Public Hearing on January 20, 2026, following the Proposition 218 Notice process; and

WHEREAS, the rate increase will begin on March 16, 2026; and

WHEREAS, the proposed water rate structure includes a fixed charge and a volumetric rate, with the Volumetric Charge including four customer classes - (1) Single Family Residential; (2) Multi-Family Residential; (3) Commercial; and (4) Landscape; and

WHEREAS, the Monthly Service Charge is a fixed charge established on the basis of the size of the water meter (in inches) serving a property and is calculated to recover a percentage of the water utility’s annual fixed costs of providing wa ter service, such as utilities, equipment, materials, billing, collections, customer service, meter reading, and meter maintenance; and

WHEREAS, the proposed water rates include revenue adjustments over the five-year rate-setting period to make sure the W ater Operating Fund has sufficient funds to cover annual expenses and to build reserves to target levels by the end of the rate -setting period, in the Year 2030; and

WHEREAS, the proposed water rates enable the City to increase water revenues, to fund expected operations, maintenance, and CIP expenditures, and maintain a sufficient Reserve Fund balance; and

WHEREAS, a public notice concerning said rate changes was duly mailed to residents in accordance with Proposition 218 noticing requirements on December 3, 2025, and a duly noticed public hearing concerning said rate adjustments was conducted by the City Council on January 20, 2026; and

WHEREAS, the public hearing concerning said rate adjustments was con tinued by the City Council to February 17, 2026; and

Resolution No. 2026-XX

WHEREAS, the City duly gave notice of the period and means for submitting written objections, and the City Council has determined that, pursuant to Proposition 218, a majority protest does not exist and the City Council may therefore proceed to set the water service rates; and

WHEREAS, the City Council finds that the proposed water rates do not exceed the reasonable and proportional costs of providing services to the ratepayers and the various categories of ratepayers.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Hollister as follows:

SECTION 1. RECITALS. The above-stated recitals are true and correct and represent the findings of the City Council.

SECTION 2. RATES. The City Council hereby adopts the following rates for water service, beginning on March 16, 2026:

Resolution No. 2026-XX

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 17, 2026, 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 Jennifer P. Thompson, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-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 February 17, 2026 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 February 17, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

City Council Selected Alternative 2
•Revenue increases do not exactly equate to customer bill impacts 1 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
0%15%20%65%75%
Loan $7M Note the anticipated $7M Loan from the Capacity Fee Fund

First Year Bill Impacts
2 83%

Five Year Rate Schedule
3 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 127 of 221

www.raftelis.com
PROPOSITION 218 NOTICE

PUBLIC HEARING FOR WATER RATES

Notice is hereby given to consider proposed increases to the City of Hollister’s water rates and charges

January 20, 2026, 6:30 PM at 375 Fifth Street, Hollister, CA 95023

Proposed rate increases will be effective for services provided on or after FEBRUARY 16, 2026, if approved by City Council.

Background:

The City of Hollister (City) is subject to Proposition 218 and required by law to charge its customers only what is necessary to provide water services. The City’s water system reliably delivers safe drinking water to more than 7,500 customer accounts. To do this, the City maintains five groundwater wells, manages two water treatment plants in partnership with other utilities, and operates 260 miles of water mains.

The City has not increased its water rates since 2018. Inflation has risen 25% since then, substantially increasing the cost of City water infrastructure maintenance, treatment materials, and purchased water.

Currently, the City maintains the lowest water rates among eight neighboring communities. The City is proposing increased water rates to ensure continued investment in the water infrastructure that serves our community, to cover necessary water purchases, and deliver water you can trust.

About the Proposed Changes:

The City’s water fund is currently operating at a deficit, which poses challenges for the water system. The City engaged Raftelis, an independent consultant, to conduct a water rate study. The study included a comprehensive review of the City’s projected future revenues, operations and maintenance expenses (O&M), and capital project expenditures (Water Rate Study.) The Water Rate Study recommends rate increases so that the water fund can continue to deliver reliable water service.

Public Hearing and Protest Proceedings:

Pursuant to State law, protests may be provided by any City customer or property owner subject to the proposed rate increases, against any or all of the proposed rate increases described in this Notice.

Written protests may be submitted in person to the City Council at the Public Hearing. They may also be submitted by mail address to:

City of Hollister, City Clerk’s Office
375 Fifth Street, Hollister, CA 95023

www.raftelis.com
Both in person and mailed written protests must be received prior to the close of the Public Hearing at 6:30 PM, JANUARY 20, 2026. Each written protest must clearly identify the property or account, reference the proposed rates, and must include the signature of the property owner or account holder, as applicable. Due to the inability to verify the authenticity of each individual protest, protests received by telephone, electronic mail (e-mail), or via social media sites, including, but not limited to, Facebook or X, shall not be accepted. All interested parties are invited to attend the Public Hearing and present written protests and/or oral comments on the proposed rate changes referenced herein. Only one protest notice is allowed per City water account. Oral comments made at the public hearing will qualify as formal protests of the proposed rate increase if accompanied by a written protest setting forth the required information (as set forth above). If written protests are submitted by a majority of the affected property owners or account holders, the proposed rate increases will not be imposed.

Proposed Water Rates:

The rate study findings resulted in proposed water rate increases. The table below describes fixed rates—a monthly charge based on meter size irrespective of water use—and commodity charges—a charge based on water use. The commodity charge for residential customers follow a tiered structure where the charge increases with water use.

Additional Information
The water utility rate study, which details the water system, its budget, and rate derivation, is available on the City’s website at www.hollister.ca.gov .

For questions, please contact Cassandra Orozco at (831) 636-4370 or [email protected].

www.raftelis.com

PROTEST FORM

To protest the proposed water rate increase, you may complete this Protest Form and mail, or hand deliver to:

City of Hollister, City Clerk
375 Fifth Street
Hollister, CA 95023

To be counted, the City must receive a mailed written protest no later than 5:00 PM JANUARY 20, 2026. Protests may be hand-delivered up until the end of the Public Hearing. Only one protest is allowed per water account.

Parcel APN or Address: ________________________________________________________ ☐ I protest the proposed water rate increase to fund operation, maintenance and replacement costs related to providing water service to properties within the City of Hollister. ☐ I hereby declare under penalty of perjury that I am the owner or account holder of the above- listed property or the authorized representative of the owner of the above listed property.

Please sign here: ___________________________
___________________________
Please print the property owner/account holder name(s) here: __________________________________

CONTENIDO PARA NOTIFICACIÓN DE PROPOSICIÓN 218

AUDIENCIA PUBLICA SOBRE LAS TARIFAS DE AGUA

Se notifica que se considerarán las propuestas de aumentos de las tarifas y cargos de agua de la ciudad de Hollister.

20 de enero de 2026, a las 6:30 PM en 375 Fifth Street, Hollister, CA 95023

Los aumentos de tarifas propuestos serán efectivos para los servicios proporcionados a partir de el 16 de febrero de 2026, si son aprobados por el Ayuntamiento.

Historial:

La ciudad de Hollister (la Ciudad) está sujeta a la Proposición 218 y requerida bajo la ley a cobrarle a sus clientes solo lo necesario para proporcionar el servicio de agua. El sistema de agua de la Ciudad suministra agua potable segura de manera fiable a más de 7500 cuentas de clientes. Para hacer esto, la Ciudad mantiene cinco pozos de agua subterránea, gestiona dos plantas de tratamiento de agua en colaboración con otras empresas de servicios públicos y opera 260 millas de tuberías principales de agua.

La Ciudad no ha aumentado sus tarifas de agua desde 2018. La inflación ha subido 25% desde entonces, incrementando sustancialmente el costo del mantenimiento de la infraestructura de agua de la Ciudad, los materiales de tratamiento y el agua comprada. Actualmente, la Ciudad mantiene las tarifas de agua más bajas entre ocho comunidades vecinas. La Ciudad está proponiendo tarifas de agua aumentadas para garantizar la inversión continua en la infraestructura de agua que sirve a nuestra comunidad, para cubrir las compras de agua necesarias y suministrar agua que usted puede confiar.

Acerca de los cambios propuestos:

El fondo de agua de la Ciudad opera actualmente con un déficit, lo que plantea desafíos para el sistema de agua. La Ciudad contrató a Raftelis, un consultor independiente, para realizar un estudio de tarifas de agua. El estudio incluyó una revisión comprensiva de los ingresos futuros proyectados, los gastos de operación y mantenimiento (O&M) y los gastos de proyecto de capital (Estudio de Tarifas de Agua) de la Ciudad. El Estudio de Tarifas de Agua recomienda aumentos de tarifa para que el fondo de agua pueda seguir suministrando servicio de agua confiable.

Audiencia pública y procedimiento de protesta:

De conformidad con la ley estatal, protestas pueden ser proveídas por cualquier cliente de la Ciudad o propietario sujeto a los aumentos de tarifa propuestos, en contra cualquiera o todos los aumentos de tarifa descritos en este aviso. Las protestas por escrito pueden ser presentados personalmente ante el Ayuntamiento en la audiencia pública. También se pueden enviar por correo a la siguiente dirección:

Ciudad de Hollister, Oficina de la Secretaria Municipal
375 Fifth Street, Hollister, CA 95023

Ambas protestas, en persona y por correo, deben recibirse antes de la finalización de la Audiencia Pública a las 6:30 PM, el 20 de enero de 2026. Cada protesta escrita debe identificar claramente la propiedad o cuenta, hacer referencia a las tarifas propuestas, y debe incluir la firma del propietario o titular de la cuenta, según corresponda. Debido a la imposibilidad de verificar la autenticidad de cada protesta individua, no se aceptarán las protestas recibidas por teléfono, correo electrónico, o a través de redes sociales, incluidas, pero no limitado a, Facebook o X. Se invita a todas las personas interesadas a asistir a la Audiencia Pública y presentar protestas escritas y/o comentarios orales sobre los cambios de tarifas propuestos referenciado aquí. Se permite solo una protesta por cuenta de agua de la Ciudad. Los comentarios orales realizados en la audiencia pública se considerarán protestas formales de los aumentos de tarifas propuestos si van acompañados de una protesta escrita estableciendo la información requerida (como se indicó anteriormente). Si protestas por escrito son presentadas por la mayoría de los propietarios o titulares de cuentas afectados, no se aplicarán los aumentos de tarifas propuestos.

Tarifas de agua propuestas:

Los resultados del estudio de tarifas dieron como resultado aumentos propuestos en las tarifas de agua.

La tabla abajo describe las tarifas fijas (un cargo mensual basado en el tamaño del medidor, independientemente del consumo de agua) y los cargos por consumo (un cargo basado en el consumo de agua). El cargo por consumo para clientes residenciales sigue una estructura escalonada, donde el cargo aumenta con el consumo de agua.

Información adicional
El estudio tarifario del servicio de agua, cual detalla el sistema de agua, su presupuesto y la derivación de las tarifas, está disponible en el sitio web de la Ciudad: www.hollister.ca.gov .

Si tiene alguna pregunta, comuníquese con Cassandra Orozco al (831) 636-4370 o [email protected].

FORMA DE PROTESTA

Para protestar los aumentos de tarifas propuestos, usted puede completar esta Forma de Protesta y envirar por correo, o entregar en mano a:

Ciudad de Hollister, Oficina de la Secretaria Municipal
375 Fifth Street
Hollister, CA 95023

Para que se cuente, la Ciudad debe recibir la protesta por escrito enviada por correo, no mas tardar a las 5:00 PM, el 20 de enero de 2026. Protestas pueden ser entregadas en mano hasta el final de la Audiencia Pública. Solo una protesta es permitida por cuenta de agua.

Numero de Parcela o Dirección:
______________________________________________________________________________ ☐ Yo protesto contra el aumento propuesto de tarifas de aguas para financiar los costos de operación, mantenimiento, y reemplazos relacionados con suministro del servicio de agua a las propiedades dentro de la ciudad de Hollister.
☐ Por la presente yo declaro bajo pena de perjurio que soy el propietario o el titular de cuenta de la propiedad mencionada arriba, o el representante autorizado del propietario de la propiedad mencionada arriba.

Por favor firme aquí: ________________________________________________________________ ____________________________________________________________________________________ Por favor imprime el nombre del propietario/titular de cuenta aquí:
____________________________________________________________________________________

1 City of Hollister
Water Rate Study
Public Hearing
January 20, 2026

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

Community Objectives:

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

O&M
Capital
Reserves
Debt Service
Derives Legally
Defensible Rates &
Charges
2 Page 135 of 221

Rate Study Process
04 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)3 Page 136 of 221

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
4 Page 137 of 221

Water Utility is 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 Maintenance5
Why Rate
Increases are
Needed:

Water Rate Survey
6 Page 139 of 221

Water & Sewer
Compared to
Other Goods
7 Page 140 of 221

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
8 Page 141 of 221

Financial Planning
Assumptions
9 Page 142 of 221

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

11 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

City Council Selected Alternative 2
•Revenue increases do not exactly equate to customer bill impacts 12 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

13 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 2 –Projected Reserve Balances
14 Page 147 of 221

First Year Bill Impacts
15 Page 148 of 221

Five Year Rate Schedule
16 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 149 of 221

Summary
•The City has not increased water rates in 7 years and is long overdue for a rate increase
•It has the lowest rates around for an old water systems which need reinvestment
•These rate increase will allow the water fund to get out of a deficit and continue to provide reliable water service
17 Page 150 of 221

Thank you
Contacts
Steve Gagnon, P.E./ [email protected]
Lindsay Roth / [email protected]
Journ Galvan / [email protected]
18 Page 151 of 221

Back-up Slides
19 Page 152 of 221

Alternative 1 –Projected Reserve Balances
20 Page 153 of 221

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 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
21 Page 154 of 221

First Year Bill Impacts
22 Page 155 of 221

Alternative 1 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 $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 156 of 221

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

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 481Page 161 of 221

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 481Page 162 of 221

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 481Page 163 of 221

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 481Page 165 of 221

Water & Sewer
Compared to
Other Goods
8 Page 356 of 481Page 166 of 221

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 481Page 167 of 221

Water
10 Page 358 of 481Page 168 of 221

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 481Page 173 of 221

Alternative 1 –Projected Reserve Balances
16 Page 364 of 481Page 174 of 221

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 481Page 175 of 221

First Year Bill Impacts
18 Page 366 of 481Page 176 of 221

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 481Page 177 of 221

Alternative 2
20 Page 368 of 481Page 178 of 221

Alternative 2 –Projected Reserve Balances
21 Page 369 of 481Page 179 of 221

First Year Bill Impacts
22 Page 370 of 481Page 180 of 221

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 481Page 181 of 221

Thank you
Contacts
Steve Gagnon, P.E./ [email protected]
Lindsay Roth / [email protected]
Journ Galvan / [email protected]
24 Page 372 of 481Page 182 of 221

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 20, 2026
REPORT # Public Works-2026-04

AGENDA ITEM: WATER RATE STUDY PUBLIC HEARING AND ADJUSTMENTS TO

WATER RATES

DEPARTMENT: Public Works
DEPARTMENT HEAD: Jim Pia, Interim City Manager
STAFF CONTACT: Javier Hernandez, Public Works Director

RECOMMENDED ACTION: Hold a public hearing and adopt a resolution increasing the City’s water rates.

DISCUSSION: On October 20, 2025, a Hollister water rate study was presented to the City Council by Raftelis Financial Consultants, Inc. (RFC). The study recommended a phased increase in water rates and charges over the next 5-year period beginning in 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.

Over the last many years, the cost of operating the City’s water system and delivering potable water to City customers has significantly increased. Despite these increases, it has been more than twelve years since the City’s completion of the last water rate study, and seven years since the last rate increase.

Following the presentation and discussion at the October meeting, Council directed staff to move forward with the required Proposition 218 process and schedule a public hearing using the rate presented in Alternative 2 from the discussion.

Alternative 2 provides an approximate 60% initial increase, while Alternative 1 would have been approximately 95%.

The City of Hollister is subject to Proposition 218 and required by law to charge its customers only what is necessary to provide water services. The City’s water system reliably delivers safe drinking water to approximately 7,500 customer accounts. In accomplishing water delivery, the City maintains five groundwater wells, manages two water treatment plants in partnership with other utilities, and operates 260 miles of water mains. The Proposition 218 Notice was mailed on December 3, 2025, with just over 10,000 pieces of mail to ensure that all parcels and customer addresses were covered.

Pursuant to state law, protests may be provided by any City customer or property owner subject to the proposed rate increases. The Proposition 218 notice identified the 6:30 PM, January 20, 2026, as the public hearing date. For a majority protest to exist, the City Clerk would need to hear protests from 3,644 accounts. Information on this will be provided at the public hearing at the Council meeting.

FISCAL IMPACT: The proposed rate increases are sufficient to address increased costs to the City's water enterprise program and are consistent with the Proposition 218 Notice.

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).

ATTACHMENTS:

1. Resolution

2. Proposition 218 Notice

3. Water Rate Study Presentation

4. City Council Report of October 20, 2025

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING CITY WATER RATES AND FINDING THE RATES WILL

NOT EXCEED THE ESTIMATED AMOUNT NECESSARY TO FUND THE

OPERATION OF THE CITY WATER SYSTEM

WHEREAS, pursuant to the Hollister Municipal Code Section 13.08.180, water rates may be set and modified by resolution of the City Council; and

WHEREAS, it is the desire of the City Council to maintain flexibility to best meet the needs of the City and water consumers; and

WHEREAS, proposed water rate changes were presented to Council at its October 20, 2025, meeting and again at the Council Public Hearing on January 20, 2026, following the Proposition 218 Notice process; and

WHEREAS, the rate increase will begin on February 16, 2026; and

WHEREAS, the proposed water rate structure includes a fixed charge and a volumetric rate, with the Volumetric Charge including four customer classes - (1) Single Family Residential; (2) Multi-Family Residential; (3) Commercial; and (4) Landscape; and

WHEREAS, the Monthly Service Charge is a fixed charge established on the basis of the size of the water meter (in inches) serving a property and is calculated to recover a percentage of the water utility’s annual fixed costs of providing wa ter service, such as utilities, equipment, materials, billing, collections, customer service, meter reading, and meter maintenance; and

WHEREAS, the proposed water rates include revenue adjustments over the five-year rate-setting period to make sure the W ater Operating Fund has sufficient funds to cover annual expenses and to build reserves to target levels by the end of the rate -setting period, in the Year 2030; and

WHEREAS, the proposed water rates enable the City to increase water revenues, to fund expected operations, maintenance, and CIP expenditures, and maintain a sufficient Reserve Fund balance; and

WHEREAS, a public notice concerning said rate changes was duly mailed to residents in accordance with Proposition 218 noticing requirements on December 3, 2025, and a duly noticed public hearing concerning said rate adjustments was conducted by the City Council on January 20, 2026; and

WHEREAS, the City duly gave notice of the period and means for submitting written objections, and the City Council has determined that, pursuant to Proposition 218, a majority protest does not exist and the City Council may therefore proceed to set the

Resolution No. 2026-XX

water service rates; and

WHEREAS, the City Council finds that the proposed water rates do not exceed the reasonable and proportional costs of providing services to the ratepayers and the various categories of ratepayers.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Hollister as follows:

SECTION 1. RECITALS. The above-stated recitals and true and correct and represent the findings of the City Council.

SECTION 2. RATES. The City Council hereby adopts the following rates for water service, beginning on February 16, 2026:

Resolution No. 2026-XX

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on January 20, 2026, 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 Jennifer P. Thompson, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-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 January 20, 2026 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 January 20, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

www.raftelis.com
PROPOSITION 218 NOTICE

PUBLIC HEARING FOR WATER RATES

Notice is hereby given to consider proposed increases to the City of Hollister’s water rates and charges

January 20, 2026, 6:30 PM at 375 Fifth Street, Hollister, CA 95023

Proposed rate increases will be effective for services provided on or after FEBRUARY 16, 2026, if approved by City Council.

Background:

The City of Hollister (City) is subject to Proposition 218 and required by law to charge its customers only what is necessary to provide water services. The City’s water system reliably delivers safe drinking water to more than 7,500 customer accounts. To do this, the City maintains five groundwater wells, manages two water treatment plants in partnership with other utilities, and operates 260 miles of water mains.

The City has not increased its water rates since 2018. Inflation has risen 25% since then, substantially increasing the cost of City water infrastructure maintenance, treatment materials, and purchased water.

Currently, the City maintains the lowest water rates among eight neighboring communities. The City is proposing increased water rates to ensure continued investment in the water infrastructure that serves our community, to cover necessary water purchases, and deliver water you can trust.

About the Proposed Changes:

The City’s water fund is currently operating at a deficit, which poses challenges for the water system. The City engaged Raftelis, an independent consultant, to conduct a water rate study. The study included a comprehensive review of the City’s projected future revenues, operations and maintenance expenses (O&M), and capital project expenditures (Water Rate Study.) The Water Rate Study recommends rate increases so that the water fund can continue to deliver reliable water service.

Public Hearing and Protest Proceedings:

Pursuant to State law, protests may be provided by any City customer or property owner subject to the proposed rate increases, against any or all of the proposed rate increases described in this Notice.

Written protests may be submitted in person to the City Council at the Public Hearing. They may also be submitted by mail address to:

City of Hollister, City Clerk’s Office
375 Fifth Street, Hollister, CA 95023

www.raftelis.com
Both in person and mailed written protests must be received prior to the close of the Public Hearing at 6:30 PM, JANUARY 20, 2026. Each written protest must clearly identify the property or account, reference the proposed rates, and must include the signature of the property owner or account holder, as applicable. Due to the inability to verify the authenticity of each individual protest, protests received by telephone, electronic mail (e-mail), or via social media sites, including, but not limited to, Facebook or X, shall not be accepted. All interested parties are invited to attend the Public Hearing and present written protests and/or oral comments on the proposed rate changes referenced herein. Only one protest notice is allowed per City water account. Oral comments made at the public hearing will qualify as formal protests of the proposed rate increase if accompanied by a written protest setting forth the required information (as set forth above). If written protests are submitted by a majority of the affected property owners or account holders, the proposed rate increases will not be imposed.

Proposed Water Rates:

The rate study findings resulted in proposed water rate increases. The table below describes fixed rates—a monthly charge based on meter size irrespective of water use—and commodity charges—a charge based on water use. The commodity charge for residential customers follow a tiered structure where the charge increases with water use.

Additional Information
The water utility rate study, which details the water system, its budget, and rate derivation, is available on the City’s website at www.hollister.ca.gov .

For questions, please contact Cassandra Orozco at (831) 636-4370 or [email protected].

www.raftelis.com

PROTEST FORM

To protest the proposed water rate increase, you may complete this Protest Form and mail, or hand deliver to:

City of Hollister, City Clerk
375 Fifth Street
Hollister, CA 95023

To be counted, the City must receive a mailed written protest no later than 5:00 PM JANUARY 20, 2026. Protests may be hand-delivered up until the end of the Public Hearing. Only one protest is allowed per water account.

Parcel APN or Address: ________________________________________________________ ☐ I protest the proposed water rate increase to fund operation, maintenance and replacement costs related to providing water service to properties within the City of Hollister. ☐ I hereby declare under penalty of perjury that I am the owner or account holder of the above- listed property or the authorized representative of the owner of the above listed property.

Please sign here: ___________________________
___________________________
Please print the property owner/account holder name(s) here: __________________________________

CONTENIDO PARA NOTIFICACIÓN DE PROPOSICIÓN 218

AUDIENCIA PUBLICA SOBRE LAS TARIFAS DE AGUA

Se notifica que se considerarán las propuestas de aumentos de las tarifas y cargos de agua de la ciudad de Hollister.

20 de enero de 2026, a las 6:30 PM en 375 Fifth Street, Hollister, CA 95023

Los aumentos de tarifas propuestos serán efectivos para los servicios proporcionados a partir de el 16 de febrero de 2026, si son aprobados por el Ayuntamiento.

Historial:

La ciudad de Hollister (la Ciudad) está sujeta a la Proposición 218 y requerida bajo la ley a cobrarle a sus clientes solo lo necesario para proporcionar el servicio de agua. El sistema de agua de la Ciudad suministra agua potable segura de manera fiable a más de 7500 cuentas de clientes. Para hacer esto, la Ciudad mantiene cinco pozos de agua subterránea, gestiona dos plantas de tratamiento de agua en colaboración con otras empresas de servicios públicos y opera 260 millas de tuberías principales de agua.

La Ciudad no ha aumentado sus tarifas de agua desde 2018. La inflación ha subido 25% desde entonces, incrementando sustancialmente el costo del mantenimiento de la infraestructura de agua de la Ciudad, los materiales de tratamiento y el agua comprada. Actualmente, la Ciudad mantiene las tarifas de agua más bajas entre ocho comunidades vecinas. La Ciudad está proponiendo tarifas de agua aumentadas para garantizar la inversión continua en la infraestructura de agua que sirve a nuestra comunidad, para cubrir las compras de agua necesarias y suministrar agua que usted puede confiar.

Acerca de los cambios propuestos:

El fondo de agua de la Ciudad opera actualmente con un déficit, lo que plantea desafíos para el sistema de agua. La Ciudad contrató a Raftelis, un consultor independiente, para realizar un estudio de tarifas de agua. El estudio incluyó una revisión comprensiva de los ingresos futuros proyectados, los gastos de operación y mantenimiento (O&M) y los gastos de proyecto de capital (Estudio de Tarifas de Agua) de la Ciudad. El Estudio de Tarifas de Agua recomienda aumentos de tarifa para que el fondo de agua pueda seguir suministrando servicio de agua confiable.

Audiencia pública y procedimiento de protesta:

De conformidad con la ley estatal, protestas pueden ser proveídas por cualquier cliente de la Ciudad o propietario sujeto a los aumentos de tarifa propuestos, en contra cualquiera o todos los aumentos de tarifa descritos en este aviso. Las protestas por escrito pueden ser presentados personalmente ante el Ayuntamiento en la audiencia pública. También se pueden enviar por correo a la siguiente dirección:

Ciudad de Hollister, Oficina de la Secretaria Municipal
375 Fifth Street, Hollister, CA 95023

Ambas protestas, en persona y por correo, deben recibirse antes de la finalización de la Audiencia Pública a las 6:30 PM, el 20 de enero de 2026. Cada protesta escrita debe identificar claramente la propiedad o cuenta, hacer referencia a las tarifas propuestas, y debe incluir la firma del propietario o titular de la cuenta, según corresponda. Debido a la imposibilidad de verificar la autenticidad de cada protesta individua, no se aceptarán las protestas recibidas por teléfono, correo electrónico, o a través de redes sociales, incluidas, pero no limitado a, Facebook o X. Se invita a todas las personas interesadas a asistir a la Audiencia Pública y presentar protestas escritas y/o comentarios orales sobre los cambios de tarifas propuestos referenciado aquí. Se permite solo una protesta por cuenta de agua de la Ciudad. Los comentarios orales realizados en la audiencia pública se considerarán protestas formales de los aumentos de tarifas propuestos si van acompañados de una protesta escrita estableciendo la información requerida (como se indicó anteriormente). Si protestas por escrito son presentadas por la mayoría de los propietarios o titulares de cuentas afectados, no se aplicarán los aumentos de tarifas propuestos.

Tarifas de agua propuestas:

Los resultados del estudio de tarifas dieron como resultado aumentos propuestos en las tarifas de agua.

La tabla abajo describe las tarifas fijas (un cargo mensual basado en el tamaño del medidor, independientemente del consumo de agua) y los cargos por consumo (un cargo basado en el consumo de agua). El cargo por consumo para clientes residenciales sigue una estructura escalonada, donde el cargo aumenta con el consumo de agua.

Información adicional
El estudio tarifario del servicio de agua, cual detalla el sistema de agua, su presupuesto y la derivación de las tarifas, está disponible en el sitio web de la Ciudad: www.hollister.ca.gov .

Si tiene alguna pregunta, comuníquese con Cassandra Orozco al (831) 636-4370 o [email protected].

FORMA DE PROTESTA

Para protestar los aumentos de tarifas propuestos, usted puede completar esta Forma de Protesta y envirar por correo, o entregar en mano a:

Ciudad de Hollister, Oficina de la Secretaria Municipal
375 Fifth Street
Hollister, CA 95023

Para que se cuente, la Ciudad debe recibir la protesta por escrito enviada por correo, no mas tardar a las 5:00 PM, el 20 de enero de 2026. Protestas pueden ser entregadas en mano hasta el final de la Audiencia Pública. Solo una protesta es permitida por cuenta de agua.

Numero de Parcela o Dirección:
______________________________________________________________________________ ☐ Yo protesto contra el aumento propuesto de tarifas de aguas para financiar los costos de operación, mantenimiento, y reemplazos relacionados con suministro del servicio de agua a las propiedades dentro de la ciudad de Hollister.
☐ Por la presente yo declaro bajo pena de perjurio que soy el propietario o el titular de cuenta de la propiedad mencionada arriba, o el representante autorizado del propietario de la propiedad mencionada arriba.

Por favor firme aquí: ________________________________________________________________ ____________________________________________________________________________________ Por favor imprime el nombre del propietario/titular de cuenta aquí:
____________________________________________________________________________________

1 City of Hollister
Water Rate Study
Public Hearing
January 20, 2026

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

Community Objectives:

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

O&M
Capital
Reserves
Debt Service
Derives Legally
Defensible Rates &
Charges
2 Page 100 of 168Page 195 of 221

Rate Study Process
04 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)3 Page 101 of 168Page 196 of 221

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
4 Page 102 of 168Page 197 of 221

Water Utility is 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 Maintenance5
Why Rate
Increases are
Needed:

Water Rate Survey
6 Page 104 of 168Page 199 of 221

Water & Sewer
Compared to
Other Goods
7 Page 105 of 168Page 200 of 221

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
8 Page 106 of 168Page 201 of 221

Financial Planning
Assumptions
9 Page 107 of 168Page 202 of 221

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

11 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

City Council Selected Alternative 2
•Revenue increases do not exactly equate to customer bill impacts 12 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

13 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 2 –Projected Reserve Balances
14 Page 112 of 168Page 207 of 221

First Year Bill Impacts
15 Page 113 of 168Page 208 of 221

Five Year Rate Schedule
16 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 114 of 168Page 209 of 221

Summary
•The City has not increased water rates in 7 years and is long overdue for a rate increase
•It has the lowest rates around for an old water systems which need reinvestment
•These rate increase will allow the water fund to get out of a deficit and continue to provide reliable water service
17 Page 115 of 168Page 210 of 221

Thank you
Contacts
Steve Gagnon, P.E./ [email protected]
Lindsay Roth / [email protected]
Journ Galvan / [email protected]
18 Page 116 of 168Page 211 of 221

Back-up Slides
19 Page 117 of 168Page 212 of 221

Alternative 1 –Projected Reserve Balances
20 Page 118 of 168Page 213 of 221

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 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
21 Page 119 of 168Page 214 of 221

First Year Bill Impacts
22 Page 120 of 168Page 215 of 221

Alternative 1 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 $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 121 of 168Page 216 of 221

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

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # Public Works-2026-07

AGENDA ITEM: WEST GATEWAY IMPROVEMENT PROJECT – CDBG CONTRACT NO. 21-CDBG-NH-20012 GRANT CLOSURE REPORT

DEPARTMENT: Public Works
DEPARTMENT HEAD: Javier Hernandez, Public Works Director STAFF CONTACT: Cristian Builes, Associate Engineer

COUNCIL NEXT STEPS: Receive presentation from Adams Ashby Group regarding the CDBG Grant Closure for the West Gateway CIP Project.

DISCUSSION:

I. PROJECT SUMMARY
Project Name: West Gateway Improvement Project
Jurisdiction: City of Hollister
Contract Number: 21-CDBG-NH-20012
Grant Term: December 2, 2022 – December 1, 2025 (fully expended)

The West Gateway Improvement Project is a capital infrastructure init iative intended to improve a key gateway corridor in the City of Hollister. The project enhanced safety, circulation, and accessibility for vehicles, pedestrians, and cyclists. It includes installation or upgrades to intersections, roadway improvements, and related infrastructure work as outlined in the project’s engineering and bid documents.

II. FUNDING AND PROGRAM CONTEXT
This activity is funded through a Community Development Block Grant (CDBG) award under Contract 21-CDBG-NH-20012. The grant term spans from December 2, 2022 through December 1, 2025, by which time all funds were expended and the project delivery period concluded.

The CDBG program supports activities that principally benefit low- and moderate- income persons or address community infrastructure needs that support economic development and public facilities improvements.

III. PROJECT DESCRIPTION
The scope of the West Gateway Improvement Project includes site work associated with intersection and roadway enhancements , notably:
 Removal of existing traffic signal equipment
 Installation of a roundabout at the intersection of 4th Street and Graf Road  Construction of curb and gutter, sidewalks, and raised medians  Street lighting upgrades
 Sanitary sewer upgrades
 Storm drain improvements
 Signing and striping to support safe circulation

The project has been configured to meet federal requirements, including prevailing wage and bonding obligations.

IV. PROJECT STATUS
Phase II of the project has now concluded. Phase III has an estimated completion date of April/May.

V. COMMUNITY IMPACT AND BENEFITS
The West Gateway Improvement Project is anticipated to provide significant public benefits, including:
 Improved traffic safety and circulation at a key City gateway intersection  Enhanced pedestrian and bicyclist facilities
 Infrastructure improvements that strengthened the community’s domestic water distribution, stormwater management, and sanitary sewer systems.  Aesthetic and functional upgrades that support community connectivity and long- term economic growth

These improvements help align the corridor with modern design standards and contribute to Hollister’s broader transportation network enhancements. Furthermore, these improvements contribute to the beautification of the area through design.

VI. COMPLIANCE AND RECORDS
As a CDBG-funded activity, the project is subject to compliance with all applicable Federal, State, and Municipal requirements, including:
 Fair labor standards and prevailing wage provisions
 Recordkeeping and monitoring obligations
 Environmental review clearances prior to construction  Reporting and close-out documentation pursuant to CDBG performance standards

The grant-term closing procedures, including final reporting and audit documentation, will ensure that the City meets all obligations associated with the fully expended award.

VII. RECOMMENDATION
Staff recommends that the Council receive this update on the West Gateway Improvement Project and the status of activities completed under CDBG Contract 21 - CDBG-NH-20012. Continued coordination with the City’s Engineering Division and Public Works Department will support timely completion of construction, compliance with grant requirements, and documentation for future audit or monitoring review.

FISCAL IMPACT: N/A

PREVIOUS COUNCIL OR COMMISSION ACTION: Resolution 2020-21, 2023-23, 2023-71, 2025-16 and 2025-149

CEQA: This project is categorically exempt from the California Environment Quality Act (CEQA) pursuant to CEQA Guidelines section 15301(Class 1 Existing Facilities) and section 15302 (Replacement or Reconstruction)

ATTACHMENTS:

1. N/A

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 17, 2026
REPORT # City Manager-2026-08

AGENDA ITEM: DISCUSSION ON WHETHER TO BRING BACK AN ORDINANCE AMENDING SECTION 02.04.050 (MEETINGS- TIME AND PLACE) OF CHAPTER

02.04 (CITY COUNCIL) OF TITLE 2 (ADMINISTRATION AND PERSONNEL) OF THE

HOLLISTER MUNICIPAL CODE

DEPARTMENT: City Manager
DEPARTMENT HEAD: Ana Cortez, City Manager
STAFF CONTACT: Ana Cortez, City Manager

COUNCIL NEXT STEPS: Discuss whether to direct staff to bring back an ordinance amending the Hollister Municipal Code regarding the time and place of City Council meetings.

DISCUSSION: At the City Council meeting of January 5, 2026, the Council reviewed a request for a future agenda item from Councilmember Morales. The Councilmember proposed that the City Council meetings change from the 1 st and 3rd Mondays to the 2nd and 4th Mondays. The Council authorized this request to come back to a future Council meeting discussion.

As background, on March 4, 2024, the City Council approved an amendment to the Hollister Municipal Code, updating the date and time of City Council meetings from the first and third Mondays at 6:30 p.m. to the first and third Tuesdays of each month at 4:00 p.m. Following that action, on January 7, 2025, the City Council approved an amendment to bring the meetings back to the 1st and 3rd Mondays at 6:30. The proposed action would be the third amendment on Council meeting time change in less than two years.

Staff notes that the risks of moving from the 1st and 3rd Monday evenings to the 2nd and 4th Monday evenings include changes within each Councilmember’s current schedule, changes to the public awareness of the current schedule and legal counsel limitations.

City Attorney and the City Attorney’s firm are unavailable on the 2nd and 4th Monday of the month. Staff indicated that attendance to council meetings would not be impacted by the Council’s decision on this matter.

FISCAL IMPACT: There is no fiscal impact.

PREVIOUS COUNCIL OR COMMISSION ACTION: City Council discussed the item on January 20, 2026 and directed staff to poll City staff to determine if there are scheduling conflicts that would prevent staff from being able to attend on the second and fourth Mondays of the month.

CEQA: N/A

ATTACHMENTS: None.